TERADATA CORP /DE/, 10-K filed on 2/26/2016
Annual Report
Document and Entity Information (USD $)
In Billions, except Share data in Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Jan. 29, 2016
Jun. 30, 2015
Document And Entity Information [Abstract]
 
 
 
Entity Registrant Name
TERADATA CORP /DE/ 
 
 
Entity Central Index Key
0000816761 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2015 
 
 
Document Fiscal Year Focus
2015 
 
 
Trading Symbol
TDC 
 
 
Document Fiscal Period Focus
FY 
 
 
Amendment Flag
false 
 
 
Entity Common Stock, Shares Outstanding (in shares)
 
129.4 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Public Float
 
 
$ 5.2 
Consolidated Statements of (Loss) Income (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Revenue
 
 
 
Product revenue
$ 1,057 
$ 1,227 
$ 1,230 
Service revenue
1,473 
1,505 
1,462 
Total revenue
2,530 
2,732 
2,692 
Costs and operating expenses
 
 
 
Cost of products
440 
443 
433 
Cost of services
814 
810 
786 
Selling, general and administrative expenses
765 
770 
757 
Research and development expenses
228 
206 
184 
Impairment of goodwill and acquired intangibles
478 
0 
0 
Total costs and operating expenses
2,725 
2,229 
2,160 
(Loss) income from operations
(195)
503 
532 
Interest expense
(9)
(3)
(4)
Other income (expense), net
60 
(6)
(20)
Total other income (expense), net
51 
(9)
(24)
(Loss) income before income taxes
(144)
494 
508 
Income tax expense
70 
127 
131 
Net (loss) income
$ (214)
$ 367 
$ 377 
Net (loss) income per common share
 
 
 
Basic (in usd per share)
$ (1.53)
$ 2.36 
$ 2.31 
Diluted (in usd per share)
$ (1.53)
$ 2.33 
$ 2.27 
Weighted average common shares outstanding
 
 
 
Basic (in shares)
139.6 
155.3 
163.4 
Diluted (in shares)
139.6 
157.8 
166.4 
Consolidated Statements of Comprehensive (Loss) Income (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Statement of Comprehensive Income [Abstract]
 
 
 
Net (loss) income
$ (214)
$ 367 
$ 377 
Other comprehensive (loss) income:
 
 
 
Foreign currency translation adjustments
(36)
(47)
2 
Securities:
 
 
 
Reclassification of gain to net income
(26)
0 
0 
Unrealized (loss) gain on securities, before tax
(7)
50 
0 
Tax impact on securities
2 
(19)
0 
Net change in securities
(31)
31 
0 
Defined benefit plans:
 
 
 
Reclassification of loss to net income
3 
1 
2 
Defined benefit plan adjustment, before tax
(9)
(29)
0 
Defined benefit plan adjustment, tax portion
1 
7 
0 
Defined benefit plan adjustment, net of tax
(5)
(21)
2 
Other comprehensive (loss) income
(72)
(37)
4 
Comprehensive (loss) income
$ (286)
$ 330 
$ 381 
Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Current Assets
 
 
Cash and cash equivalents
$ 839 
$ 834 
Accounts receivable, net
580 
619 
Inventories
49 
38 
Assets held for sale
214 
0 
Other current assets
52 
81 
Total current assets
1,734 
1,572 
Property and equipment, net
143 
159 
Capitalized software, net
190 
199 
Goodwill
380 
948 
Acquired intangible assets, net
22 
136 
Deferred income taxes
41 
20 
Other assets
20 
98 
Total assets
2,530 
3,132 
Current liabilities
 
 
Current portion of long-term debt
30 
53 
Short-term borrowings
180 
220 
Accounts payable
96 
126 
Payroll and benefits liabilities
120 
125 
Deferred revenue
367 
370 
Liabilities held for sale
58 
0 
Other current liabilities
102 
101 
Total current liabilities
953 
995 
Long-term debt
570 
195 
Pension and other postemployment plan liabilities
89 
99 
Long-term deferred revenue
15 
18 
Deferred tax liabilities
28 
86 
Other liabilities
26 
32 
Total liabilities
1,681 
1,425 
Commitments and contingencies
   
   
Stockholders' equity
 
 
Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and outstanding at December 31, 2015 and 2014, respectively
0 
0 
Common stock: par value $0.01 per share, 500.0 shares authorized, 130.7 and 147.9 shares issued at December 31, 2015 and 2014, respectively
1 
1 
Paid-in capital
1,128 
1,054 
(Accumulated deficit) retained earnings
(204)
656 
Accumulated other comprehensive loss
(76)
(4)
Total stockholders’ equity
849 
1,707 
Total liabilities and stockholders’ equity
$ 2,530 
$ 3,132 
Consolidated Balance Sheets (Parenthetical) (USD $)
Dec. 31, 2015
Dec. 31, 2014
Statement of Financial Position [Abstract]
 
 
Preferred stock, par value (in usd per share)
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
100,000,000 
100,000,000 
Preferred stock, shares issued
0 
0 
Preferred stock, shares outstanding
0 
0 
Common stock, par value (in usd per share)
$ 0.01 
$ 0.01 
Common stock, shares authorized
500,000,000 
500,000,000 
Common stock, shares issued
130,700,000 
147,900,000 
Consolidated Statements of Cash Flows (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Operating activities
 
 
 
Net (loss) income
$ (214,000,000)
$ 367,000,000 
$ 377,000,000 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
170,000,000 
169,000,000 
147,000,000 
Stock-based compensation expense
56,000,000 
50,000,000 
49,000,000 
Excess tax benefit from stock-based compensation
(2,000,000)
(2,000,000)
(7,000,000)
Deferred income taxes
(39,000,000)
(2,000,000)
18,000,000 
(Gain) loss on investments
(57,000,000)
9,000,000 
25,000,000 
Impairment of goodwill and acquired intangibles
478,000,000 
0 
0 
Changes in assets and liabilities, net of acquisitions:
 
 
 
Receivables
1,000,000 
101,000,000 
(46,000,000)
Inventories
(11,000,000)
18,000,000 
(9,000,000)
Current payables and accrued expenses
(8,000,000)
(23,000,000)
(63,000,000)
Deferred revenue
24,000,000 
(28,000,000)
9,000,000 
Other assets and liabilities
3,000,000 
21,000,000 
10,000,000 
Net cash provided by operating activities
401,000,000 
680,000,000 
510,000,000 
Investing activities
 
 
 
Expenditures for property and equipment
(52,000,000)
(54,000,000)
(60,000,000)
Additions to capitalized software
(68,000,000)
(75,000,000)
(78,000,000)
Proceeds from disposition of investments
85,000,000 
0 
0 
Business acquisitions and other investing activities, net
(17,000,000)
(69,000,000)
(36,000,000)
Net cash used in investing activities
(52,000,000)
(198,000,000)
(174,000,000)
Financing activities
 
 
 
Proceeds from long-term borrowings
600,000,000 
0 
0 
Repayments of long-term borrowings
(247,000,000)
(26,000,000)
(15,000,000)
Proceeds from credit facility borrowings
180,000,000 
220,000,000 
 
Repayments of credit-facility borrowings
(220,000,000)
0 
0 
Repurchases of common stock
(657,000,000)
(551,000,000)
(382,000,000)
Excess tax benefit from stock-based compensation
2,000,000 
2,000,000 
7,000,000 
Other financing activities, net
18,000,000 
29,000,000 
28,000,000 
Net cash used in financing activities
(324,000,000)
(326,000,000)
(362,000,000)
Effect of exchange rate changes on cash and cash equivalents
(20,000,000)
(17,000,000)
(8,000,000)
Increase (decrease) in cash and cash equivalents
5,000,000 
139,000,000 
(34,000,000)
Cash and cash equivalents at beginning of year
834,000,000 
695,000,000 
729,000,000 
Cash and cash equivalents at end of year
839,000,000 
834,000,000 
695,000,000 
Cash paid during the year for:
 
 
 
Income taxes
98,000,000 
133,000,000 
124,000,000 
Interest
$ 8,000,000 
$ 3,000,000 
$ 4,000,000 
Consolidated Statements of Changes in Stockholders' Equity (USD $)
In Millions, unless otherwise specified
Total
Common Stock
Treasury Stock
Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Beginning Balance at Dec. 31, 2012
$ 1,779 
$ 2 
$ (806)
$ 898 
$ 1,656 
$ 29 
Beginning Balance (in shares) at Dec. 31, 2012
 
190 
24 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Net (loss) income
377 
 
 
 
377 
 
Employee stock compensation, employee stock purchase programs and option exercises (in shares)
 
1 
 
 
 
 
Employee stock compensation, employee stock purchase programs and option exercises
68 
 
 
68 
 
 
Income tax benefit from stock compensation plans
7 
 
 
7 
 
 
Treasury stock (in shares)
 
 
(8.0)
 
 
 
Purchases of treasury stock, not retired
(378)
 
(378)
 
 
 
Pension and postemployment benefit plans, net of tax
2 
 
 
 
 
2 
Unrealized gain on securities
0 
 
 
 
 
 
Currency translation adjustment
2 
 
 
 
 
2 
Ending Balance at Dec. 31, 2013
1,857 
2 
(1,184)
973 
2,033 
33 
Ending Balance (in shares) at Dec. 31, 2013
 
191 
32 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Net (loss) income
367 
 
 
 
367 
 
Employee stock compensation, employee stock purchase programs and option exercises (in shares)
 
2 
 
 
 
 
Employee stock compensation, employee stock purchase programs and option exercises
 
(1)
 
 
 
 
Employee stock compensation, employee stock purchase programs and option exercises
77 
 
 
78 
 
 
Income tax benefit from stock compensation plans
3 
 
 
3 
 
 
Retirement of common stock previously held as treasury
0 
 
1,184 
 
(1,184)
 
Treasury stock (in shares)
 
(32.0)
32.0 
 
 
 
Repurchases of Company common stock retired (in shares)
 
(13)
 
 
 
 
Repurchases of Company common stock, retired
(560)
 
 
 
(560)
 
Pension and postemployment benefit plans, net of tax
(21)
 
 
 
 
(21)
Unrealized gain on securities
31 
 
 
 
 
31 
Currency translation adjustment
(47)
 
 
 
 
(47)
Ending Balance at Dec. 31, 2014
1,707 
1 
0 
1,054 
656 
(4)
Ending Balance (in shares) at Dec. 31, 2014
 
148 
0 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Net (loss) income
(214)
 
 
 
(214)
 
Employee stock compensation, employee stock purchase programs and option exercises (in shares)
 
2 
 
 
 
 
Employee stock compensation, employee stock purchase programs and option exercises
78 
 
 
78 
 
 
Income tax expense for stock compensation plans
(4)
 
 
(4)
 
 
Repurchases of Company common stock retired (in shares)
 
(19)
 
 
 
 
Repurchases of Company common stock, retired
(646)
 
 
 
(646)
 
Pension and postemployment benefit plans, net of tax
(5)
 
 
 
 
(5)
Unrealized gain on securities
(31)
 
 
 
 
(31)
Currency translation adjustment
(36)
 
 
 
 
(36)
Ending Balance at Dec. 31, 2015
$ 849 
$ 1 
$ 0 
$ 1,128 
$ (204)
$ (76)
Ending Balance (in shares) at Dec. 31, 2015
 
131 
0 
 
 
 
Description of Business, Basis of Presentation and Significant Accounting Policies
Description of Business, Basis of Presentation and Significant Accounting Policies
Description of Business, Basis of Presentation and Significant Accounting Policies
Description of the Business. Teradata Corporation (“Teradata” or the “Company”) is a global leader in analytic data platforms, marketing and analytic applications, and related services. The Company’s analytic data platforms are comprised of software, hardware, and related business consulting and support services for data warehousing and big data analytics.
Basis of Presentation. The financial statements are presented on a consolidated basis and include the accounts of the Company and its wholly-owned subsidiaries in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the period reported. On an ongoing basis, management evaluates these estimates and judgments, including those related to allowances for doubtful accounts, the valuation of inventory to net realizable value, impairments of goodwill and other intangibles, stock-based compensation, pension and other postemployment benefits, and income taxes and any changes will be accounted for on a prospective basis. Actual results could differ from those estimates.
Revenue Recognition. Teradata’s solution offerings typically include software, software subscriptions (unspecified when-and-if-available upgrades), hardware, maintenance support services, and other consulting, implementation and installation-related (“consulting”) services. Teradata records revenue when it is realized, or realizable, and earned. Teradata considers these requirements met when:
•
Persuasive evidence of an arrangement exists
•
The products or services have been delivered to the customer
•
The sales price is fixed or determinable and free of contingencies or significant uncertainties
•
Collectibility is reasonably assured
Teradata reports revenue net of any taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. The Company assesses whether fees are fixed or determinable at the time of sale. Standard payment terms may vary based on the country in which the agreement is executed, but are generally between 30 days and 90 days. Payments that are due within six months are generally deemed to be fixed or determinable based on a successful collection history on such arrangements, and thereby satisfy the required criteria for revenue recognition. Teradata delivers its solutions primarily through direct sales channels, as well as through alliances with system integrators, other independent software vendors and distributors, and value-added resellers (collectively referred to as “resellers”). In assessing whether the sales price to a reseller is fixed or determinable, the Company considers, among other things, past business practices with the reseller, the reseller’s operating history, payment terms, return rights and the financial wherewithal of the reseller. When Teradata determines that the contract fee to a reseller is not fixed or determinable, that transaction is deferred and recognized upon sell-through to the end customer.
The Company’s deliverables often involve delivery or performance at different periods of time. Revenue for software is generally recognized upon delivery with the hardware once title and risk of loss have been transferred. Revenue for software subscriptions, which provide for unspecified upgrades or enhancements on a when-and-if-available basis, is recognized straight-line over the term of the subscription arrangement. Revenue for maintenance support services is also recognized on a straight-line basis over the term of the contract. Revenue for other consulting, implementation and installation services is recognized as services are provided. In certain instances, acceptance of the product or service is specified by the customer. In such cases, revenue is deferred until the acceptance criteria have been met. Delivery and acceptance generally occur in the same reporting period. The Company’s arrangements generally do not include any customer negotiated provisions for cancellation, termination or refunds that would significantly impact recognized revenue.

The Company evaluates all deliverables in an arrangement to determine whether they represent separate units of accounting. A deliverable constitutes a separate unit of accounting when it has standalone value, and if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered items is considered probable and substantially in the control of Teradata. Most of the Company’s products and services qualify as separate units of accounting and are recognized upon meeting the criteria as described above.
For multiple deliverable arrangements that contain non-software related deliverables, the Company allocates revenue to each deliverable based upon the relative selling price hierarchy and if software and software-related deliverables are also included in the arrangement, to those deliverables as a group based on the best estimate of selling price (“BESP”) for the group. The selling price for a deliverable is based on its vendor-specific objective evidence of selling price (“VSOE”) if available, third-party evidence of selling price (“TPE”) if VSOE is not available, or BESP if neither VSOE nor TPE is available. The Company then recognizes revenue when the remaining revenue recognition criteria are met for each deliverable. For the software group or arrangements that contain only software and software-related deliverables, the revenue is allocated utilizing the residual or fair value method. Under the residual method, the VSOE of the undelivered elements is deferred and accounted for under the applicable revenue recognition guidance, and the remaining portion of the software arrangement fee is allocated to the delivered elements and is recognized as revenue. The fair value method is similar to the relative selling price method used for non-software deliverables except that the allocation of each deliverable is based on VSOE. For software groups or arrangements that contain only software and software-related deliverables in which VSOE does not exist for each deliverable (fair value method) or does not exist for each undelivered element (residual method), revenue for the entire software arrangement or group is deferred and not recognized until delivery of all elements without VSOE has occurred, unless the only undelivered element is postcontract customer support (“PCS”) in which case the entire software arrangement or group is recognized ratably over the PCS period.
Teradata’s analytic database software and hardware products are sold and delivered together in the form of a “Node” of capacity as an integrated technology solution. Because both the analytic database software and hardware platform are necessary to deliver the analytic data platform’s essential functionality, the database software and hardware (Node) are excluded from the software rules and considered a non-software related deliverable. Teradata software applications and related support are considered software-related deliverables. Additionally, the amount of revenue allocated to the delivered items utilizing the relative selling price or fair value method is limited to the amount that is not contingent upon the delivery of additional items or meeting other specified performance conditions (the non-contingent amount).
VSOE is based upon the normal pricing and discounting practices for those products and services when sold separately. Teradata uses the stated renewal rate approach in establishing VSOE for maintenance and subscriptions (collectively referred to as PCS). Under this approach, the Company assesses whether the contractually stated renewal rates are substantive and consistent with the Company’s normal pricing practices. Renewal rates greater than the lower level of our targeted pricing ranges are considered to be substantive and, therefore, meet the requirements to support VSOE. In instances where there is not a substantive renewal rate in the arrangement, the Company allocates revenue based upon BESP, using the minimum established pricing targets as supported by the renewal rates for similar customers utilizing the bell-curve method. Teradata also offers consulting and installation-related services to its customers, which are considered non-software deliverables if they relate to the nodes. These services are rarely considered essential to the functionality of the data warehouse solution deliverable and there is never software customization of the proprietary database software. VSOE for consulting services is based on the hourly rates for standalone consulting services projects by geographic region and are indicative of the Company’s customary pricing practices. Pricing in each market is structured to obtain a reasonable margin based on input costs.
In nearly all multiple-deliverable arrangements, the Company is unable to establish VSOE for all deliverables in the arrangement. This is due to infrequently selling each deliverable separately (such is the case with our nodes), not pricing products or services within a narrow range, or only having a limited sales history. When VSOE cannot be established, attempts are made to establish TPE of the selling price for each deliverable. TPE is determined based on competitor prices for similar deliverables when sold separately. However, Teradata’s offerings contain significant differentiation such that the comparable pricing of products with similar functionality cannot typically be obtained. This is because Teradata’s products contain a significant amount of proprietary technology and its solutions offer substantially different features and functionality than other available products. As Teradata’s products are significantly different from those of its competitors, the Company is unable to establish TPE for the vast majority of its products.
When the Company is unable to establish selling prices using VSOE or TPE, the Company uses BESP in its allocation of arrangement consideration. The objective of BESP is to determine the price at which the Company would transact a sale if the product or service was sold on a standalone basis. The Company determines BESP for a product or service by considering multiple factors including, but not limited to, geographies, market conditions, product life cycles, competitive landscape, internal costs, gross margin objectives, purchase volumes and pricing practices.
The primary consideration in developing BESP for the Company’s nodes is the bell-curve method based on historical transactions. The BESP analysis is at the geography level in order to align it with the way in which the Company goes to market and establishes pricing for its products. The Company has established discount ranges off of published list prices for different geographies based on strategy and maturity of Teradata’s presence in the respective geography. There are distinctions in each geography and product group which support the use of geographies and markets for the determination of BESP. For example, the Company’s U.S. market is relatively mature and most of the large transactions are captured in this market, whereas the International markets are less mature with generally smaller deal size. Additionally, the prices and margins for the Company’s products vary by geography and by product class. BESP is analyzed on a semi-annual basis using data from the 4 previous quarters, which the Company believes best reflects most recent pricing practices in a changing marketplace.
The Company reviews VSOE, TPE and its determination of BESP on a periodic basis and updates it, when appropriate, to ensure that the practices employed reflect the Company’s recent pricing experience. The Company maintains internal controls over the establishment and updates of these estimates, which includes review and approval by the Company’s management. For the year ended December 31, 2015 there was no material impact to revenue resulting from changes in VSOE, TPE or BESP, nor does the Company expect a material impact from such changes in the near term.
Perpetual licenses, term licenses, hosting arrangements and software as a service. Teradata’s application offerings include perpetual licenses, term licenses, hosting arrangements and software as a service. For software arrangements that include a perpetual license, the residual method is typically used because the Company does not have VSOE for its perpetual licenses. This is because the perpetual license is never sold standalone. If the license is of limited life and does not require the Company to host the software for the customer, the software is considered a term license. Teradata’s term licenses are typically offered for application software and include a right-to-use license, PCS and consulting services. The revenue for these arrangements are typically recognized ratably over the contract term. The term of these arrangements varies between one and five years and may or may not include hosting services. In most arrangements the pricing is bundled to the customer. If the term license is hosted, the customer has the right to take possession of the software at any time during the hosting period. The customer’s rights to the software in these circumstances are not dependent on additional software payments or significant penalties, and the customer can feasibly run the software on its own hardware or contract with another party to host the software. If these criteria are not met, the hosting arrangement is accounted for outside the software rules as a software as a service arrangement. Under a software as a service arrangement, the license, PCS and hosting fee are recognized ratably over the term of the contract.
Shipping and Handling. Product shipping and handling costs are included in cost of products in the Consolidated Statements of Income.
Cash and Cash Equivalents. All short-term, highly-liquid investments having original maturities of three months or less are considered to be cash equivalents.
Allowance for Doubtful Accounts. Teradata establishes provisions for doubtful accounts using both percentages of accounts receivable balances to reflect historical average credit losses and specific provisions for known issues.
Inventories. Inventories are stated at the lower of cost or market. Cost of service parts is determined using the average cost method. Finished goods inventory is determined using actual cost.
Available-for-sale Securities. Available-for-sale securities are reported at fair value. Unrealized holding gains and losses are excluded from earnings and reported in other comprehensive income. Realized gains and losses are included in other income and expense in the Consolidated Statements of Income.
Long-Lived Assets
Property and Equipment. Property and equipment, leasehold improvements and rental equipment are stated at cost less accumulated depreciation. Depreciation is computed over the estimated useful lives of the related assets primarily on a straight-line basis. Equipment is depreciated over 3 to 20 years and buildings over 25 to 45 years. Leasehold improvements are depreciated over the life of the lease or the asset, whichever is shorter. Total depreciation expense on the Company’s property and equipment for December 31 was as follows:
In millions
2015
 
2014
 
2013
Depreciation expense
$
53

 
$
51

 
$
48


Capitalized Software. Direct development costs associated with internal-use software are capitalized and amortized over the estimated useful lives of the resulting software. The costs are capitalized when both the preliminary project stage is completed and it is probable that computer software being developed will be completed and placed in service. Teradata typically amortizes capitalized internal-use software on a straight-line basis over three years beginning when the asset is substantially ready for use.
Costs incurred for the development of big data, marketing and analytic applications are expensed as incurred based on the frequency and agile nature of development. Costs incurred for the development of data warehousing software that will be sold, leased or otherwise marketed are capitalized when technological feasibility has been established. Technological feasibility is established when planning, designing and initial coding activities that are necessary to establish the product can be produced to meet its design specifications. In the absence of a program design, a working model is used to establish technological feasibility. These costs are included within capitalized software and are amortized over the estimated useful lives of four years using the greater of the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product or the straight-line method over the remaining estimated economic life of the product beginning when the product is available for general release. Costs capitalized include direct labor and related overhead costs. Costs incurred prior to technological feasibility and after general release are expensed as incurred. The following table identifies the activity relating to capitalized software:
 
Internal-use Software
 
External-use Software
In millions
2015
 
2014
 
2013
 
2015
 
2014
 
2013
Beginning balance at January 1
$
13

 
$
12

 
$
12

 
$
186

 
$
183

 
$
161

Capitalized
6

 
7

 
6

 
61

 
68

 
72

Amortization
(6
)
 
(6
)
 
(6
)
 
(70
)
 
(65
)
 
(50
)
Ending balance at December 31
$
13

 
$
13

 
$
12

 
$
177

 
$
186

 
$
183


The aggregate amortization expense (actual and estimated) for internal-use and external-use software for the following periods is:
 
Actual
 
For the year ended (estimated)
In millions
2015
 
2016
 
2017
 
2018
 
2019
 
2020
Internal-use software amortization expense
$
6

 
$
6

 
$
4

 
$
3

 
$
—

 
$
—

External-use software amortization expense
$
70

 
$
66

 
$
56

 
$
36

 
$
19

 
$
—


Estimated expense, which is recorded to cost of sales for external use software, is based on capitalized software at December 31, 2015 and does not include any new capitalization for future periods.
Valuation of Long-Lived Assets. Long-lived assets such as property and equipment, acquired intangible assets and internal capitalized software are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. An impairment loss would be recognized when estimated future undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than the carrying amount.
Goodwill. Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Goodwill amounts are not amortized, but rather are tested for impairment annually or upon occurrence of an event or change in circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying amount. See Note 3- Goodwill and Acquired Intangibles for additional information.
Assets and Liabilities Held for Sale. The Company classifies assets and liabilities (disposal groups) to be sold as held for sale in the period in which all of the following criteria are met:
•
Management, having the authority to approve the action, commits to a plan to sell the disposal group;
•
The disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal groups;
•
An active program to locate a buyer and other actions required to complete the plan to sell the disposal group have been initiated;
•
The sale of the disposal group is probable, and transfer of the disposal group is expected to qualify for recognition as a completed sale, within one year, except if events or circumstances beyond the Company’s control extend the period of time required to sell the disposal group beyond one year;
•
The disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and
•
Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
The Company initially measures a disposal group that is classified as held for sale at the lower of its carrying value or fair value less costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized until the date of sale. The Company assesses the fair value of a disposal group less costs to sell each reporting period it remains classified as held for sale and reports any subsequent changes as an adjustment to the carrying value of the disposal group, as long as the new carrying value does not exceed the carrying value of the disposal group at the time it was initially classified as held for sale.
Upon determining that a disposal group meets the criteria to be classified as held for sale, the Company reports the assets and liabilities of the disposal group under Assets held for sale and Liabilities held for sale in the Consolidated Balance Sheets. Refer to Note 15 for further information on the Company’s assets and liabilities held for sale.
Warranty. Provisions for product warranties are recorded in the period in which the related revenue is recognized. The Company accrues warranty reserves using percentages of revenue to reflect the Company’s historical average warranty claims.
Research and Development Costs. Research and development costs are expensed as incurred (with the exception of the capitalized software development costs discussed above). Research and development costs primarily include labor-related costs, contractor fees, and overhead expenses directly related to research and development support.
Pension and Postemployment Benefits. The Company accounts for its pension and postemployment benefit obligations using actuarial models. The measurement of plan obligations was made as of December 31, 2015. Liabilities are computed using the projected unit credit method. The objective under this method is to expense each participant’s benefits under the plan as they accrue, taking into consideration salary increases and the plan’s benefit allocation formula. Thus, the total pension or postemployment benefit to which each participant is expected to become entitled is broken down into units, each associated with a year of past or future credited service.
The Company recognizes the funded status of its pension and postemployment plan obligations in its consolidated balance sheet and records in other comprehensive income certain gains and losses that arise during the period, but are deferred under pension accounting rules.
Foreign Currency. Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment are translated into U.S. dollars at period-end exchange rates. Income and expense accounts are translated at daily exchange rates prevailing during the period. Adjustments arising from the translation are included in accumulated other comprehensive income, a separate component of stockholders’ equity. Gains and losses resulting from foreign currency transactions are included in determining net income.
Income Taxes. Income tax expense is provided based on income before income taxes in the various jurisdictions in which the Company conducts its business. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. These deferred taxes are determined based on the enacted tax rates expected to apply in the periods in which the deferred assets or liabilities are expected to be settled or realized. Teradata recognizes tax benefits from uncertain tax positions only if it is more likely than not the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company records valuation allowances related to its deferred income tax assets when it is more likely than not that some portion or all of the deferred income tax assets will not be realized.
Stock-based Compensation. Stock-based payments to employees, including grants of stock options, restricted shares and restricted share units, are recognized in the financial statements based on their fair value. The fair value of each stock option award on the grant date is estimated using the Black-Scholes option-pricing model with the following assumptions: expected dividend yield, expected stock price volatility, weighted-average risk-free interest rate and weighted average expected term of the options. The Company’s expected volatility assumption used in the Black-Scholes option-pricing model is based on Teradata's historical volatility. Prior to 2014, because the Company did not have a sufficient trading history as a standalone public company, the volatility was based on a blend of peer group volatility and Teradata volatility. The expected term for options granted is based upon historical observation of actual time elapsed between date of grant and exercise of options for all employees. Prior to 2015, the expected term assumption was based on the simplified method under GAAP, which is based on the vesting period and contractual term for each vesting tranche of awards. The mid-point between the vesting date and the expiration date was used as the expected term under this method. The risk-free interest rate used in the Black-Scholes model is based on the implied yield curve available on U.S. Treasury issues at the date of grant with a remaining term equal to the Company’s expected term assumption. The Company has never declared or paid a cash dividend.
Treasury Stock. Prior to the fourth quarter of 2014 when all treasury stock shares were retired, shares of the Company’s common stock repurchased through the share repurchase programs were held as treasury stock. Treasury stock was accounted for using the cost method. Beginning in the fourth quarter of 2014, stock repurchased through the share repurchase programs will be retired upon repurchase. The excess repurchase price over the par value is charged to retained earnings.
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 added from stock options, restricted share awards and other stock awards. Refer to Note 5 for share information on the Company’s stock compensation plans.
The components of basic and diluted earnings per share are as follows: 
 
For the year ended December 31
In millions, except earnings per share
2015
 
2014
 
2013
Net (loss) income attributable to common stockholders
$
(214
)
 
$
367

 
$
377

Weighted average outstanding shares of common stock
139.6

 
155.3

 
163.4

Dilutive effect of employee stock options, restricted shares and other stock awards
—

 
2.5

 
3.0

Common stock and common stock equivalents
139.6

 
157.8

 
166.4

(Loss) earnings per share:
 
 
 
 
 
Basic
$
(1.53
)
 
$
2.36

 
$
2.31

Diluted
$
(1.53
)
 
$
2.33

 
$
2.27


For 2015, due to the net loss attributable to Teradata common stockholders, largely due to the goodwill and acquired intangibles impairment charges, potential common shares that would cause dilution, such as employee stock options, restricted shares and other stock awards, have been excluded from the diluted share count because their effect would have been anti-dilutive. For 2015, the fully diluted shares would have been 141.9 million.
Options to purchase 4.5 million in 2015, 2.4 million shares in 2014 and 0.9 million shares in 2013 of common stock, were not included in the computation of diluted earnings per share because their exercise prices were greater than the average market price of the common shares and, therefore, the effect would have been anti-dilutive.
Recently Issued Accounting Pronouncements
Revenue Recognition. In May 2014, the Financial Accounting Standards Board ("FASB") issued new guidance that affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The new guidance will supersede the revenue recognition requirements in the current revenue recognition guidance, and most industry-specific guidance. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer are amended to be consistent with the guidance on recognition and measurement in this update. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the FASB defines a five step process which includes the following: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation.
In July 2015, the FASB issued a one-year delay in the effective date of the new standard. Under this guidance, the new revenue standard will be effective for annual reporting periods beginning after December 15, 2017, with early application permitted. The standard allows entities to apply the standard retrospectively for all periods presented or alternatively an entity is permitted to recognize the cumulative effect of initially applying the guidance as an opening balance sheet adjustment to retained earnings in the period of initial application. The Company is currently evaluating the impact on its consolidated financial position, results of operations and cash flows, as well as the method of transition that will be used in adopting the standard.
Accounting for Share-based Payments with Performance Targets. In June 2014, the FASB issued new guidance that requires that a performance target that affects vesting and that could be achieved after the requisite service period, be treated as a performance condition. A reporting entity should apply existing guidance as it relates to awards with performance conditions that affect vesting to account for such awards. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which the requisite service has already been rendered. The amendments in this update are effective for annual periods, and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. This amendment is not expected to have a material impact on the Company's consolidated financial statements.
Income Statement Presentation by Eliminating the Concept of Extraordinary Items. This update eliminates from GAAP the concept of extraordinary items. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. This amendment is not expected to have a material impact on the Company's results of operations.
Simplifying the Presentation of Debt Issuance Costs. To simplify presentation of debt issuance costs, the amendments in this update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. For public business entities, the amendments in this update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years and shall be applied on a retrospective basis. Debt issuance costs as of December 31, 2015 were $3 million. The Company plans to adopt this amendment when effective. This amendment is not expected to have a material impact on the Company's consolidated financial position.
Intangibles, Goodwill and Other Internal-Use Software. The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance will not change current guidance for a customer’s accounting for service contracts. This amendment will be effective for annual periods, including interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial position, results of operations and cash flows.
Business Combinations. In September 2015, the FASB issued new guidance that eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively. An acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment. The amendments in this update are effective for annual periods, and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Company does not expect this guidance to have significant impact on its consolidated financial statements.
Financial Instruments. In January 2016, the FASB issued new guidance which enhances the reporting model for financial instruments and related disclosures. This update requires equity securities to be measured at fair value with changes in fair value recognized through net income and will eliminate the cost method for equity securities without readily determinable fair values. The provisions are effective for public entities with fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, in certain circumstances. The Company is currently evaluating the impact of this guidance on its consolidated financial position, results of operations and cash flows.
Recently Adopted Guidance
Income Taxes. In November 2015, the FASB issued new guidance to simplify the presentation of deferred income taxes. The amendments in this update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. For public business entities, the amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has early adopted the new guidance prospectively as of December 31, 2015. As such, we did not restate our December 31, 2014 Balance Sheet. As a result of this adoption, no deferred tax amounts were recorded in other current assets and other current liabilities in 2015, as compared to $28 million recorded in other current assets and $1 million recorded in other current liabilities in 2014.
Supplemental Financial Information
Supplemental Financial Information
Supplemental Financial Information
 
 
At December 31
In millions
2015
 
2014
Accounts receivable
 
 
 
Trade
$
591

 
$
635

Other
6

 
3

Accounts receivable, gross
597

 
638

Less: allowance for doubtful accounts
(17
)
 
(19
)
Total accounts receivable, net
$
580

 
$
619

Inventories
 
 
 
Finished goods
$
32

 
$
21

Service parts
17

 
17

Total inventories
$
49

 
$
38

Other current assets
 
 
 
Current deferred tax assets
$
—

 
$
28

Other
52

 
53

Total other current assets
$
52

 
$
81

Property and equipment
 
 
 
Land
$
8

 
$
8

Buildings and improvements
78

 
77

Machinery and other equipment
336

 
341

Property and equipment, gross
422

 
426

Less: accumulated depreciation
(279
)
 
(267
)
Total property and equipment, net
$
143

 
$
159

Other assets
 
 
 
Available-for-sale securities
$
—

 
$
78

Other
20

 
20

Total other assets
$
20

 
$
98

Other current liabilities
 
 
 
Sales and value-added taxes
$
35

 
$
40

Other
67

 
61

Total other current liabilities
$
102

 
$
101

Deferred revenue
 
 
 
Deferred revenue, current
$
367

 
$
370

Long-term deferred revenue
15

 
18

Total deferred revenue
$
382

 
$
388


Above amounts exclude assets and liabilities held for sale. Refer to Note 15 for further information on the Company's assets and liabilities held for sale.
Goodwill and Acquired Intangible Assets
Goodwill and Acquired Intangible Assets
Goodwill and Acquired Intangible Assets
The following table identifies the activity relating to goodwill by operating segment:
In millions
Balance
December 31,
2014
 
Additions
 
Currency
Translation
Adjustments
 
Impairment
 
Transfers to Held for Sale
 
Balance
December 31,
2015
Goodwill
 
 
 
 
 
 
 
 
 
 
 
Data and Analytics
$
351

 
$
4

 
$
(4
)
 
$
—

 
$
—

 
$
351

Marketing Applications
597

 
—

 
(18
)
 
(437
)
 
(113
)
 
29

Total goodwill
$
948

 
$
4

 
$
(22
)
 
$
(437
)
 
$
(113
)
 
$
380


The changes to goodwill for the year ended December 31, 2015 were due to an impairment of goodwill discussed below, the transfer of goodwill to held for sale (See Note 15), an immaterial complementary acquisition, and changes in foreign currency exchange rates.
The Company reviews goodwill for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate it is more likely than not that the fair value of the reporting unit is less than its carrying amount. The guidance on goodwill impairment requires the Company to perform a step one impairment test, which may result in a second step if the fair value of the reporting unit is less than the carrying value of the net assets. In the first step, the Company compares the fair value of each reporting unit to its carrying value. The Company’s reporting units are at one level below the operating segment level, which include the Americas and International reporting units for the data and analytics and marketing applications operating segments. The Company typically determines the fair value of its reporting units using a weighting of fair values derived from the income approach and the market approach. Under the income approach, the Company calculates the fair value of a reporting unit based on the present value of estimated future cash flows. The market approach estimates fair value based on market multiples of revenue and earnings derived from comparable companies with similar operating and investment characteristics as the reporting unit. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the second step of the impairment test is performed in order to determine the implied fair value of the reporting unit’s goodwill in the same manner as if the reporting unit was being acquired in a business combination. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then the Company records an impairment loss equal to the difference.
During the second quarter of 2015, the Company determined that indicators were present in the marketing applications reporting units which would suggest the fair value of the reporting units may have declined below the carrying value. The indicators were primarily due to lower than forecasted revenue and profitability levels for 2015 and future periods. The lower projected operating results reflect further review and analysis of the marketing applications business performed following the creation of the business as a separate business unit as was announced at the end of the first quarter of 2015. Based on our analysis, the implied fair value of goodwill was substantially lower than the carrying value of goodwill for the Americas and International marketing applications reporting units. As a result, the Company recorded an impairment charge of $241 million for the Americas marketing applications reporting unit and $99 million for the International marketing applications reporting unit during the second quarter of 2015.
For the impairment analysis performed in the second quarter of 2015, the Company utilized a combination of income and market approaches evenly weighted to estimate the fair value of the reporting units for step one. The income approach was determined based on the present value of estimated future cash flows, discounted at a risk-adjusted market rate, including a growth rate to calculate the terminal value. The Company’s forecasted future cash flows, which incorporate anticipated future revenue growth and related expenses to support the growth, were used to calculate fair value. These cash flow projections are based on management’s most current estimates of revenue growth rates and operating margins, taking into consideration historical, industry and market conditions. The discount rate used represents the weighted average cost of capital for the marketing applications reporting units considering the risks and uncertainty inherent in the cash flows of the reporting units and in the internally developed forecasts. In applying the market approach, valuation multiples were derived from historical and projected operating data of selected peer companies and applied to the appropriate historical and projected operating data to arrive at a fair value. The implied fair value of the goodwill in step two was determined by allocating the fair value of the reporting units to all of the assets and liabilities as if the reporting units had been acquired in a business combination and its fair value was the purchase price paid to be acquired. The use of these unobservable inputs resulted in the fair value estimate being classified as a Level 3 measurement.
In the fourth quarter of 2015, the Company committed to a plan to exit the majority of the marketing applications business, which met the criteria for held for sale and will continue to be reported under continuing operations. The Company will retain a portion of the marketing applications business, which was allocated $29 million of goodwill based on the relative fair values of the business to be disposed of and the portion that will be retained. The Company then performed a goodwill impairment analysis on the business to be disposed of along with the remainder reporting units. As a result of this analysis, the Company recognized an additional impairment of $97 million in the fourth quarter of 2015. The fair value of the marketing applications business that will be disposed of was based on a review of indications of interest received from potential buyers and determined based on the best estimate of what the actual sales price will be. The Company believes that this is a better indication of fair value than the income and market approaches used in the interim analysis performed in the second quarter of 2015. The remaining goodwill of $113 million was then transferred to assets held for sale in the Consolidated Balance Sheets. There was no goodwill impairment for the remaining reporting units as the fair value of each reporting unit exceeded their respective carrying amounts.
The determination of whether or not goodwill is impaired involves a significant level of judgment in the assumptions underlying the approaches used to determine the estimated fair value of our reporting units. The Company believes that the assumptions and rates used in the impairment assessment are reasonable. However, these assumptions are judgmental and variations in any assumptions could result in materially different calculations of fair value. The Company will continue to evaluate goodwill on an annual basis as of the beginning of its fourth quarter, and whenever events or changes in circumstances, such as significant adverse changes in operating results, market conditions or changes in management’s business strategy, indicate that there may be a probability of impairment. It is possible that the assumptions used by management related to the evaluation may change or that actual results may vary significantly from management’s estimates. As a result, additional impairment charges may occur in the future.
Acquired intangible assets were specifically identified when acquired, and are deemed to have finite lives. The gross carrying amount and accumulated amortization for Teradata’s acquired intangible assets were as follows: 
 
 
 
December 31, 2015
 
December 31, 2014
In millions
Amortization
Life (in Years)
 
Gross 
Carrying Amount
 
Accumulated
Amortization
and Currency
Translation
Adjustments
 
Gross
 Carrying
Amount
 
Accumulated
Amortization
and Currency
Translation
Adjustments
Acquired intangible assets
 
 
 
 
 
 
 
 
 
Intellectual property/developed technology
1 to 7
 
$
83

 
$
(63
)
 
$
186

 
$
(95
)
Customer relationships
3 to 10
 
3

 
(3
)
 
77

 
(35
)
Trademarks/trade names
5
 
1

 
(1
)
 
1

 
(1
)
In-process research and development
5
 
5

 
(3
)
 
5

 
(2
)
Total
 
 
$
92

 
$
(70
)
 
$
269

 
$
(133
)

The decrease in gross carrying amount of acquired intangible assets was primarily due to a transfer of intangibles to held for sale of $190 million ($85 million net), partially offset by $10 million for newly acquired intangible assets associated with an immaterial acquisition. The $85 million transferred to held for sale was then reduced by an additional $41 million to adjust the carrying amount of the net assets and liabilities down to their fair value less cost to sell (See Note 15).
The aggregate amortization expense (actual and estimated) for acquired intangible assets for the following periods is:
 
Actual
 
For the year ended (estimated)
In millions
2013
 
2014
 
2015
 
2016
 
2017
 
2018
 
2019
 
2020
Amortization expense
$
44

 
$
47

 
$
40

 
$
10

 
$
7

 
$
3

 
$
2

 
$
—

Income Taxes
Income Taxes
Income Taxes
For the years ended December 31, (loss) income before income taxes consisted of the following: 
In millions
2015
 
2014
 
2013
(Loss) income before income taxes
 
 
 
 
 
United States
$
(88
)
 
$
301

 
$
362

Foreign
(56
)
 
193

 
146

Total (loss) income before income taxes
$
(144
)
 
$
494

 
$
508


For the years ended December 31, income tax expense consisted of the following: 
In millions
2015
 
2014
 
2013
Income tax expense
 
 
 
 
 
Current
 
 
 
 
 
Federal
$
74

 
$
94

 
$
78

State and local
9

 
8

 
10

Foreign
26

 
27

 
26

Deferred
 
 
 
 
 
Federal
(19
)
 
1

 
18

State and local
(3
)
 
—

 
2

Foreign
(17
)
 
(3
)
 
(3
)
Total income tax expense
$
70

 
$
127

 
$
131

Effective tax rate
(48.6
%)
 
25.7
%
 
25.8
%


The following table presents the principal components of the difference between the effective tax rate and the U.S. federal statutory income tax rate for the years ended December 31:
 
2015
 
2014
 
2013
Income tax expense at the U.S. federal tax rate
35.0
%
 
35.0
%
 
35.0
%
Foreign income tax differential
14.0
%
 
(9.0
%)
 
(7.3
%)
State and local income taxes
0.5
%
 
0.5
%
 
0.4
%
U.S. permanent book/tax differences
3.1
%
 
0.4
%
 
0.5
%
U.S. manufacturing deduction
5.5
%
 
(2.1
%)
 
(2.1
%)
Impairment of goodwill and acquired intangibles
(100.1
%)
 
—
%
 
—
%
Other, net
(6.6
%)
 
0.9
%
 
(0.7
%)
Effective tax rate
(48.6
%)
 
25.7
%
 
25.8
%


The 2015 effective tax rate includes a discrete tax expense of $145 million resulting from the $437 million goodwill impairment, of which $414 million is related to non-deductible goodwill. In addition to the goodwill impairment, the higher 2015 effective tax rate as compared to 2014 was also driven by the lower foreign earnings mix in 2015 versus 2014. The 2014 effective tax had no material discrete tax items impacting the effective tax rate. 

Deferred income tax assets and liabilities included in the balance sheets at December 31 were as follows:
In millions
2015
 
2014
Deferred income tax assets
 
 
 
Employee pensions and other liabilities
$
62

 
$
61

Other balance sheet reserves and allowances
23

 
22

Tax loss and credit carryforwards
62

 
59

Deferred revenue
3

 
—

Total deferred income tax assets
150

 
142

Valuation allowance
(25
)
 
(20
)
Net deferred income tax assets
125

 
122

Deferred income tax liabilities
 
 
 
Intangibles and capitalized software
81

 
102

Property and equipment
30

 
29

Deferred revenue
—

 
17

Other
1

 
12

Total deferred income tax liabilities
112

 
160

Total net deferred income tax assets (liabilities)
$
13

 
$
(38
)

As of December 31, 2015, Teradata has net operating loss ("NOL") and tax credit carryforwards totaling $73 million (tax effected and before any valuation allowance offset and application of recognition criteria for uncertain tax positions). Of the total tax carryforwards, $26 million are NOL's in the U.S. and certain foreign jurisdictions, a small portion of which will begin to expire in 2016; $36 million are R&D tax credits, of which almost 90 percent are California R&D tax credits that have an indefinite carryforward period (which has a $25 million valuation allowance offset recorded); and the remaining $11 million are tax attributes that were acquired from various acquisitions and were not recorded for financial reporting purposes as they did not meet the recognition criteria for uncertain tax positions.
The Company’s intention is to permanently reinvest its foreign earnings outside of the U.S. As a result, the effective tax rates in the periods presented are largely based upon the pre-tax earnings mix and allocation of certain expenses in various taxing jurisdictions where the Company conducts its business; these jurisdictions apply a broad range of statutory income tax rates. At December 31, 2015, the Company had not provided for federal income taxes on earnings of approximately $1.2 billion from its foreign subsidiaries. Should these earnings be distributed in the form of dividends or otherwise, the Company would be subject to U.S. income taxes and potential withholding taxes in various international jurisdictions. The U.S. taxes would be partially offset by U.S. foreign tax credits. Determination of the amount of unrecognized deferred U.S. tax liability is not practical because of the complexities associated with this hypothetical calculation.
The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company reflects any interest and penalties recorded in connection with its uncertain tax positions as a component of income tax expense.
As of December 31, 2015, the Company’s uncertain tax positions totaled approximately $38 million, of which $20 million is reflected in the other liabilities section of the Company’s balance sheet as a non-current liability, and $3 million is recorded in current income taxes payable as the Company expects to settle this uncertain tax position within the next twelve months. The remaining balance of $15 million of uncertain tax positions relates to certain tax attributes both generated by the Company and acquired in various acquisitions, which are netted against the underlying deferred tax assets recorded on the balance sheet. The entire balance of $38 million in uncertain tax positions would cause a decrease in the effective income tax rate upon recognition. Teradata has recorded $2 million of interest accruals related to its uncertain tax liabilities as of December 31, 2015.
Below is a rollforward of the Company’s liability related to uncertain tax positions at December 31:
In millions
2015
 
2014
Balance at January 1
$
36

 
$
34

Gross increases for prior period tax positions
—

 
4

Gross decreases for prior period tax positions
—

 
(3
)
Gross increases for current period tax positions
6

 
4

Decreases due to the lapse of applicable statute of limitations
(1
)
 
(3
)
Decreases relating to settlements with taxing authorities
(3
)
 
—

Balance at December 31
$
38

 
$
36


The Company and its subsidiaries file income tax returns in the U.S. federal and various state jurisdictions, as well as numerous foreign jurisdictions. As of December 31, 2015, the Company has ongoing tax audits in a limited number of state and foreign jurisdictions; however, no material adjustments have been proposed or made in any of these examinations to date which would result in any incremental income tax expense in future periods to the company. In addition, the Internal Revenue Service audit of the Company’s United States Federal tax filing for tax year 2011 was finalized in July of 2014 and resulted in a no change audit.
Employee Stock-based Compensation Plans
Employee Stock-based Compensation Plans
Employee Stock-based Compensation Plans
The Company recorded stock-based compensation expense for the years ended December 31 as follows: 
In millions
2015
 
2014
 
2013
Stock options
$
12

 
$
13

 
$
14

Restricted shares
41

 
33

 
32

Employee share repurchase program
3

 
4

 
3

Total stock-based compensation before income taxes
56

 
50

 
49

Tax benefit
(17
)
 
(16
)
 
(16
)
Total stock-based compensation, net of tax
$
39

 
$
34

 
$
33


The Teradata Corporation 2007 Stock Incentive Plan (the “2007 SIP”), as amended, and the Teradata 2012 Stock Incentive Plan (the “2012 SIP”) provide for the grant of several different forms of stock-based compensation. The 2012 SIP was adopted and approved by stockholders in April 2012 and no further awards may be made under the 2007 SIP after that time. A total of approximately 16.4 million shares were authorized to be issued under the 2012 SIP. New shares of the Company’s common stock are issued as a result of the vesting of restricted share units and stock option exercises, and at the time of grant for restricted shares, for awards under both plans.
As of December 31, 2015, the Company’s primary types of stock-based compensation were stock options, restricted shares, restricted share units and the employee stock purchase program (the “ESPP”).
Stock Options
The Compensation and Human Resource Committee of Teradata’s Board of Directors has discretion to determine the material terms and conditions of option awards under both the 2007 SIP and the 2012 SIP (collectively, the “Teradata SIP”), provided that (i) the exercise price must be no less than the fair market value of Teradata common stock (as defined in both plans) on the date of grant, and (ii) the term must be no longer than ten years. Option grants generally have a four-year vesting period.
The weighted-average fair value of options granted for Teradata equity awards was $11.37 in 2015, $17.67 in 2014 and $18.02 in 2013. The fair value of each option award on the grant date was estimated using the Black-Scholes option-pricing model with the following assumptions:
 
2015
 
2014
 
2013
Dividend yield
—
%
 
—
%
 
—
%
Risk-free interest rate
1.76
%
 
1.73
%
 
1.77
%
Expected volatility
34.4
%
 
37.8
%
 
37.6
%
Expected term (years)
6.3

 
6.3

 
6.3


The following table summarizes the Company’s stock option activity for the year ended December 31, 2015: 
Shares in thousands
Shares
Under
Option
 
Weighted-
Average
Exercise
Price per
Share
 
Weighted-
Average
Remaining
Contractual
Term (in
years)
 
Aggregate
Intrinsic
Value (in
millions)
Outstanding at January 1, 2015
7,237

 
$
35.50

 
6.1
 
$
78

Granted
1,185

 
$
30.63

 
 
 
 
Exercised
(428
)
 
$
20.66

 
 
 
 
Canceled
(134
)
 
$
46.18

 
 
 
 
Forfeited
(286
)
 
$
48.12

 
 
 
 
Outstanding at December 31, 2015
7,574

 
$
34.91

 
5.7
 
$
20

Fully vested and expected to vest at December 31, 2015
7,476

 
$
34.89

 
5.6
 
$
20

Exercisable at December 31, 2015
5,299

 
$
33.43

 
4.2
 
$
20


The following table summarizes the total intrinsic value of options exercised and the cash received by the Company from option exercises under all share-based payment arrangements at December 31:
In millions
2015
 
2014
 
2013
Intrinsic value of options exercised
$
8

 
$
14

 
$
19

Cash received from option exercises
$
9

 
$
11

 
$
9

Tax benefit realized from option exercises
$
3

 
$
5

 
$
6


As of December 31, 2015, there was $30 million of total unrecognized compensation cost related to unvested stock option grants. That cost is expected to be recognized over a weighted-average period of 3.0 years.
Restricted Shares and Restricted Share Units
The Teradata SIP provides for the issuance of restricted shares, as well as restricted share units. These grants consist of both service-based and performance-based awards. Service-based awards typically vest over a three year period beginning on the effective date of grant. These grants are not subject to future performance measures. The cost of these awards, determined to be the fair market value at the date of grant, is expensed ratably over the vesting period. For substantially all restricted share grants, at the date of grant, the recipient has all rights of a stockholder, subject to certain restrictions on transferability and a risk of forfeiture. A recipient of restricted share units does not have the rights of a stockholder and is subject to restrictions on transferability and risk of forfeiture. For both restricted share grants and restricted share units, any potential dividend rights would be subject to the same vesting requirements as the underlying equity award. As a result, such rights are considered a contingent transfer of value and consequently these equity awards are not considered participating securities. Performance-based grants are subject to future performance measurements over a one-to four-year period. All performance-based shares that are earned in respect of an award will become vested at the end of the performance and/or service period provided the employee is continuously employed by the Company and applicable performance measures and other vesting conditions are met. The fair value of each performance-based award is determined on the grant date, based on the Company’s stock price, and assumes that performance targets will be achieved. Over the performance period, the number of shares of stock that will be issued is adjusted upward or downward based upon management’s assessment of the probability of achievement of performance targets. The ultimate number of shares issued and the related compensation cost recognized as expense will be based on a comparison of the final achievement of performance metrics to the specified targets.
The following table reports restricted shares and restricted share unit activity during the year ended December 31, 2015:
Shares in thousands
Number of
Shares
 
Weighted-
Average 
Grant
Date Fair
 Value
per Share
Unvested shares at January 1, 2015
3,252

 
$
47.24

Granted
2,118

 
$
32.82

Vested
(832
)
 
$
54.60

Forfeited/canceled
(392
)
 
$
45.34

Unvested shares at December 31, 2015
4,146

 
$
38.58


The following table summarizes the weighted-average fair value of restricted share units granted for Teradata equity awards and the total fair value of shares vested at December 31:
 
2015
 
2014
 
2013
Weighted-average fair value of restricted share units granted
$
32.82

 
$
44.39

 
$
48.24

Total fair value of shares vested (in millions)
$
45

 
$
27

 
$
30


As of December 31, 2015, there was $96 million of unrecognized compensation cost related to unvested restricted share grants. The unrecognized compensation cost is expected to be recognized over a remaining weighted-average period of 2.4 years.
The following table represents the composition of Teradata restricted share unit grants in 2015: 
Shares in thousands
Number of
Shares
 
Weighted-
Average 
Grant
Date Fair 
Value
Service-based shares
2,055

 
$
32.68

Performance-based shares
63

 
$
37.36

Total stock grants
2,118

 
$
32.82


In 2012, approximately 0.3 million shares of the performance awards issued included challenging or “stretch” financial goals through 2016 based on a GAAP revenue and/or non-GAAP earnings per share targets in 2016. Each recipient’s opportunity to earn the award is based on performance over a four-year period ending in 2016. There was no compensation expense related to these awards recorded in 2015 based on management’s determination that at December 31, 2015 it was not probable that performance targets for these awards would be achieved.
In February of 2016, restricted share units granted as part of our 2015-16 long-term incentive program for certain corporate officers and key executives will be earned based on Teradata's total shareholder return ("TSR") over a three-year performance period relative to the other companies in the S&P 1500 Technology Index. The number of shares actually issued, as a percentage of the amount subject to the performance share award, could range from 0% to 200%. The grant date fair value of the non-vested performance-based awards was determined through the use of a Monte Carlo simulation model, which utilized multiple input variables that determined the probability of satisfying the market condition requirements applicable to each award.The compensation expense for the award will be recognized as long as the requisite service is rendered, regardless of whether the market conditions are achieved.
Modifications In connection with the plan to exit most of the marketing applications business, the Company modified its awards for certain impacted employees to accelerate the vesting of any unvested awards at the date of sale. This modification resulted in a Type III modification (improbable to probable). In addition, a modification to extend the exercise period of all vested options from 59 days to one year resulted in a Type I modification (probable to probable). Related to the awards that were modified, the Company recognized a net reduction in compensation expense of $1 million in the fourth quarter of 2015.
Employee Stock Purchase Program
The Company’s ESPP, effective on October 1, 2007, and as amended effective as of January 1, 2013, provides eligible employees of Teradata and its designated subsidiaries an opportunity to purchase the Company’s common stock at a discount to the average of the highest and lowest sale prices on the last trading day of each month. As of January 1, 2013, the ESPP discount was 15% of the average market price and considered compensatory. Prior to 2013, the ESPP discount was 5% of the average market price and this plan was considered non-compensatory.
Employees may authorize payroll deductions of up to 10% of eligible compensation for common stock purchases. A total of 4 million shares were authorized to be issued under the ESPP, with approximately 1.4 million shares remaining under that authorization at December 31, 2015. The shares of Teradata common stock purchased by a participant on an exercise date (the last day of each month), for all purposes, are deemed to have been issued and sold at the close of business on such exercise date. Prior to that time, none of the rights or privileges of a stockholder exists with respect to such shares. Employee purchases and aggregate cost were as follows at December 31:
In millions
2015
 
2014
 
2013
Employee share purchases
0.5

 
0.4

 
0.4

Aggregate cost
$
17

 
$
18

 
$
20

Employee Benefit Plans
Employee Benefit Plan
Employee Benefit Plans
Pension and Postemployment Plans. Teradata currently sponsors defined benefit pension plans for certain of its international employees. For those international pension plans for which the Company holds asset balances, those assets are primarily invested in common/collective trust funds (which include publicly traded common stocks, corporate and government debt securities, real estate indirect investments, cash or cash equivalents) and insurance contracts.
Postemployment obligations relate to benefits provided to involuntarily terminated employees and certain inactive employees after employment but before retirement. These benefits are paid in accordance with various foreign statutory laws and regulations, and Teradata’s established postemployment benefit practices and policies. Postemployment benefits may include disability benefits, supplemental unemployment benefits, severance, workers’ compensation benefits, continuation of health care benefits and life insurance coverage, and are funded on a pay-as-you-go basis.
During the fourth quarter of 2015, the Company amended it U.S. separation plan to eliminate the accumulation of postemployment benefits based on service, resulting in an immaterial curtailment benefit. As a result of this change, postemployment benefits for the U.S. will no longer be accounted for using actuarial models.
Pension and postemployment benefit costs for the years ended December 31 were as follows: 
 
2015
 
2014
 
2013
In millions
Pension
 
Postemployment
 
Pension
 
Postemployment
 
Pension
 
Postemployment
Service cost
$
8

 
$
6

 
$
9

 
$
4

 
$
8

 
$
3

Interest cost
3

 
1

 
4

 
1

 
4

 
1

Expected return on plan assets
(2
)
 
—

 
(2
)
 
—

 
(2
)
 
—

Settlement charge
1

 
—

 
1

 
—

 
1

 
—

Amortization of actuarial loss (gain)
2

 
—

 
2

 
(1
)
 
2

 
(1
)
Amortization of prior service credit
—

 
—

 
(1
)
 
—

 
—

 
—

Total costs
$
12

 
$
7

 
$
13

 
$
4

 
$
13

 
$
3


The underfunded amount of pension and postemployment obligations is recorded as a liability in the Company’s consolidated balance sheet. The following tables present the changes in benefit obligations, plan assets, funded status and the reconciliation of the funded status to amounts recognized in the consolidated balance sheets and in accumulated other comprehensive income at December 31:
 
Pension
 
Postemployment
In millions
2015
 
2014
 
2015
 
2014
Change in benefit obligation
 
 
 
 
 
 
 
Benefit obligation at January 1
$
130

 
$
129

 
$
39

 
$
27

Service cost
8

 
9

 
6

 
4

Interest cost
3

 
4

 
1

 
1

Plan participant contributions
1

 
1

 
—

 
—

Actuarial (gain) loss
(9
)
 
18

 
20

 
19

Benefits paid
(9
)
 
(19
)
 
(15
)
 
(11
)
Currency translation adjustments
(9
)
 
(15
)
 
(2
)
 
(1
)
New plans
—

 
3

 
—

 
—

Benefit obligation at December 31
115

 
130

 
49

 
39

Change in plan assets
 
 
 
 
 
 
 
Fair value of plan assets at January 1
$
67

 
$
76

 
$
—

 
$
—

Actual return on plan assets
1

 
7

 
—

 
—

Company contributions
5

 
8

 
—

 
—

Benefits paid
(9
)
 
(19
)
 
—

 
—

Currency translation adjustments
(2
)
 
(7
)
 
—

 
—

Plan participant contribution
1

 
1

 
—

 
—

New plans
—

 
1

 
—

 
—

Fair value of plan assets at December 31
63

 
67

 
—

 
—

Funded status (underfunded)
$
(52
)
 
$
(63
)
 
$
(49
)
 
$
(39
)
Amounts Recognized in the Balance Sheet
 
 
 
 
 
 
 
Non-current assets
$
5

 
$
4

 
$
—

 
$
—

Current liabilities
(1
)
 
(1
)
 
(16
)
 
(5
)
Non-current liabilities
(56
)
 
(66
)
 
(33
)
 
(34
)
Net amounts recognized
$
(52
)
 
$
(63
)
 
$
(49
)
 
$
(39
)
Amounts Recognized in Accumulated Other Comprehensive Income
 
 
 
 
 
 
 
Unrecognized Net actuarial loss
$
19

 
$
33

 
$
23

 
$
6

Unrecognized Prior service (credit) cost
(1
)
 
—

 
2

 
1

Total
$
18

 
$
33

 
$
25

 
$
7



The following table presents the accumulated pension benefit obligation at December 31:
In millions
2015
 
2014
Accumulated pension benefit obligation
$
106

 
$
118


The following table presents pension plans with accumulated benefit obligations in excess of plan assets at December 31:
In millions
2015
 
2014
Projected benefit obligation
$
58

 
$
69

Accumulated benefit obligation
$
50

 
$
61

Fair value of plan assets
$
—

 
$
3


The following table presents the pre-tax net changes in projected benefit obligations recognized in other comprehensive income during 2015 and 2014: 
 
Pension
 
Postemployment
In millions
2015
 
2014
 
2015
 
2014
Actuarial (gain) loss arising during the year
$
(9
)
 
$
14

 
$
18

 
$
18

Amortization of (loss) gain included in net periodic benefit cost
(2
)
 
(2
)
 
—

 
1

Prior service cost arising during the year
—

 
1

 
—

 
—

Recognition of loss due to settlement
(1
)
 
(1
)
 
—

 
—

Foreign currency exchange
—

 
(3
)
 
—

 
—

Total recognized in other comprehensive (loss) income
$
(12
)
 
$
9

 
$
18

 
$
19



The following table presents the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost during 2016: 
In millions
Pension
 
Postemployment
Net loss to be recognized in other comprehensive income
$
3

 
$
—


The weighted-average rates and assumptions used to determine benefit obligations at December 31, and net periodic benefit cost for the years ended December 31, were as follows: 
 
Pension Benefit Obligations
 
Pension Benefit Cost
 
2015
 
2014
 
2015
 
2014
 
2013
Discount rate
2.4%
 
2.3%
 
2.3%
 
3.0%
 
3.0%
Rate of compensation increase
3.2%
 
3.3%
 
3.3%
 
3.2%
 
3.3%
Expected return on plan assets
N/A
 
N/A
 
3.3%
 
3.4%
 
3.4%
 
Postemployment 
Benefit Obligations
 
Postemployment 
Benefit Cost
 
2015
 
2014
 
2015
 
2014
 
2013
Discount rate
3.6%
 
3.5%
 
3.5%
 
3.8%
 
3.4%
Rate of compensation increase
3.0%
 
3.0%
 
3.0%
 
3.7%
 
3.8%
Involuntary turnover rate
1.8%
 
1.3%
 
1.3%
 
1.0%
 
1.0%

The Company determines the expected return on assets based on individual plan asset allocations, historical capital market returns, and long-term interest rate assumptions, with input from its actuaries, investment managers, and independent investment advisors. The company emphasizes long-term expectations in its evaluation of return factors, discounting or ignoring short-term market fluctuations. Expected asset returns are reviewed annually, but are generally modified only when asset allocation strategies change or long-term economic trends are identified.
The discount rate used to determine year-end 2015 U.S. benefit obligations was derived by matching the plans’ expected future cash flows to the corresponding yields from the Citigroup Pension Liability Index. This yield curve has been constructed to represent the available yields on high-quality fixed-income investments across a broad range of future maturities. International discount rates were determined by examining interest rate levels and trends within each country, particularly yields on high-quality long-term corporate bonds, relative to our future expected cash flows.
Gains and losses have resulted from changes in actuarial assumptions and from differences between assumed and actual experience, including, among other items, changes in discount rates and differences between actual and assumed asset returns. These gains and losses (except those differences being amortized to the market-related value) are only amortized to the extent that they exceed 10% of the higher of the market-related value of plan assets or the projected benefit obligation of each respective plan.
Plan Assets. The weighted-average asset allocations at December 31, by asset category are as follows: 
 
Actual Asset Allocation
As of December 31
 
Target Asset Allocation
 
2015
 
2014
 
Equity securities
31
%
 
32
%
 
31
%
Debt securities
43
%
 
41
%
 
47
%
Insurance (annuity) contracts
16
%
 
17
%
 
16
%
Real estate
6
%
 
5
%
 
3
%
Other
4
%
 
5
%
 
3
%
Total
100
%
 
100
%
 
100
%

Fair Value. Fair value measurements are established utilizing a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are more fully described in Note 9.
The following is a description of the valuation methodologies used for pension assets as of December 31, 2015.
Common/collective trust funds (which include money market funds, equity funds, bond funds, real-estate indirect investments, etc.): Valued at the net asset value (“NAV”) of shares held by the Plan at year end, as reported to the Plan by the trustee, which represents the fair value of shares held by the Plan. Because the NAV of the shares held in the common/collective trust funds are derived by the value of the underlying investments, the Company has classified these underlying investments as Level 2 fair value measurements.
Insurance contracts: Valued by discounting the related future benefit payments using a current year-end market discount rate, which represents the fair value of the insurance contract. The Company has classified these contracts as Level 3 assets for fair value measurement purposes.
The following table sets forth by level, within the fair value hierarchy, the pension plan assets at fair value as of December 31, 2015: 
 
 
 
Fair Value Measurements at Reporting Date Using
 
 
 
Quoted Prices in Active Markets
for Identical
Assets
 
Significant
Other
Observable
Inputs
 
Significant
Unobservable
Inputs
In millions
December 31, 2015
 
(Level 1)
 
(Level 2)
 
(Level 3)
Money market funds
$
3

 
$
—

 
$
3

 
$
—

Equity funds
19

 
—

 
19

 
—

Bond/fixed-income funds
27

 
—

 
27

 
—

Real-estate indirect investments
4

 
—

 
4

 
—

Insurance contracts
10

 
—

 
—

 
10

Total Assets at fair value
$
63

 
$
—

 
$
53

 
$
10



The table below sets forth a summary of changes in the fair value of the pension plan level 3 assets for the year ended December 31, 2015:
In millions
Insurance
Contracts
Balance as of January 1, 2015
$
11

Purchases, sales and settlements, net
(1
)
Balance as of December 31, 2015
$
10


The following table sets forth by level, within the fair value hierarchy, the pension plan assets at fair value as of December 31, 2014: 
 
 
 
Fair Value Measurements at Reporting Date Using
 
 
 
Quoted Prices in Active 
Markets
for Identical
Assets
 
Significant
Other
Observable
Inputs
 
Significant
Unobservable
Inputs
In millions
December 31, 2014
 
(Level 1)
 
(Level 2)
 
(Level 3)
Money market funds
$
2

 
$
—

 
$
2

 
$
—

Equity funds
21

 
—

 
21

 
—

Bond/fixed-income funds
28

 
—

 
28

 
—

Real-estate indirect investments
4

 
—

 
4

 
—

Commodities/Other
1

 
—

 
1

 
—

Insurance contracts
11

 
—

 
—

 
11

Total Assets at fair value
$
67

 
$
—

 
$
56

 
$
11


The table below sets forth a summary of changes in the fair value of the pension plan level 3 assets for the year ended December 31, 2014:
In millions
Insurance
Contracts
Balance as of January 1, 2014
$
10

Purchases, sales and settlements, net
1

Balance as of December 31, 2014
$
11


Investment Strategy. Teradata employs a number of investment strategies across its various international pension plans. In some countries, particularly where Teradata does not have a large employee base, the Company may use insurance (annuity) contracts to satisfy its future pension payment obligations, whereby the Company makes pension plan contributions to an insurance company in exchange for which the pension plan benefits will be paid when the members reach a specified retirement age or on earlier exit of members from the plan. In other countries, the Company may employ local asset managers to manage investment portfolios according to the investment policies and guidelines established by the Company, and with consideration to individual plan liability structure and local market environment and risk tolerances. The Company’s investment policies and guidelines primarily emphasize diversification across and within asset classes to maximize long-term returns subject to prudent levels of risk, with the overall objective of enabling the plans to meet their future obligations. The investment portfolios contain a diversified blend of equity and fixed-income investments. Furthermore, equity investments are diversified across domestic and international stocks, small and large capitalization stocks, and growth and value stocks. Fixed-income assets are diversified across government and corporate bonds. Where applicable, real estate investments are made through real estate securities, partnership interests or direct investment, and are diversified by property type and location.
Cash Flows Related to Employee Benefit Plans
Cash Contributions. The Company expects to contribute approximately $5 million to the international pension plans, in 2016.
Estimated Future Benefit Payments. The Company expects to make the following benefit payments reflecting past and future service from its pension and postemployment plans: 
 
Pension Benefits
 
Postemployment Benefits
In millions
 
Year
 
 
 
2016
$
4

 
$
16

2017
$
5

 
$
5

2018
$
5

 
$
5

2019
$
4

 
$
5

2020
$
4

 
$
5

2021-2025
$
27

 
$
23


Savings Plans. U.S. employees and many international employees participate in defined contribution savings plans. These plans generally provide either a specified percent of pay or a matching contribution on participating employees’ voluntary elections. The Company’s matching contributions typically are subject to a maximum percentage or level of compensation. Employee contributions can be made pre-tax, after-tax or a combination thereof. The following table identifies the expense for the U.S and International subsidiary savings plans for the years ended December 31:
In millions
2015
 
2014
 
2013
U.S. savings plan
$
22

 
$
23

 
$
23

International subsidiary savings plans
$
18

 
$
18

 
$
17

Derivative Instruments and Hedging Activities
Derivative Instruments and Hedging Activities
Derivative Instruments and Hedging Activities
As a portion of the Company’s operations and revenue occur outside the United States 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 Company does not hold or issue derivative financial instruments for trading purposes, nor does it hold or issue leveraged derivative instruments. By using derivative financial instruments to hedge exposures to changes in exchange rates, the Company exposes itself to credit risk. The Company manages exposure to counterparty credit risk by entering into derivative financial instruments with highly rated institutions that can be expected to fully perform under the terms of the applicable contracts.
All derivatives are recognized in the Consolidated Balance Sheets at their fair value. The fair values of foreign exchange contracts are based on market spot and forward exchange rates and represent estimates of possible value that may not be realized in the future. Changes in the fair value of derivative financial instruments, along with the loss or gain on the hedged asset or liability, are recorded in current period earnings. The notional amounts represent agreed-upon amounts on which calculations of dollars to be exchanged are based, and are an indication of the extent of Teradata’s involvement in such instruments. These notional amounts do not represent amounts exchanged by the parties and, therefore, are not a measure of the instruments. Across its portfolio of contracts, Teradata has both long and short positions relative to the U.S. dollar. As a result, Teradata’s net involvement is less than the total contract notional amount of the Company’s foreign exchange forward contracts.
The following table identifies the contract notional amount of the Company’s foreign exchange forward contracts at December 31:
In millions
2015
 
2014
Contract notional amount of foreign exchange forward contracts
$
138

 
$
116

Net contract notional amount of foreign exchange forward contracts
$
25

 
$
17


The fair value derivative assets and liabilities recorded in other current assets and accrued liabilities at December 31, 2015 and 2014, were not material.
Gains and losses from the Company’s fair value hedges (foreign currency forward contracts and related hedged items) were immaterial for the years ended December 31, 2015, 2014 and 2013. Gains and losses from foreign exchange forward contracts are fully recognized each period and reported along with the offsetting gain or loss of the related hedged item, either in cost of products or in other income, depending on the nature of the related hedged item.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
In the normal course of business, the Company is subject to proceedings, lawsuits, governmental investigations, claims and other matters, including those that relate to the environment, health and safety, employee benefits, export compliance, intellectual property, tax matters, and other regulatory compliance and general matters.
Guarantees and Product Warranties.
Guarantees associated with the Company’s business activities are reviewed for appropriateness and impact to the Company’s financial statements. Periodically, the Company’s customers enter into various leasing arrangements coordinated with a leasing company. In some instances, the Company guarantees the leasing company a minimum value at the end of the lease term on the leased equipment. As of December 31, 2015, the maximum future payment obligation of this guaranteed value and the associated liability balance was $3 million.
The Company provides its customers a standard manufacturer’s warranty and records, at the time of the sale, a corresponding estimated liability for potential warranty costs. Estimated future obligations due to warranty claims are based upon historical factors such as labor rates, average repair time, travel time, number of service calls and cost of replacement parts. For each consummated sale, the Company recognizes the total customer revenue and records the associated warranty liability using pre-established warranty percentages for that product class.
The following table identifies the activity relating to the warranty reserve liability for the years ended December 31: 
In millions
2015
 
2014
 
2013
Beginning balance at January 1
$
7

 
$
8

 
$
8

Accruals for warranties issued
9

 
16

 
15

Settlements (in cash or kind)
(10
)
 
(17
)
 
(15
)
Balance at end of period
$
6

 
$
7

 
$
8


The Company also offers extended and/or enhanced coverage to its customers in the form of maintenance contracts. The Company accounts for these contracts by deferring the related maintenance revenue over the extended and/or enhanced coverage period. Costs associated with maintenance support are expensed as incurred. Amounts associated with these maintenance contracts are not included in the table above.
In addition, the Company provides its customers with certain indemnification rights. In general, the Company agrees to indemnify the customer if a third party asserts patent or other infringement on the part of the customer for its use of the Company’s products. The Company has indemnification obligations under its charter and bylaws to its officers and directors, and has entered into indemnification agreements with the officers and directors of its subsidiaries. From time to time, the Company also enters into agreements in connection with its acquisition and divesture activities that include indemnification obligations by the Company. The fair value of these indemnification obligations is 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, and as such the Company has not recorded a liability in connection with these indemnification arrangements. Historically, payments made by the Company under these types of agreements have not had a material effect on the Company’s consolidated financial condition, results of operations or cash flows.
Leases. Teradata conducts certain of its sales and administrative operations using leased facilities, the initial lease terms of which vary in length. Many of the leases contain renewal options and escalation clauses that are not material to the overall lease portfolio. Future minimum operating lease payments and committed subleases under non-cancelable leases as of December 31, 2015, for the following fiscal years were: 
 
Total
 
 
 
 
 
 
 
 
 
 
In millions
Amounts
 
2016
 
2017
 
2018
 
2019
 
2020
Operating lease obligations
$
70

 
$
24

 
$
19

 
$
15

 
$
7

 
$
5

Sublease rentals
(5
)
 
(3
)
 
(2
)
 
—

 
—

 
—

Total committed operating leases less sublease rentals
$
65

 
$
21

 
$
17

 
$
15

 
$
7

 
$
5


The following table represents the Company’s actual rental expense and sublease rental income for the years ended December 31:
In millions
2015
 
2014
 
2013
Rental expense
$
26

 
$
26

 
$
26

Sublease rental income
$
3

 
$
3

 
$
3


The Company had no contingent rentals for these periods.
Concentrations of Risk. The Company is potentially subject to concentrations of credit risk on accounts receivable and financial instruments such as hedging instruments, and cash and cash equivalents. Credit risk includes the risk of nonperformance by counterparties. The maximum potential loss may exceed the amount recognized on the balance sheet. Exposure to credit risk is managed through credit approvals, credit limits, selecting major international financial institutions (as counterparties to hedging transactions) and monitoring procedures. Teradata’s business often involves large transactions with customers, and if one or more of those customers were to default in its obligations under applicable contractual arrangements, the Company could be exposed to potentially significant losses. However, management believes that the reserves for potential losses were adequate at December 31, 2015 and 2014.
The Company is also potentially subject to concentrations of supplier risk. Our hardware components are assembled exclusively by Flextronics International Ltd. (“Flextronics”). Flextronics procures a wide variety of components used in the manufacturing process on our behalf. Although many of these components are available from multiple sources, Teradata utilizes preferred supplier relationships to better ensure more consistent quality, cost and delivery. Typically, these preferred suppliers maintain alternative processes and/or facilities to ensure continuity of supply. Given the Company’s strategy to outsource its manufacturing activities to Flextronics and to source certain components from single suppliers, a disruption in production at Flextronics or at a supplier could impact the timing of customer shipments and/or Teradata’s operating results.
Fair Value Measurements
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, available-for-sale securities 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. Available-for-sale securities include equity securities that are traded in active markets, such as the National Association of Securities Dealers Automated Quotations Systems ("NASDAQ"), and are therefore included in Level 1 of the valuation hierarchy. Available-for-sale securities are included in other assets in the Company's balance sheet. Unrealized holding gains and losses are excluded from earnings and reported in other comprehensive income until realized.
When deemed appropriate, the Company minimizes its exposure to changes in foreign currency exchange rates through the use of derivative financial instruments, specifically, forward foreign exchange contracts. The fair value of these contracts are measured at the end of each interim reporting period using observable inputs other than quoted prices, specifically market spot and forward exchange rates. As such, these derivative instruments are classified within Level 2 of the valuation hierarchy. Fair value gains for open contracts are recognized as assets and fair value losses are recognized as liabilities. The fair value derivative assets and liabilities recorded in other current assets and accrued liabilities at December 31, 2015 and 2014, were not material. Any realized gains or losses would be mitigated by corresponding gains or losses on the underlying exposures. Further information on the Company’s use of forward foreign exchange contracts is included in Note 7.
The Company’s assets measured at fair value on a recurring basis and subject to fair value disclosure requirements at December 31, were as follows: 
 
 
 
Fair Value Measurements at Reporting Date Using
 
 
 
Quoted Prices 
in Active Markets
for Identical
Assets
 
Significant
Other
Observable
Inputs
 
Significant Unobservable Inputs
In millions
December 31, 2015
 
(Level 1)
 
(Level 2)
 
(Level 3)
Assets
 
 
 
 
 
 
 
Money market funds
$
351

 
$
351

 
$
—

 
$
—

 
 
 
Fair Value Measurements at Reporting Date Using
 
 
 
Quoted Prices 
in Active Markets
for Identical
Assets
 
Significant
Other
Observable
Inputs
 
Significant Unobservable Inputs
In millions
December 31, 2014
 
(Level 1)
 
(Level 2)
 
(Level 3)
Assets
 
 
 
 
 
 
 
Money market funds
$
393

 
$
393

 
$
—

 
$
—

Available-for-sale securities
78

 
78

 
—

 
—

Total assets at fair value
$
471

 
$
471

 
$
—

 
$
—

Debt
Debt
Debt
On March 25, 2015, Teradata replaced its existing five-year, $300 million revolving credit facility with a new $400 million revolving credit facility (the “Credit Facility”). The Credit Facility ends on March 25, 2020 at which point any remaining outstanding borrowings would be due for repayment unless extended by agreement of the parties for up to two additional one-year periods. The interest rate charged on borrowings pursuant to the Credit Facility can vary depending on the interest rate option the Company chooses to utilize and the Company’s leverage ratio at the time of the borrowing. During 2015, Teradata chose a floating rate based on the London Interbank Offered Rate (“LIBOR”). The Credit Facility is unsecured and contains certain representations and warranties, conditions, affirmative, negative and financial covenants, and events of default customary for such facilities.
As of December 31, 2015, the Company had $180 million outstanding under the Credit Facility and carried an interest rate of 1.623%, leaving $220 million in additional borrowing capacity available. The new revolving credit-facility was accounted for as a modification. Unamortized deferred costs on the original credit facility and new lender fees of approximately $1 million are being amortized over the five-year term of the credit facility. The Company was in compliance with all covenants as of December 31, 2015.
Also on March 25, 2015, Teradata closed on a new senior unsecured $600 million five-year term loan, the proceeds of which were used to pay off the remaining $247 million of principal on its existing term loan, pay off the $220 million outstanding balance on the prior credit facility, and to fund share repurchases. The $600 million term loan is payable in quarterly installments, which will commence on March 31, 2016, with all remaining principal due in March 2020. The outstanding principal amount under the term loan agreement bears interest at a floating rate based upon a negotiated base rate or a Eurodollar rate plus a margin based on the leverage ratio of the Company. As of December 31, 2015, the term loan principal outstanding was $600 million and carried an interest rate of 1.8125%. The payment of the existing term loan with proceeds for the new term loan was accounted for as a modification. Unamortized deferred issuance costs on the original term loan and new lender fees of approximately $2 million are being amortized over the five-year term of the loan. The Company was in compliance with all covenants as of December 31, 2015.
Annual contractual maturities of principal on term loan outstanding at December 31, 2015, are as follows: 
In millions
 
2016
$
30

2017
30

2018
60

2019
67

2020
413

Total
$
600


The following table presents interest expense on borrowings for the years ended December 31:
In millions
2015
 
2014
 
2013
Interest expense
$
9

 
$
3

 
$
4


Teradata’s term loan is recognized on the Company’s balance sheet at its unpaid principal balance, and is not subject to fair value measurement. However, given that the loan carries a variable rate, the Company estimates that the unpaid principal balance of the term loan would approximate its fair value. If measured at fair value in the financial statements, the Company’s term loan would be classified as Level 2 in the fair value hierarchy.
Segment, Other Supplemental Information and Concentrations
Segment, Other Supplemental Information and Concentrations
Segment, Other Supplemental Information and Concentrations
Effective January 1, 2015, Teradata implemented an organizational change in which Teradata now manages its business in two divisions, which are also the Company’s operating segments: (1) data and analytics, and (2) marketing applications. This change was intended to enable each division to be more sharply focused in rapidly addressing the dynamics of each market, and in bringing the best solutions to our customers. 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 evaluates the performance of the segments based on revenue and multiple profit measures, including segment gross margin. For management reporting purposes assets are not allocated to the segments. Prior period segment information has been reclassified to conform to the current period presentation.
The following table presents segment revenue and segment gross margin for the Company for the years ended December 31: 
In millions
2015
 
2014
 
2013
Segment revenue
 
 
 
 
 
Data and Analytics
$
2,337

 
$
2,523

 
$
2,478

Marketing Applications
193

 
209

 
214

Total revenue
2,530

 
2,732

 
2,692

Segment gross margin
 
 
 
 
 
Data and Analytics
1,237

 
1,422

 
1,399

Marketing Application
79

 
94

 
109

Total segment gross margin
1,316

 
1,516

 
1,508

Stock-based compensation expense
13

 
11

 
7

Amortization of acquisition-related intangible assets
19

 
21

 
24

Acquisition, integration and reorganization-related costs
8

 
5

 
4

Total gross margin
1,276

 
1,479

 
1,473

Selling, general and administrative expenses
765

 
770

 
757

Research and development expenses
228

 
206

 
184

Impairment of goodwill and acquired intangibles
478

 
—

 
—

Total (loss) income from operations
$
(195
)
 
$
503

 
$
532


 
The following table presents revenue by product and services revenue for the Company for the years ended December 31:
In millions
2015
 
2014
 
2013
Products (software and hardware)(1)
$
1,057

 
$
1,227

 
$
1,230

Consulting services
780

 
817

 
818

Maintenance services
693

 
688

 
644

Total services
1,473

 
1,505

 
1,462

Total revenue
$
2,530

 
$
2,732

 
$
2,692

 
(1)
Our analytic database software and hardware products are often sold and delivered together in the form of a “node” of capacity as an integrated technology solution. Accordingly, it is impracticable to provide the breakdown of revenue from various types of software and hardware products.
The following table presents revenues by geographic area at December 31: 
In millions
2015
 
2014
 
2013
United States
$
1,428

 
$
1,458

 
$
1,511

Americas (excluding United States)
125

 
161

 
122

International
977

 
1,113

 
1,059

Total revenue
$
2,530

 
$
2,732

 
$
2,692


The following table presents property and equipment by geographic area at December 31: 
In millions
2015(1)
 
2014
United States
$
129

 
$
130

Americas (excluding United States)
3

 
4

International
23

 
25

Property and equipment, net
$
155

 
$
159


(1) 2015 amounts include property and equipment held for sale for $12 million.
Concentrations. No single customer accounts for more than 10% of the Company's revenue. As of December 31, 2015, the Company is not aware of any significant concentration of business transacted with a particular customer that could, if suddenly eliminated, have a material adverse effect on the Company’s operations. The Company's hardware components are assembled exclusively by Flextronics. In addition, the Company utilizes preferred supplier relationships to better ensure more consistent quality, cost and delivery. There can be no assurances that a disruption in production at Flextronics or at a supplier would not have a material adverse effect on the Company's operations.
Changes in segment reporting. Beginning January 2016, the Company will change its operating segments and report future results under three separate segments: (a) Americas Data and Analytics (b) International Data and Analytics, and (c) Marketing Applications until such time as the portion of the marketing applications business to be divested is sold. The remainder of the marketing applications business that will be retained will be reported under the data and analytics operating segments.
Business Combinations and Other Investment Activities
Business Combinations and Other Investment Activities
Business Combinations and Other Investment Activities
During 2015, the Company completed two immaterial business acquisitions for $17 million, which complement and strengthen the Company's global portfolio. One of the acquisitions pertains to the marketing applications business, which the Company plans to exit and therefore has been classified in the assets held for sale (see Note 15). In addition, the Company sold two equity investments for $85 million and recognized a gain of $57 million.
During 2014, the Company completed six immaterial business acquisitions and other equity investments for $69 million. These acquisitions complement and strengthen the Company's global portfolio. Two of these acquisitions pertained to the marketing applications business, which the Company plans to exit and therefore have been classified in the assets held for sale (see Note 15). In addition, the Company recognized a loss of $9 million in an equity investment arising from an impairment of carrying value.
During 2013, the Company completed two immaterial business acquisitions and two other equity investments for $36 million. In addition, the Company recognized a loss of $25 million on an equity investment arising from an impairment of carrying value, partially offset by a $3 million gain on sale.The gains and losses for these transactions were recorded in other income (expense) in the Consolidated Statements of Income.
Accumulated Other Comprehensive (Loss) Income
Accumulated Other Comprehensive (Loss) Income
Accumulated Other Comprehensive (Loss) Income
The following table provides information on changes in accumulated other comprehensive income (“AOCI”), net of tax, for the three years ended December 31:
In millions
Available-for-sale securities
 
Defined 
benefit
plans
 
Foreign 
currency
translation
adjustments
 
Total 
AOCI
Balance as of December 31, 2012
$
—

 
$
(5
)
 
$
34

 
$
29

Other comprehensive income before reclassifications
—

 
—

 
2

 
2

Amounts reclassified from AOCI
—

 
2

 
—

 
2

Net other comprehensive income
—

 
2

 
2

 
4

Balance as of December 31, 2013
$
—

 
$
(3
)
 
$
36

 
$
33

Other comprehensive income (loss) before reclassifications
31

 
(22
)
 
(47
)
 
(38
)
Amounts reclassified from AOCI
—

 
1

 
—

 
1

Net other comprehensive income (loss)
31

 
(21
)
 
(47
)
 
(37
)
Balance as of December 31, 2014
$
31

 
$
(24
)
 
$
(11
)
 
$
(4
)
Other comprehensive loss before reclassifications
(5
)
 
(8
)
 
(36
)
 
(49
)
Amounts reclassified from AOCI
(26
)
 
3

 
—

 
(23
)
Net other comprehensive loss
(31
)
 
(5
)
 
(36
)
 
(72
)
Balance as of December 31, 2015
$
—

 
$
(29
)
 
$
(47
)
 
$
(76
)

The following table presents the impact and respective location of AOCI reclassifications in the Consolidated Statements of Income:
In millions
 
 
 
For the year ended December 31
AOCI Component
 
Location
 
2015
 
2014
 
2013
Defined benefit plans
 
Cost of services
 
$
(2
)
 
$
(1
)
 
$
(2
)
Defined benefit plans
 
Selling, general and administrative expenses
 
(1
)
 
—

 
(1
)
Defined benefit plans
 
Research and development expenses
 
—

 
—

 
1

Available for sale securities
 
Other income
 
42

 
—

 
—

Tax portion
 
Income tax expense
 
(16
)
 
—

 
—

Total reclassifications
 
Net income (loss)
 
$
23

 
$
(1
)
 
$
(2
)

Further information on the Company’s defined benefit plans is included in Note 6.
Reorganization and Business Transformation (Notes)
Reorganization and Business Transformation
Reorganization and Business Transformation
In the fourth quarter of 2015 the Company announced a plan to realign Teradata’s business by reducing its cost structure and focusing on the Company’s core data and analytics business. This business transformation includes exiting the marketing applications business (see Note 15), rationalizing costs, and modifying the Company’s go-to-market approach. The Company incurred the following costs in 2015 related to these actions:
•
$4 million for employee severance and other employee-related costs,
•
$140 million charge for asset write-downs, and
•
$8 million for professional services, legal and other associated costs.
From the amounts incurred above, $140 million was for non-cash write-downs of goodwill, acquired intangibles and other assets (see Note 3). In addition to the costs and charges incurred above, the Company made cash payments of $14 million for employee severance that did not have a material impact on its Statement of Operations due to Teradata accounting for its postemployment benefits under Accounting Standards Codification 712, Compensation - Nonretirement Postemployment Benefits (“ASC 712”), which uses actuarial estimates and defers the immediate recognition of gains or losses. Because the Company accounts for postemployment benefits under ASC 712, it did not record any liability associated with ASC 420, Exit or Disposal Cost Obligations.
Assets and Liabilities Held for Sale
Assets and Liabilities Held for Sale
Assets and Liabilities Held for Sale
In the fourth quarter of 2015, the Company committed to a plan to exit the majority of the marketing applications business. The Company determined that it was in the long-term best interests of the Company and its shareholders to realign Teradata’s business by focusing on the Company’s core data and analytics business. The assets and liabilities for this business, which are included within our marketing applications segment, were classified as held for sale in the fourth quarter of 2015 and, therefore, the corresponding depreciation and amortization expense was ceased at that time. The anticipated divestiture is not presented as discontinued operations in our consolidated financial statements, because it does not have a major effect on the Company's operations and financial results.
For the year ended December 31, 2015, we generated revenue from these assets of $152 million. Additionally, for the year ended December 31, 2015 we recognized operating loss from these assets of $561 million (includes loss from impairment of goodwill and acquired intangibles of $478 million).
When an asset is classified as held for sale, the asset’s carrying amount is evaluated and adjusted to the lower of its carrying amount or fair value less costs to sell. As discussed in Note 3, the Company recorded a goodwill impairment of $97 million in the fourth quarter of 2015. In addition, acquired intangible assets were reduced by $41 million to adjust the carrying amount of the disposal group's net assets and liabilities down to its fair value less cost to sell.
A summary of the carrying amounts of assets and liabilities held for sale on our consolidated balance sheets as of December 31, 2015 related to the anticipated divestiture discussed above is detailed below:
 
As of
In millions
December 31, 2015
Current Assets
 
Accounts receivable, net
$
41

Other current assets
3

Total current assets
44

Property and equipment, net
12

Goodwill
113

Acquired intangibles, net
44

Other Assets
1

Total assets held for sale
$
214

 
 
Current Liabilities
 
Accounts payable
10

Payroll and benefits liabilities
12

Deferred Revenue
30

Other current liabilities
5

Total current liabilities
57

Other liabilities
1

Total liabilities held for sale
$
58



The final sale of the business described above will be subject to the ability to negotiate acceptable terms and conditions and approval of the Company's Board of Directors, as applicable.
Quarterly Information (unaudited)
Quarterly Information (unaudited)
Quarterly Information (unaudited)
In millions, except per share amounts
First
 
Second(1)
 
Third
 
Fourth(2)
2015
 
 
 
 
 
 
 
Total revenues
$
582

 
$
623

 
$
606

 
$
719

Gross margin
$
277

 
$
327

 
$
307

 
$
365

Operating income (loss)
$
30

 
$
(262
)
 
$
77

 
$
(40
)
Net income (loss)
$
22

 
$
(265
)
 
$
78

 
$
(49
)
Net income (loss) per share:
 
 
 
 
 
 
 
Basic
$
0.15

 
$
(1.87
)
 
$
0.56

 
$
(0.37
)
Diluted
$
0.15

 
$
(1.87
)
 
$
0.55

 
$
(0.37
)
2014
 
 
 
 
 
 
 
Total revenues
$
628

 
$
676

 
$
667

 
$
761

Gross margin
$
333

 
$
371

 
$
350

 
$
425

Operating income
$
89

 
$
133

 
$
123

 
$
158

Net income
$
59

 
$
96

 
$
94

 
$
118

Net income per share:
 
 
 
 
 
 
 
Basic
$
0.37

 
$
0.61

 
$
0.61

 
$
0.78

Diluted
$
0.37

 
$
0.60

 
$
0.60

 
$
0.77


(1) Loss from operations for the three months ended June 30, 2015 includes a goodwill impairment charge of $340 million for the marketing applications segment.
(2) Loss from operations for the three months ended December 31, 2015 includes goodwill and acquired intangibles impairment charges of $138 million for the marketing applications business.
Subsequent Events
Subsequent Events
Subsequent Events
From January 1, 2016 through February 26, 2016, the Company purchased approximately 2 million shares for approximately $47 million. As of February 26, 2016 the Company had approximately $528 million of share repurchase authorization remaining.
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
(In millions)
 
Column A
 
Column B
 
Column C
 
Column D
 
Column E
Description
 
Balance at
Beginning
of Period
 
Additions
Charged
to Costs &
Expenses
 
Charged
to Other
Accounts
 
Deductions
 
Balance
at End of
Period
Allowance for doubtful accounts
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2015**
 
$
19

 
$
5

 
$
—

 
$
2

 
$
22

Year ended December 31, 2014
 
$
18

 
$
3

 
$
—

 
$
2

 
$
19

Year ended December 31, 2013
 
$
18

 
$
1

 
$
—

 
$
1

 
$
18

Deferred tax valuation allowance
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2015
 
$
20

 
$
5

 
$
—

 
$
—

 
$
25

Year ended December 31, 2014
 
$
13

 
$
7

 
$
—

 
$
—

 
$
20

Year ended December 31, 2013
 
$
9

 
$
4

 
$
—

 
$
—

 
$
13


** Above amounts include allowances classified as held for sale.  
Description of Business, Basis of Presentation and Significant Accounting Policies (Policies)
Description of the Business 
Description of the Business. Teradata Corporation (“Teradata” or the “Company”) is a global leader in analytic data platforms, marketing and analytic applications, and related services. The Company’s analytic data platforms are comprised of software, hardware, and related business consulting and support services for data warehousing and big data analytics.
Basis of Presentation 
Basis of Presentation. The financial statements are presented on a consolidated basis and include the accounts of the Company and its wholly-owned subsidiaries in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Use of Estimates 
Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the period reported. On an ongoing basis, management evaluates these estimates and judgments, including those related to allowances for doubtful accounts, the valuation of inventory to net realizable value, impairments of goodwill and other intangibles, stock-based compensation, pension and other postemployment benefits, and income taxes and any changes will be accounted for on a prospective basis. Actual results could differ from those estimates.
Revenue Recognition 
Revenue Recognition. Teradata’s solution offerings typically include software, software subscriptions (unspecified when-and-if-available upgrades), hardware, maintenance support services, and other consulting, implementation and installation-related (“consulting”) services. Teradata records revenue when it is realized, or realizable, and earned. Teradata considers these requirements met when:
•
Persuasive evidence of an arrangement exists
•
The products or services have been delivered to the customer
•
The sales price is fixed or determinable and free of contingencies or significant uncertainties
•
Collectibility is reasonably assured
Teradata reports revenue net of any taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. The Company assesses whether fees are fixed or determinable at the time of sale. Standard payment terms may vary based on the country in which the agreement is executed, but are generally between 30 days and 90 days. Payments that are due within six months are generally deemed to be fixed or determinable based on a successful collection history on such arrangements, and thereby satisfy the required criteria for revenue recognition. Teradata delivers its solutions primarily through direct sales channels, as well as through alliances with system integrators, other independent software vendors and distributors, and value-added resellers (collectively referred to as “resellers”). In assessing whether the sales price to a reseller is fixed or determinable, the Company considers, among other things, past business practices with the reseller, the reseller’s operating history, payment terms, return rights and the financial wherewithal of the reseller. When Teradata determines that the contract fee to a reseller is not fixed or determinable, that transaction is deferred and recognized upon sell-through to the end customer.
The Company’s deliverables often involve delivery or performance at different periods of time. Revenue for software is generally recognized upon delivery with the hardware once title and risk of loss have been transferred. Revenue for software subscriptions, which provide for unspecified upgrades or enhancements on a when-and-if-available basis, is recognized straight-line over the term of the subscription arrangement. Revenue for maintenance support services is also recognized on a straight-line basis over the term of the contract. Revenue for other consulting, implementation and installation services is recognized as services are provided. In certain instances, acceptance of the product or service is specified by the customer. In such cases, revenue is deferred until the acceptance criteria have been met. Delivery and acceptance generally occur in the same reporting period. The Company’s arrangements generally do not include any customer negotiated provisions for cancellation, termination or refunds that would significantly impact recognized revenue.

The Company evaluates all deliverables in an arrangement to determine whether they represent separate units of accounting. A deliverable constitutes a separate unit of accounting when it has standalone value, and if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered items is considered probable and substantially in the control of Teradata. Most of the Company’s products and services qualify as separate units of accounting and are recognized upon meeting the criteria as described above.
For multiple deliverable arrangements that contain non-software related deliverables, the Company allocates revenue to each deliverable based upon the relative selling price hierarchy and if software and software-related deliverables are also included in the arrangement, to those deliverables as a group based on the best estimate of selling price (“BESP”) for the group. The selling price for a deliverable is based on its vendor-specific objective evidence of selling price (“VSOE”) if available, third-party evidence of selling price (“TPE”) if VSOE is not available, or BESP if neither VSOE nor TPE is available. The Company then recognizes revenue when the remaining revenue recognition criteria are met for each deliverable. For the software group or arrangements that contain only software and software-related deliverables, the revenue is allocated utilizing the residual or fair value method. Under the residual method, the VSOE of the undelivered elements is deferred and accounted for under the applicable revenue recognition guidance, and the remaining portion of the software arrangement fee is allocated to the delivered elements and is recognized as revenue. The fair value method is similar to the relative selling price method used for non-software deliverables except that the allocation of each deliverable is based on VSOE. For software groups or arrangements that contain only software and software-related deliverables in which VSOE does not exist for each deliverable (fair value method) or does not exist for each undelivered element (residual method), revenue for the entire software arrangement or group is deferred and not recognized until delivery of all elements without VSOE has occurred, unless the only undelivered element is postcontract customer support (“PCS”) in which case the entire software arrangement or group is recognized ratably over the PCS period.
Teradata’s analytic database software and hardware products are sold and delivered together in the form of a “Node” of capacity as an integrated technology solution. Because both the analytic database software and hardware platform are necessary to deliver the analytic data platform’s essential functionality, the database software and hardware (Node) are excluded from the software rules and considered a non-software related deliverable. Teradata software applications and related support are considered software-related deliverables. Additionally, the amount of revenue allocated to the delivered items utilizing the relative selling price or fair value method is limited to the amount that is not contingent upon the delivery of additional items or meeting other specified performance conditions (the non-contingent amount).
VSOE is based upon the normal pricing and discounting practices for those products and services when sold separately. Teradata uses the stated renewal rate approach in establishing VSOE for maintenance and subscriptions (collectively referred to as PCS). Under this approach, the Company assesses whether the contractually stated renewal rates are substantive and consistent with the Company’s normal pricing practices. Renewal rates greater than the lower level of our targeted pricing ranges are considered to be substantive and, therefore, meet the requirements to support VSOE. In instances where there is not a substantive renewal rate in the arrangement, the Company allocates revenue based upon BESP, using the minimum established pricing targets as supported by the renewal rates for similar customers utilizing the bell-curve method. Teradata also offers consulting and installation-related services to its customers, which are considered non-software deliverables if they relate to the nodes. These services are rarely considered essential to the functionality of the data warehouse solution deliverable and there is never software customization of the proprietary database software. VSOE for consulting services is based on the hourly rates for standalone consulting services projects by geographic region and are indicative of the Company’s customary pricing practices. Pricing in each market is structured to obtain a reasonable margin based on input costs.
In nearly all multiple-deliverable arrangements, the Company is unable to establish VSOE for all deliverables in the arrangement. This is due to infrequently selling each deliverable separately (such is the case with our nodes), not pricing products or services within a narrow range, or only having a limited sales history. When VSOE cannot be established, attempts are made to establish TPE of the selling price for each deliverable. TPE is determined based on competitor prices for similar deliverables when sold separately. However, Teradata’s offerings contain significant differentiation such that the comparable pricing of products with similar functionality cannot typically be obtained. This is because Teradata’s products contain a significant amount of proprietary technology and its solutions offer substantially different features and functionality than other available products. As Teradata’s products are significantly different from those of its competitors, the Company is unable to establish TPE for the vast majority of its products.
When the Company is unable to establish selling prices using VSOE or TPE, the Company uses BESP in its allocation of arrangement consideration. The objective of BESP is to determine the price at which the Company would transact a sale if the product or service was sold on a standalone basis. The Company determines BESP for a product or service by considering multiple factors including, but not limited to, geographies, market conditions, product life cycles, competitive landscape, internal costs, gross margin objectives, purchase volumes and pricing practices.
The primary consideration in developing BESP for the Company’s nodes is the bell-curve method based on historical transactions. The BESP analysis is at the geography level in order to align it with the way in which the Company goes to market and establishes pricing for its products. The Company has established discount ranges off of published list prices for different geographies based on strategy and maturity of Teradata’s presence in the respective geography. There are distinctions in each geography and product group which support the use of geographies and markets for the determination of BESP. For example, the Company’s U.S. market is relatively mature and most of the large transactions are captured in this market, whereas the International markets are less mature with generally smaller deal size. Additionally, the prices and margins for the Company’s products vary by geography and by product class. BESP is analyzed on a semi-annual basis using data from the 4 previous quarters, which the Company believes best reflects most recent pricing practices in a changing marketplace.
The Company reviews VSOE, TPE and its determination of BESP on a periodic basis and updates it, when appropriate, to ensure that the practices employed reflect the Company’s recent pricing experience. The Company maintains internal controls over the establishment and updates of these estimates, which includes review and approval by the Company’s management. For the year ended December 31, 2015 there was no material impact to revenue resulting from changes in VSOE, TPE or BESP, nor does the Company expect a material impact from such changes in the near term.
Perpetual licenses, term licenses, hosting arrangements and software as a service. Teradata’s application offerings include perpetual licenses, term licenses, hosting arrangements and software as a service. For software arrangements that include a perpetual license, the residual method is typically used because the Company does not have VSOE for its perpetual licenses. This is because the perpetual license is never sold standalone. If the license is of limited life and does not require the Company to host the software for the customer, the software is considered a term license. Teradata’s term licenses are typically offered for application software and include a right-to-use license, PCS and consulting services. The revenue for these arrangements are typically recognized ratably over the contract term. The term of these arrangements varies between one and five years and may or may not include hosting services. In most arrangements the pricing is bundled to the customer. If the term license is hosted, the customer has the right to take possession of the software at any time during the hosting period. The customer’s rights to the software in these circumstances are not dependent on additional software payments or significant penalties, and the customer can feasibly run the software on its own hardware or contract with another party to host the software. If these criteria are not met, the hosting arrangement is accounted for outside the software rules as a software as a service arrangement. Under a software as a service arrangement, the license, PCS and hosting fee are recognized ratably over the term of the contract.
Shipping and Handling 
Shipping and Handling. Product shipping and handling costs are included in cost of products in the Consolidated Statements of Income.
Cash and Cash Equivalents 
Cash and Cash Equivalents. All short-term, highly-liquid investments having original maturities of three months or less are considered to be cash equivalents.
Allowance for Doubtful Accounts 
Allowance for Doubtful Accounts. Teradata establishes provisions for doubtful accounts using both percentages of accounts receivable balances to reflect historical average credit losses and specific provisions for known issues.
Inventories 
Inventories. Inventories are stated at the lower of cost or market. Cost of service parts is determined using the average cost method. Finished goods inventory is determined using actual cost.
Available-for-sale Securities 
Available-for-sale Securities. Available-for-sale securities are reported at fair value. Unrealized holding gains and losses are excluded from earnings and reported in other comprehensive income. Realized gains and losses are included in other income and expense in the Consolidated Statements of Income.
Long-Lived Assets 
Long-Lived Assets
Property and Equipment. Property and equipment, leasehold improvements and rental equipment are stated at cost less accumulated depreciation. Depreciation is computed over the estimated useful lives of the related assets primarily on a straight-line basis. Equipment is depreciated over 3 to 20 years and buildings over 25 to 45 years. Leasehold improvements are depreciated over the life of the lease or the asset, whichever is shorter.
Capitalized Software 
Capitalized Software. Direct development costs associated with internal-use software are capitalized and amortized over the estimated useful lives of the resulting software. The costs are capitalized when both the preliminary project stage is completed and it is probable that computer software being developed will be completed and placed in service. Teradata typically amortizes capitalized internal-use software on a straight-line basis over three years beginning when the asset is substantially ready for use.
Costs incurred for the development of big data, marketing and analytic applications are expensed as incurred based on the frequency and agile nature of development. Costs incurred for the development of data warehousing software that will be sold, leased or otherwise marketed are capitalized when technological feasibility has been established. Technological feasibility is established when planning, designing and initial coding activities that are necessary to establish the product can be produced to meet its design specifications. In the absence of a program design, a working model is used to establish technological feasibility. These costs are included within capitalized software and are amortized over the estimated useful lives of four years using the greater of the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product or the straight-line method over the remaining estimated economic life of the product beginning when the product is available for general release. Costs capitalized include direct labor and related overhead costs. Costs incurred prior to technological feasibility and after general release are expensed as incurred. The following table identifies the activity relating to capitalized software:
 
Internal-use Software
 
External-use Software
In millions
2015
 
2014
 
2013
 
2015
 
2014
 
2013
Beginning balance at January 1
$
13

 
$
12

 
$
12

 
$
186

 
$
183

 
$
161

Capitalized
6

 
7

 
6

 
61

 
68

 
72

Amortization
(6
)
 
(6
)
 
(6
)
 
(70
)
 
(65
)
 
(50
)
Ending balance at December 31
$
13

 
$
13

 
$
12

 
$
177

 
$
186

 
$
183


The aggregate amortization expense (actual and estimated) for internal-use and external-use software for the following periods is:
 
Actual
 
For the year ended (estimated)
In millions
2015
 
2016
 
2017
 
2018
 
2019
 
2020
Internal-use software amortization expense
$
6

 
$
6

 
$
4

 
$
3

 
$
—

 
$
—

External-use software amortization expense
$
70

 
$
66

 
$
56

 
$
36

 
$
19

 
$
—


Estimated expense, which is recorded to cost of sales for external use software, is based on capitalized software at December 31, 2015 and does not include any new capitalization for future periods.
Valuation of Long-Lived Assets 
Valuation of Long-Lived Assets. Long-lived assets such as property and equipment, acquired intangible assets and internal capitalized software are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. An impairment loss would be recognized when estimated future undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than the carrying amount.
Goodwill 
Goodwill. Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Goodwill amounts are not amortized, but rather are tested for impairment annually or upon occurrence of an event or change in circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying amount. See Note 3- Goodwill and Acquired Intangibles for additional information.
Assets and Liabilities Held for Sale 
Assets and Liabilities Held for Sale. The Company classifies assets and liabilities (disposal groups) to be sold as held for sale in the period in which all of the following criteria are met:
•
Management, having the authority to approve the action, commits to a plan to sell the disposal group;
•
The disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal groups;
•
An active program to locate a buyer and other actions required to complete the plan to sell the disposal group have been initiated;
•
The sale of the disposal group is probable, and transfer of the disposal group is expected to qualify for recognition as a completed sale, within one year, except if events or circumstances beyond the Company’s control extend the period of time required to sell the disposal group beyond one year;
•
The disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and
•
Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
The Company initially measures a disposal group that is classified as held for sale at the lower of its carrying value or fair value less costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized until the date of sale. The Company assesses the fair value of a disposal group less costs to sell each reporting period it remains classified as held for sale and reports any subsequent changes as an adjustment to the carrying value of the disposal group, as long as the new carrying value does not exceed the carrying value of the disposal group at the time it was initially classified as held for sale.
Upon determining that a disposal group meets the criteria to be classified as held for sale, the Company reports the assets and liabilities of the disposal group under Assets held for sale and Liabilities held for sale in the Consolidated Balance Sheets.
Warranty 
Warranty. Provisions for product warranties are recorded in the period in which the related revenue is recognized. The Company accrues warranty reserves using percentages of revenue to reflect the Company’s historical average warranty claims.
Research and Development Costs 
Research and Development Costs. Research and development costs are expensed as incurred (with the exception of the capitalized software development costs discussed above). Research and development costs primarily include labor-related costs, contractor fees, and overhead expenses directly related to research and development support.
Pension and Postemployment Benefits 
Pension and Postemployment Benefits. The Company accounts for its pension and postemployment benefit obligations using actuarial models. The measurement of plan obligations was made as of December 31, 2015. Liabilities are computed using the projected unit credit method. The objective under this method is to expense each participant’s benefits under the plan as they accrue, taking into consideration salary increases and the plan’s benefit allocation formula. Thus, the total pension or postemployment benefit to which each participant is expected to become entitled is broken down into units, each associated with a year of past or future credited service.
The Company recognizes the funded status of its pension and postemployment plan obligations in its consolidated balance sheet and records in other comprehensive income certain gains and losses that arise during the period, but are deferred under pension accounting rules.
Foreign Currency 
Foreign Currency. Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment are translated into U.S. dollars at period-end exchange rates. Income and expense accounts are translated at daily exchange rates prevailing during the period. Adjustments arising from the translation are included in accumulated other comprehensive income, a separate component of stockholders’ equity. Gains and losses resulting from foreign currency transactions are included in determining net income.
Income Taxes 
Income Taxes. Income tax expense is provided based on income before income taxes in the various jurisdictions in which the Company conducts its business. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. These deferred taxes are determined based on the enacted tax rates expected to apply in the periods in which the deferred assets or liabilities are expected to be settled or realized. Teradata recognizes tax benefits from uncertain tax positions only if it is more likely than not the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company records valuation allowances related to its deferred income tax assets when it is more likely than not that some portion or all of the deferred income tax assets will not be realized.
Stock-based Compensation 
Stock-based Compensation. Stock-based payments to employees, including grants of stock options, restricted shares and restricted share units, are recognized in the financial statements based on their fair value. The fair value of each stock option award on the grant date is estimated using the Black-Scholes option-pricing model with the following assumptions: expected dividend yield, expected stock price volatility, weighted-average risk-free interest rate and weighted average expected term of the options. The Company’s expected volatility assumption used in the Black-Scholes option-pricing model is based on Teradata's historical volatility. Prior to 2014, because the Company did not have a sufficient trading history as a standalone public company, the volatility was based on a blend of peer group volatility and Teradata volatility. The expected term for options granted is based upon historical observation of actual time elapsed between date of grant and exercise of options for all employees. Prior to 2015, the expected term assumption was based on the simplified method under GAAP, which is based on the vesting period and contractual term for each vesting tranche of awards. The mid-point between the vesting date and the expiration date was used as the expected term under this method. The risk-free interest rate used in the Black-Scholes model is based on the implied yield curve available on U.S. Treasury issues at the date of grant with a remaining term equal to the Company’s expected term assumption. The Company has never declared or paid a cash dividend.
Treasury Stock 
Treasury Stock. Prior to the fourth quarter of 2014 when all treasury stock shares were retired, shares of the Company’s common stock repurchased through the share repurchase programs were held as treasury stock. Treasury stock was accounted for using the cost method. Beginning in the fourth quarter of 2014, stock repurchased through the share repurchase programs will be retired upon repurchase.
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 added from stock options, restricted share awards and other stock awards.
Recently Issued Accounting Pronouncements 
Recently Issued Accounting Pronouncements
Revenue Recognition. In May 2014, the Financial Accounting Standards Board ("FASB") issued new guidance that affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The new guidance will supersede the revenue recognition requirements in the current revenue recognition guidance, and most industry-specific guidance. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer are amended to be consistent with the guidance on recognition and measurement in this update. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the FASB defines a five step process which includes the following: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation.
In July 2015, the FASB issued a one-year delay in the effective date of the new standard. Under this guidance, the new revenue standard will be effective for annual reporting periods beginning after December 15, 2017, with early application permitted. The standard allows entities to apply the standard retrospectively for all periods presented or alternatively an entity is permitted to recognize the cumulative effect of initially applying the guidance as an opening balance sheet adjustment to retained earnings in the period of initial application. The Company is currently evaluating the impact on its consolidated financial position, results of operations and cash flows, as well as the method of transition that will be used in adopting the standard.
Accounting for Share-based Payments with Performance Targets. In June 2014, the FASB issued new guidance that requires that a performance target that affects vesting and that could be achieved after the requisite service period, be treated as a performance condition. A reporting entity should apply existing guidance as it relates to awards with performance conditions that affect vesting to account for such awards. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which the requisite service has already been rendered. The amendments in this update are effective for annual periods, and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. This amendment is not expected to have a material impact on the Company's consolidated financial statements.
Income Statement Presentation by Eliminating the Concept of Extraordinary Items. This update eliminates from GAAP the concept of extraordinary items. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. This amendment is not expected to have a material impact on the Company's results of operations.
Simplifying the Presentation of Debt Issuance Costs. To simplify presentation of debt issuance costs, the amendments in this update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. For public business entities, the amendments in this update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years and shall be applied on a retrospective basis. Debt issuance costs as of December 31, 2015 were $3 million. The Company plans to adopt this amendment when effective. This amendment is not expected to have a material impact on the Company's consolidated financial position.
Intangibles, Goodwill and Other Internal-Use Software. The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance will not change current guidance for a customer’s accounting for service contracts. This amendment will be effective for annual periods, including interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial position, results of operations and cash flows.
Business Combinations. In September 2015, the FASB issued new guidance that eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively. An acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment. The amendments in this update are effective for annual periods, and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Company does not expect this guidance to have significant impact on its consolidated financial statements.
Financial Instruments. In January 2016, the FASB issued new guidance which enhances the reporting model for financial instruments and related disclosures. This update requires equity securities to be measured at fair value with changes in fair value recognized through net income and will eliminate the cost method for equity securities without readily determinable fair values. The provisions are effective for public entities with fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, in certain circumstances. The Company is currently evaluating the impact of this guidance on its consolidated financial position, results of operations and cash flows.
Recently Adopted Guidance
Income Taxes. In November 2015, the FASB issued new guidance to simplify the presentation of deferred income taxes. The amendments in this update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. For public business entities, the amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has early adopted the new guidance prospectively as of December 31, 2015. As such, we did not restate our December 31, 2014 Balance Sheet. As a result of this adoption, no deferred tax amounts were recorded in other current assets and other current liabilities in 2015, as compared to $28 million recorded in other current assets and $1 million recorded in other current liabilities in 2014.
Description of Business, Basis of Presentation and Significant Accounting Policies (Tables)
Schedule Of Depreciation Expense 
Total depreciation expense on the Company’s property and equipment for December 31 was as follows:
In millions
2015
 
2014
 
2013
Depreciation expense
$
53

 
$
51

 
$
48

Schedule Of Activities Relating To Capitalized Software 
The following table identifies the activity relating to capitalized software:
 
Internal-use Software
 
External-use Software
In millions
2015
 
2014
 
2013
 
2015
 
2014
 
2013
Beginning balance at January 1
$
13

 
$
12

 
$
12

 
$
186

 
$
183

 
$
161

Capitalized
6

 
7

 
6

 
61

 
68

 
72

Amortization
(6
)
 
(6
)
 
(6
)
 
(70
)
 
(65
)
 
(50
)
Ending balance at December 31
$
13

 
$
13

 
$
12

 
$
177

 
$
186

 
$
183

Aggregate Amortization Expense for Internal and External-Use Software 
The aggregate amortization expense (actual and estimated) for internal-use and external-use software for the following periods is:
 
Actual
 
For the year ended (estimated)
In millions
2015
 
2016
 
2017
 
2018
 
2019
 
2020
Internal-use software amortization expense
$
6

 
$
6

 
$
4

 
$
3

 
$
—

 
$
—

External-use software amortization expense
$
70

 
$
66

 
$
56

 
$
36

 
$
19

 
$
—

Schedule Of Basic And Diluted Earnings Per Share 
The components of basic and diluted earnings per share are as follows: 
 
For the year ended December 31
In millions, except earnings per share
2015
 
2014
 
2013
Net (loss) income attributable to common stockholders
$
(214
)
 
$
367

 
$
377

Weighted average outstanding shares of common stock
139.6

 
155.3

 
163.4

Dilutive effect of employee stock options, restricted shares and other stock awards
—

 
2.5

 
3.0

Common stock and common stock equivalents
139.6

 
157.8

 
166.4

(Loss) earnings per share:
 
 
 
 
 
Basic
$
(1.53
)
 
$
2.36

 
$
2.31

Diluted
$
(1.53
)
 
$
2.33

 
$
2.27

Supplemental Financial Information (Tables)
Supplemental Financial Information
 
At December 31
In millions
2015
 
2014
Accounts receivable
 
 
 
Trade
$
591

 
$
635

Other
6

 
3

Accounts receivable, gross
597

 
638

Less: allowance for doubtful accounts
(17
)
 
(19
)
Total accounts receivable, net
$
580

 
$
619

Inventories
 
 
 
Finished goods
$
32

 
$
21

Service parts
17

 
17

Total inventories
$
49

 
$
38

Other current assets
 
 
 
Current deferred tax assets
$
—

 
$
28

Other
52

 
53

Total other current assets
$
52

 
$
81

Property and equipment
 
 
 
Land
$
8

 
$
8

Buildings and improvements
78

 
77

Machinery and other equipment
336

 
341

Property and equipment, gross
422

 
426

Less: accumulated depreciation
(279
)
 
(267
)
Total property and equipment, net
$
143

 
$
159

Other assets
 
 
 
Available-for-sale securities
$
—

 
$
78

Other
20

 
20

Total other assets
$
20

 
$
98

Other current liabilities
 
 
 
Sales and value-added taxes
$
35

 
$
40

Other
67

 
61

Total other current liabilities
$
102

 
$
101

Deferred revenue
 
 
 
Deferred revenue, current
$
367

 
$
370

Long-term deferred revenue
15

 
18

Total deferred revenue
$
382

 
$
388

Goodwill and Acquired Intangible Assets (Tables)
Goodwill by Operating Segment 
The following table identifies the activity relating to goodwill by operating segment:
In millions
Balance
December 31,
2014
 
Additions
 
Currency
Translation
Adjustments
 
Impairment
 
Transfers to Held for Sale
 
Balance
December 31,
2015
Goodwill
 
 
 
 
 
 
 
 
 
 
 
Data and Analytics
$
351

 
$
4

 
$
(4
)
 
$
—

 
$
—

 
$
351

Marketing Applications
597

 
—

 
(18
)
 
(437
)
 
(113
)
 
29

Total goodwill
$
948

 
$
4

 
$
(22
)
 
$
(437
)
 
$
(113
)
 
$
380

Gross Carrying Amount and Accumulated Amortization for Teradata's Acquired Intangible Assets 
The gross carrying amount and accumulated amortization for Teradata’s acquired intangible assets were as follows: 
 
 
 
December 31, 2015
 
December 31, 2014
In millions
Amortization
Life (in Years)
 
Gross 
Carrying Amount
 
Accumulated
Amortization
and Currency
Translation
Adjustments
 
Gross
 Carrying
Amount
 
Accumulated
Amortization
and Currency
Translation
Adjustments
Acquired intangible assets
 
 
 
 
 
 
 
 
 
Intellectual property/developed technology
1 to 7
 
$
83

 
$
(63
)
 
$
186

 
$
(95
)
Customer relationships
3 to 10
 
3

 
(3
)
 
77

 
(35
)
Trademarks/trade names
5
 
1

 
(1
)
 
1

 
(1
)
In-process research and development
5
 
5

 
(3
)
 
5

 
(2
)
Total
 
 
$
92

 
$
(70
)
 
$
269

 
$
(133
)
Aggregate Amortization Expense for Acquired Intangible Assets 
The aggregate amortization expense (actual and estimated) for acquired intangible assets for the following periods is:
 
Actual
 
For the year ended (estimated)
In millions
2013
 
2014
 
2015
 
2016
 
2017
 
2018
 
2019
 
2020
Amortization expense
$
44

 
$
47

 
$
40

 
$
10

 
$
7

 
$
3

 
$
2

 
$
—

Income Taxes (Tables)
Income Before Income Taxes 
For the years ended December 31, (loss) income before income taxes consisted of the following: 
In millions
2015
 
2014
 
2013
(Loss) income before income taxes
 
 
 
 
 
United States
$
(88
)
 
$
301

 
$
362

Foreign
(56
)
 
193

 
146

Total (loss) income before income taxes
$
(144
)
 
$
494

 
$
508

Income Tax Expense 
For the years ended December 31, income tax expense consisted of the following: 
In millions
2015
 
2014
 
2013
Income tax expense
 
 
 
 
 
Current
 
 
 
 
 
Federal
$
74

 
$
94

 
$
78

State and local
9

 
8

 
10

Foreign
26

 
27

 
26

Deferred
 
 
 
 
 
Federal
(19
)
 
1

 
18

State and local
(3
)
 
—

 
2

Foreign
(17
)
 
(3
)
 
(3
)
Total income tax expense
$
70

 
$
127

 
$
131

Effective tax rate
(48.6
%)
 
25.7
%
 
25.8
%
The Difference Between the Effective Tax Rate and the U.S. Federal Statutory Income Tax Rate 
The following table presents the principal components of the difference between the effective tax rate and the U.S. federal statutory income tax rate for the years ended December 31:
 
2015
 
2014
 
2013
Income tax expense at the U.S. federal tax rate
35.0
%
 
35.0
%
 
35.0
%
Foreign income tax differential
14.0
%
 
(9.0
%)
 
(7.3
%)
State and local income taxes
0.5
%
 
0.5
%
 
0.4
%
U.S. permanent book/tax differences
3.1
%
 
0.4
%
 
0.5
%
U.S. manufacturing deduction
5.5
%
 
(2.1
%)
 
(2.1
%)
Impairment of goodwill and acquired intangibles
(100.1
%)
 
—
%
 
—
%
Other, net
(6.6
%)
 
0.9
%
 
(0.7
%)
Effective tax rate
(48.6
%)
 
25.7
%
 
25.8
%
Deferred Income Tax Assets and Liabilities 
Deferred income tax assets and liabilities included in the balance sheets at December 31 were as follows:
In millions
2015
 
2014
Deferred income tax assets
 
 
 
Employee pensions and other liabilities
$
62

 
$
61

Other balance sheet reserves and allowances
23

 
22

Tax loss and credit carryforwards
62

 
59

Deferred revenue
3

 
—

Total deferred income tax assets
150

 
142

Valuation allowance
(25
)
 
(20
)
Net deferred income tax assets
125

 
122

Deferred income tax liabilities
 
 
 
Intangibles and capitalized software
81

 
102

Property and equipment
30

 
29

Deferred revenue
—

 
17

Other
1

 
12

Total deferred income tax liabilities
112

 
160

Total net deferred income tax assets (liabilities)
$
13

 
$
(38
)
Liability Related to Uncertain Tax Positions 
Below is a rollforward of the Company’s liability related to uncertain tax positions at December 31:
In millions
2015
 
2014
Balance at January 1
$
36

 
$
34

Gross increases for prior period tax positions
—

 
4

Gross decreases for prior period tax positions
—

 
(3
)
Gross increases for current period tax positions
6

 
4

Decreases due to the lapse of applicable statute of limitations
(1
)
 
(3
)
Decreases relating to settlements with taxing authorities
(3
)
 
—

Balance at December 31
$
38

 
$
36

Employee Stock-based Compensation Plans (Tables)
Stock-Based Compensation Expense 
The Company recorded stock-based compensation expense for the years ended December 31 as follows: 
In millions
2015
 
2014
 
2013
Stock options
$
12

 
$
13

 
$
14

Restricted shares
41

 
33

 
32

Employee share repurchase program
3

 
4

 
3

Total stock-based compensation before income taxes
56

 
50

 
49

Tax benefit
(17
)
 
(16
)
 
(16
)
Total stock-based compensation, net of tax
$
39

 
$
34

 
$
33

Fair Value of Each Option Award on the Grant Date Using the Black-Scholes Option-Pricing Model 
The fair value of each option award on the grant date was estimated using the Black-Scholes option-pricing model with the following assumptions:
 
2015
 
2014
 
2013
Dividend yield
—
%
 
—
%
 
—
%
Risk-free interest rate
1.76
%
 
1.73
%
 
1.77
%
Expected volatility
34.4
%
 
37.8
%
 
37.6
%
Expected term (years)
6.3

 
6.3

 
6.3

The Company's Stock Option Activity 
The following table summarizes the Company’s stock option activity for the year ended December 31, 2015: 
Shares in thousands
Shares
Under
Option
 
Weighted-
Average
Exercise
Price per
Share
 
Weighted-
Average
Remaining
Contractual
Term (in
years)
 
Aggregate
Intrinsic
Value (in
millions)
Outstanding at January 1, 2015
7,237

 
$
35.50

 
6.1
 
$
78

Granted
1,185

 
$
30.63

 
 
 
 
Exercised
(428
)
 
$
20.66

 
 
 
 
Canceled
(134
)
 
$
46.18

 
 
 
 
Forfeited
(286
)
 
$
48.12

 
 
 
 
Outstanding at December 31, 2015
7,574

 
$
34.91

 
5.7
 
$
20

Fully vested and expected to vest at December 31, 2015
7,476

 
$
34.89

 
5.6
 
$
20

Exercisable at December 31, 2015
5,299

 
$
33.43

 
4.2
 
$
20

Total Intrinsic Value of Options Exercised and The Cash Received 
The following table summarizes the total intrinsic value of options exercised and the cash received by the Company from option exercises under all share-based payment arrangements at December 31:
In millions
2015
 
2014
 
2013
Intrinsic value of options exercised
$
8

 
$
14

 
$
19

Cash received from option exercises
$
9

 
$
11

 
$
9

Tax benefit realized from option exercises
$
3

 
$
5

 
$
6

Restricted Stock and Restricted Stock Unit Activity 
The following table reports restricted shares and restricted share unit activity during the year ended December 31, 2015:
Shares in thousands
Number of
Shares
 
Weighted-
Average 
Grant
Date Fair
 Value
per Share
Unvested shares at January 1, 2015
3,252

 
$
47.24

Granted
2,118

 
$
32.82

Vested
(832
)
 
$
54.60

Forfeited/canceled
(392
)
 
$
45.34

Unvested shares at December 31, 2015
4,146

 
$
38.58

Weighted-Average Fair Value and Total Fair Value of Shares Vested 
The following table summarizes the weighted-average fair value of restricted share units granted for Teradata equity awards and the total fair value of shares vested at December 31:
 
2015
 
2014
 
2013
Weighted-average fair value of restricted share units granted
$
32.82

 
$
44.39

 
$
48.24

Total fair value of shares vested (in millions)
$
45

 
$
27

 
$
30

The Composition of Teradata Restricted Stock Grants 
The following table represents the composition of Teradata restricted share unit grants in 2015: 
Shares in thousands
Number of
Shares
 
Weighted-
Average 
Grant
Date Fair 
Value
Service-based shares
2,055

 
$
32.68

Performance-based shares
63

 
$
37.36

Total stock grants
2,118

 
$
32.82

Employee Purchases and Aggregate Cost 
Employee purchases and aggregate cost were as follows at December 31:
In millions
2015
 
2014
 
2013
Employee share purchases
0.5

 
0.4

 
0.4

Aggregate cost
$
17

 
$
18

 
$
20

Employee Benefit Plans (Tables)
Pension and Postemployment Benefit Costs 
Pension and postemployment benefit costs for the years ended December 31 were as follows: 
 
2015
 
2014
 
2013
In millions
Pension
 
Postemployment
 
Pension
 
Postemployment
 
Pension
 
Postemployment
Service cost
$
8

 
$
6

 
$
9

 
$
4

 
$
8

 
$
3

Interest cost
3

 
1

 
4

 
1

 
4

 
1

Expected return on plan assets
(2
)
 
—

 
(2
)
 
—

 
(2
)
 
—

Settlement charge
1

 
—

 
1

 
—

 
1

 
—

Amortization of actuarial loss (gain)
2

 
—

 
2

 
(1
)
 
2

 
(1
)
Amortization of prior service credit
—

 
—

 
(1
)
 
—

 
—

 
—

Total costs
$
12

 
$
7

 
$
13

 
$
4

 
$
13

 
$
3

Accumulated Pension Benefit Obligation 
The following table presents pension plans with accumulated benefit obligations in excess of plan assets at December 31:
In millions
2015
 
2014
Projected benefit obligation
$
58

 
$
69

Accumulated benefit obligation
$
50

 
$
61

Fair value of plan assets
$
—

 
$
3

The following table presents the accumulated pension benefit obligation at December 31:
In millions
2015
 
2014
Accumulated pension benefit obligation
$
106

 
$
118

The following tables present the changes in benefit obligations, plan assets, funded status and the reconciliation of the funded status to amounts recognized in the consolidated balance sheets and in accumulated other comprehensive income at December 31:
 
Pension
 
Postemployment
In millions
2015
 
2014
 
2015
 
2014
Change in benefit obligation
 
 
 
 
 
 
 
Benefit obligation at January 1
$
130

 
$
129

 
$
39

 
$
27

Service cost
8

 
9

 
6

 
4

Interest cost
3

 
4

 
1

 
1

Plan participant contributions
1

 
1

 
—

 
—

Actuarial (gain) loss
(9
)
 
18

 
20

 
19

Benefits paid
(9
)
 
(19
)
 
(15
)
 
(11
)
Currency translation adjustments
(9
)
 
(15
)
 
(2
)
 
(1
)
New plans
—

 
3

 
—

 
—

Benefit obligation at December 31
115

 
130

 
49

 
39

Change in plan assets
 
 
 
 
 
 
 
Fair value of plan assets at January 1
$
67

 
$
76

 
$
—

 
$
—

Actual return on plan assets
1

 
7

 
—

 
—

Company contributions
5

 
8

 
—

 
—

Benefits paid
(9
)
 
(19
)
 
—

 
—

Currency translation adjustments
(2
)
 
(7
)
 
—

 
—

Plan participant contribution
1

 
1

 
—

 
—

New plans
—

 
1

 
—

 
—

Fair value of plan assets at December 31
63

 
67

 
—

 
—

Funded status (underfunded)
$
(52
)
 
$
(63
)
 
$
(49
)
 
$
(39
)
Amounts Recognized in the Balance Sheet
 
 
 
 
 
 
 
Non-current assets
$
5

 
$
4

 
$
—

 
$
—

Current liabilities
(1
)
 
(1
)
 
(16
)
 
(5
)
Non-current liabilities
(56
)
 
(66
)
 
(33
)
 
(34
)
Net amounts recognized
$
(52
)
 
$
(63
)
 
$
(49
)
 
$
(39
)
Amounts Recognized in Accumulated Other Comprehensive Income
 
 
 
 
 
 
 
Unrecognized Net actuarial loss
$
19

 
$
33

 
$
23

 
$
6

Unrecognized Prior service (credit) cost
(1
)
 
—

 
2

 
1

Total
$
18

 
$
33

 
$
25

 
$
7

Pre-Tax Net Changes in Projected Benefit Obligations Recognized in Other Comprehensive Income 
The following table presents the pre-tax net changes in projected benefit obligations recognized in other comprehensive income during 2015 and 2014: 
 
Pension
 
Postemployment
In millions
2015
 
2014
 
2015
 
2014
Actuarial (gain) loss arising during the year
$
(9
)
 
$
14

 
$
18

 
$
18

Amortization of (loss) gain included in net periodic benefit cost
(2
)
 
(2
)
 
—

 
1

Prior service cost arising during the year
—

 
1

 
—

 
—

Recognition of loss due to settlement
(1
)
 
(1
)
 
—

 
—

Foreign currency exchange
—

 
(3
)
 
—

 
—

Total recognized in other comprehensive (loss) income
$
(12
)
 
$
9

 
$
18

 
$
19

Amounts in Accumulated Other Comprehensive Income Expected to be Recognized as Components of Net Periodic Benefit Cost 
The following table presents the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost during 2016: 
In millions
Pension
 
Postemployment
Net loss to be recognized in other comprehensive income
$
3

 
$
—

Weighted-Average Rates and Assumptions Used to Determine Benefit Obligations and Net Periodic Benefit 
The weighted-average rates and assumptions used to determine benefit obligations at December 31, and net periodic benefit cost for the years ended December 31, were as follows: 
 
Pension Benefit Obligations
 
Pension Benefit Cost
 
2015
 
2014
 
2015
 
2014
 
2013
Discount rate
2.4%
 
2.3%
 
2.3%
 
3.0%
 
3.0%
Rate of compensation increase
3.2%
 
3.3%
 
3.3%
 
3.2%
 
3.3%
Expected return on plan assets
N/A
 
N/A
 
3.3%
 
3.4%
 
3.4%
 
Postemployment 
Benefit Obligations
 
Postemployment 
Benefit Cost
 
2015
 
2014
 
2015
 
2014
 
2013
Discount rate
3.6%
 
3.5%
 
3.5%
 
3.8%
 
3.4%
Rate of compensation increase
3.0%
 
3.0%
 
3.0%
 
3.7%
 
3.8%
Involuntary turnover rate
1.8%
 
1.3%
 
1.3%
 
1.0%
 
1.0%
Weighted-Average Asset Allocations, by Category 
The weighted-average asset allocations at December 31, by asset category are as follows: 
 
Actual Asset Allocation
As of December 31
 
Target Asset Allocation
 
2015
 
2014
 
Equity securities
31
%
 
32
%
 
31
%
Debt securities
43
%
 
41
%
 
47
%
Insurance (annuity) contracts
16
%
 
17
%
 
16
%
Real estate
6
%
 
5
%
 
3
%
Other
4
%
 
5
%
 
3
%
Total
100
%
 
100
%
 
100
%
Pension Plan Assets at Fair Value 
The following table sets forth by level, within the fair value hierarchy, the pension plan assets at fair value as of December 31, 2015: 
 
 
 
Fair Value Measurements at Reporting Date Using
 
 
 
Quoted Prices in Active Markets
for Identical
Assets
 
Significant
Other
Observable
Inputs
 
Significant
Unobservable
Inputs
In millions
December 31, 2015
 
(Level 1)
 
(Level 2)
 
(Level 3)
Money market funds
$
3

 
$
—

 
$
3

 
$
—

Equity funds
19

 
—

 
19

 
—

Bond/fixed-income funds
27

 
—

 
27

 
—

Real-estate indirect investments
4

 
—

 
4

 
—

Insurance contracts
10

 
—

 
—

 
10

Total Assets at fair value
$
63

 
$
—

 
$
53

 
$
10

The following table sets forth by level, within the fair value hierarchy, the pension plan assets at fair value as of December 31, 2014: 
 
 
 
Fair Value Measurements at Reporting Date Using
 
 
 
Quoted Prices in Active 
Markets
for Identical
Assets
 
Significant
Other
Observable
Inputs
 
Significant
Unobservable
Inputs
In millions
December 31, 2014
 
(Level 1)
 
(Level 2)
 
(Level 3)
Money market funds
$
2

 
$
—

 
$
2

 
$
—

Equity funds
21

 
—

 
21

 
—

Bond/fixed-income funds
28

 
—

 
28

 
—

Real-estate indirect investments
4

 
—

 
4

 
—

Commodities/Other
1

 
—

 
1

 
—

Insurance contracts
11

 
—

 
—

 
11

Total Assets at fair value
$
67

 
$
—

 
$
56

 
$
11

Changes in Fair Value of the Pension Plan Level 3 Assets 
The table below sets forth a summary of changes in the fair value of the pension plan level 3 assets for the year ended December 31, 2015:
In millions
Insurance
Contracts
Balance as of January 1, 2015
$
11

Purchases, sales and settlements, net
(1
)
Balance as of December 31, 2015
$
10

The table below sets forth a summary of changes in the fair value of the pension plan level 3 assets for the year ended December 31, 2014:
In millions
Insurance
Contracts
Balance as of January 1, 2014
$
10

Purchases, sales and settlements, net
1

Balance as of December 31, 2014
$
11

Estimated Future Benefit Payments 
The Company expects to make the following benefit payments reflecting past and future service from its pension and postemployment plans: 
 
Pension Benefits
 
Postemployment Benefits
In millions
 
Year
 
 
 
2016
$
4

 
$
16

2017
$
5

 
$
5

2018
$
5

 
$
5

2019
$
4

 
$
5

2020
$
4

 
$
5

2021-2025
$
27

 
$
23

U.S and International Subsidiary Savings Plans 
The following table identifies the expense for the U.S and International subsidiary savings plans for the years ended December 31:
In millions
2015
 
2014
 
2013
U.S. savings plan
$
22

 
$
23

 
$
23

International subsidiary savings plans
$
18

 
$
18

 
$
17

Derivative Instruments and Hedging Activities Derivative Instruments and Hedging Activities (Tables)
Schedule of Foreign Exchange Contracts
The following table identifies the contract notional amount of the Company’s foreign exchange forward contracts at December 31:
In millions
2015
 
2014
Contract notional amount of foreign exchange forward contracts
$
138

 
$
116

Net contract notional amount of foreign exchange forward contracts
$
25

 
$
17

Commitments and Contingencies (Tables)
Warranty Reserve Activity 
The following table identifies the activity relating to the warranty reserve liability for the years ended December 31: 
In millions
2015
 
2014
 
2013
Beginning balance at January 1
$
7

 
$
8

 
$
8

Accruals for warranties issued
9

 
16

 
15

Settlements (in cash or kind)
(10
)
 
(17
)
 
(15
)
Balance at end of period
$
6

 
$
7

 
$
8

Committed Operating Leases Less Sublease Rentals 
Future minimum operating lease payments and committed subleases under non-cancelable leases as of December 31, 2015, for the following fiscal years were: 
 
Total
 
 
 
 
 
 
 
 
 
 
In millions
Amounts
 
2016
 
2017
 
2018
 
2019
 
2020
Operating lease obligations
$
70

 
$
24

 
$
19

 
$
15

 
$
7

 
$
5

Sublease rentals
(5
)
 
(3
)
 
(2
)
 
—

 
—

 
—

Total committed operating leases less sublease rentals
$
65

 
$
21

 
$
17

 
$
15

 
$
7

 
$
5


The following table represents the Company’s actual rental expense and sublease rental income for the years ended December 31:
In millions
2015
 
2014
 
2013
Rental expense
$
26

 
$
26

 
$
26

Sublease rental income
$
3

 
$
3

 
$
3

Fair Value Measurements (Tables)
Assets and Liabilities Measured at Fair Value on Recurring Basis and Subject to Fair Value Disclosure Requirements
The Company’s assets measured at fair value on a recurring basis and subject to fair value disclosure requirements at December 31, were as follows: 
 
 
 
Fair Value Measurements at Reporting Date Using
 
 
 
Quoted Prices 
in Active Markets
for Identical
Assets
 
Significant
Other
Observable
Inputs
 
Significant Unobservable Inputs
In millions
December 31, 2015
 
(Level 1)
 
(Level 2)
 
(Level 3)
Assets
 
 
 
 
 
 
 
Money market funds
$
351

 
$
351

 
$
—

 
$
—

 
 
 
Fair Value Measurements at Reporting Date Using
 
 
 
Quoted Prices 
in Active Markets
for Identical
Assets
 
Significant
Other
Observable
Inputs
 
Significant Unobservable Inputs
In millions
December 31, 2014
 
(Level 1)
 
(Level 2)
 
(Level 3)
Assets
 
 
 
 
 
 
 
Money market funds
$
393

 
$
393

 
$
—

 
$
—

Available-for-sale securities
78

 
78

 
—

 
—

Total assets at fair value
$
471

 
$
471

 
$
—

 
$
—

Debt (Tables)
Annual Contractual Maturities of Principal on Debt Outstanding 
Annual contractual maturities of principal on term loan outstanding at December 31, 2015, are as follows: 
In millions
 
2016
$
30

2017
30

2018
60

2019
67

2020
413

Total
$
600

Interest Expense on Borrowings 
The following table presents interest expense on borrowings for the years ended December 31:
In millions
2015
 
2014
 
2013
Interest expense
$
9

 
$
3

 
$
4

Segment, Other Supplemental Information and Concentrations (Tables)
Regional Segment Revenue and Segment Gross Margin 
The following table presents segment revenue and segment gross margin for the Company for the years ended December 31: 
In millions
2015
 
2014
 
2013
Segment revenue
 
 
 
 
 
Data and Analytics
$
2,337

 
$
2,523

 
$
2,478

Marketing Applications
193

 
209

 
214

Total revenue
2,530

 
2,732

 
2,692

Segment gross margin
 
 
 
 
 
Data and Analytics
1,237

 
1,422

 
1,399

Marketing Application
79

 
94

 
109

Total segment gross margin
1,316

 
1,516

 
1,508

Stock-based compensation expense
13

 
11

 
7

Amortization of acquisition-related intangible assets
19

 
21

 
24

Acquisition, integration and reorganization-related costs
8

 
5

 
4

Total gross margin
1,276

 
1,479

 
1,473

Selling, general and administrative expenses
765

 
770

 
757

Research and development expenses
228

 
206

 
184

Impairment of goodwill and acquired intangibles
478

 
—

 
—

Total (loss) income from operations
$
(195
)
 
$
503

 
$
532

Revenue by Product and Services 
The following table presents revenue by product and services revenue for the Company for the years ended December 31:
In millions
2015
 
2014
 
2013
Products (software and hardware)(1)
$
1,057

 
$
1,227

 
$
1,230

Consulting services
780

 
817

 
818

Maintenance services
693

 
688

 
644

Total services
1,473

 
1,505

 
1,462

Total revenue
$
2,530

 
$
2,732

 
$
2,692

 
(1)
Our analytic database software and hardware products are often sold and delivered together in the form of a “node” of capacity as an integrated technology solution. Accordingly, it is impracticable to provide the breakdown of revenue from various types of software and hardware products.
Revenue from External Customers by Geographic Areas [Table Text Block] 
The following table presents revenues by geographic area at December 31: 
In millions
2015
 
2014
 
2013
United States
$
1,428

 
$
1,458

 
$
1,511

Americas (excluding United States)
125

 
161

 
122

International
977

 
1,113

 
1,059

Total revenue
$
2,530

 
$
2,732

 
$
2,692

Property and Equipment by Geographic Area 
The following table presents property and equipment by geographic area at December 31: 
In millions
2015(1)
 
2014
United States
$
129

 
$
130

Americas (excluding United States)
3

 
4

International
23

 
25

Property and equipment, net
$
155

 
$
159


(1) 2015 amounts include property and equipment held for sale for $12 million.
Accumulated Other Comprehensive (Loss) Income (Tables)
Changes in Accumulated Other Comprehensive Income (AOCI), Net of Tax 
The following table provides information on changes in accumulated other comprehensive income (“AOCI”), net of tax, for the three years ended December 31:
In millions
Available-for-sale securities
 
Defined 
benefit
plans
 
Foreign 
currency
translation
adjustments
 
Total 
AOCI
Balance as of December 31, 2012
$
—

 
$
(5
)
 
$
34

 
$
29

Other comprehensive income before reclassifications
—

 
—

 
2

 
2

Amounts reclassified from AOCI
—

 
2

 
—

 
2

Net other comprehensive income
—

 
2

 
2

 
4

Balance as of December 31, 2013
$
—

 
$
(3
)
 
$
36

 
$
33

Other comprehensive income (loss) before reclassifications
31

 
(22
)
 
(47
)
 
(38
)
Amounts reclassified from AOCI
—

 
1

 
—

 
1

Net other comprehensive income (loss)
31

 
(21
)
 
(47
)
 
(37
)
Balance as of December 31, 2014
$
31

 
$
(24
)
 
$
(11
)
 
$
(4
)
Other comprehensive loss before reclassifications
(5
)
 
(8
)
 
(36
)
 
(49
)
Amounts reclassified from AOCI
(26
)
 
3

 
—

 
(23
)
Net other comprehensive loss
(31
)
 
(5
)
 
(36
)
 
(72
)
Balance as of December 31, 2015
$
—

 
$
(29
)
 
$
(47
)
 
$
(76
)
Impact and Respective Location of AOCI Reclassifications in Consolidated Statements of Income 
The following table presents the impact and respective location of AOCI reclassifications in the Consolidated Statements of Income:
In millions
 
 
 
For the year ended December 31
AOCI Component
 
Location
 
2015
 
2014
 
2013
Defined benefit plans
 
Cost of services
 
$
(2
)
 
$
(1
)
 
$
(2
)
Defined benefit plans
 
Selling, general and administrative expenses
 
(1
)
 
—

 
(1
)
Defined benefit plans
 
Research and development expenses
 
—

 
—

 
1

Available for sale securities
 
Other income
 
42

 
—

 
—

Tax portion
 
Income tax expense
 
(16
)
 
—

 
—

Total reclassifications
 
Net income (loss)
 
$
23

 
$
(1
)
 
$
(2
)
Assets and Liabilities Held for Sale (Tables)
Schedule of Assets and Liabilities Held for Sale
A summary of the carrying amounts of assets and liabilities held for sale on our consolidated balance sheets as of December 31, 2015 related to the anticipated divestiture discussed above is detailed below:
 
As of
In millions
December 31, 2015
Current Assets
 
Accounts receivable, net
$
41

Other current assets
3

Total current assets
44

Property and equipment, net
12

Goodwill
113

Acquired intangibles, net
44

Other Assets
1

Total assets held for sale
$
214

 
 
Current Liabilities
 
Accounts payable
10

Payroll and benefits liabilities
12

Deferred Revenue
30

Other current liabilities
5

Total current liabilities
57

Other liabilities
1

Total liabilities held for sale
$
58

Quarterly Information (unaudited) (Tables)
Quarterly Results of Operations
In millions, except per share amounts
First
 
Second(1)
 
Third
 
Fourth(2)
2015
 
 
 
 
 
 
 
Total revenues
$
582

 
$
623

 
$
606

 
$
719

Gross margin
$
277

 
$
327

 
$
307

 
$
365

Operating income (loss)
$
30

 
$
(262
)
 
$
77

 
$
(40
)
Net income (loss)
$
22

 
$
(265
)
 
$
78

 
$
(49
)
Net income (loss) per share:
 
 
 
 
 
 
 
Basic
$
0.15

 
$
(1.87
)
 
$
0.56

 
$
(0.37
)
Diluted
$
0.15

 
$
(1.87
)
 
$
0.55

 
$
(0.37
)
2014
 
 
 
 
 
 
 
Total revenues
$
628

 
$
676

 
$
667

 
$
761

Gross margin
$
333

 
$
371

 
$
350

 
$
425

Operating income
$
89

 
$
133

 
$
123

 
$
158

Net income
$
59

 
$
96

 
$
94

 
$
118

Net income per share:
 
 
 
 
 
 
 
Basic
$
0.37

 
$
0.61

 
$
0.61

 
$
0.78

Diluted
$
0.37

 
$
0.60

 
$
0.60

 
$
0.77

Description of Business Basis of Presentation and Significant Accounting Policies - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
 
 
 
Debt issuance cost
$ 3 
 
 
Depreciation
53 
51 
48 
Fully diluted shares
0 
2.5 
3.0 
Antidilutive options to purchase were excluded from computation of diluted earnings per share (in shares)
141.9 
 
 
Internal-Use Software
 
 
 
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
 
 
 
Period capitalized on a straight-line basis when the asset is substantially ready for use
3 years 
 
 
Capitalized Software
 
 
 
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
 
 
 
Intangible assets amortizable period
4 years 
 
 
Minimum
 
 
 
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
 
 
 
Fees payment term (in days)
30 days 
 
 
Maximum
 
 
 
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
 
 
 
Fees payment term (in days)
90 days 
 
 
Equipment |
Minimum
 
 
 
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
 
 
 
Estimated Useful Lives
3 years 
 
 
Equipment |
Maximum
 
 
 
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
 
 
 
Estimated Useful Lives
20 years 
 
 
Building |
Minimum
 
 
 
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
 
 
 
Estimated Useful Lives
25 years 
 
 
Building |
Maximum
 
 
 
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
 
 
 
Estimated Useful Lives
45 years 
 
 
New Accounting Pronouncement, Early Adoption, Effect [Member]
 
 
 
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
 
 
 
Deferred tax current assets
 
28 
 
Deferred tax current liabilities
 
$ 1 
 
Employee Stock Option
 
 
 
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
 
 
 
Antidilutive options to purchase were excluded from computation of diluted earnings per share (in shares)
4.5 
2.4 
0.9 
Description of Business, Basis of Presentation and Significant Accounting Policies Activities Relating to Capitalized Software (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Movement in Capitalized Computer Software, Net [Roll Forward]
 
 
 
Ending balance at December 31
$ 190 
$ 199 
 
Internal-Use Software
 
 
 
Movement in Capitalized Computer Software, Net [Roll Forward]
 
 
 
Beginning balance at January 1
13 
12 
12 
Capitalized
6 
7 
6 
Amortization
(6)
(6)
(6)
Ending balance at December 31
13 
13 
12 
External-Use Software
 
 
 
Movement in Capitalized Computer Software, Net [Roll Forward]
 
 
 
Beginning balance at January 1
186 
183 
161 
Capitalized
61 
68 
72 
Amortization
(70)
(65)
(50)
Ending balance at December 31
$ 177 
$ 186 
$ 183 
Description of Business, Basis of Presentation and Significant Accounting Policies Aggregate Amortization Expense for Internal and External-Use Software (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Acquired Intangible Assets Amortization [Line Items]
 
 
 
Actual 2015
$ 40 
$ 47 
$ 44 
2016
10 
 
 
2017
7 
 
 
2018
3 
 
 
2019
2 
 
 
2020
0 
 
 
Internal-use software amortization expense
 
 
 
Acquired Intangible Assets Amortization [Line Items]
 
 
 
Actual 2015
6 
 
 
2016
6 
 
 
2017
4 
 
 
2018
3 
 
 
2019
0 
 
 
2020
0 
 
 
External-use software amortization expense
 
 
 
Acquired Intangible Assets Amortization [Line Items]
 
 
 
Actual 2015
70 
 
 
2016
66 
 
 
2017
56 
 
 
2018
36 
 
 
2019
19 
 
 
2020
$ 0 
 
 
Description of Business, Basis of Presentation and Significant Accounting Policies Components of Basic and Diluted Earnings Per Share (Detail) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Description of Business, Basis of Presentation and Significant Accounting Policies [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Net (loss) income attributable to common stockholders
$ (49)
$ 78 
$ (265)
$ 22 
$ 118 
$ 94 
$ 96 
$ 59 
$ (214)
$ 367 
$ 377 
Weighted average outstanding shares of common stock
 
 
 
 
 
 
 
 
139.6 
155.3 
163.4 
Dilutive effect of employee stock options, restricted shares and other stock awards
 
 
 
 
 
 
 
 
0 
2.5 
3.0 
Common stock and common stock equivalents
 
 
 
 
 
 
 
 
139.6 
157.8 
166.4 
(Loss) earnings per share:
 
 
 
 
 
 
 
 
 
 
 
Basic (in usd per share)
$ (0.37)
$ 0.56 
$ (1.87)
$ 0.15 
$ 0.78 
$ 0.61 
$ 0.61 
$ 0.37 
$ (1.53)
$ 2.36 
$ 2.31 
Diluted (in usd per share)
$ (0.37)
$ 0.55 
$ (1.87)
$ 0.15 
$ 0.77 
$ 0.60 
$ 0.60 
$ 0.37 
$ (1.53)
$ 2.33 
$ 2.27 
Supplemental Financial Information (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Accounts receivable
 
 
Trade
$ 591 
$ 635 
Other
6 
3 
Accounts receivable, gross
597 
638 
Less: allowance for doubtful accounts
(17)
(19)
Total accounts receivable, net
580 
619 
Inventories
 
 
Finished goods
32 
21 
Service parts
17 
17 
Total inventories
49 
38 
Other current assets
 
 
Current deferred tax assets
0 
28 
Other
52 
53 
Total other current assets
52 
81 
Property and equipment
 
 
Land
8 
8 
Buildings and improvements
78 
77 
Machinery and other equipment
336 
341 
Property and equipment, gross
422 
426 
Less: accumulated depreciation
(279)
(267)
Total property and equipment, net
143 
159 
Other assets
 
 
Available-for-sale securities
0 
78 
Other
20 
20 
Total other assets
20 
98 
Other current liabilities
 
 
Sales and value-added taxes
35 
40 
Other
67 
61 
Total other current liabilities
102 
101 
Deferred revenue
 
 
Deferred revenue, current
367 
370 
Long-term deferred revenue
15 
18 
Total deferred revenue
$ 382 
$ 388 
Goodwill and Acquired Intangible Assets Goodwill by Operating Segment (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2015
Jun. 30, 2015
Dec. 31, 2015
Goodwill
 
 
 
December 31, 2014
 
 
$ 948 
Additions
 
 
4 
Currency Translation Adjustments
 
 
(22)
Impairment
 
(478)
(437)
Transfers to Held for Sale
 
 
(113)
December 31, 2015
380 
 
380 
Data and Analytics
 
 
 
Goodwill
 
 
 
December 31, 2014
 
 
351 
Additions
 
 
4 
Currency Translation Adjustments
 
 
(4)
Impairment
 
 
0 
Transfers to Held for Sale
 
 
0 
December 31, 2015
351 
 
351 
Marketing Applications
 
 
 
Goodwill
 
 
 
December 31, 2014
 
 
597 
Additions
 
 
0 
Currency Translation Adjustments
 
 
(18)
Impairment
(140)
(340)
(437)
Transfers to Held for Sale
(97)
 
(113)
December 31, 2015
$ 29 
 
$ 29 
Goodwill and Acquired Intangible Assets Gross Carrying Amount and Accumulated Amortization for Teradata Acquired Intangible Assets (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Acquired Finite-Lived Intangible Assets
 
 
Gross Carrying Amount
$ 92 
$ 269 
Accumulated Amortization and Currency Translation Adjustments
(70)
(133)
Intellectual property/developed technology
 
 
Acquired Finite-Lived Intangible Assets
 
 
Gross Carrying Amount
83 
186 
Accumulated Amortization and Currency Translation Adjustments
(63)
(95)
Customer relationships
 
 
Acquired Finite-Lived Intangible Assets
 
 
Gross Carrying Amount
3 
77 
Accumulated Amortization and Currency Translation Adjustments
(3)
(35)
Trademarks/trade names
 
 
Acquired Finite-Lived Intangible Assets
 
 
Amortization Life (in Years)
5 years 
5 years 
Gross Carrying Amount
1 
1 
Accumulated Amortization and Currency Translation Adjustments
(1)
(1)
In-process research and development
 
 
Acquired Finite-Lived Intangible Assets
 
 
Amortization Life (in Years)
5 years 
5 years 
Gross Carrying Amount
5 
5 
Accumulated Amortization and Currency Translation Adjustments
$ (3)
$ (2)
Minimum |
Intellectual property/developed technology
 
 
Acquired Finite-Lived Intangible Assets
 
 
Amortization Life (in Years)
1 year 
1 year 
Minimum |
Customer relationships
 
 
Acquired Finite-Lived Intangible Assets
 
 
Amortization Life (in Years)
3 years 
3 years 
Maximum |
Intellectual property/developed technology
 
 
Acquired Finite-Lived Intangible Assets
 
 
Amortization Life (in Years)
7 years 
7 years 
Maximum |
Customer relationships
 
 
Acquired Finite-Lived Intangible Assets
 
 
Amortization Life (in Years)
10 years 
10 years 
Goodwill and Acquired Intangible Assets Aggregate Amortization Expense for Acquired Intangible Assets (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Goodwill and Intangible Assets Disclosure [Abstract]
 
 
 
Amortization expense - Actual
$ 40 
$ 47 
$ 44 
Amortization expense - 2016
10 
 
 
Amortization expense - 2017
7 
 
 
Amortization expense - 2018
3 
 
 
Amortization expense - 2019
2 
 
 
Amortization expense - 2020
$ 0 
 
 
Goodwill and Acquired Intangible Assets - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Jun. 30, 2015
Americas Marketing Application
Dec. 31, 2015
Marketing Applications
Dec. 31, 2015
Marketing Applications
Dec. 31, 2014
Marketing Applications
Dec. 31, 2015
International Marketing Application
Jun. 30, 2015
International Marketing Application
Dec. 31, 2015
Series of Individually Immaterial Business Acquisitions
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
Goodwill and Intangible Asset Impairment
$ 478 
$ 0 
$ 0 
$ 241 
$ 138 
 
 
$ 140 
$ 99 
 
Goodwill
380 
948 
 
 
29 
29 
597 
 
 
 
Intangible transfered
190 
 
 
 
 
 
 
 
 
 
Transfers, net
85 
 
 
 
 
 
 
 
 
 
Assets acquired
 
 
 
 
 
 
 
 
 
10 
Transfers to Held for Sale
113 
 
 
 
97 
113 
 
 
 
 
Impairment of Intangible Assets (Excluding Goodwill)
$ 41 
 
 
 
 
 
 
 
 
 
Income Taxes - Additional information (Detail) (USD $)
3 Months Ended 12 Months Ended
Jun. 30, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Taxes
 
 
 
 
Discrete tax expense
 
$ 145,000,000 
 
 
Impairment of goodwill and acquired intangibles
478,000,000 
437,000,000 
 
 
Non-deductible goodwill amount
 
414,000,000 
 
 
Net operating loss and tax credit carryforwards
 
73,000,000 
 
 
Research and development tax credit carryforwards
 
36,000,000 
 
 
Tax credit carryforwards recognized as deferred tax assets on balance sheet
 
11,000,000 
 
 
Deferred tax liability from foreign subsidiaries
 
1,200,000,000 
 
 
Tax liability related to uncertain tax positions
 
38,000,000 
36,000,000 
34,000,000 
Uncertain tax positions recognized as noncurrent liability on balance sheet
 
20,000,000 
 
 
Uncertain tax positions related to business acquisitions not recognized on balance sheet
 
15,000,000 
 
 
Interest accruals related to uncertain tax liabilities
 
2,000,000 
 
 
United States And Certain Foreign Jurisdictions
 
 
 
 
Income Taxes
 
 
 
 
Net operating loss carryforwards in the United States and certain foreign jurisdictions
 
26,000,000 
 
 
Operating loss carryforwards expiration year
 
2016 
 
 
Research Tax Credit Carryforward |
State and Local Jurisdiction
 
 
 
 
Income Taxes
 
 
 
 
Percentage of credits indefinite
 
0.90 
 
 
Valuation allowance
 
25,000,000 
 
 
Current Income Taxes Payable
 
 
 
 
Income Taxes
 
 
 
 
Tax liability related to uncertain tax positions
 
$ 3,000,000 
 
 
Income Taxes Income Before Income Taxes (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract]
 
 
 
United States
$ (88)
$ 301 
$ 362 
Foreign
(56)
193 
146 
(Loss) income before income taxes
$ (144)
$ 494 
$ 508 
Income Taxes Income Tax Expense (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Current
 
 
 
Federal
$ 74 
$ 94 
$ 78 
State and local
9 
8 
10 
Foreign
26 
27 
26 
Deferred
 
 
 
Federal
(19)
1 
18 
State and local
(3)
0 
2 
Foreign
(17)
(3)
(3)
Total income tax expense
$ 70 
$ 127 
$ 131 
Effective tax rate
(48.60%)
25.70% 
25.80% 
Income Taxes Difference Between the Effective Tax Rate and the U.S. Federal Statutory Income Tax Rate (Detail)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Tax Disclosure [Abstract]
 
 
 
Income tax expense at the U.S. federal tax rate
35.00% 
35.00% 
35.00% 
Foreign income tax differential
14.00% 
(9.00%)
(7.30%)
State and local income taxes
0.50% 
0.50% 
0.40% 
U.S. permanent book/tax differences
3.10% 
0.40% 
0.50% 
U.S. manufacturing deduction
5.50% 
(2.10%)
(2.10%)
Impairment of goodwill and acquired intangibles
(100.10%)
0.00% 
0.00% 
Other, net
(6.60%)
0.90% 
(0.70%)
Effective tax rate
(48.60%)
25.70% 
25.80% 
Income Taxes Deferred Income Tax Assets and Liabilities (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Deferred income tax assets
 
 
Employee pensions and other liabilities
$ 62 
$ 61 
Other balance sheet reserves and allowances
23 
22 
Tax loss and credit carryforwards
62 
59 
Deferred revenue
3 
0 
Total deferred income tax assets
150 
142 
Valuation allowance
(25)
(20)
Net deferred income tax assets
125 
122 
Deferred income tax liabilities
 
 
Intangibles and capitalized software
81 
102 
Property and equipment
30 
29 
Deferred revenue
0 
17 
Other
1 
12 
Total deferred income tax liabilities
112 
160 
Total net deferred income tax assets (liabilities)
13 
 
Total deferred income tax liabilities
 
$ (38)
Employee Stock-based Compensation Plans Stock-Based Compensation Expense (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
 
 
Stock options
 
$ 12 
$ 13 
$ 14 
Restricted shares
 
41 
33 
32 
Employee share repurchase program
 
3 
4 
3 
Total stock-based compensation before income taxes
 
56 
50 
49 
Tax benefit
 
(17)
(16)
(16)
Total stock-based compensation, net of tax
$ 1 
$ 39 
$ 34 
$ 33 
Employee Stock-based Compensation Plans Fair Value of Each Option Award on the Grant Date Using the Black-Scholes Option-Pricing Model (Detail)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
 
Dividend yield
0.00% 
0.00% 
0.00% 
Risk-free interest rate
1.76% 
1.73% 
1.77% 
Expected volatility
34.40% 
37.80% 
37.60% 
Expected term (years)
6 years 3 months 18 days 
6 years 3 months 18 days 
6 years 3 months 18 days 
Employee Stock-based Compensation Plans Summary of Stock Option Activity (Detail) (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Shares Under Option
 
 
Outstanding at beginning of period (in shares)
7,237 
 
Granted (in shares)
1,185 
 
Exercised (in shares)
(428)
 
Canceled (in shares)
(134)
 
Forfeited (in shares)
(286)
 
Outstanding at end of period (in shares)
7,574 
7,237 
Fully vested and expected to vest at period end (in shares)
7,476 
 
Exercisable at period end (in shares)
5,299 
 
Weighted-Average Exercise Price per Share
 
 
Outstanding at beginning of period (in usd per share)
$ 35.50 
 
Granted (in usd per share)
$ 30.63 
 
Exercised (in usd per share)
$ 20.66 
 
Canceled (in usd per share)
$ 46.18 
 
Forfeited (in usd per share)
$ 48.12 
 
Outstanding at end of period (in usd per share)
$ 34.91 
$ 35.50 
Fully vested and expected to vest at period end (in usd per share)
$ 34.89 
 
Exercisable at period end (in usd per share)
$ 33.43 
 
Weighted-Average Remaining Contractual Term
 
 
Weighted-average remaining contractual term (in years)
5 years 8 months 12 days 
6 years 1 month 6 days 
Fully vested and expected to vest at period end (in years)
5 years 7 months 6 days 
 
Exercisable at period end (in years)
4 years 2 months 12 days 
 
Aggregate Intrinsic Value
 
 
Aggregate Intrinsic Value
$ 20 
$ 78 
Fully vested and expected to vest at period end
20 
 
Exercisable at period end
$ 20 
 
Employee Stock-based Compensation Plans Total Intrinsic Value of Options Exercised and The Cash Received (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Intrinsic value of options exercised
$ 8 
$ 14 
$ 19 
Cash received from option exercises
9 
11 
9 
Tax benefit realized from option exercises
$ 3 
$ 5 
$ 6 
Employee Stock-based Compensation Plans Restricted Stock and Restricted Stock Unit Activity (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Number of Shares
 
Unvested shares at January 1, 2014 (in shares)
3,252 
Granted (in shares)
2,118 
Vested (in shares)
(832)
Forfeited/canceled (in shares)
(392)
Unvested shares at December 31, 2015 (in shares)
4,146 
Weighted-Average Grant Date Fair Value
 
Unvested shares at January 1, 2014 (in usd per share)
$ 47.24 
Granted (in usd per share)
$ 32.82 
Vested (in usd per share)
$ 54.60 
Forfeited/canceled (in usd per share)
$ 45.34 
Unvested shares at December 31, 2015 (in usd per share)
$ 38.58 
Employee Stock-based Compensation Plans Weighted-Average Fair Value and Total Fair Value of Shares Vested (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Weighted-average fair value of restricted shares units granted (in usd per share)
$ 32.82 
 
 
Restricted Stock Units
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Weighted-average fair value of restricted shares units granted (in usd per share)
$ 32.82 
$ 44.39 
$ 48.24 
Total fair value of shares vested (in millions)
$ 45 
$ 27 
$ 30 
Employee Stock-based Compensation Plans Composition of Teradata Restricted Stock Grants (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Number of Shares
2,118 
Weighted-average fair value of restricted shares units granted (in usd per share)
$ 32.82 
Service-based shares
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Number of Shares
2,055 
Weighted-average fair value of restricted shares units granted (in usd per share)
$ 32.68 
Performance-based shares
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Number of Shares
63 
Weighted-average fair value of restricted shares units granted (in usd per share)
$ 37.36 
Employee Stock-based Compensation Plans Primary Assumptions Valuation Market Component Awards (Detail)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Share based Compensation Arrangement by Share based Payment Award, Fair Value Assumptions, Method Used [Line Items]
 
 
 
Grant date fair value per share of Company common stock
$ 38.58 
$ 47.24 
 
Expected volatility
34.40% 
37.80% 
37.60% 
Risk-free interest rate
1.76% 
1.73% 
1.77% 
Dividend yield
0.00% 
0.00% 
0.00% 
Employee Stock-based Compensation Plans Employee Purchases and Aggregate Cost (Details) (Employee Stock Puchase Program, USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Employee Stock Puchase Program
 
 
 
Equity, Class of Treasury Stock [Line Items]
 
 
 
Employee share purchases (in shares)
0.5 
0.4 
0.4 
Aggregate cost
$ 17 
$ 18 
$ 20 
Employee Stock-based Compensation Plans - Additional Information (Detail) (USD $)
3 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended
Dec. 31, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Jan. 31, 2013
Employee Stock Purchase Program
Dec. 31, 2013
Employee Stock Purchase Program
Dec. 31, 2015
Employee Stock Purchase Program
Dec. 31, 2014
Employee Stock Purchase Program
Dec. 31, 2015
Long-Term Strategic PBRSU
Dec. 31, 2015
Special 2016 PSRSU
Dec. 31, 2015
Special 2016 PSRSU
Minimum
Dec. 31, 2015
Special 2016 PSRSU
Maximum
Dec. 31, 2015
Stock Option
Dec. 31, 2015
Restricted Stock
Dec. 31, 2012
Restricted Stock Units With Market Based Performance Criteria
Dec. 31, 2015
Service-Based Awards
Minimum
Dec. 31, 2015
Performance Based Awards
Minimum
Dec. 31, 2015
Performance Based Awards
Maximum
Dec. 31, 2015
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares authorized to be issued under the Teradata SIP (in shares)
16,400,000 
16,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock option, term
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10 years 
Vesting period (in years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3 years 
1 year 
4 years 
4 years 
Weighted-average fair value of options granted for Teradata equity awards
 
$ 11.37 
$ 17.67 
$ 18.02 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tax benefit realized from stock options exercises
 
$ 3,000,000 
$ 5,000,000 
$ 6,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total unrecognized compensation cost related to unvested stock grants
 
 
 
 
 
 
 
 
 
 
 
 
30,000,000 
96,000,000 
 
 
 
 
 
Cost expected to be recognized over a weighted-average period (in years)
 
 
 
 
 
 
 
 
 
 
 
 
3 years 
2 years 4 months 24 days 
 
 
 
 
 
Restricted stock unit awards granted
 
2,118,000 
 
 
 
 
 
 
 
 
 
 
 
 
300,000 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Award Subjective Performance Period
 
 
 
 
 
 
 
 
 
4 years 
 
 
 
 
 
 
 
 
 
Performance share percentage
 
 
 
 
 
 
 
 
 
 
0.00% 
200.00% 
 
 
 
 
 
 
 
Total stock-based compensation, net of tax
1,000,000 
39,000,000 
34,000,000 
33,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average fair value of restricted shares units granted (in usd per share)
 
$ 32.82 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation expense for restricted stock awards
 
$ 41,000,000 
$ 33,000,000 
$ 32,000,000 
 
 
 
 
$ 0 
$ 0 
 
 
 
 
 
 
 
 
 
Service period
 
 
 
 
 
 
 
 
 
3 years 
 
 
 
 
 
 
 
 
 
Employee stock purchase program discount from average market price
 
 
 
 
15.00% 
5.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of authorized payroll deductions for common stock purchases by employees
 
 
 
 
 
10.00% 
10.00% 
10.00% 
 
 
 
 
 
 
 
 
 
 
 
Shares authorized to be issued under the Employee Stock Purchase Program
 
 
 
 
 
 
4,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
Remaining shares authorized to be issued under the Employee Stock Purchase Program
 
 
 
 
 
 
1,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
Employee Benefit Plans Schedule of Pension and Postemployment Benefit Costs (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Postemployment
 
 
 
Service cost
$ 6 
$ 4 
$ 3 
Interest cost
1 
1 
1 
Amortization of actuarial loss (gain)
0 
(1)
(1)
Amortization of prior service credit
0 
0 
0 
Total costs
7 
4 
3 
Foreign Pension Plan
 
 
 
Pension
 
 
 
Service cost
8 
9 
8 
Interest cost
3 
4 
4 
Expected return on plan assets
(2)
(2)
(2)
Settlement charge
1 
1 
1 
Amortization of actuarial loss (gain)
2 
2 
2 
Amortization of prior service credit
0 
(1)
0 
Total costs
$ 12 
$ 13 
$ 13 
Employee Benefit Plans Changes in Benefit Obligations Plan Assets Funded Status and Reconciliation of Funded Status to Amounts Recognized in Consolidated Balance Sheets and in Accumulated Other Comprehensive Income (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Change in Postemployment Benefit Obligation
 
 
 
Benefit obligation at January 1
$ 39 
$ 27 
 
Service cost
6 
4 
3 
Interest cost
1 
1 
1 
Actuarial (gain) loss
20 
19 
 
Benefits paid
(15)
(11)
 
Currency translation adjustments
(2)
(1)
 
Benefit obligation at December 31
49 
39 
27 
Postemployment Benefits, Funded Status (Underfunded)
(49)
(39)
 
Change in Pension Benefit Plan Assets
 
 
 
Fair value of plan assets at January 1
67 
 
 
Fair value of plan assets at December 31
63 
67 
 
Amounts Recognized in the Balance Sheet, Postemployment
 
 
 
Current liabilities
(16)
(5)
 
Non-current liabilities
(33)
(34)
 
Non-current liabilities
(49)
(39)
(27)
Amounts Recognized in Accumulated Other Comprehensive Income, Postemployment
 
 
 
Unrecognized Net actuarial loss
23 
6 
 
Unrecognized Prior service (credit) cost
2 
1 
 
Total
25 
7 
 
Foreign Pension Plan
 
 
 
Change in Pension Benefit Obligation
 
 
 
Benefit obligation at January 1
130 
129 
 
Service cost
8 
9 
 
Interest cost
3 
4 
 
Plan participant contributions
1 
1 
 
Actuarial (gain) loss
(9)
18 
 
Benefits paid
(9)
(19)
 
Currency translation adjustments
(9)
(15)
 
New plans
0 
3 
 
Benefit obligation at December 31
115 
130 
 
Change in Pension Benefit Plan Assets
 
 
 
Fair value of plan assets at January 1
67 
76 
 
Actual return on plan assets
1 
7 
 
Company contributions
5 
8 
 
Benefits paid
(9)
(19)
 
Currency translation adjustments
(2)
(7)
 
Plan participant contribution
1 
1 
 
New plans
0 
1 
 
Fair value of plan assets at December 31
63 
67 
 
Funded status (underfunded)
(52)
(63)
 
Amounts Recognized in Balance Sheet, Pension
 
 
 
Non-current assets
5 
4 
 
Current liabilities
(1)
(1)
 
Non-current liabilities
(56)
(66)
 
Net amounts recognized
(52)
(63)
 
Amounts Recognized in Accumulated Other Comprehensive Income, Pension
 
 
 
Unrecognized Net actuarial loss
19 
33 
 
Unrecognized Prior service (credit) cost
(1)
0 
 
Total
$ 18 
$ 33 
 
Employee Benefit Plans Accumulated Pension Benefit Obligation (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Compensation and Retirement Disclosure [Abstract]
 
 
Accumulated pension benefit obligation
$ 106 
$ 118 
Employee Benefit Plans Accumulated Benefit Obligation in Excess of Plan Assets (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Compensation and Retirement Disclosure [Abstract]
 
 
Projected benefit obligation
$ 58 
$ 69 
Accumulated benefit obligation
50 
61 
Fair value of plan assets
$ 0 
$ 3 
Employee Benefit Plans Pre-tax Net Changes in Projected Benefit Obligations Recognized in Other Comprehensive Income (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Pension
 
 
 
Total recognized in other comprehensive (loss) income
$ (9)
$ (29)
$ 0 
Postemployment
 
 
 
Actuarial (gain) loss arising during the year
18 
18 
 
Amortization of (loss) gain included in net periodic benefit cost
0 
1 
1 
Prior service cost arising during the year
0 
0 
 
Total recognized in other comprehensive (loss) income
18 
19 
 
Foreign Pension Plan
 
 
 
Pension
 
 
 
Actuarial (gain) loss arising during the year
(9)
14 
 
Amortization of (loss) gain included in net periodic benefit cost
(2)
(2)
(2)
Prior service cost arising during the year
0 
1 
 
Recognition of loss due to settlement
(1)
(1)
(1)
Foreign currency exchange
0 
(3)
 
Total recognized in other comprehensive (loss) income
$ (12)
$ 9 
 
Employee Benefit Plans Amounts in Accumulated Other Comprehensive Income Expected to be Recognized as Components of Net Periodic Benefit Cost (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
 
Net loss to be recognized in other comprehensive income
$ 0 
Foreign Pension Plan
 
Defined Benefit Plan Disclosure [Line Items]
 
Net loss to be recognized in other comprehensive income
$ 3 
Employee Benefit Plans Weighted Average Assumptions Used to Determine Benefit Obligations and Net Periodic Benefit (Detail)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Postemployment
 
 
 
Discount rate
3.60% 
3.50% 
 
Rate of compensation increase
3.00% 
3.00% 
 
Involuntary turnover rate
1.80% 
1.30% 
 
Discount rate
3.50% 
3.80% 
3.40% 
Rate of compensation increase
3.00% 
3.70% 
3.80% 
Involuntary turnover rate
1.30% 
1.00% 
1.00% 
Foreign Pension Plan
 
 
 
Pension Benefit
 
 
 
Discount rate
2.40% 
2.30% 
 
Rate of compensation increase
3.20% 
3.30% 
 
Discount rate
2.30% 
3.00% 
3.00% 
Rate of compensation increase
3.30% 
3.20% 
3.30% 
Expected return on plan assets
3.30% 
3.40% 
3.40% 
Employee Benefit Plans Weighted Average Asset Allocations by Asset Category (Detail)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
 
 
Actual Asset Allocation As of December 31
100.00% 
100.00% 
Target Asset Allocation
100.00% 
 
Equity securities
 
 
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
 
 
Actual Asset Allocation As of December 31
31.00% 
32.00% 
Target Asset Allocation
31.00% 
 
Debt securities
 
 
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
 
 
Actual Asset Allocation As of December 31
43.00% 
41.00% 
Target Asset Allocation
47.00% 
 
Insurance (annuity) contracts
 
 
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
 
 
Actual Asset Allocation As of December 31
16.00% 
17.00% 
Target Asset Allocation
16.00% 
 
Real estate
 
 
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
 
 
Actual Asset Allocation As of December 31
6.00% 
5.00% 
Target Asset Allocation
3.00% 
 
Other
 
 
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
 
 
Actual Asset Allocation As of December 31
4.00% 
5.00% 
Target Asset Allocation
3.00% 
 
Employee Benefit Plans Schedule of Pension Plan Assets at Fair Value (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Money market funds
$ 3 
$ 2 
 
Equity funds
19 
21 
 
Bond/fixed-income funds
27 
28 
 
Real-estate indirect investments
4 
4 
 
Commodities/Other
 
1 
 
Insurance contracts
10 
11 
10 
Total Assets at fair value
63 
67 
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Money market funds
0 
0 
 
Equity funds
0 
0 
 
Bond/fixed-income funds
0 
0 
 
Real-estate indirect investments
0 
0 
 
Commodities/Other
 
0 
 
Insurance contracts
0 
0 
 
Total Assets at fair value
0 
0 
 
Significant Other Observable Inputs (Level 2)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Money market funds
3 
2 
 
Equity funds
19 
21 
 
Bond/fixed-income funds
27 
28 
 
Real-estate indirect investments
4 
4 
 
Commodities/Other
 
1 
 
Insurance contracts
0 
0 
 
Total Assets at fair value
53 
56 
 
Significant Unobservable Inputs (Level 3)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Money market funds
0 
0 
 
Equity funds
0 
0 
 
Bond/fixed-income funds
0 
0 
 
Real-estate indirect investments
0 
0 
 
Commodities/Other
 
0 
 
Insurance contracts
10 
11 
 
Total Assets at fair value
$ 10 
$ 11 
 
Employee Benefit Plans Summary of Changes in Fair Value of Pension Plan Level 3 Assets (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Insurance Contracts Pension Plan Assets Fair Value [Roll Forward]
 
 
Balance as of January 1
$ 11 
$ 10 
Purchases, sales and settlements, net
(1)
1 
Balance as of December 31
$ 10 
$ 11 
Employee Benefit Plans Estimated Future Benefit Payments (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2015
Postemployment Benefits
 
2016
$ 16 
2017
5 
2018
5 
2019
5 
2020
5 
2021-2025
23 
Foreign Pension Plan
 
Pension Benefits
 
2016
4 
2017
5 
2018
5 
2019
4 
2020
4 
2021-2025
$ 27 
Employee Benefit Plans U.S and International Subsidiary Savings Plans (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
U.S. savings plan
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Defined Contribution Plan, Cost Recognized
$ 22 
$ 23 
$ 23 
International subsidiary savings plans
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Defined Contribution Plan, Cost Recognized
$ 18 
$ 18 
$ 17 
Employee Benefit Plans - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
 
Amount of gains and losses to be amortized to the extent that they exceed 10% of the higher of the market-related value or the projected benefit obligation of each respective plan
10.00% 
Foreign Pension Plan
 
Defined Benefit Plan Disclosure [Line Items]
 
Estimated benefits in the next fiscal year
$ 5 
Derivative Instruments and Hedging Activities - Schedule of Foreign Exchange Contracts (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Derivative
 
 
Net contract notional amount of foreign exchange forward contracts
$ 25 
$ 17 
Foreign Exchange Contract
 
 
Derivative
 
 
Contract notional amount of foreign exchange forward contracts
$ 138 
$ 116 
Commitments and Contingencies - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
 
Maximum future payment obligation of the guaranteed value and associated liabilities
$ 3 
Commitments and Contingencies - Warranty Reserve Activity (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Movement in Standard Product Warranty Accrual [Roll Forward]
 
 
 
Beginning balance at January 1
$ 7 
$ 8 
$ 8 
Accruals for warranties issued
9 
16 
15 
Settlements (in cash or kind)
(10)
(17)
(15)
Balance at end of period
$ 6 
$ 7 
$ 8 
Commitments and Contingencies - Future Minimum Operating Lease Payments and Committed Subleases Under Non-cancelable Leases (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
 
 
 
Operating lease obligations - Total Amounts
$ 70 
 
 
Operating lease obligations - 2016
24 
 
 
Operating lease obligations - 2017
19 
 
 
Operating lease obligations - 2018
15 
 
 
Operating lease obligations - 2019
7 
 
 
Operating lease obligations - 2020
5 
 
 
Sublease rentals - Total Amounts
(5)
 
 
Sublease rentals - 2016
(3)
 
 
Sublease rentals - 2017
(2)
 
 
Sublease rentals - 2018
0 
 
 
Sublease rentals - 2019
0 
 
 
Sublease rentals - 2020
0 
 
 
Total committed operating leases less sublease rentals - Total Amounts
65 
 
 
Total committed operating leases less sublease rentals - 2016
21 
 
 
Total committed operating leases less sublease rentals - 2017
17 
 
 
Total committed operating leases less sublease rentals - 2018
15 
 
 
Total committed operating leases less sublease rentals - 2019
7 
 
 
Total committed operating leases less sublease rentals - 2020
5 
 
 
Rental expense
26 
26 
26 
Sublease rental income
$ 3 
$ 3 
$ 3 
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis and Subject to Fair Value Disclosure Requirements (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Assets
 
 
Available-for-sale securities
$ 0 
$ 78 
Recurring
 
 
Assets
 
 
Money market funds
351 
393 
Available-for-sale securities
 
78 
Total assets at fair value
 
471 
Recurring |
Quoted Price as in Active Markets for Identical Assets (Level 1)
 
 
Assets
 
 
Money market funds
351 
393 
Available-for-sale securities
 
78 
Total assets at fair value
 
471 
Recurring |
Significant Other Observable Inputs (Level 2)
 
 
Assets
 
 
Money market funds
0 
0 
Available-for-sale securities
 
0 
Total assets at fair value
 
0 
Recurring |
Significant Unobservable Inputs (Level 3)
 
 
Assets
 
 
Money market funds
0 
0 
Available-for-sale securities
 
0 
Total assets at fair value
 
$ 0 
Debt - Additional Information (Detail) (USD $)
12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Mar. 25, 2015
Senior Notes
Senior Unsecured Five Year Term Loan issued March 2015
Dec. 31, 2015
Senior Notes
Senior Unsecured Five Year Term Loan issued March 2015
Mar. 25, 2015
Senior Notes
Senior Unsecured Five Year Term Loan issued March 2015
Mar. 25, 2015
Senior Notes
Senior Unsecured Term Loan Issued Prior to March 2015
Mar. 25, 2015
Line of Credit
Revolving Credit Facility
Five-Year Revolving Credit Facility Established Prior to March 2015
Mar. 25, 2015
Line of Credit
Revolving Credit Facility
Five-Year Revolving Credit Facility Established Prior to March 2015
Dec. 31, 2015
Line of Credit
Revolving Credit Facility
Revolving Credit Facility Ending in March 2020
Mar. 25, 2015
Line of Credit
Revolving Credit Facility
Revolving Credit Facility Ending in March 2020
Debt Instrument
 
 
 
 
 
 
 
 
 
 
 
Expiration period
 
 
 
 
 
 
 
5 years 
 
 
 
Credit facility maximum borrowing capacity
 
 
 
 
 
 
 
 
$ 300,000,000 
 
$ 400,000,000 
Credit facility outstanding balance
 
 
 
 
 
 
 
 
 
180,000,000 
 
Interest rate
 
 
 
 
1.8125% 
 
 
 
 
1.623% 
 
Credit facility borrowing capacity
 
 
 
 
 
 
 
 
 
220,000,000 
 
Unamortized debt issuance expense
 
 
 
 
2,000,000 
 
 
 
 
1,000,000 
 
Revolving credit agreement period (in years)
 
 
 
5 years 
5 years 
 
 
 
 
5 years 
 
Term loan, face amount
 
 
 
 
 
600,000,000 
 
 
 
 
 
Repayments of debt
 
 
 
 
 
 
247,000,000 
 
 
 
 
Repayments of lines of credit
220,000,000 
0 
0 
 
 
 
 
220,000,000 
 
 
 
Long-term debt, gross amount
 
 
 
 
$ 600,000,000 
 
 
 
 
 
 
Debt - Annual Contractual Maturities of Principal on Debt Outstanding (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2015
Debt Disclosure [Abstract]
 
2016
$ 30 
2017
30 
2018
60 
2019
67 
2020
413 
Total
$ 600 
Debt - Interest Expense (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Debt Disclosure [Abstract]
 
 
 
Interest Expense, Debt
$ 9 
$ 3 
$ 4 
Segment, Other Supplemental Information and Concentrations - Additional Information (Detail)
12 Months Ended 1 Months Ended
Dec. 31, 2015
segment
Jan. 31, 2016
Subsequent Event
segment
Subsequent Event [Line Items]
 
 
Number of operating segments
2 
3 
Segment, Other Supplemental Information and Concentrations - Regional Segment Revenue and Gross Margin for Company (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Segment revenue
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 719 
$ 606 
$ 623 
$ 582 
$ 761 
$ 667 
$ 676 
$ 628 
$ 2,530 
$ 2,732 
$ 2,692 
Segment gross margin
 
 
 
 
 
 
 
 
 
 
 
Gross margin
365 
307 
327 
277 
425 
350 
371 
333 
1,276 
1,479 
1,473 
Selling, general and administrative expenses
 
 
 
 
 
 
 
 
765 
770 
757 
Research and development expenses
 
 
 
 
 
 
 
 
228 
206 
184 
Impairment of goodwill and acquired intangibles
 
 
 
 
 
 
 
 
478 
0 
0 
(Loss) income from operations
(40)
77 
(262)
30 
158 
123 
133 
89 
(195)
503 
532 
Marketing Applications
 
 
 
 
 
 
 
 
 
 
 
Segment gross margin
 
 
 
 
 
 
 
 
 
 
 
Impairment of goodwill and acquired intangibles
138 
 
 
 
 
 
 
 
 
 
 
Operating Segments
 
 
 
 
 
 
 
 
 
 
 
Segment revenue
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
2,530 
2,732 
2,692 
Segment gross margin
 
 
 
 
 
 
 
 
 
 
 
Gross margin
 
 
 
 
 
 
 
 
1,316 
1,516 
1,508 
Operating Segments |
Data and Analytics
 
 
 
 
 
 
 
 
 
 
 
Segment revenue
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
2,337 
2,523 
2,478 
Segment gross margin
 
 
 
 
 
 
 
 
 
 
 
Gross margin
 
 
 
 
 
 
 
 
1,237 
1,422 
1,399 
Operating Segments |
Marketing Applications
 
 
 
 
 
 
 
 
 
 
 
Segment revenue
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
193 
209 
214 
Segment gross margin
 
 
 
 
 
 
 
 
 
 
 
Gross margin
 
 
 
 
 
 
 
 
79 
94 
109 
Corporate, Non-Segment
 
 
 
 
 
 
 
 
 
 
 
Segment gross margin
 
 
 
 
 
 
 
 
 
 
 
Stock-based compensation expense
 
 
 
 
 
 
 
 
13 
11 
7 
Amortization of acquisition-related intangible assets
 
 
 
 
 
 
 
 
19 
21 
24 
Acquisition, integration and reorganization-related costs
 
 
 
 
 
 
 
 
$ 8 
$ 5 
$ 4 
Segment, Other Supplemental Information and Concentrations - Revenue by Product and Services (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Segment Reporting [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Products (software and hardware)
 
 
 
 
 
 
 
 
$ 1,057 
$ 1,227 
$ 1,230 
Consulting services
 
 
 
 
 
 
 
 
780 
817 
818 
Maintenance services
 
 
 
 
 
 
 
 
693 
688 
644 
Total services
 
 
 
 
 
 
 
 
1,473 
1,505 
1,462 
Total revenue
$ 719 
$ 606 
$ 623 
$ 582 
$ 761 
$ 667 
$ 676 
$ 628 
$ 2,530 
$ 2,732 
$ 2,692 
Segment, Other Supplemental Information and Concentrations - Schedule of Revenue by Geographical Area (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 719 
$ 606 
$ 623 
$ 582 
$ 761 
$ 667 
$ 676 
$ 628 
$ 2,530 
$ 2,732 
$ 2,692 
UNITED STATES
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
1,428 
1,458 
1,511 
Americas (excluding United States)
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
125 
161 
122 
International
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
$ 977 
$ 1,113 
$ 1,059 
Segment, Other Supplemental Information and Concentrations - Schedule of Property and Equipment by Geographic Area (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Schedule Of Identifiable Assets By Segment [Line Items]
 
 
Property and equipment, net
$ 155 
$ 159 
Property and equipment, net
12 
 
United States
 
 
Schedule Of Identifiable Assets By Segment [Line Items]
 
 
Property and equipment, net
129 
130 
Americas (excluding United States)
 
 
Schedule Of Identifiable Assets By Segment [Line Items]
 
 
Property and equipment, net
3 
4 
International
 
 
Schedule Of Identifiable Assets By Segment [Line Items]
 
 
Property and equipment, net
$ 23 
$ 25 
Business Combinations and Other Investment Activities - Additional Information (Detail) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Business Acquisition
 
 
 
Business Acquisitions And Other Investing Activities Net
$ 17,000,000 
$ 69,000,000 
$ 2 
Equity investment arising from an impairment of carrying value
3,000,000 
9,000,000 
25,000,000 
Series of Individually Immaterial Business Acquisitions
 
 
 
Business Acquisition
 
 
 
Number of equity investments
2 
6 
 
Number of Business Acquisitions and Other Equity Investments
85,000,000 
 
 
Business Acquisitions And Other Investing Activities Net
17,000,000 
69,000,000 
36,000,000 
Number of businesses acquired
2 
 
2 
Other Nonoperating Income (Expense)
 
 
 
Business Acquisition
 
 
 
Gain (loss) on sale of equity investment
$ 57,000,000 
 
 
Marketing Applications |
Series of Individually Immaterial Business Acquisitions
 
 
 
Business Acquisition
 
 
 
Number of businesses acquired
 
2 
 
Accumulated Other Comprehensive (Loss) Income - Changes in Accumulated Other Comprehensive Income (AOCI) (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
Beginning Balance
$ (4)
$ 33 
$ 29 
Other comprehensive income (loss) before reclassifications
(49)
(38)
2 
Amounts reclassified from AOCI
(23)
1 
2 
Net other comprehensive income (loss)
(72)
(37)
4 
Ending Balance
(76)
(4)
33 
Available-for-sale Securities
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
Beginning Balance
31 
0 
0 
Other comprehensive income (loss) before reclassifications
(5)
31 
0 
Amounts reclassified from AOCI
(26)
0 
0 
Net other comprehensive income (loss)
(31)
31 
0 
Ending Balance
0 
31 
0 
Accumulated Defined Benefit Plans Adjustment
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
Beginning Balance
(24)
(3)
(5)
Other comprehensive income (loss) before reclassifications
(8)
(22)
0 
Amounts reclassified from AOCI
3 
1 
2 
Net other comprehensive income (loss)
(5)
(21)
2 
Ending Balance
(29)
(24)
(3)
Foreign Currency Translation Adjustments
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
Beginning Balance
(11)
36 
34 
Other comprehensive income (loss) before reclassifications
(36)
(47)
2 
Amounts reclassified from AOCI
0 
0 
0 
Net other comprehensive income (loss)
(36)
(47)
2 
Ending Balance
$ (47)
$ (11)
$ 36 
Accumulated Other Comprehensive (Loss) Income - Impact and Location of AOCI Reclassifications in Consolidated Statements of Income (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Cost of services
 
 
 
 
 
 
 
 
$ (814)
$ (810)
$ (786)
Selling, general and administrative expenses
 
 
 
 
 
 
 
 
(765)
(770)
(757)
Research and development expenses
 
 
 
 
 
 
 
 
(228)
(206)
(184)
Other income
 
 
 
 
 
 
 
 
(51)
9 
24 
Income Tax Expense (Benefit)
 
 
 
 
 
 
 
 
(70)
(127)
(131)
Net (loss) income
(49)
78 
(265)
22 
118 
94 
96 
59 
(214)
367 
377 
Amount Reclassified from of Accumulated Other Comprehensive Income
 
 
 
 
 
 
 
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Cost of services
 
 
 
 
 
 
 
 
(2)
(1)
(2)
Selling, general and administrative expenses
 
 
 
 
 
 
 
 
(1)
0 
(1)
Research and development expenses
 
 
 
 
 
 
 
 
0 
0 
1 
Other income
 
 
 
 
 
 
 
 
(42)
0 
0 
Income Tax Expense (Benefit)
 
 
 
 
 
 
 
 
(16)
0 
0 
Net (loss) income
 
 
 
 
 
 
 
 
$ 23 
$ (1)
$ (2)
Reorganization and Business Transformation (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended
Jun. 30, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2015
Marketing Applications
Jun. 30, 2015
Marketing Applications
Dec. 31, 2015
Marketing Applications
Dec. 31, 2015
International Marketing Application
Jun. 30, 2015
International Marketing Application
Dec. 31, 2015
Employee Severance
Marketing Applications
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
 
 
 
Severance costs
 
 
 
 
$ 4 
 
 
 
 
 
Impairment of goodwill and acquired intangibles
478 
437 
 
 
140 
340 
437 
 
 
 
Other restructuring costs
 
 
 
 
8 
 
 
 
 
 
Impairment of goodwill and acquired intangibles
 
478 
0 
0 
138 
 
 
140 
99 
 
Payments for restructuring
 
 
 
 
 
 
 
 
 
$ 14 
Assets and Liabilities Held for Sale (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Jun. 30, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2015
Marketing Applications
Discontinued Operations, Held-for-sale
Dec. 31, 2015
Marketing Applications
Discontinued Operations, Held-for-sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
 
Revenue
 
 
 
 
$ 152 
Operating loss
 
 
 
 
561 
Impairment of goodwill and acquired intangibles
478 
437 
 
97 
 
Current Assets
 
 
 
 
 
Accounts receivable, net
 
 
 
41 
41 
Other current assets
 
 
 
3 
3 
Total current assets
 
214 
0 
44 
44 
Property and equipment, net
 
12 
 
12 
12 
Goodwill
 
 
 
113 
113 
Acquired intangibles, net
 
 
 
44 
44 
Other Assets
 
 
 
1 
1 
Total assets held for sale
 
 
 
214 
214 
Current Liabilities
 
 
 
 
 
Accounts payable
 
 
 
10 
10 
Payroll and benefits liabilities
 
 
 
12 
12 
Deferred Revenue
 
 
 
30 
30 
Other current liabilities
 
 
 
5 
5 
Total current liabilities
 
58 
0 
57 
57 
Other liabilities
 
 
 
1 
1 
Total liabilities held for sale
 
 
 
58 
58 
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill)
 
 
 
$ 41 
 
Quarterly Information (Detail) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Business Combination Segment Allocation [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Impairment of goodwill and acquired intangibles
 
 
$ 478 
 
 
 
 
 
$ 437 
 
 
Impairment of goodwill and acquired intangibles
 
 
 
 
 
 
 
 
478 
0 
0 
Total revenues
719 
606 
623 
582 
761 
667 
676 
628 
2,530 
2,732 
2,692 
Gross margin
365 
307 
327 
277 
425 
350 
371 
333 
1,276 
1,479 
1,473 
Operating income (loss)
(40)
77 
(262)
30 
158 
123 
133 
89 
(195)
503 
532 
Net (loss) income
(49)
78 
(265)
22 
118 
94 
96 
59 
(214)
367 
377 
Net income (loss) per share:
 
 
 
 
 
 
 
 
 
 
 
Basic (in usd per share)
$ (0.37)
$ 0.56 
$ (1.87)
$ 0.15 
$ 0.78 
$ 0.61 
$ 0.61 
$ 0.37 
$ (1.53)
$ 2.36 
$ 2.31 
Diluted (in usd per share)
$ (0.37)
$ 0.55 
$ (1.87)
$ 0.15 
$ 0.77 
$ 0.60 
$ 0.60 
$ 0.37 
$ (1.53)
$ 2.33 
$ 2.27 
Marketing Applications
 
 
 
 
 
 
 
 
 
 
 
Business Combination Segment Allocation [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Impairment of goodwill and acquired intangibles
140 
 
340 
 
 
 
 
 
437 
 
 
Impairment of goodwill and acquired intangibles
$ 138 
 
 
 
 
 
 
 
 
 
 
Subsequent Events (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 2 Months Ended
Dec. 31, 2013
Feb. 25, 2016
Subsequent Event
Subsequent Event [Line Items]
 
 
Amount of shares purchased (in shares)
 
2.0 
Shares purchased
$ 378 
$ 47 
Remaining authorized amount of shares repurchased
 
$ 528 
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS Valuation and Qualifying Accounts (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Allowance for doubtful accounts
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at Beginning of Period
$ 19 
$ 18 
$ 18 
Additions Charged to Costs & Expenses
5 
3 
1 
Charged to Other Accounts
0 
0 
0 
Deductions
2 
2 
1 
Balance at End of Period
22 
19 
18 
Deferred tax valuation allowance
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at Beginning of Period
20 
13 
9 
Additions Charged to Costs & Expenses
5 
7 
4 
Charged to Other Accounts
0 
0 
0 
Deductions
0 
0 
0 
Balance at End of Period
$ 25 
$ 20 
$ 13