TERADATA CORP /DE/, 10-K filed on 2/23/2018
Annual Report
Document and Entity Information (USD $)
In Billions, except Share data in Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Jan. 31, 2018
Jun. 30, 2017
Document And Entity Information [Abstract]
 
 
 
Entity Registrant Name
TERADATA CORP /DE/ 
 
 
Entity Central Index Key
0000816761 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2017 
 
 
Document Fiscal Year Focus
2017 
 
 
Trading Symbol
TDC 
 
 
Document Fiscal Period Focus
FY 
 
 
Amendment Flag
false 
 
 
Entity Common Stock, Shares Outstanding (in shares)
 
122.0 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Public Float
 
 
$ 3.7 
Consolidated Statements of (Loss) Income (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Revenue
 
 
 
Product and cloud revenue
$ 747 
$ 923 
$ 1,115 
Service revenue
1,409 
1,399 
1,415 
Total revenue
2,156 
2,322 
2,530 
Costs and operating expenses
 
 
 
Cost of product and cloud
325 
383 
489 
Cost of services
809 
751 
765 
Selling, general and administrative expenses
652 
664 
765 
Research and development expenses
306 
212 
228 
Impairment of goodwill, acquired intangibles and other assets
80 
478 
Total costs and operating expenses
2,092 
2,090 
2,725 
Income (loss) from operations
64 
232 
(195)
Interest expense
(15)
(12)
(9)
Other income, net
60 
Total other (expense) income, net
(6)
(11)
51 
Income (loss) before income taxes
58 
221 
(144)
Income tax expense
125 
96 
70 
Net (loss) income
$ (67)
$ 125 
$ (214)
Net (loss) income per common share
 
 
 
Basic (in usd per share)
$ (0.53)
$ 0.96 
$ (1.53)
Diluted (in usd per share)
$ (0.53)
$ 0.95 
$ (1.53)
Weighted average common shares outstanding
 
 
 
Basic (in shares)
125.8 
129.7 
139.6 
Diluted (in shares)
125.8 
131.5 
139.6 
Consolidated Statements of Comprehensive Income (Loss) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Statement of Comprehensive Income [Abstract]
 
 
 
Net (loss) income
$ (67)
$ 125 
$ (214)
Other comprehensive income (loss):
 
 
 
Foreign currency translation adjustments
16 
(7)
(36)
Securities:
 
 
 
Reclassification of gain to net income (loss)
(26)
Unrealized loss on securities, before tax
(7)
Tax impact on securities
Net change in securities
(31)
Defined benefit plans:
 
 
 
Reclassification of loss to net income (loss)
Defined benefit plan adjustment, before tax
(6)
(12)
(9)
Defined benefit plan adjustment, tax portion
Defined benefit plan adjustment, net of tax
(1)
(6)
(5)
Other comprehensive income (loss)
15 
(13)
(72)
Comprehensive (loss) income
$ (52)
$ 112 
$ (286)
Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Current assets
 
 
Cash and cash equivalents
$ 1,089 
$ 974 
Accounts receivable, net
554 
548 
Inventories
30 
34 
Other current assets
77 
65 
Total current assets
1,750 
1,621 
Property and equipment, net
162 
138 
Capitalized software, net
121 
187 
Goodwill
399 
390 
Acquired intangible assets, net
23 
11 
Deferred income taxes
57 
49 
Other assets
44 
17 
Total assets
2,556 
2,413 
Current liabilities
 
 
Current portion of long-term debt
60 
30 
Short-term borrowings
240 
Accounts payable
74 
103 
Payroll and benefits liabilities
173 
139 
Deferred revenue
414 
369 
Other current liabilities
102 
88 
Total current liabilities
1,063 
729 
Long-term debt
478 
538 
Pension and other postemployment plan liabilities
109 
96 
Long-term deferred revenue
85 
14 
Deferred tax liabilities
33 
Other liabilities
149 
32 
Total liabilities
1,888 
1,442 
Commitments and contingencies (Note 8)
   
   
Stockholders' equity
 
 
Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and outstanding at December 31, 2017 and 2016, respectively
Common stock: par value $0.01 per share, 500.0 shares authorized, 121.9 and 130.6 shares issued at December 31, 2017 and 2016, respectively
Paid-in capital
1,320 
1,220 
Accumulated deficit
(579)
(161)
Accumulated other comprehensive loss
(74)
(89)
Total stockholders’ equity
668 
971 
Total liabilities and stockholders’ equity
$ 2,556 
$ 2,413 
Consolidated Balance Sheets (Parenthetical) (USD $)
Dec. 31, 2017
Dec. 31, 2016
Statement of Financial Position [Abstract]
 
 
Preferred stock, par value (in usd per share)
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
100,000,000 
100,000,000 
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value (in usd per share)
$ 0.01 
$ 0.01 
Common stock, shares authorized
500,000,000 
500,000,000 
Common stock, shares issued
121,900,000 
130,600,000 
Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Operating activities
 
 
 
Net (loss) income
$ (67)
$ 125 
$ (214)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
138 
128 
170 
Stock-based compensation expense
68 
62 
56 
Excess tax benefit from stock-based compensation
(2)
Deferred income taxes
(34)
(3)
(39)
Gain on investments
(2)
(57)
Impairment of goodwill, acquired intangibles and other assets
80 
478 
Changes in assets and liabilities, net of acquisitions:
 
 
 
Receivables
(6)
40 
Inventories
14 
(11)
Account payables and accrued expenses
12 
11 
(8)
Deferred revenue
115 
24 
Other assets and liabilities
95 
(10)
Net cash provided by operating activities
324 
446 
401 
Investing activities
 
 
 
Expenditures for property and equipment
(78)
(53)
(52)
Additions to capitalized software
(9)
(65)
(68)
Proceeds from sales of property and equipment
Proceeds from disposition of investments
85 
Proceeds from sale of business
92 
Business acquisitions and other investing activities, net
(21)
(16)
(17)
Net cash used in investing activities
(108)
(35)
(52)
Financing activities
 
 
 
Proceeds from long-term borrowings
600 
Repayments of long-term borrowings
(30)
(30)
(247)
Proceeds from credit facility borrowings
420 
180 
Repayments of credit-facility borrowings
(180)
(180)
(220)
Repurchases of common stock
(351)
(82)
(657)
Excess tax benefit from stock-based compensation
Other financing activities, net
32 
30 
18 
Net cash used in financing activities
(109)
(262)
(324)
Effect of exchange rate changes on cash and cash equivalents
(14)
(20)
Increase in cash and cash equivalents
115 
135 
Cash and cash equivalents at beginning of year
974 
839 
834 
Cash and cash equivalents at end of year
1,089 
974 
839 
Cash paid during the year for:
 
 
 
Income taxes
25 
105 
98 
Interest
$ 14 
$ 12 
$ 8 
Consolidated Statements of Changes in Stockholders' Equity (USD $)
In Millions, unless otherwise specified
Total
Common Stock
Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Beginning Balance at Dec. 31, 2014
$ 1,707 
$ 1 
$ 1,054 
$ 656 
$ (4)
Beginning Balance (in shares) at Dec. 31, 2014
 
148 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
Net (loss) income
(214)
 
 
(214)
 
Employee stock compensation, employee stock purchase programs and option exercises (in shares)
 
 
 
 
Employee stock compensation, employee stock purchase programs and option exercises
78 
 
78 
 
 
Income tax benefit from stock compensation plans
(4)
 
(4)
 
 
Repurchases of Company common stock, retired (in shares)
 
(19)
 
 
 
Repurchases of common stock, retired
(646)
 
 
(646)
 
Pension and postemployment benefit plans, net of tax
(5)
 
 
 
(5)
Unrealized gain on securities
(31)
 
 
 
(31)
Currency translation adjustment
(36)
 
 
 
(36)
Ending Balance at Dec. 31, 2015
849 
1,128 
(204)
(76)
Ending Balance (in shares) at Dec. 31, 2015
 
131 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
Net (loss) income
125 
 
 
125 
 
Employee stock compensation, employee stock purchase programs and option exercises (in shares)
 
 
 
 
Employee stock compensation, employee stock purchase programs and option exercises
92 
 
92 
 
 
Repurchases of Company common stock, retired (in shares)
 
(3)
 
 
 
Repurchases of common stock, retired
(82)
 
 
(82)
 
Pension and postemployment benefit plans, net of tax
(6)
 
 
 
(6)
Unrealized gain on securities
 
 
 
 
Currency translation adjustment
(7)
 
 
 
(7)
Ending Balance at Dec. 31, 2016
971 
1,220 
(161)
(89)
Ending Balance (in shares) at Dec. 31, 2016
 
131 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
Net (loss) income
(67)
 
 
(67)
 
Employee stock compensation, employee stock purchase programs and option exercises (in shares)
 
 
 
 
Employee stock compensation, employee stock purchase programs and option exercises
100 
 
100 
 
 
Purchases of treasury stock, retired (in shares)
 
(11)
 
 
 
Repurchases of common stock, retired
(351)
 
 
(351)
 
Pension and postemployment benefit plans, net of tax
(1)
 
 
 
(1)
Unrealized gain on securities
 
 
 
 
Currency translation adjustment
16 
 
 
 
16 
Ending Balance at Dec. 31, 2017
$ 668 
$ 1 
$ 1,320 
$ (579)
$ (74)
Ending Balance (in shares) at Dec. 31, 2017
 
122 
 
 
 
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 solutions and services. Our analytic data solutions comprise software, hardware, and related business consulting and support services for analytics across a company’s entire analytical ecosystem.
Basis of Presentation. The financial statements are presented on a consolidated basis and include the accounts of the Company and its wholly-owned subsidiaries in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the period reported. On an ongoing basis, management evaluates these estimates and judgments, including those related to allowances for doubtful accounts, the valuation of inventory to net realizable value, impairments of goodwill and other intangibles, stock-based compensation, pension and other postemployment benefits, and income taxes and any changes will be accounted for on a prospective basis. Actual results could differ from those estimates.
Revenue Recognition. Teradata’s solution offerings typically include software, unspecified when-and-if-available software upgrades, hardware, maintenance support services, and other consulting, implementation and installation-related (“consulting”) services. Teradata records revenue when it is realized, or realizable, and earned. Teradata considers these requirements met when:
Persuasive evidence of an arrangement exists
The products or services have been delivered to the customer
The sales price is fixed or determinable and free of contingencies or significant uncertainties
Collectibility is reasonably assured
Teradata reports revenue net of any taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. The Company assesses whether fees are fixed or determinable at the time of sale. Standard payment terms may vary based on the country in which the agreement is executed, but are generally between 30 days and 90 days. Payments that are due within six months are generally deemed to be fixed or determinable based on a successful collection history on such arrangements, and thereby satisfy the required criteria for revenue recognition. Teradata delivers its solutions primarily through direct sales channels, as well as through alliances with system integrators, other independent software vendors and distributors, and value-added resellers (collectively referred to as “resellers”). In assessing whether the sales price to a reseller is fixed or determinable, the Company considers, among other things, past business practices with the reseller, the reseller’s operating history, payment terms, return rights and the financial wherewithal of the reseller. When Teradata determines that the contract fee to a reseller is not fixed or determinable, that transaction is deferred and recognized upon sell-through to the end customer.
The Company’s deliverables often involve delivery or performance at different periods of time. Revenue for perpetual software is generally recognized upon delivery with the hardware once title and risk of loss have been transferred. Revenue for unspecified software upgrades or enhancements on a when-and-if-available basis are recognized straight-line over the term of the arrangement. Revenue for maintenance support services is also recognized on a straight-line basis over the term of the contract. Revenue for other consulting, implementation and installation services is recognized as services are provided. In certain instances, acceptance of the product or service is specified by the customer. In such cases, revenue is deferred until the acceptance criteria have been met. Delivery and acceptance generally occur in the same reporting period. The Company’s arrangements generally do not include any customer negotiated provisions for cancellation, termination or refunds that would significantly impact recognized revenue.
The Company evaluates all deliverables in an arrangement to determine whether they represent separate units of accounting. A deliverable constitutes a separate unit of accounting when it has standalone value, and if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered items is considered probable and substantially in the control of Teradata. Most of the Company’s products and services qualify as separate units of accounting and are recognized upon meeting the criteria as described above.
For multiple deliverable arrangements that contain non-software related deliverables, the Company allocates revenue to each deliverable based upon the relative selling price hierarchy and if software and software-related deliverables are also included in the arrangement, to those deliverables as a group based on the best estimate of selling price (“BESP”) for the group. The selling price for a deliverable is based on its vendor-specific objective evidence of selling price (“VSOE”) if available, third-party evidence of selling price (“TPE”) if VSOE is not available, or BESP if neither VSOE nor TPE is available. The Company then recognizes revenue when the remaining revenue recognition criteria are met for each deliverable. For the software group or arrangements that contain only software and software-related deliverables, the revenue is allocated utilizing the residual or fair value method. Under the residual method, the VSOE of the undelivered elements is deferred and accounted for under the applicable revenue recognition guidance, and the remaining portion of the software arrangement fee is allocated to the delivered elements and is recognized as revenue. The fair value method is similar to the relative selling price method used for non-software deliverables except that the allocation of each deliverable is based on VSOE. For software groups or arrangements that contain only software and software-related deliverables in which VSOE does not exist for each deliverable (fair value method) or does not exist for each undelivered element (residual method), revenue for the entire software arrangement or group is deferred and not recognized until delivery of all elements without VSOE has occurred, unless the only undelivered element is postcontract customer support (“PCS”) in which case the entire software arrangement or group is recognized ratably over the PCS period.
Teradata’s analytic software and hardware products are sold and delivered together in the form of a “Node” of capacity as an integrated technology solution. Because both the analytic software and hardware platform are necessary to deliver the analytic data platform’s essential functionality, the analytic software and hardware (Node) are excluded from the software rules and considered a non-software related deliverable. Teradata software applications and related support are considered software-related deliverables. Additionally, the amount of revenue allocated to the delivered items utilizing the relative selling price or fair value method is limited to the amount that is not contingent upon the delivery of additional items or meeting other specified performance conditions (the non-contingent amount).
VSOE is based upon the normal pricing and discounting practices for those products and services when sold separately. Teradata uses the stated renewal rate approach in establishing VSOE for maintenance and when-and-if-available software upgrades (collectively referred to as PCS). Under this approach, the Company assesses whether the contractually stated renewal rates are substantive and consistent with the Company’s normal pricing practices. Renewal rates greater than the lower level of our targeted pricing ranges are substantive and, therefore, meet the requirements to support VSOE. In instances where there is not a substantive renewal rate in the arrangement, the Company allocates revenue based upon BESP, using the minimum established pricing targets as supported by the renewal rates for similar customers utilizing the bell-curve method. Teradata also offers consulting and installation-related services to its customers, which are considered non-software deliverables if they relate to the nodes. These services are rarely considered essential to the functionality of the analytics solution deliverable and there is never software customization of the proprietary database software. VSOE for consulting services is based on the hourly rates for standalone consulting services projects by geographic region and are indicative of the Company’s customary pricing practices. Pricing in each market is structured to obtain a reasonable margin based on input costs.
In nearly all multiple-deliverable arrangements, the Company is unable to establish VSOE for all deliverables in the arrangement. This is due to infrequently selling each deliverable separately (such is the case with our nodes), not pricing products or services within a narrow range, or only having a limited sales history. When VSOE cannot be established, attempts are made to establish TPE of the selling price for each deliverable. TPE is determined based on competitor prices for similar deliverables when sold separately. However, Teradata’s offerings contain significant differentiation such that the comparable pricing of products with similar functionality cannot typically be obtained. This is because Teradata’s products contain a significant amount of proprietary technology and its solutions offer substantially different features and functionality than other available products. As Teradata’s products are significantly different from those of its competitors, the Company is unable to establish TPE for the vast majority of its products.
When the Company is unable to establish selling prices using VSOE or TPE, the Company uses BESP in its allocation of arrangement consideration. The objective of BESP is to determine the price at which the Company would transact a sale if the product or service was sold on a standalone basis. The Company determines BESP for a product or service by considering multiple factors including, but not limited to, geographies, market conditions, product life cycles, competitive landscape, internal costs, gross margin objectives, purchase volumes and pricing practices.
The primary consideration in developing BESP for the Company’s nodes is the bell-curve method based on historical transactions. The BESP analysis is at the geography level to align it with the way in which the Company goes to market and establishes pricing for its products. The Company has established discount ranges off published list prices for different geographies based on strategy and maturity of Teradata’s presence in the respective geography. There are distinctions in each geography and product group which support the use of geographies and markets for the determination of BESP. For example, the Company’s U.S. market is relatively mature and most of the large transactions are captured in this market, whereas the International markets are less mature with generally smaller deal size. Additionally, the prices and margins for the Company’s products vary by geography and by product class. BESP is analyzed on a semi-annual basis using data from the four previous quarters, which the Company believes best reflects most recent pricing practices in a changing marketplace.
The Company reviews VSOE, TPE and its determination of BESP on a periodic basis and updates it, when appropriate, to ensure that the practices employed reflect the Company’s recent pricing experience. The Company maintains internal controls over the establishment and updates of these estimates, which includes review and approval by the Company’s management. For the year ended December 31, 2017 there was no material impact to revenue resulting from changes in VSOE, TPE or BESP.
Teradata’s new go-to-market offerings introduced in the second half of 2016, which are part of the overall business transformation strategy, include the following offerings:
Subscription license - Teradata’s subscription licenses include a right-to-use license and are typically sold with PCS. The revenue for these arrangements is typically recognized ratably over the contract term. The term of these arrangements varies between one and five years.
Cloud - These arrangements include a right-to-access software license that the customer does not have a right to take possession of without significant penalty during the hosting period and the services can be delivered through a managed or public cloud. These arrangements are recognized outside the software rules and revenue is recognized ratably over the contract term. The term of these arrangements typically varies between one and five years.
Rentals - Teradata owns the equipment and may or may not provide managed services. The revenue for these arrangements is generally recognized straight-line over the term of the contract. The term of these arrangements typically varies between one and three years and are generally accounted for as operating leases.
Service model - Teradata owns the equipment to provide the service on-premises. Service models typically include a minimum fixed amount that is recognized ratably over the contract term and may include an elastic amount for usage above the minimum, which is recognized monthly based on actual utilization. The term of these arrangements varies between one and five years.
Shipping and Handling. Product shipping and handling costs are included in cost of products in the Consolidated Statements of (Loss) Income.
Cash and Cash Equivalents. All short-term, highly-liquid investments having original maturities of three months or less are considered to be cash equivalents.
Allowance for Doubtful Accounts. Teradata establishes provisions for doubtful accounts using both percentages of accounts receivable balances to reflect historical average credit losses and specific provisions for known issues.
Inventories. Inventories are stated at the lower of cost or market. Cost of service parts is determined using the average cost method. Finished goods inventory is determined using actual cost.
Available-for-sale Securities. Available-for-sale securities are reported at fair value. Unrealized holding gains and losses are excluded from earnings and reported in other comprehensive (loss) income. Realized gains and losses are included in other income and expense in the Consolidated Statements of (Loss) Income.
Long-Lived Assets
Property and Equipment. Property and equipment, leasehold improvements and rental equipment are stated at cost less accumulated depreciation. Depreciation is computed over the estimated useful lives of the related assets primarily on a straight-line basis. Equipment is depreciated over 3 to 20 years and buildings over 25 to 45 years. Leasehold improvements are depreciated over the life of the lease or the asset, whichever is shorter. Total depreciation expense on the Company’s property and equipment for December 31 was as follows:
In millions
2017
 
2016
 
2015
Depreciation expense
$
55

 
$
49

 
$
53


Capitalized Software. Direct development costs associated with internal-use software are capitalized and amortized over the estimated useful lives of the resulting software. The costs are capitalized when both the preliminary project stage is completed and it is probable that computer software being developed will be completed and placed in service. Teradata typically amortizes capitalized internal-use software on a straight-line basis over three years beginning when the asset is substantially ready for use.
Costs incurred for the development of analytic applications are expensed as incurred based on the frequency and agile nature of development. Prior to December 31, 2016, costs incurred for the development of analytic database software that will be sold, leased or otherwise marketed were capitalized between technological feasibility and the point at which a product was ready for general release. Technological feasibility is established when planning, designing and initial coding activities that are necessary to establish the product can be produced to meet its design specifications are complete. In the absence of a program design, a working model is used to establish technological feasibility. These costs are included within capitalized software and are amortized over the estimated useful lives of four years using the greater of the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product or the straight-line method over the remaining estimated economic life of the product beginning when the product is available for general release. Costs capitalized include direct labor and related overhead costs. Costs incurred prior to technological feasibility and after general release are expensed as incurred.
Our research and development efforts have recently become more driven by market requirements and rapidly changing customers' needs. In addition, the Company started applying agile development methodologies to help respond to new technologies and trends. Agile development methodologies are characterized by a more dynamic development process with more frequent and iterative revisions to a product release features and functions as the software is being developed. Due to the shorter development cycle and focus on rapid production associated with agile development, the Company did not capitalize any amounts for external-use software development costs in 2017 due to the relatively short duration between the completion of the working model and the point at which a product is ready for general release. Prior capitalized costs will continue to be amortized under the greater of revenue-based or straight-line method over the estimated useful life.
The following table identifies the activity relating to capitalized software:
 
Internal-use Software
 
External-use Software
In millions
2017
 
2016
 
2015
 
2017
 
2016
 
2015
Beginning balance at January 1
$
13

 
$
13

 
$
13

 
$
174

 
$
177

 
$
186

Capitalized
9

 
6

 
6

 

 
59

 
61

Amortization
(6
)
 
(6
)
 
(6
)
 
(69
)
 
(62
)
 
(70
)
Ending balance at December 31
$
16

 
$
13

 
$
13

 
$
105

 
$
174

 
$
177


The aggregate amortization expense (actual and estimated) for internal-use and external-use software for the following periods is:
 
Actual
 
For the years ended (estimated)
In millions
2017
 
2018
 
2019
 
2020
 
2021
 
2022
Internal-use software amortization expense
$
6

 
$
7

 
$
7

 
$
7

 
$
7

 
$
6

External-use software amortization expense
$
69

 
$
49

 
$
34

 
$
22

 
$

 
$


Estimated expense, which is recorded to cost of sales for external use software, is based on capitalized software at December 31, 2017 and does not include any new capitalization for future periods.
Valuation of Long-Lived Assets. Long-lived assets such as property and equipment, acquired intangible assets and internal capitalized software are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. An impairment loss would be recognized when estimated future undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than the carrying amount. No impairment was recognized during 2017.
Goodwill. Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Goodwill amounts are not amortized, but rather are tested for impairment annually or upon occurrence of an event or change in circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying amount. See Note 3 - Goodwill and Acquired Intangibles for additional information.
Warranty. Provisions for product warranties are recorded in the period in which the related revenue is recognized. The Company accrues warranty reserves using percentages of revenue to reflect the Company’s historical average warranty claims.
Research and Development Costs. Research and development costs are expensed as incurred (except for the capitalized software development costs discussed above). Research and development costs primarily include labor-related costs, contractor fees, and overhead expenses directly related to research and development support.
Pension and Postemployment Benefits. The Company accounts for its pension and postemployment benefit obligations using actuarial models. The measurement of plan obligations was made as of December 31, 2017. Liabilities are computed using the projected unit credit method. The objective under this method is to expense each participant’s benefits under the plan as they accrue, taking into consideration salary increases and the plan’s benefit allocation formula. Thus, the total pension or postemployment benefit to which each participant is expected to become entitled is broken down into units, each associated with a year of past or future credited service.
The Company recognizes the funded status of its pension and postemployment plan obligations in its consolidated balance sheet and records in other comprehensive income certain gains and losses that arise during the period, but are deferred under pension and postemployment accounting rules.
Foreign Currency. Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment are translated into U.S. dollars at period-end exchange rates. Income and expense accounts are translated at daily exchange rates prevailing during the period. Adjustments arising from the translation are included in accumulated other comprehensive income, a separate component of stockholders’ equity. Gains and losses resulting from foreign currency transactions are included in determining net income.
Income Taxes. Income tax expense is provided based on income before income taxes in the various jurisdictions in which the Company conducts its business. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. These deferred taxes are determined based on the enacted tax rates expected to apply in the periods in which the deferred assets or liabilities are expected to be settled or realized. For the Global Intangible Low-Taxed Income (“GILTI”) provisions of the Tax Act, a provisional estimate could not be made as the Company has not yet completed its assessment of or elected an accounting policy to either recognize deferred taxes for basis differences expected to reverse as GILTI or to record GILTI as period costs if and when incurred. In accordance with SEC guidance, provisional amounts may be refined as a result of additional guidance from, and interpretations by, U.S. regulatory and standard-setting bodies and changes in assumptions. Teradata recognizes tax benefits from uncertain tax positions only if it is more likely than not the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company records valuation allowances related to its deferred income tax assets when it is more likely than not that some portion or all of the deferred income tax assets will not be realized.
Stock-based Compensation. Stock-based payments to employees, including grants of stock options, restricted shares and restricted share units, are recognized in the financial statements based on their fair value. The fair value of each stock option award on the grant date is estimated using the Black-Scholes option-pricing model with the following assumptions: expected dividend yield, expected stock price volatility, weighted-average risk-free interest rate and weighted average expected term of the options. The Company’s expected volatility assumption used in the Black-Scholes option-pricing model is based on Teradata's historical volatility. The expected term for options granted is based upon historical observation of actual time elapsed between date of grant and exercise of options for all employees. The risk-free interest rate used in the Black-Scholes model is based on the implied yield curve available on U.S. Treasury issues at the date of grant with a remaining term equal to the Company’s expected term assumption. The Company has never declared or paid a cash dividend.
Earnings (Loss) Per Share. Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted-average number of shares outstanding during the reported period. The calculation of diluted earnings per share is similar to basic earnings per share, except that the weighted-average number of shares outstanding includes the dilution from potential shares added from stock options, restricted share awards and other stock awards. Refer to Note 5 for share information on the Company’s stock compensation plans.
The components of basic and diluted earnings (loss) per share are as follows: 
 
For the years ended December 31
In millions, except (loss) earnings per share
2017
 
2016
 
2015
Net (loss) income attributable to common stockholders
$
(67
)
 
$
125

 
$
(214
)
Weighted average outstanding shares of common stock
125.8

 
129.7

 
139.6

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

 
1.8

 

Common stock and common stock equivalents
125.8

 
131.5

 
139.6

Earnings (loss) per share:
 
 
 
 
 
Basic
$
(0.53
)
 
$
0.96

 
$
(1.53
)
Diluted
$
(0.53
)
 
$
0.95

 
$
(1.53
)

For 2017, due to the net loss attributable to Teradata common stockholders, largely due to the tax expense recorded as a result of the Tax Cuts and Jobs Act of 2017, potential common shares that would cause dilution, such as employee stock options, restricted shares and other stock awards, have been excluded from the diluted share count because their effect would have been anti-dilutive. For 2017, the fully diluted shares would have been 127.8 million
For 2015, due to the net loss attributable to Teradata common stockholders, largely due to the goodwill and acquired intangibles impairment charges, potential common shares that would cause dilution, such as employee stock options, restricted shares and other stock awards, have been excluded from the diluted share count because their effect would have been anti-dilutive. For 2015, the fully diluted shares would have been 141.9 million.
Options to purchase 2.7 million in 2017, 5.2 million shares in 2016 and 4.5 million shares in 2015 of common stock, were not included in the computation of diluted earnings per share because their exercise prices were greater than the average market price of the common shares and, therefore, the effect would have been anti-dilutive.
Recently Issued Accounting Pronouncements
Revenue Recognition.  In May 2014, the Financial Accounting Standards Board ("FASB") issued new guidance that affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The new guidance will supersede the revenue recognition requirements in the current revenue recognition guidance, and most industry-specific guidance. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer are amended to be consistent with the guidance on recognition and measurement in this update. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the FASB defines a five-step process which includes the following: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation.
The new revenue standard will be effective for annual reporting periods beginning after December 15, 2017, with early application permitted. The standard allows entities to apply the standard retrospectively for all periods presented or alternatively an entity is permitted to recognize the cumulative effect of initially applying the guidance as an opening balance sheet adjustment to retained earnings in the period of initial application (modified retrospective method).
The Company will adopt the new accounting guidance effective January 1, 2018 by utilizing the modified retrospective method. The Company is still evaluating and finalizing the impact on its consolidated financial position, results of operations and cash flows.
Although the Company is still evaluating the impact on its consolidated financial statements, the Company believes the most significant impacts will likely include the following items:
As the Company transitions to the new go-to-market offerings, such as subscription-based licenses rather than perpetual licenses, the Company could potentially see a more significant impact in the amount of revenue recognized over time under the current rules but upfront under the new rules. This impact will result in revenue that is adjusted to retained earnings in the period of adoption and therefore not recognized in future periods or restated to prior periods due to the Company applying the modified retrospective method of adoption.
The Company currently expenses contract acquisition costs and believes that the requirement to defer incremental contract acquisition costs and recognize them over the term of the contract to which the costs relate will have an impact, especially as the Company transitions to longer-term, over-time revenue contracts.
The amount of revenue allocated to the delivered items and recognized upfront utilizing the relative selling price model is limited to the amount that is not contingent upon the delivery of additional items or meeting other specified performance conditions (i.e., the non-contingent amount) under current rules. Under the new rules, the amounts allocated to delivered items and recognized upfront could be higher if it is probable that a significant reversal in the amount of revenue recognized will not occur in future periods upon the delivery of additional items or meeting other specified performance conditions; and
The new standard will impact our internal control environment, including our financial statement disclosure controls, business process controls, new systems and processes, and enhancements to existing systems and processes.
The Company expects to record approximately $20 million of adjustments to retained earnings for the revenue-related items discussed above. The Company also expects to record approximately $15 million of deferred compensation costs upon adoption that will then be amortized in future periods.
The Company does not expect that the new standard will result in substantive changes in our performance obligations or the amounts of revenue allocated between multiple performance obligations, with the exception of contingent revenue discussed above. The Company is still in the process of evaluating and finalizing these impacts, and our initial assessment may change as the Company continues with implementing new systems, processes, accounting policies and internal controls.
Leases.  In February 2016, the FASB issued new guidance which requires a lessee to account for leases as finance or operating leases. Both leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability on its balance sheet, with differing methodology for income statement recognition. For lessors, the standard modifies the classification criteria and the accounting for sales-type and direct financing leases. Entities will classify leases to determine how to recognize lease-related revenue and expense. This standard is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. A modified retrospective approach is required for leases existing or entered into after the beginning of the earliest comparative period in the consolidated financial statements. The Company is currently assessing the impact of this update on its consolidated financial statements. We currently believe that the most significant changes will be related to the recognition of right-of-use assets and lease liabilities on our consolidated balance sheets for real estate and equipment leases that are currently classified as operating leases and therefore not recorded on the consolidated balance sheets.
Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. In August 2016, the FASB issued an update addressing eight specific cash flow issues to reduce diversity in practice. The amended guidance is effective for fiscal years beginning after December 31, 2017, and for interim periods within those years. Early adoption is permitted. The Company will adopt this amended guidance in the first quarter of 2018 and does not expect the impact on its consolidated financial statements to be material.
Financial Instruments. In January 2016, the FASB issued new guidance which enhances the reporting model for financial instruments and related disclosures. This update requires equity securities to be measured at fair value with changes in fair value recognized through net income and will eliminate the cost method for equity securities without readily determinable fair values. The provisions are effective for public entities with fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, in certain circumstances. The Company will adopt this amended guidance in the first quarter of 2018 and does not expect the impact on its consolidated financial statements to be material.
Intra-entity asset transfers. In October 2016, the FASB issued accounting guidance to simplify the accounting for income tax consequences of intra-entity transfers of assets other than inventory. Under this guidance, companies will be required to recognize the income tax consequences of an intra-entity asset transfer when the transfer occurs. Current guidance prohibits companies from recognizing current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. The guidance must be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the period of adoption. The guidance is effective for periods beginning after December 15, 2017 and early adoption is permitted. The Company will adopt this amended guidance in the first quarter of 2018 and does not expect the impact on its consolidated financial statements to be material.
Classification of restricted cash. In December 2016, the FASB issued accounting guidance to address diversity in the classification and presentation of changes in restricted cash on the statement of cash flows. Under this guidance, companies will be required to present restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows. The guidance is required to be applied retrospectively and is effective for periods beginning after December 15, 2017, with early adoption permitted. The Company will adopt this amended guidance in the first quarter of 2018 and does not expect the impact on its consolidated financial statements to be material.
Clarification on the definition of a business. In January 2017, the FASB issued accounting guidance to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This new guidance is effective for reporting periods beginning after December 15, 2017 with early adoption permitted. The Company will adopt this amended guidance in the first quarter of 2018 and does not expect the impact on its consolidated financial statements to be material.
Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost. In March 2017, the FASB issued accounting guidance for “Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost”. The amendment requires the service cost component of net periodic benefit cost be presented in the same income statement line item as other employee compensation costs arising from services rendered during the period and other components of the net periodic benefit cost be presented separately from the line item that includes the service cost and outside of any subtotal of operating income. For public entities, the amendments are effective for interim and annual reporting periods beginning after December 15, 2017. The Company will adopt this amended guidance in the first quarter of 2018. The retroactive adoption of this standard will result in an increase in operating income and a corresponding decrease in other income (primarily related to the return on pension assets) for the years ended December 31 of $4 million in 2017 and $3 million in 2016.
Stock Compensation. In May 2017, the FASB issued accounting guidance for "Compensation—Stock Compensation (Topic 718) - Scope of Modification Accounting". The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The current disclosure requirements in Topic 718 apply regardless of whether an entity is required to apply modification accounting under the amendments in this update. The amendments in this update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The Company will adopt this amended guidance in the first quarter of 2018 and does not expect any impact on its consolidated financial statements.

Derivatives and Hedging. In August 2017, the FASB issued amendments to hedge accounting guidance. These amendments are intended to better align a company’s risk management strategies and financial reporting for hedging relationships. Under the new guidance, more hedging strategies will be eligible for hedge accounting and the application of hedge accounting is simplified. In addition, the new guidance amends presentation and disclosure requirements. The guidance is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, including the interim periods within those years. The guidance requires the use of a modified retrospective approach. The Company is currently evaluating the impact of the guidance on our consolidated financial statements.
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. In February 2018, the FASB issued guidance allowing companies the option to reclassify to retained earnings the tax effects related to items in Accumulated other comprehensive income (loss) as a result of the Tax Cuts and Jobs Act that was enacted on December 22, 2017. This update is effective in fiscal years, including interim periods, beginning after December 15, 2018, and early adoption is permitted. This guidance should be applied either in the period of adoption or retrospectively to each period in which the effects of the change in the U.S. federal income tax rate in the Tax Cuts and Jobs Act is recognized. The Company is currently evaluating the impact of the guidance on our consolidated financial statements.
Recently Adopted Guidance
Simplifying the measurement for goodwill. In January 2017, the FASB issued guidance to simplify the accounting for the impairment of goodwill. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The Company early adopted this accounting guidance effective January 1, 2017. This amendment did not have an impact on the Company's consolidated financial statements.
Supplemental Financial Information
Supplemental Financial Information
Supplemental Financial Information
 
 
At December 31
In millions
2017
 
2016
Accounts receivable
 
 
 
Trade
$
559

 
$
561

Other
7

 
6

Accounts receivable, gross
566

 
567

Less: allowance for doubtful accounts
(12
)
 
(19
)
Total accounts receivable, net
$
554

 
$
548

Inventories
 
 
 
Finished goods
$
18

 
$
20

Service parts
12

 
14

Total inventories
$
30

 
$
34

Property and equipment
 
 
 
Land
$
8

 
$
8

Buildings and improvements
82

 
77

Machinery and other equipment
404

 
354

Property and equipment, gross
494

 
439

Less: accumulated depreciation
(332
)
 
(301
)
Total property and equipment, net
$
162

 
$
138

Other current liabilities
 
 
 
Sales and value-added taxes
$
30

 
$
28

Pension and other postemployment plan liabilities
2

 
7

Other
70

 
53

Total other current liabilities
$
102

 
$
88

Deferred revenue
 
 
 
Deferred revenue, current
$
414

 
$
369

Long-term deferred revenue
85

 
14

Total deferred revenue
$
499

 
$
383

Other long-term liabilities
 
 
 
Transition tax
$
133

 
$

Uncertain tax positions
14

 
20

Other
2

 
12

Total other long-term liabilities
$
149

 
$
32

 
 
 
 
Goodwill and Acquired 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 at December 31, 2016
 
Additions
 
Currency
Translation
Adjustments
 
Balance at December 31, 2017
Goodwill
 
 
 
 
 
 
 
Americas Data and Analytics
$
251

 
$
2

 
$

 
$
253

International Data and Analytics
139

 

 
7

 
146

Total goodwill
$
390

 
$
2

 
$
7

 
$
399


During 2017, the Company recorded additional goodwill of $2 million, for an immaterial acquisition that occurred during the period.
In the fourth quarter of 2017, the Company performed its annual impairment test of goodwill and determined that no impairment to the carrying value of goodwill was necessary. The Company reviewed two reporting units in its 2017 goodwill impairment assessment, as both geographic operating segments were considered separate reporting units for purposes of testing. Based on the Company's evaluation and weighting of the events and circumstances that have occurred since the most recent quantitative test, the Company concluded that it was not more likely than not that each reporting unit's fair value was below its carrying value. Therefore, the Company determined that it was not necessary to perform a quantitative goodwill impairment test for the reporting units in 2017.
Acquired intangible assets were specifically identified when acquired, and are deemed to have finite lives. The gross carrying amount and accumulated amortization for Teradata’s acquired intangible assets were as follows: 
 
 
 
December 31, 2017
 
December 31, 2016
In millions
Amortization
Life (in Years)
 
Gross 
Carrying Amount
 
Accumulated
Amortization
and Currency
Translation
Adjustments
 
Gross
 Carrying
Amount
 
Accumulated
Amortization
and Currency
Translation
Adjustments
Acquired intangible assets
 
 
 
 
 
 
 
 
 
Intellectual property/developed technology
1 to 7
 
$
43

 
$
(20
)
 
$
71

 
$
(61
)
Trademarks/trade names
5
 

 

 
1

 
(1
)
In-process research and development
5
 

 

 
5

 
(4
)
Total
 
 
$
43

 
$
(20
)
 
$
77

 
$
(66
)

During 2017, the Company recorded additional intangibles of $18 million, for intellectual property related to an immaterial acquisition that occurred during the period. The gross carrying amount of acquired intangibles was reduced by certain intangible assets previously acquired that became fully amortized and were removed from the balance sheet.
The aggregate amortization expense (actual and estimated) for acquired intangible assets for the following periods is:
 
Actual
 
For the years ended (estimated)
In millions
2015
 
2016
 
2017
 
2018
 
2019
 
2020
 
2021
 
2022
 
Amortization expense
$
40

 
$
10

 
$
8

 
$
7

 
$
6

 
$
4

 
$
4

 
$
2

 
Income Taxes
Income Taxes
Income Taxes
For the years ended December 31, income (loss) before income taxes consisted of the following: 
In millions
2017
 
2016
 
2015
Income (loss) before income taxes
 
 
 
 
 
United States
$
(26
)
 
$
93

 
$
(88
)
Foreign
84

 
128

 
(56
)
Total income (loss) before income taxes
$
58

 
$
221

 
$
(144
)

For the years ended December 31, income tax expense consisted of the following: 
In millions
2017
 
2016
 
2015
Income tax expense
 
 
 
 
 
Current
 
 
 
 
 
Federal
$
132

 
$
67

 
$
74

State and local
2

 
7

 
9

Foreign
25

 
25

 
26

Deferred
 
 
 
 
 
Federal
(22
)
 
7

 
(19
)
State and local
(4
)
 
1

 
(3
)
Foreign
(8
)
 
(11
)
 
(17
)
Total income tax expense
$
125

 
$
96

 
$
70

Effective income tax rate
215.5
%
 
43.4
%
 
(48.6
%)


The following table presents the principal components of the difference between the effective tax rate and the U.S. federal statutory income tax rate for the years ended December 31:
In millions
2017
 
2016
 
2015
Income tax expense at the U.S. federal tax rate
35.0
 %
 
35.0
 %
 
35.0
 %
Foreign income tax differential
(18.0
)%
 
(13.2
)%
 
14.0
 %
State and local income taxes
(11.0
)%
 
0.2
 %
 
0.5
 %
U.S. permanent book/tax differences
(12.0
)%
 
(0.1
)%
 
3.1
 %
Change in valuation allowance for California R&D credit
10.0
 %
 
0.8
 %
 
(3.4
)%
U.S. manufacturing deduction permanent difference
(8.0
)%
 
(3.5
)%
 
5.5
 %
Goodwill impairment
 %
 
8.9
 %
 
(100.1
)%
Tax impact of sale of marketing applications business
 %
 
9.9
 %
 
 %
Impact of excess tax benefits and tax deficiencies
 %
 
2.2
 %
 
 %
Tax impact of U.S. tax law change - IRC Section 987
 %
 
3.5
 %
 
 %
Deferred tax impact from U.S. rate change
(27.0
)%
 
 %
 
 %
Tax impact of transition Tax- U.S. tax reform
250.0
 %
 
 %
 
 %
Other, net
(3.5
)%
 
(0.3
)%
 
(3.2
)%
Effective income tax rate
215.5
 %
 
43.4
 %
 
(48.6
)%

The 2017 effective tax rate was impacted by the Tax Act, which was signed into law on December 22, 2017, making significant changes to the U.S. Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a modified territorial tax system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act.
In accordance with SAB 118, the Company has determined its best estimate of the impact of the Tax Act in its year-end income tax provision in accordance with its understanding of the Tax Act and guidance available as of the date of this filing and has recorded $126 million as additional income tax expense in the fourth quarter of 2017. The provisional amount related to the one-time transition tax on the mandatory deemed repatriation of foreign earnings was $145 million of tax expense based on cumulative foreign earnings of $1.3 billion, which the Company expects to pay over an 8-year period. In addition, a tax benefit of $19 million was recorded, a majority of which related to the re-measurement of certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future. The ultimate impact may differ materially from these provisional amounts, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the Tax Act.
The 2016 effective tax rate was impacted by the $57 million of goodwill impairment charges recorded in the first quarter of 2016, all of which was treated as a permanent, non-deductible tax item. In addition, a discrete tax charge of $22 million was recorded in the third quarter of 2016 related to the tax impact of the sale of the marketing applications business, which occurred on July 1, 2016. In the fourth quarter of 2016, the Company recorded $8 million of tax expense associated with the issuance of new U.S. Treasury Regulations under Internal Revenue Code Section 987 on December 7, 2016, which clarified how companies calculate foreign currency translation gains and losses for income tax purposes for branches whose accounting records are kept in a currency other than the currency of the Company. Also in the fourth quarter of 2016, the Company elected to early adopt Accounting Standards Update 2016-09, Improvements to Employee Share-based Payment Accounting. As a result, the Company incurred a $5 million discrete tax expense associated with the net shortfall arising from 2016 equity compensation vestings and exercises.
The 2015 effective tax rate was impacted by the $437 million of goodwill impairment charges recorded for 2015, of which $414 million was treated as a permanent non-deductible tax item. This resulted in full-year income tax expense in 2015 of $70 million, on a pre-tax net loss of $(144) million, causing a negative tax rate of (48.6)%.
Deferred income tax assets and liabilities included in the balance sheets at December 31 were as follows:
In millions
2017
 
2016
Deferred income tax assets
 
 
 
Employee pensions and other liabilities
$
50

 
$
59

Other balance sheet reserves and allowances
13

 
18

Tax loss and credit carryforwards
59

 
53

Deferred revenue
3

 
3

Other
2

 

Total deferred income tax assets
127

 
133

Valuation allowance
(32
)
 
(26
)
Net deferred income tax assets
95

 
107

Deferred income tax liabilities
 
 
 
Intangibles and capitalized software
30

 
63

Property and equipment
12

 
22

Other

 
6

Total deferred income tax liabilities
42

 
91

Total net deferred income tax assets
$
53

 
$
16


As of December 31, 2017, Teradata has net operating loss ("NOL") and tax credit carryforwards totaling $59 million (tax effected and before any valuation allowance offset and application of recognition criteria for uncertain tax positions). Of the total tax carryforwards, $15 million are NOL's in the U.S. and certain foreign jurisdictions, a small portion of which will begin to expire in 2019 and $44 million are California R&D tax credits that have an indefinite carryforward period (which has a $32 million valuation allowance offset recorded).
Prior to the enactment of the Tax Act, the Company had not provided for taxes on the undistributed earnings of its foreign subsidiaries as the Company either reinvested or intended to reinvest those earnings outside of the U.S. As a result of the 2017 Tax Act, the Company has changed its indefinite reinvestment assertion related to foreign earnings that have been taxed in the U.S. and now considers a majority of these earnings no longer indefinitely reinvested. As a result of U.S. tax reform legislation, distributions of profits from non-U.S. subsidiaries are not expected to cause a significant U.S. tax impact in the future. However, these distributions may be subject to non-U.S. withholding taxes if profits are distributed from certain jurisdictions. The Company has not recorded any provisional foreign or state tax expense with respect to earnings which have been subject to federal income tax as they either would not be taxable upon remittance or they are considered permanently reinvested. Additional information and analysis are needed to determine the final amount of deferred tax liability considering factors such as whether non-U.S. entities are subject to withholding taxes, have reserve requirements, or have projected working capital and other capital needs in the country where the earnings were generated that would result in a decision to indefinitely reinvest a portion or all their earnings. The Company will disclose any future impact, if any, in the reporting period in which the accounting is completed, which will not exceed one year from the date of enactment of the Tax Act in accordance with SAB 118.
The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company reflects any interest and penalties recorded in connection with its uncertain tax positions as a component of income tax expense.
As of December 31, 2017, the Company’s uncertain tax positions totaled approximately $28 million, of which $2 million is reflected in current taxes payable as it is anticipated the liability will be settled within the next twelve months, and $14 million is reflected in the other liabilities section of the Company’s balance sheet as a non-current liability. The remaining balance of $12 million of uncertain tax positions relates to certain tax attributes both generated by the Company and acquired in various acquisitions, which are netted against the underlying deferred tax assets recorded on the balance sheet. The entire balance of $28 million in uncertain tax positions would cause a decrease in the effective income tax rate upon recognition. Teradata has recorded $2 million of interest accruals related to its uncertain tax liabilities as of December 31, 2017.
Below is a roll-forward of the Company’s liability related to uncertain tax positions at December 31:
In millions
2017
 
2016
Balance at January 1
$
30

 
$
38

Gross decreases for prior period tax positions
(1
)
 
(7
)
Gross increases for current period tax positions
3

 
3

Decreases due to the lapse of applicable statute of limitations
(4
)
 
(4
)
Balance at December 31
$
28

 
$
30


The Company and its subsidiaries file income tax returns in the U.S. and various state jurisdictions, as well as numerous foreign jurisdictions. As of December 31, 2017, the Company has ongoing tax audits in a limited number of state and foreign jurisdictions. However, no material adjustments have been proposed or made in any of these examinations to date, which would result in any incremental income tax expense in future periods to the Company. The Company's tax returns for years 2014-2017 are still open for assessment by tax authorities in its major jurisdictions.
Employee Stock-based 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
2017
 
2016
 
2015
Stock options
$
9

 
$
9

 
$
12

Restricted shares
56

 
51

 
41

Employee share repurchase program
3

 
2

 
3

Total stock-based compensation before income taxes
68

 
62

 
56

Tax benefit
(21
)
 
(13
)
 
(17
)
Total stock-based compensation, net of tax
$
47

 
$
49

 
$
39


The Teradata Corporation 2007 Stock Incentive Plan (the “2007 SIP”), as amended, and the Teradata 2012 Stock Incentive Plan (the “2012 SIP”) provide for the grant of several different forms of stock-based compensation. The 2012 SIP was adopted and approved by stockholders in April 2012 and no further awards may be made under the 2007 SIP after that time. A total of approximately 17.5 million shares were authorized to be issued under the 2012 SIP. New shares of the Company’s common stock are issued as a result of the vesting of restricted share units and stock option exercises, and at the time of grant for restricted shares, for awards under both plans.
As of December 31, 2017, the Company’s primary types of stock-based compensation were stock options, restricted shares, restricted share units and the employee stock purchase program (the “ESPP”).
Stock Options
The Compensation and Human Resource Committee of Teradata’s Board of Directors has discretion to determine the material terms and conditions of option awards under both the 2007 SIP and the 2012 SIP (collectively, the “Teradata SIP”), provided that (i) the exercise price must be no less than the fair market value of Teradata common stock (as defined in both plans) on the date of grant, and (ii) the term must be no longer than ten years. Option grants generally have a four-year vesting period.
The weighted-average fair value of options granted for Teradata equity awards was $11.08 in 2017, $10.68 in 2016 and $11.37 in 2015. The fair value of each option award on the grant date was estimated using the Black-Scholes option-pricing model with the following assumptions:
 
2017
 
2016
 
2015
Dividend yield
%
 
%
 
%
Risk-free interest rate
1.99
%
 
2.08
%
 
1.76
%
Expected volatility
35.0
%
 
35.2
%
 
34.4
%
Expected term (years)
6.3

 
6.3

 
6.3


The following table summarizes the Company’s stock option activity for the year ended December 31, 2017: 
Shares in thousands
Shares
Under
Option
 
Weighted-
Average
Exercise
Price per
Share
 
Weighted-
Average
Remaining
Contractual
Term (in
years)
 
Aggregate
Intrinsic
Value (in
millions)
Outstanding at January 1, 2017
6,509

 
$
36.22

 
5.3
 
$
8

Granted
10

 
$
29.04

 
 
 
 
Exercised
(746
)
 
$
25.28

 
 
 
 
Canceled
(153
)
 
$
46.56

 
 
 
 
Forfeited
(247
)
 
$
32.97

 
 
 
 
Outstanding at December 31, 2017
5,373

 
$
37.63

 
4.5
 
$
30

Fully vested and expected to vest at December 31, 2017
5,373

 
$
37.63

 
4.5
 
$
30

Exercisable at December 31, 2017
4,220

 
$
39.60

 
3.4
 
$
21


The following table summarizes the total intrinsic value of options exercised and the cash received by the Company from option exercises under all share-based payment arrangements at December 31:
In millions
2017
 
2016
 
2015
Intrinsic value of options exercised
$
6

 
$
13

 
$
8

Cash received from option exercises
$
19

 
$
18

 
$
9

Tax benefit realized from option exercises
$
2

 
$
5

 
$
3


As of December 31, 2017, there was $13 million of total unrecognized compensation cost related to unvested stock option grants. That cost is expected to be recognized over a weighted-average period of 2.4 years.
Restricted Shares and Restricted Share Units
The Teradata SIP provides for the issuance of restricted shares, as well as restricted share units. These grants consist of both service-based and performance-based awards. Service-based awards typically vest over a three-year period beginning on the effective date of grant. These grants are not subject to future performance measures. The cost of these awards, determined to be the fair market value at the date of grant, is expensed ratably over the vesting period. For substantially all restricted share grants, at the date of grant, the recipient has all rights of a stockholder, subject to certain restrictions on transferability and a risk of forfeiture. A recipient of restricted share units does not have the rights of a stockholder and is subject to restrictions on transferability and risk of forfeiture. For both restricted share grants and restricted share units, any potential dividend rights would be subject to the same vesting requirements as the underlying equity award. As a result, such rights are considered a contingent transfer of value and consequently these equity awards are not considered participating securities. Performance-based grants are subject to future performance measurements over a one-to four-year period. All performance-based shares that are earned in respect of an award will become vested at the end of the performance and/or service period provided the employee is continuously employed by the Company and applicable performance measures and other vesting conditions are met. The fair value of each performance-based award is determined on the grant date, based on the Company’s stock price, and assumes that performance targets will be achieved. Over the performance period, the number of shares of stock that will be issued is adjusted upward or downward based upon management’s assessment of the probability of achievement of performance targets. The ultimate number of shares issued and the related compensation cost recognized as expense will be based on a comparison of the final achievement of performance metrics to the specified targets.
The following table reports restricted shares and restricted share unit activity during the year ended December 31, 2017:
Shares in thousands
Number of
Shares
 
Weighted-
Average 
Grant
Date Fair
 Value
per Share
Unvested shares at January 1, 2017
4,042

 
$
31.57

Granted
2,044

 
$
34.88

Vested
(1,487
)
 
$
33.55

Forfeited/canceled
(373
)
 
$
29.05

Unvested shares at December 31, 2017
4,226

 
$
32.76


The following table summarizes the weighted-average fair value of restricted share units granted for Teradata equity awards and the total fair value of shares vested.
 
2017
 
2016
 
2015
Weighted-average fair value of restricted share units granted
$
34.88

 
$
26.61

 
$
32.82

Total fair value of shares vested (in millions)
$
50

 
$
61

 
$
45


As of December 31, 2017, there was $98 million of unrecognized compensation cost related to unvested restricted share grants. The unrecognized compensation cost is expected to be recognized over a remaining weighted-average period of 2.4 years.
The following table represents the composition of Teradata restricted share unit grants in 2017: 
Shares in thousands
Number of
Shares
 
Weighted-
Average 
Grant
Date Fair 
Value
Service-based shares
1,736

 
$
36.33

Performance-based shares
308

 
$
26.68

Total stock grants
2,044

 
$
34.88


Performance-based share units granted as part of our long-term incentive program for certain corporate officers and key executives will be earned based on Teradata's total shareholder return ("TSR") over a three-year performance period relative to the other companies in the S&P 1500 Technology Index. The number of shares issued, as a percentage of the amount subject to the performance share award, could range from 0% to 200%. The grant date fair value of the non-vested performance-based awards was determined using a Monte Carlo simulation model, which utilized multiple input variables that determined the probability of satisfying the market condition requirements applicable to each award. The compensation expense for the award will be recognized if the requisite service is rendered, regardless of whether the market conditions are achieved.
Employee Stock Purchase Program
The Company’s ESPP, effective on October 1, 2007, and as amended effective as of January 1, 2013, provides eligible employees of Teradata and its designated subsidiaries an opportunity to purchase the Company’s common stock at a discount to the average of the highest and lowest sale prices on the last trading day of each month. The ESPP discount was 15% of the average market price and is considered compensatory.
Employees may authorize payroll deductions of up to 10% of eligible compensation for common stock purchases. A total of 4 million shares were authorized to be issued under the ESPP, with approximately 0.2 million shares remaining under that authorization at December 31, 2017. The shares of Teradata common stock purchased by a participant on an exercise date (the last day of each month), for all purposes, are deemed to have been issued and sold at the close of business on such exercise date. Prior to that time, none of the rights or privileges of a stockholder exists with respect to such shares. Employee purchases and aggregate cost were as follows at December 31:
In millions
2017
 
2016
 
2015
Employee share purchases
0.6

 
0.6

 
0.5

Aggregate cost
$
15

 
$
13

 
$
17

Employee Benefit Plans
Employee Benefit Plans
Employee Benefit Plans
Pension and Postemployment Plans. Teradata currently sponsors defined benefit pension plans for certain of its international employees. For those international pension plans for which the Company holds asset balances, those assets are primarily invested in common/collective trust funds (which include publicly traded common stocks, corporate and government debt securities, real estate indirect investments, cash or cash equivalents) and insurance contracts.
Postemployment obligations relate to benefits provided to involuntarily terminated employees and certain inactive employees after employment but before retirement. These benefits are paid in accordance with various foreign statutory laws and regulations, and Teradata’s established postemployment benefit practices and policies. Postemployment benefits may include disability benefits, supplemental unemployment benefits, severance, workers’ compensation benefits, continuation of health care benefits and life insurance coverage, and are funded on a pay-as-you-go basis.
Pension and postemployment benefit costs for the years ended December 31 were as follows: 
 
2017
 
2016
 
2015
In millions
Pension
 
Postemployment
 
Pension
 
Postemployment
 
Pension
 
Postemployment
Service cost
$
9

 
$
7

 
$
8

 
$
6

 
$
8

 
$
6

Interest cost
3

 
1

 
3

 
1

 
3

 
1

Expected return on plan assets
(2
)
 

 
(2
)
 

 
(2
)
 

Settlement charge

 

 
1

 

 
1

 

Amortization of actuarial loss
1

 
2

 
1

 
1

 
2

 

Amortization of prior service (credit) cost
(1
)
 
1

 

 
2

 

 

Divestiture

 

 
(2
)
 
(1
)
 

 

Total costs
$
10

 
$
11

 
$
9

 
$
9

 
$
12

 
$
7


The underfunded amount of pension and postemployment obligations is recorded as a liability in the Company’s consolidated balance sheet. The following tables present the changes in benefit obligations, plan assets, funded status and the reconciliation of the funded status to amounts recognized in the consolidated balance sheets and in accumulated other comprehensive income at December 31:
 
Pension
 
Postemployment
In millions
2017
 
2016
 
2017
 
2016
Change in benefit obligation
 
 
 
 
 
 
 
Benefit obligation at January 1
$
120

 
$
115

 
$
42

 
$
49

Service cost
9

 
8

 
7

 
6

Interest cost
3

 
3

 
1

 
1

Plan participant contributions
1

 
1

 

 

Actuarial (gain) loss
(3
)
 
5

 
12

 
12

Benefits paid
(4
)
 
(8
)
 
(15
)
 
(20
)
Currency translation adjustments
10

 
(2
)
 

 
(1
)
Divestiture

 
(2
)
 

 
(5
)
Benefit obligation at December 31
$
136

 
$
120

 
$
47

 
$
42

Change in plan assets
 
 
 
 
 
 
 
Fair value of plan assets at January 1
$
64

 
$
63

 
$

 
$

Actual return on plan assets
5

 
2

 

 

Company contributions
5

 
6

 

 

Benefits paid
(4
)
 
(8
)
 

 

Currency translation adjustments
4

 

 

 

Plan participant contribution
1

 
1

 

 

Fair value of plan assets at December 31
75

 
64

 

 

Funded status (underfunded)
$
(61
)
 
$
(56
)
 
$
(47
)
 
$
(42
)
Amounts Recognized in the Balance Sheet
 
 
 
 
 
 
 
Non-current assets
$
10

 
$
5

 
$

 
$

Current liabilities
(2
)
 
(1
)
 
(7
)
 
(6
)
Non-current liabilities
(69
)
 
(60
)
 
(40
)
 
(36
)
Net amounts recognized
$
(61
)
 
$
(56
)
 
$
(47
)
 
$
(42
)
Amounts Recognized in Accumulated Other Comprehensive (Loss) Income
 
 
 
 
 
 
 
Unrecognized Net actuarial loss
$
15

 
$
21

 
$
37

 
$
26

Unrecognized Prior service (credit) cost
(1
)
 
(1
)
 
3

 
4

Total
$
14

 
$
20

 
$
40

 
$
30


The following table presents the accumulated pension benefit obligation at December 31:
In millions
2017
 
2016
Accumulated pension benefit obligation
$
125

 
$
110


The following table presents pension plans with accumulated benefit obligations in excess of plan assets at December 31:
In millions
2017
 
2016
Projected benefit obligation
$
69

 
$
60

Accumulated benefit obligation
$
63

 
$
53

Fair value of plan assets
$

 
$


The following table presents the pre-tax net changes in projected benefit obligations recognized in other comprehensive income:  
 
Pension
 
Postemployment
In millions
2017
 
2016
 
2017
 
2016
Actuarial (gain) loss arising during the year
$
(7
)
 
$
5

 
$
13

 
$
4

Amortization of loss included in net periodic benefit cost
(1
)
 
(1
)
 
(2
)
 
(1
)
Prior service (credit) cost arising during the year

 

 
(1
)
 
2

Recognition of loss due to settlement

 
(1
)
 

 

Foreign currency exchange
2

 
(1
)
 

 

Total recognized in other comprehensive (loss) income
$
(6
)
 
$
2

 
$
10

 
$
5



The following table presents the amounts in accumulated other comprehensive loss expected to be recognized as components of net periodic benefit cost during 2018: 
In millions
Pension
 
Postemployment
Net loss to be recognized in other comprehensive income
$
1

 
$
4


The weighted-average rates and assumptions used to determine benefit obligations at December 31, and net periodic benefit cost for the years ended December 31, were as follows: 
 
Pension Benefit Obligations
 
Pension Benefit Cost
 
2017
 
2016
 
2017
 
2016
 
2015
Discount rate
2.1%
 
2.0%
 
2.0%
 
2.4%
 
2.3%
Rate of compensation increase
3.3%
 
3.3%
 
3.3%
 
3.2%
 
3.3%
Expected return on plan assets
N/A
 
N/A
 
2.9%
 
3.0%
 
3.3%
 
Postemployment 
Benefit Obligations
 
Postemployment 
Benefit Cost
 
2017
 
2016
 
2017
 
2016
 
2015
Discount rate
2.6%
 
3.4%
 
2.6%
 
3.4%
 
3.5%
Rate of compensation increase
3.0%
 
3.0%
 
3.0%
 
3.0%
 
3.0%
Involuntary turnover rate
2.3%
 
2.0%
 
2.3%
 
2.0%
 
1.3%

The Company determines the expected return on assets based on individual plan asset allocations, historical capital market returns, and long-term interest rate assumptions, with input from its actuaries, investment managers, and independent investment advisors. The company emphasizes long-term expectations in its evaluation of return factors, discounting or ignoring short-term market fluctuations. Expected asset returns are reviewed annually, but are generally modified only when asset allocation strategies change or long-term economic trends are identified.
International discount rates were determined by examining interest rate levels and trends within each country, particularly yields on high-quality long-term corporate bonds, relative to our future expected cash flows. The discount rate used for countries with individually insignificant benefit obligation at year-end was derived by matching the plans’ expected future cash flows to the corresponding yields from the Citigroup Pension Liability Index. This yield curve has been constructed to represent the available yields on high-quality fixed-income investments across a broad range of future maturities.
Gains and losses have resulted from changes in actuarial assumptions and from differences between assumed and actual experience, including, among other items, changes in discount rates and differences between actual and assumed asset returns. These gains and losses (except those differences being amortized to the market-related value) are only amortized to the extent that they exceed 10% of the higher of the market-related value of plan assets or the projected benefit obligation of each respective plan.
Plan Assets. The weighted-average asset allocations at December 31, by asset category are as follows: 
 
Actual Asset Allocation
as of December 31
 
Target Asset
 
2017
 
2016
 
Allocation
Equity securities
32%
 
32%
 
31%
Debt securities
41%
 
42%
 
47%
Insurance (annuity) contracts
17%
 
17%
 
16%
Real-estate
8%
 
7%
 
3%
Other
2%
 
2%
 
3%
Total
100%
 
100%
 
100%

Fair Value. Fair value measurements are established utilizing a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are more fully described in Note 9.
The following is a description of the valuation methodologies used for pension assets as of December 31, 2017.
Common/collective trust funds (which include money market funds, equity funds, bond funds, real-estate indirect investments, etc.): Valued at the net asset value (“NAV”) of shares held by the Plan at year end, as reported to the Plan by the trustee, which represents the fair value of shares held by the Plan. Because the NAV of the shares held in the common/collective trust funds are derived by the value of the underlying investments, the Company has classified these underlying investments as Level 2 fair value measurements.
Insurance contracts: Valued by discounting the related future benefit payments using a current year-end market discount rate, which represents the fair value of the insurance contract. The Company has classified these contracts as Level 3 assets for fair value measurement purposes.
The following table sets forth by level, within the fair value hierarchy, the pension plan assets at fair value as of December 31, 2017: 
 
 
 
Fair Value Measurements at Reporting Date Using
 
 
 
Quoted Prices in Active Markets
for Identical
Assets
 
Significant
Other
Observable
Inputs
 
Significant
Unobservable
Inputs
In millions
December 31, 2017
 
(Level 1)
 
(Level 2)
 
(Level 3)
Money market funds
$
2

 
$

 
$
2

 
$

Equity funds
24

 

 
24

 

Bond/fixed-income funds
31

 

 
31

 

Real-estate indirect investments
6

 

 
6

 

Insurance contracts
12

 

 

 
12

Total assets at fair value
$
75

 
$

 
$
63

 
$
12



The table below sets forth a summary of changes in the fair value of the pension plan level 3 assets for the year ended December 31, 2017:
In millions
Insurance
Contracts
Balance as of January 1, 2017
$
11

Purchases, sales and settlements, net
1

Balance as of December 31, 2017
$
12


The following table sets forth by level, within the fair value hierarchy, the pension plan assets at fair value as of December 31, 2016: 
 
 
 
Fair Value Measurements at Reporting Date Using
 
 
 
Quoted Prices in Active 
Markets
for Identical
Assets
 
Significant
Other
Observable
Inputs
 
Significant
Unobservable
Inputs
In millions
December 31, 2016
 
(Level 1)
 
(Level 2)
 
(Level 3)
Money market funds
$
1

 
$

 
$
1

 
$

Equity funds
21

 

 
21

 

Bond/fixed-income funds
27

 

 
27

 

Real-estate indirect investments
4

 

 
4

 

Insurance contracts
11

 

 

 
11

Total assets at fair value
$
64

 
$

 
$
53

 
$
11


The table below sets forth a summary of changes in the fair value of the pension plan level 3 assets for the year ended December 31, 2016:
In millions
Insurance
Contracts
Balance as of January 1, 2016
$
10

Purchases, sales and settlements, net
1

December 31, 2016
$
11


Investment Strategy. Teradata employs several investment strategies across its various international pension plans. In some countries, particularly where Teradata does not have a large employee base, the Company may use insurance (annuity) contracts to satisfy its future pension payment obligations, whereby the Company makes pension plan contributions to an insurance company in exchange for which the pension plan benefits will be paid when the members reach a specified retirement age or on earlier exit of members from the plan. In other countries, the Company may employ local asset managers to manage investment portfolios according to the investment policies and guidelines established by the Company, and with consideration to individual plan liability structure and local market environment and risk tolerances. The Company’s investment policies and guidelines primarily emphasize diversification across and within asset classes to maximize long-term returns subject to prudent levels of risk, with the overall objective of enabling the plans to meet their future obligations. The investment portfolios contain a diversified blend of equity and fixed-income investments. Furthermore, equity investments are diversified across domestic and international stocks, small and large capitalization stocks, and growth and value stocks. Fixed-income assets are diversified across government and corporate bonds. Where applicable, real estate investments are made through real estate securities, partnership interests or direct investment, and are diversified by property type and location.
Cash Flows Related to Employee Benefit Plans
Cash Contributions. In 2018, the Company expects to contribute approximately $6 million to the international pension plans.
Estimated Future Benefit Payments. The Company expects to make the following benefit payments reflecting past and future service from its pension and postemployment plans: 
 
Pension
 
Postemployment
In millions
Benefits

 
Benefits

Year
 
 
 
2018
$
5

 
$
7

2019
$
5

 
$
6

2020
$
5

 
$
6

2021
$
6

 
$
6

2022
$
6

 
$
6

2023 - 2027
$
34

 
$
24


Savings Plans. U.S. employees and many international employees participate in defined contribution savings plans. These plans generally provide either a specified percent of pay or a matching contribution on participating employees’ voluntary elections. The Company’s matching contributions typically are subject to a maximum percentage or level of compensation. Employee contributions can be made pre-tax, after-tax or a combination thereof. The following table identifies the expense for the U.S. and International subsidiary savings plans for the years ended December 31:
In millions
2017
 
2016
 
2015
U.S. savings plan
$
21

 
$
19

 
$
22

International subsidiary savings plans
$
17

 
$
16

 
$
18

Derivative Instruments and 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 U.S. and in currencies other than the U.S. dollar, the Company is exposed to potential gains and losses from changes in foreign currency exchange rates. To mitigate the impact of currency fluctuations, the Company uses foreign exchange forward contracts to hedge transactional exposures resulting predominantly from foreign currency denominated inter-company receivables and payables. The forward contracts are designated as fair value hedges of specified foreign currency denominated inter-company receivables and payables and generally mature in three months or less. The Company does not hold or issue derivative financial instruments for trading purposes, nor does it hold or issue leveraged derivative instruments. By using derivative financial instruments to hedge exposures to changes in exchange rates, the Company exposes itself to credit risk. The Company manages exposure to counterparty credit risk by entering into derivative financial instruments with highly rated institutions that can be expected to fully perform under the terms of the applicable contracts.
All derivatives are recognized in the Consolidated Balance Sheets at their fair value. The fair values of foreign exchange contracts are based on market spot and forward exchange rates and represent estimates of possible value that may not be realized in the future. Changes in the fair value of derivative financial instruments, along with the loss or gain on the hedged asset or liability, are recorded in current period earnings. The notional amounts represent agreed-upon amounts on which calculations of dollars to be exchanged are based, and are an indication of the extent of Teradata’s involvement in such instruments. These notional amounts do not represent amounts exchanged by the parties and, therefore, are not a measure of the instruments. Across its portfolio of contracts, Teradata has both long and short positions relative to the U.S. dollar. As a result, Teradata’s net involvement is less than the total contract notional amount of the Company’s foreign exchange forward contracts.
The following table identifies the contract notional amount of the Company’s foreign exchange forward contracts at December 31:
In millions
2017
 
2016
Contract notional amount of foreign exchange forward contracts
$
147

 
$
156

Net contract notional amount of foreign exchange forward contracts
$
23

 
$
16


The fair value derivative assets and liabilities recorded in other current assets and accrued liabilities at December 31, 2017 and 2016, were not material.
Gains and losses from the Company’s fair value hedges (foreign currency forward contracts and related hedged items) were immaterial for the years ended December 31, 2017, 2016 and 2015. Gains and losses from foreign exchange forward contracts are fully recognized each period and reported along with the offsetting gain or loss of the related hedged item, either in cost of products or in other income, depending on the nature of the related hedged item.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
In the normal course of business, the Company is subject to proceedings, lawsuits, governmental investigations, claims and other matters, including those that relate to the environment, health and safety, employee benefits, export compliance, intellectual property, tax matters, and other regulatory compliance and general matters.
As first disclosed in the Company’s Form 10-Q for the second quarter of 2017, through internal processes, the Company discovered certain questionable expenditures for travel, gifts and other expenses at one of its international subsidiaries doing business in a single foreign country, Turkey. Teradata promptly initiated an internal investigation into the matter, with the assistance of outside counsel and forensic accountants, to determine whether the expenditures may have violated the U.S. Foreign Corrupt Practices Act (“FCPA”) or other potentially applicable anti-corruption laws. In February 2017, the Company voluntarily contacted the SEC and the U.S. Department of Justice (“DOJ”) to alert them to the relevant events and the Company's internal investigation. Teradata has fully cooperated with the government regarding the status of the Company's internal investigation and findings, including remedial actions and terminations.
On January 16, 2018, the SEC advised that its staff will not recommend any enforcement action by the SEC against Teradata and that its investigation into this matter is closed. On February 20, 2018, the DOJ also advised the Company that it will not take any enforcement action and that its investigation into this matter is closed.
Guarantees and Product Warranties.
Guarantees associated with the Company’s business activities are reviewed for appropriateness and impact to the Company’s financial statements. Periodically, the Company’s customers enter into various leasing arrangements coordinated with a leasing company. In some instances, the Company guarantees the leasing company a minimum value at the end of the lease term on the leased equipment. As of December 31, 2017, the maximum future payment obligation of this guaranteed value and the associated liability balance was $4 million.
The Company provides its customers a standard manufacturer’s warranty and records, at the time of the sale, a corresponding estimated liability for potential warranty costs. Estimated future obligations due to warranty claims are based upon historical factors such as labor rates, average repair time, travel time, number of service calls and cost of replacement parts. For each consummated sale, the Company recognizes the total customer revenue and records the associated warranty liability using pre-established warranty percentages for that product class.
The following table identifies the activity relating to the warranty reserve liability for the years ended December 31: 
In millions
2017
 
2016
 
2015
Beginning balance at January 1
$
5

 
$
6

 
$
7

Accruals for warranties issued
6

 
8

 
9

Settlements (in cash or kind)
(7
)
 
(9
)
 
(10
)
Balance at end of period
$
4

 
$
5

 
$
6


The Company also offers extended and/or enhanced coverage to its customers in the form of maintenance contracts. The Company accounts for these contracts by deferring the related maintenance revenue over the extended and/or enhanced coverage period. Costs associated with maintenance support are expensed as incurred. Amounts associated with these maintenance contracts are not included in the table above.
In addition, the Company provides its customers with certain indemnification rights. In general, the Company agrees to indemnify the customer if a third party asserts patent or other infringement on the part of the customer for its use of the Company’s products. The Company has indemnification obligations under its charter and bylaws to its officers and directors, and has entered into indemnification agreements with the officers and directors of its subsidiaries. From time to time, the Company also enters into agreements in connection with its acquisition and divesture activities that include indemnification obligations by the Company, including the sale of the marketing applications business. The fair value of these indemnification obligations is typically not readily determinable due to the conditional nature of the Company’s potential obligations and the specific facts and circumstances involved with each particular agreement. As such, the Company has generally not recorded a liability in connection with these indemnification arrangements. Historically, payments made by the Company under these types of agreements have not had a material effect on the Company’s consolidated financial condition, results of operations or cash flows.
Leases. Teradata conducts certain of its sales and administrative operations using leased facilities, the initial lease terms of which vary in length. Many of the leases contain renewal options and escalation clauses that are not material to the overall lease portfolio. Future minimum operating lease payments and committed subleases under non-cancelable leases as of December 31, 2017, for the following fiscal years were: 
 
 
 
 
 
 
 
 
 
 
 
 
In millions
Total Amounts
 
2018
 
2019
 
2020
 
2021
 
2022 and Thereafter
Operating lease obligations
$
81

 
$
27

 
$
20

 
$
16

 
$
8

 
$
10

Sublease rentals
(14
)
 
(6
)
 
(5
)
 
(3
)
 

 

Total committed operating leases less sublease rentals
$
67

 
$
21

 
$
15

 
$
13

 
$
8

 
$
10


The following table represents the Company’s actual rental expense and sublease rental income for the years ended December 31:
In millions
2017
 
2016
 
2015
Rental expense
$
24

 
$
24

 
$
26

Sublease rental income
$
5

 
$
3

 
$
3


The Company had no contingent rentals for these periods.
Concentrations of Risk. The Company is potentially subject to concentrations of credit risk on accounts receivable and financial instruments such as hedging instruments, and cash and cash equivalents. Credit risk includes the risk of nonperformance by counterparties. The maximum potential loss may exceed the amount recognized on the balance sheet. Exposure to credit risk is managed through credit approvals, credit limits, selecting major international financial institutions (as counterparties to hedging transactions) and monitoring procedures. Teradata’s business often involves large transactions with customers, and if one or more of those customers were to default in its obligations under applicable contractual arrangements, the Company could be exposed to potentially significant losses. However, management believes that the reserves for potential losses were adequate at December 31, 2017 and 2016.
The Company is also potentially subject to concentrations of supplier risk. Our hardware components are assembled exclusively by Flex Ltd. (“Flex”). Flex procures a wide variety of components used in the manufacturing process on our behalf. Although many of these components are available from multiple sources, Teradata utilizes preferred supplier relationships to better ensure more consistent quality, cost and delivery. Typically, these preferred suppliers maintain alternative processes and/or facilities to ensure continuity of supply. Given the Company’s strategy to outsource its manufacturing activities to Flex and to source certain components from single suppliers, a disruption in production at Flex or at a supplier could impact the timing of customer shipments and/or Teradata’s operating results. In addition, a significant change in the forecasts to any of these preferred suppliers could result in purchase obligations or components that may be in excess of demand.
Fair Value Measurements
Fair Value Measurements
Fair Value Measurements
Fair value measurements are established utilizing a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, defined as significant other observable inputs, such as quoted prices in active markets for similar assets or liabilities, or quoted prices in less-active markets for identical assets; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
The Company’s assets and liabilities measured at fair value on a recurring basis include money market funds and foreign currency exchange contracts. A portion of the Company’s excess cash reserves are held in money market funds which generate interest income based on the prevailing market rates. Money market funds are included in cash and cash equivalents in the Company’s balance sheet. Money market fund holdings are measured at fair value using quoted market prices and are classified within Level 1 of the valuation hierarchy.
When deemed appropriate, the Company minimizes its exposure to changes in foreign currency exchange rates through the use of derivative financial instruments, specifically, forward foreign exchange contracts. The fair value of these contracts are measured at the end of each interim reporting period using observable inputs other than quoted prices, specifically market spot and forward exchange rates. As such, these derivative instruments are classified within Level 2 of the valuation hierarchy. Fair value gains for open contracts are recognized as assets and fair value losses are recognized as liabilities. The fair value derivative assets and liabilities recorded in other current assets and accrued liabilities at December 31, 2017 and 2016, were not material. Any realized gains or losses would be mitigated by corresponding gains or losses on the underlying exposures. Further information on the Company’s use of forward foreign exchange contracts is included in Note 7.
The Company’s assets measured at fair value on a recurring basis and subject to fair value disclosure requirements at December 31, were as follows: 
 
 
 
Fair Value Measurements at Reporting Date Using
 
 
 
Quoted Prices 
in Active Markets
for Identical
Assets
 
Significant
Other
Observable
Inputs
 
Significant Unobservable Inputs
In millions
Total
 
(Level 1)
 
(Level 2)
 
(Level 3)
Assets
 
 
 
 
 
 
 
Money market funds at December 31, 2017
$
501

 
$
501

 
$

 
$

Money market funds at December 31, 2016
$
473

 
$
473

 
$

 
$

Debt
Debt
Debt
Teradata's $600 million term loan is payable in quarterly installments, which commenced on March 31, 2016, with all remaining principal due in March 2020. The outstanding principal amount under the term loan agreement bears interest at a floating rate based upon a negotiated base rate or a Eurodollar rate plus a margin based on the leverage ratio of the Company.
As of December 31, 2017, the term loan principal outstanding was $540 million and carried an interest rate of 3.375%. Unamortized deferred issuance costs of approximately $1 million are being amortized over the five-year term of the loan. The Company was in compliance with all covenants as of December 31, 2017.
Annual contractual maturities of outstanding principal on the term loan at December 31, 2017, are as follows: 
In millions
 
2018
$
60

2019
68

2020
412

Total
$
540



The following table presents interest expense on borrowings for the years ended December 31:
In millions
2017
 
2016
 
2015
Interest expense
$
15

 
$
12

 
$
9


Teradata’s term loan is recognized on the Company’s balance sheet at its unpaid principal balance, and is not subject to fair value measurement. However, given that the loan carries a variable rate, the Company estimates that the unpaid principal balance of the term loan would approximate its fair value. If measured at fair value in the financial statements, the Company’s term loan would be classified as Level 2 in the fair value hierarchy.
Teradata's revolving credit facility (the “Credit Facility”) has a borrowing capacity of $400 million. The Credit Facility ends on March 25, 2020 at which point any remaining outstanding borrowings would be due for repayment unless extended by agreement of the parties for up to two additional one-year periods. The interest rate charged on borrowings pursuant to the Credit Facility can vary depending on the interest rate option the Company chooses to utilize and the Company’s leverage ratio at the time of the borrowing. In the near term, Teradata would anticipate choosing a floating rate based on the London Interbank Offered Rate (“LIBOR”). The Credit Facility is unsecured and contains certain representations and warranties, conditions, affirmative, negative and financial covenants, and events of default customary for such facilities.
As of December 31, 2017, the Company had $240 million in borrowings outstanding under the Credit Facility, which carried an interest rate of 5.0%, leaving $160 million in additional borrowing capacity available. Unamortized deferred costs on the original credit facility and new lender fees of approximately $1 million are being amortized over the five-year term of the credit facility. The Company was in compliance with all covenants as of December 31, 2017.
Segment, Other Supplemental Information and Concentrations
Segment, Other Supplemental Information and Concentrations
Segment, Other Supplemental Information and Concentrations
Effective July 1, 2016, following the sale of the marketing applications business, Teradata is managing its business in two operating segments: (1) Americas region (North America and Latin America); and (2) International region (Europe, Middle East, Africa, Asia Pacific and Japan). For purposes of discussing results by segment, management excludes the impact of certain items, consistent with how management evaluates the performance of each segment. This format is useful to investors because it allows analysis and comparability of operating trends. It also includes the same information that is used by Teradata management to make decisions regarding the segments and to assess financial performance. The chief operating decision maker evaluates the performance of the segments based on revenue and multiple profit measures, including segment gross profit. For management reporting purposes assets are not allocated to the segments.
The following table presents segment revenue and segment gross profit for the Company for the years ended December 31: 
In millions
2017
 
2016
 
2015
Segment revenue
 
 
 
 
 
Americas Data and Analytics
$
1,195

 
$
1,334

 
$
1,470

International Data and Analytics
961

 
919

 
907

Total Data and Analytics
2,156

 
2,253

 
2,377

Marketing Applications

 
69

 
153

Total revenue
2,156

 
2,322

 
2,530

Segment gross profit
 
 
 
 
 
Americas Data and Analytics
676

 
796

 
871

International Data and Analytics
434

 
445

 
452

Total Data and Analytics
1,110

 
1,241

 
1,323

Marketing Application

 
34

 
63

Total segment gross profit
1,110

 
1,275

 
1,386

Stock-based compensation expense
13

 
14

 
13

Amortization of acquisition-related intangible assets
1

 
2

 
16

Acquisition, integration and reorganization-related costs
6

 
9

 
11

Amortization of capitalized software costs
68

 
62

 
70

Selling, general and administrative expenses
652

 
664

 
765

Research and development expenses
306

 
212

 
228

Impairment of goodwill, acquired intangibles and other assets

 
80

 
478

Total income (loss) from operations
$
64

 
$
232

 
$
(195
)

Prior period segment information has been reclassified to conform to the current period presentation. Certain items, including amortization of certain capitalized software costs, were excluded from segment gross profit to conform to the way the Company manages and reviews the results by segment.
The following table presents a further disaggregation of revenue for the Company for the years ended December 31:
In millions
2017
 
2016
 
2015
Recurring revenue

$
1,047

 
$
978

 
$
956

Product - perpetual licenses and hardware

429

 
600

 
752

Consulting services

680

 
675

 
669

Marketing applications

 
69

 
153

Total revenue
$
2,156

 
$
2,322

 
$
2,530

 
Recurring revenue is intended to depict the over-time revenue recognition model for these revenue streams. The recurrence of these revenue streams in future periods depends on a number of factors including contractual term periods and customers’ renewal decisions.
The following table presents revenues by geographic area for the years ended December 31: 
In millions
2017
 
2016
 
2015
United States
$
1,089

 
$
1,246

 
$
1,428

Americas (excluding United States)
107

 
123

 
125

International
960

 
953

 
977

Total revenue
$
2,156

 
$
2,322

 
$
2,530


The following table presents property and equipment by geographic area at December 31: 
In millions
2017
 
2016
United States
$
119

 
$
113

Americas (excluding United States)
11

 
4

International
32

 
21

Property and equipment, net
$
162

 
$
138


Concentrations. No single customer accounts for more than 10% of the Company's revenue. As of December 31, 2017, the Company is not aware of any significant concentration of business transacted with a particular customer that could, if suddenly eliminated, have a material adverse effect on the Company’s operations. The Company's hardware components are assembled exclusively by Flex. In addition, the Company utilizes preferred supplier relationships to better ensure more consistent quality, cost and delivery. There can be no assurances that a disruption in production at Flex or at a supplier would not have a material adverse effect on the Company's operations.
Business Combinations and Other Investment Activities
Business Combinations and Other Investment Activities
Business Combinations and Other Investment Activities
During 2017, the Company completed one immaterial business acquisition, which complements and strengthens the Company's research and development department, and released hold-back amounts from prior-year acquisitions for $21 million.
During 2016, the Company completed one immaterial business acquisition, which complements and strengthens the Company's global portfolio, and released hold-back amounts from several prior-year acquisitions for $16 million. The Company also sold the marketing applications business on July 1, 2016 (see Note 15).
During 2015, the Company completed two immaterial business acquisitions for $17 million, which complemented and strengthened the Company's global portfolio. One of the acquisitions pertained to the marketing applications business, which the Company exited on July 1, 2016. In addition, the Company sold two equity investments for $85 million and recognized a gain of $57 million.
Accumulated Other Comprehensive (Loss) Income
Accumulated Other Comprehensive (Loss) Income
Accumulated Other Comprehensive (Loss) Income
The following table provides information on changes in accumulated other comprehensive (loss) income (“AOCI”), net of tax, for the years ended December 31:
In millions
Available-for-sale securities
 
Defined 
benefit
plans
 
Foreign 
currency
translation
adjustments
 
Total 
AOCI
Balance as of December 31, 2014
$
31

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

 

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

 
$
(29
)
 
$
(47
)
 
$
(76
)
Other comprehensive loss before reclassifications

 
(9
)
 
(7
)
 
(16
)
Amounts reclassified from AOCI

 
3

 

 
3

Net other comprehensive loss

 
(6
)
 
(7
)
 
(13
)
Balance as of December 31, 2016
$

 
$
(35
)
 
$
(54
)
 
$
(89
)
Other comprehensive (loss) income before reclassifications

 
(5
)
 
16

 
11

Amounts reclassified from AOCI

 
4

 

 
4

Net other comprehensive (loss) income

 
(1
)
 
16

 
15

Balance as of December 31, 2017
$

 
$
(36
)
 
$
(38
)
 
$
(74
)

The following table presents the impact and respective location of AOCI reclassifications in the Consolidated Statements of Income for the years ended December 31:
In millions
 
 
 
 
AOCI Component
 
Location
 
2017
 
2016
 
2015
Defined benefit plans
 
Cost of services
 
$
(3
)
 
$
(3
)
 
$
(2
)
Defined benefit plans
 
Selling, general and administrative expenses
 
(2
)
 
(1
)
 
(1
)
Available for sale securities
 
Other income
 

 

 
42

Tax portion
 
Income tax benefit (expense)
 
1

 
1

 
(16
)
Total reclassifications
 
Net (loss) income
 
$
(4
)
 
$
(3
)
 
$
23


Further information on the Company’s defined benefit plans is included in Note 6.
Reorganization and Business Transformation
Reorganization and Business Transformation
Reorganization and Business Transformation
In the fourth quarter of 2015 the Company announced a plan to realign Teradata’s business by reducing its cost structure and focusing on the Company’s core data and analytics business. This business transformation included exiting the marketing applications business (see Note 15), rationalizing costs, and modifying the Company’s go-to-market approach. The Company incurred the following costs related to these actions for the years ended December 31:
In millions
 
2017
 
2016
 
2015
Employee severance and other employee related cost
 
$
2

 
$
14

 
$
4

Asset write-downs
 

 
80

 
140

Professional services, legal and other associated cost
 
24

 
35

 
8

Total reorganization and business transformation cost
 
$
26

 
$
129

 
$
152


The charges for asset write-downs were for non-cash write-downs of goodwill, acquired intangibles and other assets. In addition to the costs and charges incurred above, the Company made cash payments of less than $1 million in 2017, $20 million in 2016, and $14 million in 2015 for employee severance that did not have a material impact on its Statement of Operations due to Teradata accounting for its postemployment benefits under Accounting Standards Codification 712, Compensation - Nonretirement Postemployment Benefits (“ASC 712”), which uses actuarial estimates and defers the immediate recognition of gains or losses. As of December 31, 2017, the Company does not have any significant liabilities associated with these transformation activities.
Impairment and Sale of the Marketing Applications Business
Impairment and Sale of the Marketing Applications Business
Impairment and Sale of the Marketing Applications Business
The Company reviews goodwill for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate it is more likely than not that the fair value of the reporting unit is less than its carrying amount. During the second quarter of 2015, the Company determined that indicators were present in the marketing applications business which would suggest the fair value may have declined below the carrying value. The indicators were primarily lower than forecasted revenue and profitability levels for 2015 and future periods. Based on our analysis, the implied fair value of goodwill was substantially lower than the carrying value of goodwill. As a result, the Company recorded an impairment charge of $340 million during the second quarter of 2015.
In the fourth quarter of 2015, the Company committed to a plan to exit the marketing applications business. The assets and liabilities for this business, which were included within our marketing applications segment, were classified as held for sale in the fourth quarter of 2015 and, therefore, the corresponding depreciation and amortization expense ceased at that time. The divestiture was not presented as discontinued operations in our consolidated financial statements because it did not have a major effect on the Company's operations and financial results. The Company then performed a goodwill impairment analysis of the business to be disposed of. As a result of this analysis, the Company recognized an additional goodwill impairment of $97 million in the fourth quarter of 2015. In addition, acquired intangible assets were reduced by $41 million to adjust the carrying amount of the disposal group's net assets and liabilities down to its fair value less cost to sell.
On April 22, 2016, the Company entered into a definitive Asset Purchase Agreement (the “Purchase Agreement”) with TMA Solutions, L.P., a Cayman Islands exempted limited partnership and affiliate of Marlin Equity Partners (“Marlin Equity”), to sell the marketing applications business for $90 million in cash, subject to a post-closing adjustment for working capital, debt and other metrics. We recognized an impairment of goodwill of $57 million and acquired intangibles of $19 million in the first quarter of 2016 to adjust the carrying value of the net assets of our marketing applications business to fair value less cost to sell.
Prior to the sale that occurred on July 1, 2016, the marketing applications business that was classified as held for sale generated revenue of $69 million and an operating loss of $112 million (which includes loss from impairment of goodwill and acquired intangibles of $76 million) for the six months ended June 30, 2016. For the year ended December 31, 2015, the Company generated revenue of $153 million and an operating loss of $561 million (which includes loss from impairment of goodwill and acquired intangibles of $478 million). The net assets held for sale as of July 1, 2016 were $87 million.
On July 1, 2016, pursuant to the Purchase Agreement, Teradata completed the sale of Teradata’s marketing applications business to Marlin Equity. The purchase price received for this business was approximately $92 million in cash, after a post-closing adjustment for working capital, debt and other metrics. Transaction costs and post-closing obligations were approximately $5 million. Upon completion of the divestiture of the held for sale assets in July 2016, no material gain or loss was recognized as the carrying value of the held for sale assets was equal to the purchase price received less costs to sell.
The Company recorded tax expense of approximately $22 million in the third quarter of 2016 related to this transaction. The total tax expense, of which $14 million was cash taxes due to having zero tax basis in goodwill, was calculated based on the amount of proceeds allocated to the various jurisdictions in accordance with the Purchase Agreement at the local statutory rates.
Quarterly Information (unaudited)
Quarterly Information (unaudited)
Quarterly Information (unaudited)
In millions, except per share amounts
First (1)
 
Second
 
Third
 
Fourth (2)
2017
 
 
 
 
 
 
 
Total revenues
$
491

 
$
513

 
$
526

 
$
626

Gross profit
$
224

 
$
242

 
$
250

 
$
306

Operating (loss) income
$
(1
)
 
$
(1
)
 
$
7

 
$
59

Net (loss) income
$
(2
)
 
$
(4
)
 
$
13

 
$
(74
)
Net (loss) income per share:
 
 
 
 
 
 
 
Basic
$
(0.02
)
 
$
(0.03
)
 
$
0.11

 
$
(0.61
)
Diluted
$
(0.02
)
 
$
(0.03
)
 
$
0.10

 
$
(0.61
)
2016
 
 
 
 
 
 
 
Total revenues
$
545

 
$
599

 
$
552

 
$
626

Gross profit
$
269

 
$
310

 
$
294

 
$
315

Operating (loss) income
$
(42
)
 
$
87

 
$
89

 
$
98

Net (loss) income
$
(46
)
 
$
64

 
$
49

 
$
58

Net (loss) income per share:
 
 
 
 
 
 
 
Basic
$
(0.36
)
 
$
0.49

 
$
0.38

 
$
0.45

Diluted
$
(0.36
)
 
$
0.49

 
$
0.37

 
$
0.44


(1) Loss from operation for the three months ended March 31, 2016 includes goodwill and acquired intangibles impairment charges of $76 million for the marketing application business.
(2) Loss from operations for the three months ended December 31, 2017 includes $126 million tax impact related to 2017 U.S. Tax Reform.
Subsequent Events
Subsequent Events
Subsequent Events
From February 8, 2018 through February 22, 2018, the Company purchased approximately 1.4 million shares for approximately $49 million. As of February 23, 2018, the Company had approximately $462 million of share repurchase authorization remaining under its general share repurchase program.
SCHEDULE II-VALUATION AND 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
 
Provision/reversals
Charged
to Costs &
Expenses
 
Charged
to Other
Accounts
 
Deductions
 
Balance
at End of
Period
Allowance for doubtful accounts
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2017
 
$
19

 
$
(6
)
 
$

 
$
1

 
$
12

Year ended December 31, 2016*
 
$
22

 
$
3

 
$

 
$
6

 
$
19

Year ended December 31, 2015**
 
$
19

 
$
5

 
$

 
$
2

 
$
22

Deferred tax valuation allowance
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2017
 
$
26

 
$
6

 
$

 
$

 
$
32

Year ended December 31, 2016
 
$
25

 
$
1

 
$

 
$

 
$
26

Year ended December 31, 2015
 
$
20

 
$
5

 
$

 
$

 
$
25


* Above amount included in the deductions within column D is $5 million of reserves transferred in the sale of the marketing application business.
** Above amounts include allowances classified as held for sale.  
Description of Business, Basis of Presentation and Significant Accounting Policies (Policies)
Description of the Business. Teradata Corporation (“Teradata” or the “Company”) is a global leader in analytic data solutions and services. Our analytic data solutions comprise software, hardware, and related business consulting and support services for analytics across a company’s entire analytical ecosystem.
Basis of Presentation. The financial statements are presented on a consolidated basis and include the accounts of the Company and its wholly-owned subsidiaries in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the period reported. On an ongoing basis, management evaluates these estimates and judgments, including those related to allowances for doubtful accounts, the valuation of inventory to net realizable value, impairments of goodwill and other intangibles, stock-based compensation, pension and other postemployment benefits, and income taxes and any changes will be accounted for on a prospective basis. Actual results could differ from those estimates.
Revenue Recognition. Teradata’s solution offerings typically include software, unspecified when-and-if-available software upgrades, hardware, maintenance support services, and other consulting, implementation and installation-related (“consulting”) services. Teradata records revenue when it is realized, or realizable, and earned. Teradata considers these requirements met when:
Persuasive evidence of an arrangement exists
The products or services have been delivered to the customer
The sales price is fixed or determinable and free of contingencies or significant uncertainties
Collectibility is reasonably assured
Teradata reports revenue net of any taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. The Company assesses whether fees are fixed or determinable at the time of sale. Standard payment terms may vary based on the country in which the agreement is executed, but are generally between 30 days and 90 days. Payments that are due within six months are generally deemed to be fixed or determinable based on a successful collection history on such arrangements, and thereby satisfy the required criteria for revenue recognition. Teradata delivers its solutions primarily through direct sales channels, as well as through alliances with system integrators, other independent software vendors and distributors, and value-added resellers (collectively referred to as “resellers”). In assessing whether the sales price to a reseller is fixed or determinable, the Company considers, among other things, past business practices with the reseller, the reseller’s operating history, payment terms, return rights and the financial wherewithal of the reseller. When Teradata determines that the contract fee to a reseller is not fixed or determinable, that transaction is deferred and recognized upon sell-through to the end customer.
The Company’s deliverables often involve delivery or performance at different periods of time. Revenue for perpetual software is generally recognized upon delivery with the hardware once title and risk of loss have been transferred. Revenue for unspecified software upgrades or enhancements on a when-and-if-available basis are recognized straight-line over the term of the arrangement. Revenue for maintenance support services is also recognized on a straight-line basis over the term of the contract. Revenue for other consulting, implementation and installation services is recognized as services are provided. In certain instances, acceptance of the product or service is specified by the customer. In such cases, revenue is deferred until the acceptance criteria have been met. Delivery and acceptance generally occur in the same reporting period. The Company’s arrangements generally do not include any customer negotiated provisions for cancellation, termination or refunds that would significantly impact recognized revenue.
The Company evaluates all deliverables in an arrangement to determine whether they represent separate units of accounting. A deliverable constitutes a separate unit of accounting when it has standalone value, and if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered items is considered probable and substantially in the control of Teradata. Most of the Company’s products and services qualify as separate units of accounting and are recognized upon meeting the criteria as described above.
For multiple deliverable arrangements that contain non-software related deliverables, the Company allocates revenue to each deliverable based upon the relative selling price hierarchy and if software and software-related deliverables are also included in the arrangement, to those deliverables as a group based on the best estimate of selling price (“BESP”) for the group. The selling price for a deliverable is based on its vendor-specific objective evidence of selling price (“VSOE”) if available, third-party evidence of selling price (“TPE”) if VSOE is not available, or BESP if neither VSOE nor TPE is available. The Company then recognizes revenue when the remaining revenue recognition criteria are met for each deliverable. For the software group or arrangements that contain only software and software-related deliverables, the revenue is allocated utilizing the residual or fair value method. Under the residual method, the VSOE of the undelivered elements is deferred and accounted for under the applicable revenue recognition guidance, and the remaining portion of the software arrangement fee is allocated to the delivered elements and is recognized as revenue. The fair value method is similar to the relative selling price method used for non-software deliverables except that the allocation of each deliverable is based on VSOE. For software groups or arrangements that contain only software and software-related deliverables in which VSOE does not exist for each deliverable (fair value method) or does not exist for each undelivered element (residual method), revenue for the entire software arrangement or group is deferred and not recognized until delivery of all elements without VSOE has occurred, unless the only undelivered element is postcontract customer support (“PCS”) in which case the entire software arrangement or group is recognized ratably over the PCS period.
Teradata’s analytic software and hardware products are sold and delivered together in the form of a “Node” of capacity as an integrated technology solution. Because both the analytic software and hardware platform are necessary to deliver the analytic data platform’s essential functionality, the analytic software and hardware (Node) are excluded from the software rules and considered a non-software related deliverable. Teradata software applications and related support are considered software-related deliverables. Additionally, the amount of revenue allocated to the delivered items utilizing the relative selling price or fair value method is limited to the amount that is not contingent upon the delivery of additional items or meeting other specified performance conditions (the non-contingent amount).
VSOE is based upon the normal pricing and discounting practices for those products and services when sold separately. Teradata uses the stated renewal rate approach in establishing VSOE for maintenance and when-and-if-available software upgrades (collectively referred to as PCS). Under this approach, the Company assesses whether the contractually stated renewal rates are substantive and consistent with the Company’s normal pricing practices. Renewal rates greater than the lower level of our targeted pricing ranges are substantive and, therefore, meet the requirements to support VSOE. In instances where there is not a substantive renewal rate in the arrangement, the Company allocates revenue based upon BESP, using the minimum established pricing targets as supported by the renewal rates for similar customers utilizing the bell-curve method. Teradata also offers consulting and installation-related services to its customers, which are considered non-software deliverables if they relate to the nodes. These services are rarely considered essential to the functionality of the analytics solution deliverable and there is never software customization of the proprietary database software. VSOE for consulting services is based on the hourly rates for standalone consulting services projects by geographic region and are indicative of the Company’s customary pricing practices. Pricing in each market is structured to obtain a reasonable margin based on input costs.
In nearly all multiple-deliverable arrangements, the Company is unable to establish VSOE for all deliverables in the arrangement. This is due to infrequently selling each deliverable separately (such is the case with our nodes), not pricing products or services within a narrow range, or only having a limited sales history. When VSOE cannot be established, attempts are made to establish TPE of the selling price for each deliverable. TPE is determined based on competitor prices for similar deliverables when sold separately. However, Teradata’s offerings contain significant differentiation such that the comparable pricing of products with similar functionality cannot typically be obtained. This is because Teradata’s products contain a significant amount of proprietary technology and its solutions offer substantially different features and functionality than other available products. As Teradata’s products are significantly different from those of its competitors, the Company is unable to establish TPE for the vast majority of its products.
When the Company is unable to establish selling prices using VSOE or TPE, the Company uses BESP in its allocation of arrangement consideration. The objective of BESP is to determine the price at which the Company would transact a sale if the product or service was sold on a standalone basis. The Company determines BESP for a product or service by considering multiple factors including, but not limited to, geographies, market conditions, product life cycles, competitive landscape, internal costs, gross margin objectives, purchase volumes and pricing practices.
The primary consideration in developing BESP for the Company’s nodes is the bell-curve method based on historical transactions. The BESP analysis is at the geography level to align it with the way in which the Company goes to market and establishes pricing for its products. The Company has established discount ranges off published list prices for different geographies based on strategy and maturity of Teradata’s presence in the respective geography. There are distinctions in each geography and product group which support the use of geographies and markets for the determination of BESP. For example, the Company’s U.S. market is relatively mature and most of the large transactions are captured in this market, whereas the International markets are less mature with generally smaller deal size. Additionally, the prices and margins for the Company’s products vary by geography and by product class. BESP is analyzed on a semi-annual basis using data from the four previous quarters, which the Company believes best reflects most recent pricing practices in a changing marketplace.
The Company reviews VSOE, TPE and its determination of BESP on a periodic basis and updates it, when appropriate, to ensure that the practices employed reflect the Company’s recent pricing experience. The Company maintains internal controls over the establishment and updates of these estimates, which includes review and approval by the Company’s management. For the year ended December 31, 2017 there was no material impact to revenue resulting from changes in VSOE, TPE or BESP.
Teradata’s new go-to-market offerings introduced in the second half of 2016, which are part of the overall business transformation strategy, include the following offerings:
Subscription license - Teradata’s subscription licenses include a right-to-use license and are typically sold with PCS. The revenue for these arrangements is typically recognized ratably over the contract term. The term of these arrangements varies between one and five years.
Cloud - These arrangements include a right-to-access software license that the customer does not have a right to take possession of without significant penalty during the hosting period and the services can be delivered through a managed or public cloud. These arrangements are recognized outside the software rules and revenue is recognized ratably over the contract term. The term of these arrangements typically varies between one and five years.
Rentals - Teradata owns the equipment and may or may not provide managed services. The revenue for these arrangements is generally recognized straight-line over the term of the contract. The term of these arrangements typically varies between one and three years and are generally accounted for as operating leases.
Service model - Teradata owns the equipment to provide the service on-premises. Service models typically include a minimum fixed amount that is recognized ratably over the contract term and may include an elastic amount for usage above the minimum, which is recognized monthly based on actual utilization. The term of these arrangements varies between one and five years.
Shipping and Handling. Product shipping and handling costs are included in cost of products in the Consolidated Statements of (Loss) Income.
Cash and Cash Equivalents. All short-term, highly-liquid investments having original maturities of three months or less are considered to be cash equivalents.
Allowance for Doubtful Accounts. Teradata establishes provisions for doubtful accounts using both percentages of accounts receivable balances to reflect historical average credit losses and specific provisions for known issues.
Inventories. Inventories are stated at the lower of cost or market. Cost of service parts is determined using the average cost method. Finished goods inventory is determined using actual cost.
Available-for-sale Securities. Available-for-sale securities are reported at fair value. Unrealized holding gains and losses are excluded from earnings and reported in other comprehensive (loss) income. Realized gains and losses are included in other income and expense in the Consolidated Statements of (Loss) Income.
Long-Lived Assets
Property and Equipment. Property and equipment, leasehold improvements and rental equipment are stated at cost less accumulated depreciation. Depreciation is computed over the estimated useful lives of the related assets primarily on a straight-line basis. Equipment is depreciated over 3 to 20 years and buildings over 25 to 45 years. Leasehold improvements are depreciated over the life of the lease or the asset, whichever is shorter.
Capitalized Software. Direct development costs associated with internal-use software are capitalized and amortized over the estimated useful lives of the resulting software. The costs are capitalized when both the preliminary project stage is completed and it is probable that computer software being developed will be completed and placed in service. Teradata typically amortizes capitalized internal-use software on a straight-line basis over three years beginning when the asset is substantially ready for use.
Costs incurred for the development of analytic applications are expensed as incurred based on the frequency and agile nature of development. Prior to December 31, 2016, costs incurred for the development of analytic database software that will be sold, leased or otherwise marketed were capitalized between technological feasibility and the point at which a product was ready for general release. Technological feasibility is established when planning, designing and initial coding activities that are necessary to establish the product can be produced to meet its design specifications are complete. In the absence of a program design, a working model is used to establish technological feasibility. These costs are included within capitalized software and are amortized over the estimated useful lives of four years using the greater of the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product or the straight-line method over the remaining estimated economic life of the product beginning when the product is available for general release. Costs capitalized include direct labor and related overhead costs. Costs incurred prior to technological feasibility and after general release are expensed as incurred.
Our research and development efforts have recently become more driven by market requirements and rapidly changing customers' needs. In addition, the Company started applying agile development methodologies to help respond to new technologies and trends. Agile development methodologies are characterized by a more dynamic development process with more frequent and iterative revisions to a product release features and functions as the software is being developed. Due to the shorter development cycle and focus on rapid production associated with agile development, the Company did not capitalize any amounts for external-use software development costs in 2017 due to the relatively short duration between the completion of the working model and the point at which a product is ready for general release. Prior capitalized costs will continue to be amortized under the greater of revenue-based or straight-line method over the estimated useful life.
The following table identifies the activity relating to capitalized software:
 
Internal-use Software
 
External-use Software
In millions
2017
 
2016
 
2015
 
2017
 
2016
 
2015
Beginning balance at January 1
$
13

 
$
13

 
$
13

 
$
174

 
$
177

 
$
186

Capitalized
9

 
6

 
6

 

 
59

 
61

Amortization
(6
)
 
(6
)
 
(6
)
 
(69
)
 
(62
)
 
(70
)
Ending balance at December 31
$
16

 
$
13

 
$
13

 
$
105

 
$
174

 
$
177


The aggregate amortization expense (actual and estimated) for internal-use and external-use software for the following periods is:
 
Actual
 
For the years ended (estimated)
In millions
2017
 
2018
 
2019
 
2020
 
2021
 
2022
Internal-use software amortization expense
$
6

 
$
7

 
$
7

 
$
7

 
$
7

 
$
6

External-use software amortization expense
$
69

 
$
49

 
$
34

 
$
22

 
$

 
$


Estimated expense, which is recorded to cost of sales for external use software, is based on capitalized software at December 31, 2017 and does not include any new capitalization for future periods.
Valuation of Long-Lived Assets. Long-lived assets such as property and equipment, acquired intangible assets and internal capitalized software are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. An impairment loss would be recognized when estimated future undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than the carrying amount.
Goodwill. Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Goodwill amounts are not amortized, but rather are tested for impairment annually or upon occurrence of an event or change in circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying amount.
Warranty. Provisions for product warranties are recorded in the period in which the related revenue is recognized. The Company accrues warranty reserves using percentages of revenue to reflect the Company’s historical average warranty claims.
Research and Development Costs. Research and development costs are expensed as incurred (except for the capitalized software development costs discussed above). Research and development costs primarily include labor-related costs, contractor fees, and overhead expenses directly related to research and development support.
Pension and Postemployment Benefits. The Company accounts for its pension and postemployment benefit obligations using actuarial models. The measurement of plan obligations was made as of December 31, 2017. Liabilities are computed using the projected unit credit method. The objective under this method is to expense each participant’s benefits under the plan as they accrue, taking into consideration salary increases and the plan’s benefit allocation formula. Thus, the total pension or postemployment benefit to which each participant is expected to become entitled is broken down into units, each associated with a year of past or future credited service.
The Company recognizes the funded status of its pension and postemployment plan obligations in its consolidated balance sheet and records in other comprehensive income certain gains and losses that arise during the period, but are deferred under pension and postemployment accounting rules.
Foreign Currency. Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment are translated into U.S. dollars at period-end exchange rates. Income and expense accounts are translated at daily exchange rates prevailing during the period. Adjustments arising from the translation are included in accumulated other comprehensive income, a separate component of stockholders’ equity. Gains and losses resulting from foreign currency transactions are included in determining net income.
Income Taxes. Income tax expense is provided based on income before income taxes in the various jurisdictions in which the Company conducts its business. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. These deferred taxes are determined based on the enacted tax rates expected to apply in the periods in which the deferred assets or liabilities are expected to be settled or realized. For the Global Intangible Low-Taxed Income (“GILTI”) provisions of the Tax Act, a provisional estimate could not be made as the Company has not yet completed its assessment of or elected an accounting policy to either recognize deferred taxes for basis differences expected to reverse as GILTI or to record GILTI as period costs if and when incurred. In accordance with SEC guidance, provisional amounts may be refined as a result of additional guidance from, and interpretations by, U.S. regulatory and standard-setting bodies and changes in assumptions. Teradata recognizes tax benefits from uncertain tax positions only if it is more likely than not the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company records valuation allowances related to its deferred income tax assets when it is more likely than not that some portion or all of the deferred income tax assets will not be realized.
Stock-based Compensation. Stock-based payments to employees, including grants of stock options, restricted shares and restricted share units, are recognized in the financial statements based on their fair value. The fair value of each stock option award on the grant date is estimated using the Black-Scholes option-pricing model with the following assumptions: expected dividend yield, expected stock price volatility, weighted-average risk-free interest rate and weighted average expected term of the options. The Company’s expected volatility assumption used in the Black-Scholes option-pricing model is based on Teradata's historical volatility. The expected term for options granted is based upon historical observation of actual time elapsed between date of grant and exercise of options for all employees. The risk-free interest rate used in the Black-Scholes model is based on the implied yield curve available on U.S. Treasury issues at the date of grant with a remaining term equal to the Company’s expected term assumption. The Company has never declared or paid a cash dividend.
Earnings (Loss) Per Share. Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted-average number of shares outstanding during the reported period. The calculation of diluted earnings per share is similar to basic earnings per share, except that the weighted-average number of shares outstanding includes the dilution from potential shares added from stock options, restricted share awards and other stock awards.
Recently Issued Accounting Pronouncements
Revenue Recognition.  In May 2014, the Financial Accounting Standards Board ("FASB") issued new guidance that affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The new guidance will supersede the revenue recognition requirements in the current revenue recognition guidance, and most industry-specific guidance. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer are amended to be consistent with the guidance on recognition and measurement in this update. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the FASB defines a five-step process which includes the following: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation.
The new revenue standard will be effective for annual reporting periods beginning after December 15, 2017, with early application permitted. The standard allows entities to apply the standard retrospectively for all periods presented or alternatively an entity is permitted to recognize the cumulative effect of initially applying the guidance as an opening balance sheet adjustment to retained earnings in the period of initial application (modified retrospective method).
The Company will adopt the new accounting guidance effective January 1, 2018 by utilizing the modified retrospective method. The Company is still evaluating and finalizing the impact on its consolidated financial position, results of operations and cash flows.
Although the Company is still evaluating the impact on its consolidated financial statements, the Company believes the most significant impacts will likely include the following items:
As the Company transitions to the new go-to-market offerings, such as subscription-based licenses rather than perpetual licenses, the Company could potentially see a more significant impact in the amount of revenue recognized over time under the current rules but upfront under the new rules. This impact will result in revenue that is adjusted to retained earnings in the period of adoption and therefore not recognized in future periods or restated to prior periods due to the Company applying the modified retrospective method of adoption.
The Company currently expenses contract acquisition costs and believes that the requirement to defer incremental contract acquisition costs and recognize them over the term of the contract to which the costs relate will have an impact, especially as the Company transitions to longer-term, over-time revenue contracts.
The amount of revenue allocated to the delivered items and recognized upfront utilizing the relative selling price model is limited to the amount that is not contingent upon the delivery of additional items or meeting other specified performance conditions (i.e., the non-contingent amount) under current rules. Under the new rules, the amounts allocated to delivered items and recognized upfront could be higher if it is probable that a significant reversal in the amount of revenue recognized will not occur in future periods upon the delivery of additional items or meeting other specified performance conditions; and
The new standard will impact our internal control environment, including our financial statement disclosure controls, business process controls, new systems and processes, and enhancements to existing systems and processes.
The Company expects to record approximately $20 million of adjustments to retained earnings for the revenue-related items discussed above. The Company also expects to record approximately $15 million of deferred compensation costs upon adoption that will then be amortized in future periods.
The Company does not expect that the new standard will result in substantive changes in our performance obligations or the amounts of revenue allocated between multiple performance obligations, with the exception of contingent revenue discussed above. The Company is still in the process of evaluating and finalizing these impacts, and our initial assessment may change as the Company continues with implementing new systems, processes, accounting policies and internal controls.
Leases.  In February 2016, the FASB issued new guidance which requires a lessee to account for leases as finance or operating leases. Both leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability on its balance sheet, with differing methodology for income statement recognition. For lessors, the standard modifies the classification criteria and the accounting for sales-type and direct financing leases. Entities will classify leases to determine how to recognize lease-related revenue and expense. This standard is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. A modified retrospective approach is required for leases existing or entered into after the beginning of the earliest comparative period in the consolidated financial statements. The Company is currently assessing the impact of this update on its consolidated financial statements. We currently believe that the most significant changes will be related to the recognition of right-of-use assets and lease liabilities on our consolidated balance sheets for real estate and equipment leases that are currently classified as operating leases and therefore not recorded on the consolidated balance sheets.
Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. In August 2016, the FASB issued an update addressing eight specific cash flow issues to reduce diversity in practice. The amended guidance is effective for fiscal years beginning after December 31, 2017, and for interim periods within those years. Early adoption is permitted. The Company will adopt this amended guidance in the first quarter of 2018 and does not expect the impact on its consolidated financial statements to be material.
Financial Instruments. In January 2016, the FASB issued new guidance which enhances the reporting model for financial instruments and related disclosures. This update requires equity securities to be measured at fair value with changes in fair value recognized through net income and will eliminate the cost method for equity securities without readily determinable fair values. The provisions are effective for public entities with fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, in certain circumstances. The Company will adopt this amended guidance in the first quarter of 2018 and does not expect the impact on its consolidated financial statements to be material.
Intra-entity asset transfers. In October 2016, the FASB issued accounting guidance to simplify the accounting for income tax consequences of intra-entity transfers of assets other than inventory. Under this guidance, companies will be required to recognize the income tax consequences of an intra-entity asset transfer when the transfer occurs. Current guidance prohibits companies from recognizing current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. The guidance must be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the period of adoption. The guidance is effective for periods beginning after December 15, 2017 and early adoption is permitted. The Company will adopt this amended guidance in the first quarter of 2018 and does not expect the impact on its consolidated financial statements to be material.
Classification of restricted cash. In December 2016, the FASB issued accounting guidance to address diversity in the classification and presentation of changes in restricted cash on the statement of cash flows. Under this guidance, companies will be required to present restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows. The guidance is required to be applied retrospectively and is effective for periods beginning after December 15, 2017, with early adoption permitted. The Company will adopt this amended guidance in the first quarter of 2018 and does not expect the impact on its consolidated financial statements to be material.
Clarification on the definition of a business. In January 2017, the FASB issued accounting guidance to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This new guidance is effective for reporting periods beginning after December 15, 2017 with early adoption permitted. The Company will adopt this amended guidance in the first quarter of 2018 and does not expect the impact on its consolidated financial statements to be material.
Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost. In March 2017, the FASB issued accounting guidance for “Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost”. The amendment requires the service cost component of net periodic benefit cost be presented in the same income statement line item as other employee compensation costs arising from services rendered during the period and other components of the net periodic benefit cost be presented separately from the line item that includes the service cost and outside of any subtotal of operating income. For public entities, the amendments are effective for interim and annual reporting periods beginning after December 15, 2017. The Company will adopt this amended guidance in the first quarter of 2018. The retroactive adoption of this standard will result in an increase in operating income and a corresponding decrease in other income (primarily related to the return on pension assets) for the years ended December 31 of $4 million in 2017 and $3 million in 2016.
Stock Compensation. In May 2017, the FASB issued accounting guidance for "Compensation—Stock Compensation (Topic 718) - Scope of Modification Accounting". The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The current disclosure requirements in Topic 718 apply regardless of whether an entity is required to apply modification accounting under the amendments in this update. The amendments in this update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The Company will adopt this amended guidance in the first quarter of 2018 and does not expect any impact on its consolidated financial statements.

Derivatives and Hedging. In August 2017, the FASB issued amendments to hedge accounting guidance. These amendments are intended to better align a company’s risk management strategies and financial reporting for hedging relationships. Under the new guidance, more hedging strategies will be eligible for hedge accounting and the application of hedge accounting is simplified. In addition, the new guidance amends presentation and disclosure requirements. The guidance is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, including the interim periods within those years. The guidance requires the use of a modified retrospective approach. The Company is currently evaluating the impact of the guidance on our consolidated financial statements.
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. In February 2018, the FASB issued guidance allowing companies the option to reclassify to retained earnings the tax effects related to items in Accumulated other comprehensive income (loss) as a result of the Tax Cuts and Jobs Act that was enacted on December 22, 2017. This update is effective in fiscal years, including interim periods, beginning after December 15, 2018, and early adoption is permitted. This guidance should be applied either in the period of adoption or retrospectively to each period in which the effects of the change in the U.S. federal income tax rate in the Tax Cuts and Jobs Act is recognized. The Company is currently evaluating the impact of the guidance on our consolidated financial statements.
Recently Adopted Guidance
Simplifying the measurement for goodwill. In January 2017, the FASB issued guidance to simplify the accounting for the impairment of goodwill. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The Company early adopted this accounting guidance effective January 1, 2017. This amendment did not have an impact on the Company's consolidated financial statements.
Description of Business, Basis of Presentation and Significant Accounting Policies (Tables)
Total depreciation expense on the Company’s property and equipment for December 31 was as follows:
In millions
2017
 
2016
 
2015
Depreciation expense
$
55

 
$
49

 
$
53

The following table identifies the activity relating to capitalized software:
 
Internal-use Software
 
External-use Software
In millions
2017
 
2016
 
2015
 
2017
 
2016
 
2015
Beginning balance at January 1
$
13

 
$
13

 
$
13

 
$
174

 
$
177

 
$
186

Capitalized
9

 
6

 
6

 

 
59

 
61

Amortization
(6
)
 
(6
)
 
(6
)
 
(69
)
 
(62
)
 
(70
)
Ending balance at December 31
$
16

 
$
13

 
$
13

 
$
105

 
$
174

 
$
177

The aggregate amortization expense (actual and estimated) for internal-use and external-use software for the following periods is:
 
Actual
 
For the years ended (estimated)
In millions
2017
 
2018
 
2019
 
2020
 
2021
 
2022
Internal-use software amortization expense
$
6

 
$
7

 
$
7

 
$
7

 
$
7

 
$
6

External-use software amortization expense
$
69

 
$
49

 
$
34

 
$
22

 
$

 
$

The components of basic and diluted earnings (loss) per share are as follows: 
 
For the years ended December 31
In millions, except (loss) earnings per share
2017
 
2016
 
2015
Net (loss) income attributable to common stockholders
$
(67
)
 
$
125

 
$
(214
)
Weighted average outstanding shares of common stock
125.8

 
129.7

 
139.6

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

 
1.8

 

Common stock and common stock equivalents
125.8

 
131.5

 
139.6

Earnings (loss) per share:
 
 
 
 
 
Basic
$
(0.53
)
 
$
0.96

 
$
(1.53
)
Diluted
$
(0.53
)
 
$
0.95

 
$
(1.53
)
Supplemental Financial Information (Tables)
Supplemental Financial Information
 
At December 31
In millions
2017
 
2016
Accounts receivable
 
 
 
Trade
$
559

 
$
561

Other
7

 
6

Accounts receivable, gross
566

 
567

Less: allowance for doubtful accounts
(12
)
 
(19
)
Total accounts receivable, net
$
554

 
$
548

Inventories
 
 
 
Finished goods
$
18

 
$
20

Service parts
12

 
14

Total inventories
$
30

 
$
34

Property and equipment
 
 
 
Land
$
8

 
$
8

Buildings and improvements
82

 
77

Machinery and other equipment
404

 
354

Property and equipment, gross
494

 
439

Less: accumulated depreciation
(332
)
 
(301
)
Total property and equipment, net
$
162

 
$
138

Other current liabilities
 
 
 
Sales and value-added taxes
$
30

 
$
28

Pension and other postemployment plan liabilities
2

 
7

Other
70

 
53

Total other current liabilities
$
102

 
$
88

Deferred revenue
 
 
 
Deferred revenue, current
$
414

 
$
369

Long-term deferred revenue
85

 
14

Total deferred revenue
$
499

 
$
383

Other long-term liabilities
 
 
 
Transition tax
$
133

 
$

Uncertain tax positions
14

 
20

Other
2

 
12

Total other long-term liabilities
$
149

 
$
32

 
 
 
 
Goodwill and Acquired Intangible Assets (Tables)
The following table identifies the activity relating to goodwill by operating segment:
In millions
Balance at December 31, 2016
 
Additions
 
Currency
Translation
Adjustments
 
Balance at December 31, 2017
Goodwill
 
 
 
 
 
 
 
Americas Data and Analytics
$
251

 
$
2

 
$

 
$
253

International Data and Analytics
139

 

 
7

 
146

Total goodwill
$
390

 
$
2

 
$
7

 
$
399

The gross carrying amount and accumulated amortization for Teradata’s acquired intangible assets were as follows: 
 
 
 
December 31, 2017
 
December 31, 2016
In millions
Amortization
Life (in Years)
 
Gross 
Carrying Amount
 
Accumulated
Amortization
and Currency
Translation
Adjustments
 
Gross
 Carrying
Amount
 
Accumulated
Amortization
and Currency
Translation
Adjustments
Acquired intangible assets
 
 
 
 
 
 
 
 
 
Intellectual property/developed technology
1 to 7
 
$
43

 
$
(20
)
 
$
71

 
$
(61
)
Trademarks/trade names
5
 

 

 
1

 
(1
)
In-process research and development
5
 

 

 
5

 
(4
)
Total
 
 
$
43

 
$
(20
)
 
$
77

 
$
(66
)
The aggregate amortization expense (actual and estimated) for acquired intangible assets for the following periods is:
 
Actual
 
For the years ended (estimated)
In millions
2015
 
2016
 
2017
 
2018
 
2019
 
2020
 
2021
 
2022
 
Amortization expense
$
40

 
$
10

 
$
8

 
$
7

 
$
6

 
$
4

 
$
4

 
$
2

 
Income Taxes (Tables)
For the years ended December 31, income (loss) before income taxes consisted of the following: 
In millions
2017
 
2016
 
2015
Income (loss) before income taxes
 
 
 
 
 
United States
$
(26
)
 
$
93

 
$
(88
)
Foreign
84

 
128

 
(56
)
Total income (loss) before income taxes
$
58

 
$
221

 
$
(144
)
For the years ended December 31, income tax expense consisted of the following: 
In millions
2017
 
2016
 
2015
Income tax expense
 
 
 
 
 
Current
 
 
 
 
 
Federal
$
132

 
$
67

 
$
74

State and local
2

 
7

 
9

Foreign
25

 
25

 
26

Deferred
 
 
 
 
 
Federal
(22
)
 
7

 
(19
)
State and local
(4
)
 
1

 
(3
)
Foreign
(8
)
 
(11
)
 
(17
)
Total income tax expense
$
125

 
$
96

 
$
70

Effective income tax rate
215.5
%
 
43.4
%
 
(48.6
%)
The following table presents the principal components of the difference between the effective tax rate and the U.S. federal statutory income tax rate for the years ended December 31:
In millions
2017
 
2016
 
2015
Income tax expense at the U.S. federal tax rate
35.0
 %
 
35.0
 %
 
35.0
 %
Foreign income tax differential
(18.0
)%
 
(13.2
)%
 
14.0
 %
State and local income taxes
(11.0
)%
 
0.2
 %
 
0.5
 %
U.S. permanent book/tax differences
(12.0
)%
 
(0.1
)%
 
3.1
 %
Change in valuation allowance for California R&D credit
10.0
 %
 
0.8
 %
 
(3.4
)%
U.S. manufacturing deduction permanent difference
(8.0
)%
 
(3.5
)%
 
5.5
 %
Goodwill impairment
 %
 
8.9
 %
 
(100.1
)%
Tax impact of sale of marketing applications business
 %
 
9.9
 %
 
 %
Impact of excess tax benefits and tax deficiencies
 %
 
2.2
 %
 
 %
Tax impact of U.S. tax law change - IRC Section 987
 %
 
3.5
 %
 
 %
Deferred tax impact from U.S. rate change
(27.0
)%
 
 %
 
 %
Tax impact of transition Tax- U.S. tax reform
250.0
 %
 
 %
 
 %
Other, net
(3.5
)%
 
(0.3
)%
 
(3.2
)%
Effective income tax rate
215.5
 %
 
43.4
 %
 
(48.6
)%
Deferred income tax assets and liabilities included in the balance sheets at December 31 were as follows:
In millions
2017
 
2016
Deferred income tax assets
 
 
 
Employee pensions and other liabilities
$
50

 
$
59

Other balance sheet reserves and allowances
13

 
18

Tax loss and credit carryforwards
59

 
53

Deferred revenue
3

 
3

Other
2

 

Total deferred income tax assets
127

 
133

Valuation allowance
(32
)
 
(26
)
Net deferred income tax assets
95

 
107

Deferred income tax liabilities
 
 
 
Intangibles and capitalized software
30

 
63

Property and equipment
12

 
22

Other

 
6

Total deferred income tax liabilities
42

 
91

Total net deferred income tax assets
$
53

 
$
16

Below is a roll-forward of the Company’s liability related to uncertain tax positions at December 31:
In millions
2017
 
2016
Balance at January 1
$
30

 
$
38

Gross decreases for prior period tax positions
(1
)
 
(7
)
Gross increases for current period tax positions
3

 
3

Decreases due to the lapse of applicable statute of limitations
(4
)
 
(4
)
Balance at December 31
$
28

 
$
30

Employee Stock-based Compensation Plans (Tables)
The Company recorded stock-based compensation expense for the years ended December 31 as follows: 
In millions
2017
 
2016
 
2015
Stock options
$
9

 
$
9

 
$
12

Restricted shares
56

 
51

 
41

Employee share repurchase program
3

 
2

 
3

Total stock-based compensation before income taxes
68

 
62

 
56

Tax benefit
(21
)
 
(13
)
 
(17
)
Total stock-based compensation, net of tax
$
47

 
$
49

 
$
39

The fair value of each option award on the grant date was estimated using the Black-Scholes option-pricing model with the following assumptions:
 
2017
 
2016
 
2015
Dividend yield
%
 
%
 
%
Risk-free interest rate
1.99
%
 
2.08
%
 
1.76
%
Expected volatility
35.0
%
 
35.2
%
 
34.4
%
Expected term (years)
6.3

 
6.3

 
6.3

The following table summarizes the Company’s stock option activity for the year ended December 31, 2017: 
Shares in thousands
Shares
Under
Option
 
Weighted-
Average
Exercise
Price per
Share
 
Weighted-
Average
Remaining
Contractual
Term (in
years)
 
Aggregate
Intrinsic
Value (in
millions)
Outstanding at January 1, 2017
6,509

 
$
36.22

 
5.3
 
$
8

Granted
10

 
$
29.04

 
 
 
 
Exercised
(746
)
 
$
25.28

 
 
 
 
Canceled
(153
)
 
$
46.56

 
 
 
 
Forfeited
(247
)
 
$
32.97

 
 
 
 
Outstanding at December 31, 2017
5,373

 
$
37.63

 
4.5
 
$
30

Fully vested and expected to vest at December 31, 2017
5,373

 
$
37.63

 
4.5
 
$
30

Exercisable at December 31, 2017
4,220

 
$
39.60

 
3.4
 
$
21

The following table summarizes the total intrinsic value of options exercised and the cash received by the Company from option exercises under all share-based payment arrangements at December 31:
In millions
2017
 
2016
 
2015
Intrinsic value of options exercised
$
6

 
$
13

 
$
8

Cash received from option exercises
$
19

 
$
18

 
$
9

Tax benefit realized from option exercises
$
2

 
$
5

 
$
3

The following table reports restricted shares and restricted share unit activity during the year ended December 31, 2017:
Shares in thousands
Number of
Shares
 
Weighted-
Average 
Grant
Date Fair
 Value
per Share
Unvested shares at January 1, 2017
4,042

 
$
31.57

Granted
2,044

 
$
34.88

Vested
(1,487
)
 
$
33.55

Forfeited/canceled
(373
)
 
$
29.05

Unvested shares at December 31, 2017
4,226

 
$
32.76

The following table summarizes the weighted-average fair value of restricted share units granted for Teradata equity awards and the total fair value of shares vested.
 
2017
 
2016
 
2015
Weighted-average fair value of restricted share units granted
$
34.88

 
$
26.61

 
$
32.82

Total fair value of shares vested (in millions)
$
50

 
$
61

 
$
45

The following table represents the composition of Teradata restricted share unit grants in 2017: 
Shares in thousands
Number of
Shares
 
Weighted-
Average 
Grant
Date Fair 
Value
Service-based shares
1,736

 
$
36.33

Performance-based shares
308

 
$
26.68

Total stock grants
2,044

 
$
34.88

Employee purchases and aggregate cost were as follows at December 31:
In millions
2017
 
2016
 
2015
Employee share purchases
0.6

 
0.6

 
0.5

Aggregate cost
$
15

 
$
13

 
$
17

Employee Benefit Plans (Tables)
Pension and postemployment benefit costs for the years ended December 31 were as follows: 
 
2017
 
2016
 
2015
In millions
Pension
 
Postemployment
 
Pension
 
Postemployment
 
Pension
 
Postemployment
Service cost
$
9

 
$
7

 
$
8

 
$
6

 
$
8

 
$
6

Interest cost
3

 
1

 
3

 
1

 
3

 
1

Expected return on plan assets
(2
)
 

 
(2
)
 

 
(2
)
 

Settlement charge

 

 
1

 

 
1

 

Amortization of actuarial loss
1

 
2

 
1

 
1

 
2

 

Amortization of prior service (credit) cost
(1
)
 
1

 

 
2

 

 

Divestiture

 

 
(2
)
 
(1
)
 

 

Total costs
$
10

 
$
11

 
$
9

 
$
9

 
$
12

 
$
7

The following table presents the accumulated pension benefit obligation at December 31:
In millions
2017
 
2016
Accumulated pension benefit obligation
$
125

 
$
110

The following table presents pension plans with accumulated benefit obligations in excess of plan assets at December 31:
In millions
2017
 
2016
Projected benefit obligation
$
69

 
$
60

Accumulated benefit obligation
$
63

 
$
53

Fair value of plan assets
$

 
$

The following tables present the changes in benefit obligations, plan assets, funded status and the reconciliation of the funded status to amounts recognized in the consolidated balance sheets and in accumulated other comprehensive income at December 31:
 
Pension
 
Postemployment
In millions
2017
 
2016
 
2017
 
2016
Change in benefit obligation
 
 
 
 
 
 
 
Benefit obligation at January 1
$
120

 
$
115

 
$
42

 
$
49

Service cost
9

 
8

 
7

 
6

Interest cost
3

 
3

 
1

 
1

Plan participant contributions
1

 
1

 

 

Actuarial (gain) loss
(3
)
 
5

 
12

 
12

Benefits paid
(4
)
 
(8
)
 
(15
)
 
(20
)
Currency translation adjustments
10

 
(2
)
 

 
(1
)
Divestiture

 
(2
)
 

 
(5
)
Benefit obligation at December 31
$
136

 
$
120

 
$
47

 
$
42

Change in plan assets
 
 
 
 
 
 
 
Fair value of plan assets at January 1
$
64

 
$
63

 
$

 
$

Actual return on plan assets
5

 
2

 

 

Company contributions
5

 
6

 

 

Benefits paid
(4
)
 
(8
)
 

 

Currency translation adjustments
4

 

 

 

Plan participant contribution
1

 
1

 

 

Fair value of plan assets at December 31
75

 
64

 

 

Funded status (underfunded)
$
(61
)
 
$
(56
)
 
$
(47
)
 
$
(42
)
Amounts Recognized in the Balance Sheet
 
 
 
 
 
 
 
Non-current assets
$
10

 
$
5

 
$

 
$

Current liabilities
(2
)
 
(1
)
 
(7
)
 
(6
)
Non-current liabilities
(69
)
 
(60
)
 
(40
)
 
(36
)
Net amounts recognized
$
(61
)
 
$
(56
)
 
$
(47
)
 
$
(42
)
Amounts Recognized in Accumulated Other Comprehensive (Loss) Income
 
 
 
 
 
 
 
Unrecognized Net actuarial loss
$
15

 
$
21

 
$
37

 
$
26

Unrecognized Prior service (credit) cost
(1
)
 
(1
)
 
3

 
4

Total
$
14

 
$
20

 
$
40

 
$
30

The following table presents the pre-tax net changes in projected benefit obligations recognized in other comprehensive income:  
 
Pension
 
Postemployment
In millions
2017
 
2016
 
2017
 
2016
Actuarial (gain) loss arising during the year
$
(7
)
 
$
5

 
$
13

 
$
4

Amortization of loss included in net periodic benefit cost
(1
)
 
(1
)
 
(2
)
 
(1
)
Prior service (credit) cost arising during the year

 

 
(1
)
 
2

Recognition of loss due to settlement

 
(1
)
 

 

Foreign currency exchange
2

 
(1
)
 

 

Total recognized in other comprehensive (loss) income
$
(6
)
 
$
2

 
$
10

 
$
5

The following table presents the amounts in accumulated other comprehensive loss expected to be recognized as components of net periodic benefit cost during 2018: 
In millions
Pension
 
Postemployment
Net loss to be recognized in other comprehensive income
$
1

 
$
4

The weighted-average rates and assumptions used to determine benefit obligations at December 31, and net periodic benefit cost for the years ended December 31, were as follows: 
 
Pension Benefit Obligations
 
Pension Benefit Cost
 
2017
 
2016
 
2017
 
2016
 
2015
Discount rate
2.1%
 
2.0%
 
2.0%
 
2.4%
 
2.3%
Rate of compensation increase
3.3%
 
3.3%
 
3.3%
 
3.2%
 
3.3%
Expected return on plan assets
N/A
 
N/A
 
2.9%
 
3.0%
 
3.3%
 
Postemployment 
Benefit Obligations
 
Postemployment 
Benefit Cost
 
2017
 
2016
 
2017
 
2016
 
2015
Discount rate
2.6%
 
3.4%
 
2.6%
 
3.4%
 
3.5%
Rate of compensation increase
3.0%
 
3.0%
 
3.0%
 
3.0%
 
3.0%
Involuntary turnover rate
2.3%
 
2.0%
 
2.3%
 
2.0%
 
1.3%
The weighted-average asset allocations at December 31, by asset category are as follows: 
 
Actual Asset Allocation
as of December 31
 
Target Asset
 
2017
 
2016
 
Allocation
Equity securities
32%
 
32%
 
31%
Debt securities
41%
 
42%
 
47%
Insurance (annuity) contracts
17%
 
17%
 
16%
Real-estate
8%
 
7%
 
3%
Other
2%
 
2%
 
3%
Total
100%
 
100%
 
100%
The following table sets forth by level, within the fair value hierarchy, the pension plan assets at fair value as of December 31, 2016: 
 
 
 
Fair Value Measurements at Reporting Date Using
 
 
 
Quoted Prices in Active 
Markets
for Identical
Assets
 
Significant
Other
Observable
Inputs
 
Significant
Unobservable
Inputs
In millions
December 31, 2016
 
(Level 1)
 
(Level 2)
 
(Level 3)
Money market funds
$
1

 
$

 
$
1

 
$

Equity funds
21

 

 
21

 

Bond/fixed-income funds
27

 

 
27

 

Real-estate indirect investments
4

 

 
4

 

Insurance contracts
11

 

 

 
11

Total assets at fair value
$
64

 
$

 
$
53

 
$
11

The following table sets forth by level, within the fair value hierarchy, the pension plan assets at fair value as of December 31, 2017: 
 
 
 
Fair Value Measurements at Reporting Date Using
 
 
 
Quoted Prices in Active Markets
for Identical
Assets
 
Significant
Other
Observable
Inputs
 
Significant
Unobservable
Inputs
In millions
December 31, 2017
 
(Level 1)
 
(Level 2)
 
(Level 3)
Money market funds
$
2

 
$

 
$
2

 
$

Equity funds
24

 

 
24

 

Bond/fixed-income funds
31

 

 
31

 

Real-estate indirect investments
6

 

 
6

 

Insurance contracts
12

 

 

 
12

Total assets at fair value
$
75

 
$

 
$
63

 
$
12

The table below sets forth a summary of changes in the fair value of the pension plan level 3 assets for the year ended December 31, 2017:
In millions
Insurance
Contracts
Balance as of January 1, 2017
$
11

Purchases, sales and settlements, net
1

Balance as of December 31, 2017
$
12

The table below sets forth a summary of changes in the fair value of the pension plan level 3 assets for the year ended December 31, 2016:
In millions
Insurance
Contracts
Balance as of January 1, 2016
$
10

Purchases, sales and settlements, net
1

December 31, 2016
$
11

The Company expects to make the following benefit payments reflecting past and future service from its pension and postemployment plans: 
 
Pension
 
Postemployment
In millions
Benefits

 
Benefits

Year
 
 
 
2018
$
5

 
$
7

2019
$
5

 
$
6

2020
$
5

 
$
6

2021
$
6

 
$
6

2022
$
6

 
$
6

2023 - 2027
$
34

 
$
24

The following table identifies the expense for the U.S. and International subsidiary savings plans for the years ended December 31:
In millions
2017
 
2016
 
2015
U.S. savings plan
$
21

 
$
19

 
$
22

International subsidiary savings plans
$
17

 
$
16

 
$
18

Derivative Instruments and 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
2017
 
2016
Contract notional amount of foreign exchange forward contracts
$
147

 
$
156

Net contract notional amount of foreign exchange forward contracts
$
23

 
$
16

Commitments and Contingencies (Tables)
The following table identifies the activity relating to the warranty reserve liability for the years ended December 31: 
In millions
2017
 
2016
 
2015
Beginning balance at January 1
$
5

 
$
6

 
$
7

Accruals for warranties issued
6

 
8

 
9

Settlements (in cash or kind)
(7
)
 
(9
)
 
(10
)
Balance at end of period
$
4

 
$
5

 
$
6

Future minimum operating lease payments and committed subleases under non-cancelable leases as of December 31, 2017, for the following fiscal years were: 
 
 
 
 
 
 
 
 
 
 
 
 
In millions
Total Amounts
 
2018
 
2019
 
2020
 
2021
 
2022 and Thereafter
Operating lease obligations
$
81

 
$
27

 
$
20

 
$
16

 
$
8

 
$
10

Sublease rentals
(14
)
 
(6
)
 
(5
)
 
(3
)
 

 

Total committed operating leases less sublease rentals
$
67

 
$
21

 
$
15

 
$
13

 
$
8

 
$
10


The following table represents the Company’s actual rental expense and sublease rental income for the years ended December 31:
In millions
2017
 
2016
 
2015
Rental expense
$
24

 
$
24

 
$
26

Sublease rental income
$
5

 
$
3

 
$
3

Fair Value Measurements (Tables)
Assets and Liabilities Measured at Fair Value on Recurring Basis and Subject to Fair Value Disclosure Requirements
The Company’s assets measured at fair value on a recurring basis and subject to fair value disclosure requirements at December 31, were as follows: 
 
 
 
Fair Value Measurements at Reporting Date Using
 
 
 
Quoted Prices 
in Active Markets
for Identical
Assets
 
Significant
Other
Observable
Inputs
 
Significant Unobservable Inputs
In millions
Total
 
(Level 1)
 
(Level 2)
 
(Level 3)
Assets
 
 
 
 
 
 
 
Money market funds at December 31, 2017
$
501

 
$
501

 
$

 
$

Money market funds at December 31, 2016
$
473

 
$
473

 
$

 
$

Debt (Tables)
Annual contractual maturities of outstanding principal on the term loan at December 31, 2017, are as follows: 
In millions
 
2018
$
60

2019
68

2020
412

Total
$
540

The following table presents interest expense on borrowings for the years ended December 31:
In millions
2017
 
2016
 
2015
Interest expense
$
15

 
$
12

 
$
9

Segment, Other Supplemental Information and Concentrations (Tables)
The following table presents segment revenue and segment gross profit for the Company for the years ended December 31: 
In millions
2017
 
2016
 
2015
Segment revenue
 
 
 
 
 
Americas Data and Analytics
$
1,195

 
$
1,334

 
$
1,470

International Data and Analytics
961

 
919

 
907

Total Data and Analytics
2,156

 
2,253

 
2,377

Marketing Applications

 
69

 
153

Total revenue
2,156

 
2,322

 
2,530

Segment gross profit
 
 
 
 
 
Americas Data and Analytics
676

 
796

 
871

International Data and Analytics
434

 
445

 
452

Total Data and Analytics
1,110

 
1,241

 
1,323

Marketing Application

 
34

 
63

Total segment gross profit
1,110

 
1,275

 
1,386

Stock-based compensation expense
13

 
14

 
13

Amortization of acquisition-related intangible assets
1

 
2

 
16

Acquisition, integration and reorganization-related costs
6

 
9

 
11

Amortization of capitalized software costs
68

 
62

 
70

Selling, general and administrative expenses
652

 
664

 
765

Research and development expenses
306

 
212

 
228

Impairment of goodwill, acquired intangibles and other assets

 
80

 
478

Total income (loss) from operations
$
64

 
$
232

 
$
(195
)
The following table presents a further disaggregation of revenue for the Company for the years ended December 31:
In millions
2017
 
2016
 
2015
Recurring revenue

$
1,047

 
$
978

 
$
956

Product - perpetual licenses and hardware

429

 
600

 
752

Consulting services

680

 
675

 
669

Marketing applications

 
69

 
153

Total revenue
$
2,156

 
$
2,322

 
$
2,530

 
The following table presents revenues by geographic area for the years ended December 31: 
In millions
2017
 
2016
 
2015
United States
$
1,089

 
$
1,246

 
$
1,428

Americas (excluding United States)
107

 
123

 
125

International
960

 
953

 
977

Total revenue
$
2,156

 
$
2,322

 
$
2,530

The following table presents property and equipment by geographic area at December 31: 
In millions
2017
 
2016
United States
$
119

 
$
113

Americas (excluding United States)
11

 
4

International
32

 
21

Property and equipment, net
$
162

 
$
138


Accumulated Other Comprehensive (Loss) Income (Tables)
The following table provides information on changes in accumulated other comprehensive (loss) income (“AOCI”), net of tax, for the years ended December 31:
In millions
Available-for-sale securities
 
Defined 
benefit
plans
 
Foreign 
currency
translation
adjustments
 
Total 
AOCI
Balance as of December 31, 2014
$
31

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

 

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

 
$
(29
)
 
$
(47
)
 
$
(76
)
Other comprehensive loss before reclassifications

 
(9
)
 
(7
)
 
(16
)
Amounts reclassified from AOCI

 
3

 

 
3

Net other comprehensive loss

 
(6
)
 
(7
)
 
(13
)
Balance as of December 31, 2016
$

 
$
(35
)
 
$
(54
)
 
$
(89
)
Other comprehensive (loss) income before reclassifications

 
(5
)
 
16

 
11

Amounts reclassified from AOCI

 
4

 

 
4

Net other comprehensive (loss) income

 
(1
)
 
16

 
15

Balance as of December 31, 2017
$

 
$
(36
)
 
$
(38
)
 
$
(74
)
The following table presents the impact and respective location of AOCI reclassifications in the Consolidated Statements of Income for the years ended December 31:
In millions
 
 
 
 
AOCI Component
 
Location
 
2017
 
2016
 
2015
Defined benefit plans
 
Cost of services
 
$
(3
)
 
$
(3
)
 
$
(2
)
Defined benefit plans
 
Selling, general and administrative expenses
 
(2
)
 
(1
)
 
(1
)
Available for sale securities
 
Other income
 

 

 
42

Tax portion
 
Income tax benefit (expense)
 
1

 
1

 
(16
)
Total reclassifications
 
Net (loss) income
 
$
(4
)
 
$
(3
)
 
$
23

Reorganization and Business Transformation (Tables)
Restructuring and Related Costs
The Company incurred the following costs related to these actions for the years ended December 31:
In millions
 
2017
 
2016
 
2015
Employee severance and other employee related cost
 
$
2

 
$
14

 
$
4

Asset write-downs
 

 
80

 
140

Professional services, legal and other associated cost
 
24

 
35

 
8

Total reorganization and business transformation cost
 
$
26

 
$
129

 
$
152

Quarterly Information (unaudited) (Tables)
Quarterly Results of Operations
In millions, except per share amounts
First (1)
 
Second
 
Third
 
Fourth (2)
2017
 
 
 
 
 
 
 
Total revenues
$
491

 
$
513

 
$
526

 
$
626

Gross profit
$
224

 
$
242

 
$
250

 
$
306

Operating (loss) income
$
(1
)
 
$
(1
)
 
$
7

 
$
59

Net (loss) income
$
(2
)
 
$
(4
)
 
$
13

 
$
(74
)
Net (loss) income per share:
 
 
 
 
 
 
 
Basic
$
(0.02
)
 
$
(0.03
)
 
$
0.11

 
$
(0.61
)
Diluted
$
(0.02
)
 
$
(0.03
)
 
$
0.10

 
$
(0.61
)
2016
 
 
 
 
 
 
 
Total revenues
$
545

 
$
599

 
$
552

 
$
626

Gross profit
$
269

 
$
310

 
$
294

 
$
315

Operating (loss) income
$
(42
)
 
$
87

 
$
89

 
$
98

Net (loss) income
$
(46
)
 
$
64

 
$
49

 
$
58

Net (loss) income per share:
 
 
 
 
 
 
 
Basic
$
(0.36
)
 
$
0.49

 
$
0.38

 
$
0.45

Diluted
$
(0.36
)
 
$
0.49

 
$
0.37

 
$
0.44


(1) Loss from operation for the three months ended March 31, 2016 includes goodwill and acquired intangibles impairment charges of $76 million for the marketing application business.
(2) Loss from operations for the three months ended December 31, 2017 includes $126 million tax impact related to 2017 U.S. Tax Reform.
Description of Business, Basis of Presentation and Significant Accounting Policies - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended 0 Months Ended
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2017
Internal-Use Software
Dec. 31, 2017
Capitalized Software
Dec. 31, 2017
Minimum
Dec. 31, 2017
Maximum
Dec. 31, 2017
Equipment
Minimum
Dec. 31, 2017
Equipment
Maximum
Dec. 31, 2017
Building
Minimum
Dec. 31, 2017
Building
Maximum
Dec. 31, 2017
Employee Stock Option
Dec. 31, 2016
Employee Stock Option
Dec. 31, 2015
Employee Stock Option
Dec. 31, 2017
New Accounting Pronouncement, Early Adoption, Effect
Dec. 31, 2016
New Accounting Pronouncement, Early Adoption, Effect
Dec. 31, 2017
Subscription License
Minimum
Dec. 31, 2017
Subscription License
Maximum
Dec. 31, 2017
Software and Cloud Services
Minimum
Dec. 31, 2017
Software and Cloud Services
Maximum
Dec. 31, 2017
Rentals
Minimum
Dec. 31, 2017
Rentals
Maximum
Dec. 31, 2017
Utility Model
Minimum
Dec. 31, 2017
Utility Model
Maximum
Jan. 1, 2018
Scenario, Forecast
Accounting Standards Update 2014-09
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$ 626 
$ 526 
$ 513 
$ 491 
$ 626 
$ 552 
$ 599 
$ 545 
$ 2,156 
$ 2,322 
$ 2,530 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 20 
Fees payment term (in days)
 
 
 
 
 
 
 
 
 
 
 
 
 
30 days 
90 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contract terms (in years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 year 
5 years 
1 year 
5 years 
1 year 
3 years 
1 year 
5 years 
 
Estimated Useful lives (in years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3 years 
20 years 
25 years 
45 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation
 
 
 
 
 
 
 
 
55 
49 
53 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period capitalized on a straight-line basis when the asset is substantially ready for use
 
 
 
 
 
 
 
 
 
 
 
3 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intangible assets amortizable period
 
 
 
 
 
 
 
 
 
 
 
 
4 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Antidilutive options to purchase were excluded from computation of diluted earnings per share (in shares)
 
 
 
 
 
 
 
 
127.8 
 
141.9 
 
 
 
 
 
 
 
 
2.7 
5.2 
4.5 
 
 
 
 
 
 
 
 
 
 
 
Decrease in weighted average dilutes shares (in shares)
 
 
 
 
 
 
 
 
(125.8)
(131.5)
(139.6)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15 
Other income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating (loss) income
$ 59 
$ 7 
$ (1)
$ (1)
$ 98 
$ 89 
$ 87 
$ (42)
$ 64 
$ 232 
$ (195)
 
 
 
 
 
 
 
 
 
 
 
$ 4 
$ 3 
 
 
 
 
 
 
 
 
 
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, 2017
Dec. 31, 2016
Dec. 31, 2015
Movement in Capitalized Computer Software, Net [Roll Forward]
 
 
 
Beginning balance at January 1
$ 187 
 
 
Amortization
(68)
(62)
(70)
Ending balance at December 31
121 
187 
 
Internal-Use Software
 
 
 
Movement in Capitalized Computer Software, Net [Roll Forward]
 
 
 
Beginning balance at January 1
13 
13 
13 
Capitalized
Amortization
(6)
(6)
(6)
Ending balance at December 31
16 
13 
13 
External-Use Software
 
 
 
Movement in Capitalized Computer Software, Net [Roll Forward]
 
 
 
Beginning balance at January 1
174 
177 
186 
Capitalized
59 
61 
Amortization
(69)
(62)
(70)
Ending balance at December 31
$ 105 
$ 174 
$ 177 
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, 2017
Dec. 31, 2016
Dec. 31, 2015
Acquired Intangible Assets Amortization [Line Items]
 
 
 
Actual 2017
$ 8 
$ 10 
$ 40 
2018
 
 
2019
 
 
2020
 
 
2021
 
 
2022
 
 
Internal-use software amortization expense
 
 
 
Acquired Intangible Assets Amortization [Line Items]
 
 
 
Actual 2017
 
 
2018
 
 
2019
 
 
2020
 
 
2021
 
 
2022
 
 
External-use software amortization expense
 
 
 
Acquired Intangible Assets Amortization [Line Items]
 
 
 
Actual 2017
69 
 
 
2018
49 
 
 
2019
34 
 
 
2020
22 
 
 
2021
 
 
2022
$ 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, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Description of Business, Basis of Presentation and Significant Accounting Policies [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Net (loss) income attributable to common stockholders
$ (74)
$ 13 
$ (4)
$ (2)
$ 58 
$ 49 
$ 64 
$ (46)
$ (67)
$ 125 
$ (214)
Weighted average outstanding shares of common stock
 
 
 
 
 
 
 
 
125.8 
129.7 
139.6 
Dilutive effect of employee stock options, restricted shares and other stock awards
 
 
 
 
 
 
 
 
1.8 
Common stock and common stock equivalents
 
 
 
 
 
 
 
 
125.8 
131.5 
139.6 
Net (loss) income per share:
 
 
 
 
 
 
 
 
 
 
 
Basic (in usd per share)
$ (0.61)
$ 0.11 
$ (0.03)
$ (0.02)
$ 0.45 
$ 0.38 
$ 0.49 
$ (0.36)
$ (0.53)
$ 0.96 
$ (1.53)
Diluted (in usd per share)
$ (0.61)
$ 0.10 
$ (0.03)
$ (0.02)
$ 0.44 
$ 0.37 
$ 0.49 
$ (0.36)
$ (0.53)
$ 0.95 
$ (1.53)
Supplemental Financial Information (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Accounts receivable
 
 
Trade
$ 559 
$ 561 
Other
Accounts receivable, gross
566 
567 
Less: allowance for doubtful accounts
(12)
(19)
Total accounts receivable, net
554 
548 
Inventories
 
 
Finished goods
18 
20 
Service parts
12 
14 
Total inventories
30 
34 
Property and equipment
 
 
Land
Buildings and improvements
82 
77 
Machinery and other equipment
404 
354 
Property and equipment, gross
494 
439 
Less: accumulated depreciation
(332)
(301)
Total property and equipment, net
162 
138 
Other current liabilities
 
 
Sales and value-added taxes
30 
28 
Pension and other postemployment plan liabilities
Other
70 
53 
Total other current liabilities
102 
88 
Deferred revenue
 
 
Deferred revenue, current
414 
369 
Long-term deferred revenue
85 
14 
Total deferred revenue
499 
383 
Other long-term liabilities
 
 
Transition tax
133 
Uncertain tax positions
14 
20 
Other
12 
Total other long-term liabilities
$ 149 
$ 32 
Goodwill and Acquired Intangible Assets - Goodwill by Operating Segment (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Sep. 30, 2016
Dec. 31, 2017
Goodwill
 
 
Balance at December 31, 2016
 
$ 390 
Additions
Currency Translation Adjustments
 
Balance at December 31, 2017
 
399 
Data and Analytics
 
 
Goodwill
 
 
Balance at December 31, 2016
 
251 
Additions
 
Currency Translation Adjustments
 
Balance at December 31, 2017
 
253 
Marketing Applications
 
 
Goodwill
 
 
Balance at December 31, 2016
 
139 
Additions
 
Currency Translation Adjustments
 
Balance at December 31, 2017
 
$ 146 
Goodwill and Acquired Intangible Assets - Gross Carrying Amount and Accumulated Amortization (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Acquired Finite-Lived Intangible Assets
 
 
Gross Carrying Amount
$ 43 
$ 77 
Accumulated Amortization and Currency Translation Adjustments
(20)
(66)
Intellectual property/developed technology
 
 
Acquired Finite-Lived Intangible Assets
 
 
Finite-lived Intangible Assets Acquired
18 
 
Gross Carrying Amount
43 
71 
Accumulated Amortization and Currency Translation Adjustments
(20)
(61)
Trademarks/trade names
 
 
Acquired Finite-Lived Intangible Assets
 
 
Amortization Life (in Years)
5 years 
 
Gross Carrying Amount
Accumulated Amortization and Currency Translation Adjustments
(1)
In-process research and development
 
 
Acquired Finite-Lived Intangible Assets
 
 
Amortization Life (in Years)
5 years 
 
Gross Carrying Amount
Accumulated Amortization and Currency Translation Adjustments
$ 0 
$ (4)
Minimum |
Intellectual property/developed technology
 
 
Acquired Finite-Lived Intangible Assets
 
 
Amortization Life (in Years)
1 year 
 
Maximum |
Intellectual property/developed technology
 
 
Acquired Finite-Lived Intangible Assets
 
 
Amortization Life (in Years)
7 years 
 
Goodwill and Acquired Intangible Assets - Aggregate Amortization Expense for Acquired Intangible Assets (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
 
 
 
Amortization expense - Actual
$ 8 
$ 10 
$ 40 
Amortization expense - 2018
 
 
Amortization expense - 2019
 
 
Amortization expense - 2020
 
 
Amortization expense - 2021
 
 
Amortization expense - 2022
$ 2 
 
 
Income Taxes - Income Before Income Taxes (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract]
 
 
 
United States
$ (26)
$ 93 
$ (88)
Foreign
84 
128 
(56)
Income (loss) before income taxes
$ 58 
$ 221 
$ (144)
Income Taxes - Income Tax Expense (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Current
 
 
 
Federal
$ 132 
$ 67 
$ 74 
State and local
Foreign
25 
25 
26 
Deferred
 
 
 
Federal
(22)
(19)
State and local
(4)
(3)
Foreign
(8)
(11)
(17)
Total income tax expense
$ 125 
$ 96 
$ 70 
Effective income tax rate
215.50% 
43.40% 
(48.60%)
Income Taxes - Difference Between the Effective Tax Rate and the U.S. Federal Statutory Income Tax Rate (Detail)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Income Tax Disclosure [Abstract]
 
 
 
Income tax expense at the U.S. federal tax rate
35.00% 
35.00% 
35.00% 
Foreign income tax differential
(18.00%)
(13.20%)
14.00% 
State and local income taxes
(11.00%)
0.20% 
0.50% 
U.S. permanent book/tax differences
(12.00%)
(0.10%)
3.10% 
Change in valuation allowance for California R&D credit
10.00% 
0.80% 
(3.40%)
U.S. manufacturing deduction permanent difference
(8.00%)
(3.50%)
5.50% 
Goodwill impairment
0.00% 
8.90% 
(100.10%)
Tax impact of sale of marketing applications business
0.00% 
9.90% 
0.00% 
Impact of excess tax benefits and tax deficiencies
0.00% 
2.20% 
0.00% 
Tax impact of U.S. tax law change - IRC Section 987
0.00% 
3.50% 
0.00% 
Deferred tax impact from U.S. rate change
(27.00%)
0.00% 
0.00% 
Tax impact of transition Tax- U.S. tax reform
250.00% 
0.00% 
0.00% 
Other, net
(3.50%)
(0.30%)
(3.20%)
Effective income tax rate
215.50% 
43.40% 
(48.60%)
Income Taxes - Additional information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Income Taxes
 
 
 
 
 
 
 
 
 
 
 
Tax Cuts and Jobs Act of 2017, existing income tax expense (benefit)
$ 126 
 
 
 
 
 
 
 
 
 
 
Tax Cuts and Jobs Act of 2017, transition tax for accumulated foreign earnings, provisional liability
145 
 
 
 
 
 
 
 
145 
 
 
Revenues
626 
526 
513 
491 
626 
552 
599 
545 
2,156 
2,322 
2,530 
Tax Cuts and Jobs Act of 2017, deferred tax asset, existing income tax expense (benefit)
 
 
 
 
 
 
 
 
19 
 
 
Impairment of goodwill and acquired intangibles
 
 
 
 
 
 
 
57 
 
 
437 
Income tax expense (benefit)
 
 
 
 
 
 
 
 
125 
96 
70 
Tax expense, issuance of new US Treasury regulations
 
 
 
 
 
 
 
 
 
 
Effective income tax rate reconciliation, excess tax expense
 
 
 
 
 
 
 
 
 
 
Non-deductible goodwill amount
 
 
 
 
 
 
 
 
 
 
414 
Income (loss) before income taxes
 
 
 
 
 
 
 
 
58 
221 
(144)
Effective income tax rate
 
 
 
 
 
 
 
 
215.50% 
43.40% 
(48.60%)
Net operating loss and tax credit carryforwards
59 
 
 
 
 
 
 
 
59 
 
 
Research and development tax credit carryforwards
44 
 
 
 
 
 
 
 
44 
 
 
Tax liability related to uncertain tax positions
28 
 
 
 
30 
 
 
 
28 
30 
38 
Uncertain tax positions recognized as current liability on balance sheet
 
 
 
 
 
 
 
 
 
Uncertain tax positions
14 
 
 
 
20 
 
 
 
14 
20 
 
Uncertain tax positions related to business acquisitions not recognized on balance sheet
12 
 
 
 
 
 
 
 
12 
 
 
Interest accruals related to uncertain tax liabilities
 
 
 
 
 
 
 
 
 
United States And Certain Foreign Jurisdictions
 
 
 
 
 
 
 
 
 
 
 
Income Taxes
 
 
 
 
 
 
 
 
 
 
 
Net operating loss carryforwards in the United States and certain foreign jurisdictions
15 
 
 
 
 
 
 
 
15 
 
 
Research Tax Credit Carryforward |
State and Local Jurisdiction
 
 
 
 
 
 
 
 
 
 
 
Income Taxes
 
 
 
 
 
 
 
 
 
 
 
Valuation allowance
32 
 
 
 
 
 
 
 
32 
 
 
Marketing Applications
 
 
 
 
 
 
 
 
 
 
 
Income Taxes
 
 
 
 
 
 
 
 
 
 
 
Income tax expense (benefit)
 
 
 
 
 
22 
 
 
 
 
 
Non-US
 
 
 
 
 
 
 
 
 
 
 
Income Taxes
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
$ 1,300 
 
 
Income Taxes - Deferred Income Tax Assets and Liabilities (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Deferred income tax assets
 
 
Employee pensions and other liabilities
$ 50 
$ 59 
Other balance sheet reserves and allowances
13 
18 
Tax loss and credit carryforwards
59 
53 
Deferred revenue
Other
Total deferred income tax assets
127 
133 
Valuation allowance
(32)
(26)
Net deferred income tax assets
95 
107 
Deferred income tax liabilities
 
 
Intangibles and capitalized software
30 
63 
Property and equipment
12 
22 
Other
Total deferred income tax liabilities
42 
91 
Total net deferred income tax assets
$ 53 
$ 16 
Employee Stock-based Compensation Plans Stock-Based Compensation Expense (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
 
Stock options
$ 9 
$ 9 
$ 12 
Restricted shares
56 
51 
41 
Employee share repurchase program
Total stock-based compensation before income taxes
68 
62 
56 
Tax benefit
(21)
(13)
(17)
Total stock-based compensation, net of tax
$ 47 
$ 49 
$ 39 
Employee Stock-based Compensation Plans - Additional Information (Detail) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended 1 Months Ended 12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Jan. 31, 2013
Employee Stock Purchase Program
Dec. 31, 2017
Employee Stock Purchase Program
Dec. 31, 2017
Employee Stock Option
Dec. 31, 2017
Stock Option
Dec. 31, 2017
Service-Based Awards
Minimum
Dec. 31, 2017
Performance Based Awards
Minimum
Dec. 31, 2017
Performance Based Awards
Maximum
Dec. 31, 2017
Restricted Stock
Dec. 31, 2017
Special 2016 PSRSU
Dec. 31, 2017
Special 2016 PSRSU
Minimum
Dec. 31, 2017
Special 2016 PSRSU
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares authorized to be issued under the Teradata SIP (in shares)
17,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock option, term
 
 
 
 
 
10 years 
 
 
 
 
 
 
 
 
Vesting period (in years)
 
 
 
 
 
4 years 
 
3 years 
1 year 
4 years 
 
 
 
 
Weighted-average fair value of options granted for Teradata equity awards
$ 11.08 
$ 10.68 
$ 11.37 
 
 
 
 
 
 
 
 
 
 
 
Total unrecognized compensation cost related to unvested stock grants
 
 
 
 
 
 
$ 13 
 
 
 
$ 98 
 
 
 
Cost expected to be recognized over a weighted-average period (in years)
 
 
 
 
 
 
2 years 4 months 24 days 
 
 
 
2 years 4 months 23 days 
 
 
 
Restricted stock unit awards granted
2,044,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation expense for restricted stock awards
56 
51 
41 
 
 
 
 
 
 
 
 
 
 
 
Service period
 
 
 
 
 
 
 
 
 
 
 
3 years 
 
 
Performance share percentage
 
 
 
 
 
 
 
 
 
 
 
 
0.00% 
200.00% 
Total stock-based compensation, net of tax
$ 47 
$ 49 
$ 39 
 
 
 
 
 
 
 
 
 
 
 
Employee stock purchase program discount from average market price
 
 
 
15.00% 
 
 
 
 
 
 
 
 
 
 
Percentage of authorized payroll deductions for common stock purchases by employees
 
 
 
 
10.00% 
 
 
 
 
 
 
 
 
 
Shares authorized to be issued under the Employee Stock Purchase Program
 
 
 
 
4,000,000 
 
 
 
 
 
 
 
 
 
Remaining shares authorized to be issued under the Employee Stock Purchase Program
 
 
 
 
200,000 
 
 
 
 
 
 
 
 
 
Employee Stock-based Compensation Plans Fair Value of Each Option Award on the Grant Date Using the Black-Scholes Option-Pricing Model (Detail)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
 
Dividend yield
0.00% 
0.00% 
0.00% 
Risk-free interest rate
1.99% 
2.08% 
1.76% 
Expected volatility
35.00% 
35.20% 
34.40% 
Expected term (years)
6 years 3 months 18 days 
6 years 3 months 18 days 
6 years 3 months 18 days 
Employee Stock-based Compensation Plans Summary of Stock Option Activity (Detail) (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Shares Under Option
 
 
Outstanding at beginning of period (in shares)
6,509 
 
Granted (in shares)
10 
 
Exercised (in shares)
(746)
 
Canceled (in shares)
(153)
 
Forfeited (in shares)
(247)
 
Outstanding at end of period (in shares)
5,373 
6,509 
Fully vested and expected to vest at period end (in shares)
5,373 
 
Exercisable at period end (in shares)
4,220 
 
Weighted-Average Exercise Price per Share
 
 
Outstanding at beginning of period (in usd per share)
$ 36.22 
 
Granted (in usd per share)
$ 29.04 
 
Exercised (in usd per share)
$ 25.28 
 
Canceled (in usd per share)
$ 46.56 
 
Forfeited (in usd per share)
$ 32.97 
 
Outstanding at end of period (in usd per share)
$ 37.63 
$ 36.22 
Fully vested and expected to vest at period end (in usd per share)
$ 37.63 
 
Exercisable at period end (in usd per share)
$ 39.60 
 
Weighted-Average Remaining Contractual Term
 
 
Weighted-average remaining contractual term (in years)
4 years 6 months 
5 years 3 months 18 days 
Fully vested and expected to vest at period end (in years)
4 years 6 months 
 
Exercisable at period end (in years)
3 years 4 months 24 days 
 
Aggregate Intrinsic Value
 
 
Aggregate Intrinsic Value
$ 30 
$ 8 
Fully vested and expected to vest at period end
30 
 
Exercisable at period end
$ 21 
 
Employee Stock-based Compensation Plans Total Intrinsic Value of Options Exercised and The Cash Received (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
 
Intrinsic value of options exercised
$ 6 
$ 13 
$ 8 
Cash received from option exercises
19 
18 
Tax benefit realized from option exercises
$ 2 
$ 5 
$ 3 
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, 2017
Number of Shares
 
Unvested shares at January 1, 2016 (in shares)
4,042 
Granted (in shares)
2,044 
Vested (in shares)
(1,487)
Forfeited/canceled (in shares)
(373)
Unvested shares at December 31, 2016 (in shares)
4,226 
Weighted-Average Grant Date Fair Value
 
Unvested shares at January 1, 2016 (in usd per share)
$ 31.57 
Granted (in usd per share)
$ 34.88 
Vested (in usd per share)
$ 33.55 
Forfeited/canceled (in usd per share)
$ 29.05 
Unvested shares at December 31, 2016 (in usd per share)
$ 32.76 
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, 2017
Dec. 31, 2016
Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Weighted-average fair value of restricted shares units granted (in usd per share)
$ 34.88 
 
 
Restricted Stock Units
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Weighted-average fair value of restricted shares units granted (in usd per share)
$ 34.88 
$ 26.61 
$ 32.82 
Total fair value of shares vested (in millions)
$ 50 
$ 61 
$ 45 
Employee Stock-based Compensation Plans Composition of Teradata Restricted Stock Grants (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Number of Shares
2,044 
Weighted-average fair value of restricted shares units granted (in usd per share)
$ 34.88 
Service-based shares
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Number of Shares
1,736 
Weighted-average fair value of restricted shares units granted (in usd per share)
$ 36.33 
Performance-based shares
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Number of Shares
308 
Weighted-average fair value of restricted shares units granted (in usd per share)
$ 26.68 
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, 2017
Dec. 31, 2016
Dec. 31, 2015
Employee Stock Puchase Program
 
 
 
Equity, Class of Treasury Stock [Line Items]
 
 
 
Employee share purchases (in shares)
0.6 
0.6 
0.5 
Aggregate cost
$ 15 
$ 13 
$ 17 
Employee Benefit Plans Schedule of Pension and Postemployment Benefit Costs (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Pension Plan
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Service cost
$ 9 
$ 8 
$ 8 
Interest cost
Expected return on plan assets
(2)
(2)
(2)
Settlement charge
Amortization of actuarial loss
Amortization of prior service (credit) cost
(1)
Divestiture
(2)
Total costs
10 
12 
Postemployment Retirement Benefits
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Service cost
Interest cost
Expected return on plan assets
Settlement charge
Amortization of actuarial loss
Amortization of prior service (credit) cost
Divestiture
(1)
Total costs
$ 11 
$ 9 
$ 7 
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, 2017
Dec. 31, 2016
Dec. 31, 2015
Pension Plan
 
 
 
Change in Pension Benefit Obligation
 
 
 
Benefit obligation at January 1
$ 120 
$ 115 
 
Service cost
Interest cost
Plan participant contributions
 
Actuarial (gain) loss
(3)
 
Benefits paid
(4)
(8)
 
Currency translation adjustments
10 
(2)
 
Divestiture
(2)
 
Benefit obligation at December 31
136 
120 
115 
Change in Pension Benefit Plan Assets
 
 
 
Fair value of plan assets at January 1
64 
63 
 
Actual return on plan assets
 
Company contributions
 
Benefits paid
(4)
(8)
 
Currency translation adjustments
 
Plan participant contribution
 
Fair value of plan assets at December 31
75 
64 
63 
Funded status (underfunded)
(61)
(56)
 
Amounts Recognized in Balance Sheet, Pension
 
 
 
Non-current assets
10 
 
Current liabilities
(2)
(1)
 
Non-current liabilities
(69)
(60)
 
Net amounts recognized
(61)
(56)
 
Amounts Recognized in Accumulated Other Comprehensive Income, Pension
 
 
 
Unrecognized Net actuarial loss
15 
21 
 
Unrecognized Prior service (credit) cost
(1)
(1)
 
Total
14 
20 
 
Postemployment Retirement Benefits
 
 
 
Change in Pension Benefit Obligation
 
 
 
Benefit obligation at January 1
42 
49 
 
Service cost
Interest cost
Plan participant contributions
 
Actuarial (gain) loss
12 
12 
 
Benefits paid
(15)
(20)
 
Currency translation adjustments
(1)
 
Divestiture
(5)
 
Benefit obligation at December 31
47 
42 
49 
Change in Pension Benefit Plan Assets
 
 
 
Fair value of plan assets at January 1
 
 
Actual return on plan assets
 
Company contributions
 
Benefits paid
 
Currency translation adjustments
 
Plan participant contribution
 
Fair value of plan assets at December 31
 
Funded status (underfunded)
(47)
(42)
 
Amounts Recognized in the Balance Sheet, Postemployment
 
 
 
Current liabilities
(7)
(6)
 
Non-current liabilities
(40)
(36)
 
Non-current liabilities
(47)
(42)
 
Amounts Recognized in Accumulated Other Comprehensive Income, Pension
 
 
 
Unrecognized Net actuarial loss
37 
26 
 
Unrecognized Prior service (credit) cost
 
Total
$ 40 
$ 30 
 
Employee Benefit Plans Accumulated Pension Benefit Obligation (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Retirement Benefits [Abstract]
 
 
Accumulated pension benefit obligation
$ 125 
$ 110 
Employee Benefit Plans Accumulated Benefit Obligation in Excess of Plan Assets (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Retirement Benefits [Abstract]
 
 
Projected benefit obligation
$ 69 
$ 60 
Accumulated benefit obligation
63 
53 
Fair value of plan assets
$ 0 
$ 0 
Employee Benefit Plans Pre-tax Net Changes in Projected Benefit Obligations Recognized in Other Comprehensive Income (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total recognized in other comprehensive (loss) income
$ (6)
$ (12)
$ (9)
Pension Plan
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Actuarial (gain) loss arising during the year
(7)
 
Amortization of loss included in net periodic benefit cost
(1)
(1)
(2)
Prior service (credit) cost arising during the year
 
Recognition of loss due to settlement
(1)
(1)
Foreign currency exchange
(1)
 
Total recognized in other comprehensive (loss) income
(6)
 
Postemployment Retirement Benefits
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Actuarial (gain) loss arising during the year
13 
 
Amortization of loss included in net periodic benefit cost
(2)
(1)
Prior service (credit) cost arising during the year
(1)
 
Recognition of loss due to settlement
Foreign currency exchange
 
Total recognized in other comprehensive (loss) income
$ 10 
$ 5 
 
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
Dec. 31, 2017
Pension Plan
 
Defined Benefit Plan Disclosure [Line Items]
 
Net loss to be recognized in other comprehensive income
$ 1 
Postemployment Retirement Benefits
 
Defined Benefit Plan Disclosure [Line Items]
 
Net loss to be recognized in other comprehensive income
$ 4 
Employee Benefit Plans Weighted Average Assumptions Used to Determine Benefit Obligations and Net Periodic Benefit (Detail)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Pension Plan
 
 
 
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract]
 
 
 
Discount rate
2.10% 
2.00% 
 
Rate of compensation increase
3.30% 
3.30% 
 
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
 
 
 
Discount rate
2.00% 
2.40% 
2.30% 
Rate of compensation increase
3.30% 
3.20% 
3.30% 
Expected return on plan assets
2.90% 
3.00% 
3.30% 
Postemployment Retirement Benefits
 
 
 
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract]
 
 
 
Discount rate
2.60% 
3.40% 
 
Rate of compensation increase
3.00% 
3.00% 
 
Involuntary turnover rate
2.30% 
2.00% 
 
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
 
 
 
Discount rate
2.60% 
3.40% 
3.50% 
Rate of compensation increase
3.00% 
3.00% 
3.00% 
Expected return on plan assets
2.30% 
2.00% 
1.30% 
Employee Benefit Plans Weighted Average Asset Allocations by Asset Category (Detail)
Dec. 31, 2017
Dec. 31, 2016
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
 
 
Actual Asset Allocation as of December 31
100.00% 
100.00% 
Target Asset
100.00% 
 
Equity securities
 
 
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
 
 
Actual Asset Allocation as of December 31
32.00% 
32.00% 
Target Asset
31.00% 
 
Debt securities
 
 
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
 
 
Actual Asset Allocation as of December 31
41.00% 
42.00% 
Target Asset
47.00% 
 
Insurance (annuity) contracts
 
 
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
 
 
Actual Asset Allocation as of December 31
17.00% 
17.00% 
Target Asset
16.00% 
 
Real-estate
 
 
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
 
 
Actual Asset Allocation as of December 31
8.00% 
7.00% 
Target Asset
3.00% 
 
Other
 
 
Schedule of Defined Benefit Plan Asset Allocation Targets [Line Items]
 
 
Actual Asset Allocation as of December 31
2.00% 
2.00% 
Target Asset
3.00% 
 
Employee Benefit Plans - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Retirement Benefits [Abstract]
 
Amount of gains and losses to be amortized to the extent that they exceed 10% of the higher of the market-related value or the projected benefit obligation of each respective plan
10.00% 
Estimated benefits in the next fiscal year
$ 6 
Employee Benefit Plans Schedule of Pension Plan Assets at Fair Value (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Insurance Contract
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
$ 12 
$ 11 
$ 10 
Recurring
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
75 
64 
 
Recurring |
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
 
Recurring |
Significant Other Observable Inputs (Level 2)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
63 
53 
 
Recurring |
Significant Unobservable Inputs (Level 3)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
12 
11 
 
Recurring |
Money market funds
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
 
Recurring |
Money market funds |
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
 
Recurring |
Money market funds |
Significant Other Observable Inputs (Level 2)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
 
Recurring |
Money market funds |
Significant Unobservable Inputs (Level 3)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
 
Recurring |
Equity funds
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
24 
21 
 
Recurring |
Equity funds |
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
 
Recurring |
Equity funds |
Significant Other Observable Inputs (Level 2)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
24 
21 
 
Recurring |
Equity funds |
Significant Unobservable Inputs (Level 3)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
 
Recurring |
Bond/fixed-income funds
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
31 
27 
 
Recurring |
Bond/fixed-income funds |
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
 
Recurring |
Bond/fixed-income funds |
Significant Other Observable Inputs (Level 2)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
31 
27 
 
Recurring |
Bond/fixed-income funds |
Significant Unobservable Inputs (Level 3)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
 
Recurring |
Real-estate
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
 
Recurring |
Real-estate |
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
 
Recurring |
Real-estate |
Significant Other Observable Inputs (Level 2)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
 
Recurring |
Real-estate |
Significant Unobservable Inputs (Level 3)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
 
Recurring |
Insurance Contract
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
12 
11 
 
Recurring |
Insurance Contract |
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
 
Recurring |
Insurance Contract |
Significant Other Observable Inputs (Level 2)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
 
Recurring |
Insurance Contract |
Significant Unobservable Inputs (Level 3)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Total assets at fair value
$ 12 
$ 11 
 
Employee Benefit Plans Summary of Changes in Fair Value of Pension Plan Level 3 Assets (Detail) (Insurance Contract, USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Insurance Contract
 
 
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward]
 
 
Fair value of plan assets at January 1
$ 11 
$ 10 
Purchases, sales and settlements, net
Fair value of plan assets at December 31
$ 12 
$ 11 
Employee Benefit Plans Estimated Future Benefit Payments (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2017
Pension Plan
 
Defined Benefit Plan Disclosure [Line Items]
 
2018
$ 5 
2019
2020
2021
2022
2023-2026
34 
Other Postretirement Benefits Plan [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
2018
2019
2020
2021
2022
2023-2026
$ 24 
Employee Benefit Plans U.S and International Subsidiary Savings Plans (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
U.S. savings plan
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Defined Contribution Plan, Cost
$ 21 
$ 19 
$ 22 
International subsidiary savings plans
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Defined Contribution Plan, Cost
$ 17 
$ 16 
$ 18 
Derivative Instruments and Hedging Activities - Schedule of Foreign Exchange Contracts (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Derivative
 
 
Net contract notional amount of foreign exchange forward contracts
$ 23 
$ 16 
Foreign Exchange Contract
 
 
Derivative
 
 
Contract notional amount of foreign exchange forward contracts
$ 147 
$ 156 
Commitments and Contingencies - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
 
Maximum future payment obligation of the guaranteed value and associated liabilities
$ 4 
Commitments and Contingencies - Warranty Reserve Activity (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Movement in Standard Product Warranty Accrual [Roll Forward]
 
 
 
Beginning balance at January 1
$ 5 
$ 6 
$ 7 
Accruals for warranties issued
Settlements (in cash or kind)
(7)
(9)
(10)
Balance at end of period
$ 4 
$ 5 
$ 6 
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, 2017
Dec. 31, 2016
Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
 
 
 
Operating lease obligations - Total Amounts
$ 81 
 
 
Operating lease obligations - 2018
27 
 
 
Operating lease obligations - 2019
20 
 
 
Operating lease obligations - 2020
16 
 
 
Operating lease obligations - 2021
 
 
Operating lease obligations - 2022
10 
 
 
Sublease rentals - Total Amounts
(14)
 
 
Sublease rentals - 2018
(6)
 
 
Sublease rentals - 2019
(5)
 
 
Sublease rentals - 2020
(3)
 
 
Sublease rentals - 2021
 
 
Sublease rentals - 2022
 
 
Total committed operating leases less sublease rentals - Total Amounts
67 
 
 
Total committed operating leases less sublease rentals - 2018
21 
 
 
Total committed operating leases less sublease rentals - 2019
15 
 
 
Total committed operating leases less sublease rentals - 2020
13 
 
 
Total committed operating leases less sublease rentals - 2021
 
 
Total committed operating leases less sublease rentals - 2022
10 
 
 
Rental expense
24 
24 
26 
Sublease rental income
$ 5 
$ 3 
$ 3 
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis and Subject to Fair Value Disclosure Requirements (Detail) (Recurring, USD $)
In Millions, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Assets
 
 
Money market funds at December 31, 2017
$ 501 
$ 473 
Quoted Price as in Active Markets for Identical Assets (Level 1)
 
 
Assets
 
 
Money market funds at December 31, 2017
501 
473 
Significant Other Observable Inputs (Level 2)
 
 
Assets
 
 
Money market funds at December 31, 2017
Significant Unobservable Inputs (Level 3)
 
 
Assets
 
 
Money market funds at December 31, 2017
$ 0 
$ 0 
Debt - Additional Information (Detail) (USD $)
12 Months Ended
Dec. 31, 2017
Mar. 31, 2016
Revolving Credit Facility Ending in March 2020
 
 
Debt Instrument
 
 
Credit facility maximum borrowing capacity
$ 400,000,000 
 
Senior Notes |
Senior Unsecured Five Year Term Loan issued March 2015
 
 
Debt Instrument
 
 
Term loan, face amount
 
600,000,000 
Long-term debt, gross amount
540,000,000 
 
Interest rate
3.375% 
 
Unamortized debt issuance expense
1,000,000 
 
Revolving credit agreement period (in years)
5 years 
 
Line of Credit |
Revolving Credit Facility |
Revolving Credit Facility Ending in March 2020
 
 
Debt Instrument
 
 
Unamortized debt issuance expense
1,000,000 
 
Revolving credit agreement period (in years)
5 years 
 
Number of one year extensions
 
Duration of extension term
1 year 
 
Current borrowing capacity
240,000,000 
 
Remaining borrowing capacity
$ 160,000,000 
 
Interest rate
5.00% 
 
Debt - Annual Contractual Maturities of Principal on Debt Outstanding (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2017
Debt Disclosure [Abstract]
 
2018
$ 60 
2019
68 
2020
412 
Total
$ 540 
Debt - Interest Expense (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Debt Disclosure [Abstract]
 
 
 
Interest Expense, Debt
$ 15 
$ 12 
$ 9 
Segment, Other Supplemental Information and Concentrations - Additional Information (Detail)
12 Months Ended
Dec. 31, 2017
segment
Segment Reporting [Abstract]
 
Number of operating segments
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, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 626 
$ 526 
$ 513 
$ 491 
$ 626 
$ 552 
$ 599 
$ 545 
$ 2,156 
$ 2,322 
$ 2,530 
Gross margin
306 
250 
242 
224 
315 
294 
310 
269 
 
 
 
Segment Gross Profit
 
 
 
 
 
 
 
 
1,110 
1,275 
1,386 
Stock-based compensation expense
 
 
 
 
 
 
 
 
13 
14 
13 
Amortization of acquisition-related intangible assets
 
 
 
 
 
 
 
 
16 
Acquisition, integration and reorganization-related costs
 
 
 
 
 
 
 
 
11 
Amortization of capitalized software costs
 
 
 
 
 
 
 
 
68 
62 
70 
Selling, general and administrative expenses
 
 
 
 
 
 
 
 
652 
664 
765 
Research and development expenses
 
 
 
 
 
 
 
 
306 
212 
228 
Impairment of goodwill, acquired intangibles and other assets
 
 
 
 
 
 
 
 
80 
478 
Income (loss) from operations
59 
(1)
(1)
98 
89 
87 
(42)
64 
232 
(195)
Americas Data and Analytics
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
1,195 
1,334 
1,470 
Gross margin
 
 
 
 
 
 
 
 
676 
796 
871 
International Data and Analytics
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
961 
919 
907 
Gross margin
 
 
 
 
 
 
 
 
434 
445 
452 
Data and Analytics
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
2,156 
2,253 
2,377 
Gross margin
 
 
 
 
 
 
 
 
1,110 
1,241 
1,323 
Marketing Applications
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
69 
153 
Gross margin
 
 
 
 
 
 
 
 
$ 0 
$ 34 
$ 63 
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, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Segment Reporting [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Recurring revenue
 
 
 
 
 
 
 
 
$ 1,047 
$ 978 
$ 956 
Product - perpetual licenses and hardware
 
 
 
 
 
 
 
 
429 
600 
752 
Consulting services
 
 
 
 
 
 
 
 
680 
675 
669 
Marketing applications
 
 
 
 
 
 
 
 
69 
153 
Total revenue
$ 626 
$ 526 
$ 513 
$ 491 
$ 626 
$ 552 
$ 599 
$ 545 
$ 2,156 
$ 2,322 
$ 2,530 
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, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 626 
$ 526 
$ 513 
$ 491 
$ 626 
$ 552 
$ 599 
$ 545 
$ 2,156 
$ 2,322 
$ 2,530 
United States
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
1,089 
1,246 
1,428 
Americas (excluding United States)
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
107 
123 
125 
International
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
$ 960 
$ 953 
$ 977 
Segment, Other Supplemental Information and Concentrations - Schedule of Property and Equipment by Geographic Area (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Schedule Of Identifiable Assets By Segment [Line Items]
 
 
Property and equipment, net
$ 162 
$ 138 
United States
 
 
Schedule Of Identifiable Assets By Segment [Line Items]
 
 
Property and equipment, net
119 
113 
Americas (excluding United States)
 
 
Schedule Of Identifiable Assets By Segment [Line Items]
 
 
Property and equipment, net
11 
International
 
 
Schedule Of Identifiable Assets By Segment [Line Items]
 
 
Property and equipment, net
$ 32 
$ 21 
Business Combinations and Other Investment Activities - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Business Acquisition
 
 
 
Business acquisitions and other investing activities, net
$ 21 
$ 16 
$ 17 
Series of Individually Immaterial Business Acquisitions
 
 
 
Business Acquisition
 
 
 
Number of businesses acquired
 
Consideration transferred
21 
16 
 
Business acquisitions and other investing activities, net
 
 
17 
Number of equity investments
 
 
Number of business acquisitions
 
 
85 
Other Nonoperating Income (Expense)
 
 
 
Business Acquisition
 
 
 
Gain (loss) on sale of equity investment
 
 
$ 57 
Accumulated Other Comprehensive (Loss) Income - Changes in Accumulated Other Comprehensive Income (AOCI) (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2017
Available-for-sale Securities
Dec. 31, 2016
Available-for-sale Securities
Dec. 31, 2015
Available-for-sale Securities
Dec. 31, 2017
Accumulated Defined Benefit Plans Adjustment
Dec. 31, 2016
Accumulated Defined Benefit Plans Adjustment
Dec. 31, 2015
Accumulated Defined Benefit Plans Adjustment
Dec. 31, 2017
Foreign Currency Translation Adjustments
Dec. 31, 2016
Foreign Currency Translation Adjustments
Dec. 31, 2015
Foreign Currency Translation Adjustments
Dec. 31, 2017
AOCI Attributable to Parent
Dec. 31, 2016
AOCI Attributable to Parent
Dec. 31, 2015
AOCI Attributable to Parent
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning Balance
$ 668 
$ 971 
$ 849 
$ 1,707 
$ 0 
$ 0 
$ 31 
$ (35)
$ (29)
$ (24)
$ (54)
$ (47)
$ (11)
$ (89)
$ (76)
$ (4)
Other comprehensive loss before reclassifications
 
 
 
 
(5)
(5)
(9)
(8)
16 
(7)
(36)
11 
(16)
(49)
Amounts reclassified from AOCI
 
 
 
 
(26)
(23)
Net other comprehensive loss
 
 
 
 
(31)
(1)
(6)
(5)
16 
(7)
(36)
15 
(13)
(72)
Ending Balance
$ 668 
$ 971 
$ 849 
$ 1,707 
$ 0 
$ 0 
$ 0 
$ (36)
$ (35)
$ (29)
$ (38)
$ (54)
$ (47)
$ (74)
$ (89)
$ (76)
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, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Cost of services
 
 
 
 
 
 
 
 
$ (809)
$ (751)
$ (765)
Selling, general and administrative expenses
 
 
 
 
 
 
 
 
(652)
(664)
(765)
Other income
 
 
 
 
 
 
 
 
(6)
(11)
51 
Income tax benefit (expense)
 
 
 
 
 
 
 
 
(125)
(96)
(70)
Net (loss) income
(74)
13 
(4)
(2)
58 
49 
64 
(46)
(67)
125 
(214)
Amount Reclassified from of Accumulated Other Comprehensive Income
 
 
 
 
 
 
 
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Cost of services
 
 
 
 
 
 
 
 
(3)
(3)
(2)
Selling, general and administrative expenses
 
 
 
 
 
 
 
 
(2)
(1)
(1)
Other income
 
 
 
 
 
 
 
 
42 
Income tax benefit (expense)
 
 
 
 
 
 
 
 
(16)
Net (loss) income
 
 
 
 
 
 
 
 
$ (4)
$ (3)
$ 23 
Reorganization and Business Transformation (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2017
Marketing Applications
Dec. 31, 2016
Marketing Applications
Dec. 31, 2015
Marketing Applications
Dec. 31, 2017
Employee Severance
Marketing Applications
Dec. 31, 2016
Employee Severance
Marketing Applications
Dec. 31, 2015
Employee Severance
Marketing Applications
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
 
Severance costs
 
 
$ 2 
$ 14 
$ 4 
 
 
 
Impairment of goodwill and acquired intangibles
57 
437 
80 
140 
 
 
 
Other restructuring costs
 
 
24 
35 
 
 
 
Restructuring Charges
 
 
26 
129 
152 
 
 
 
Payments for restructuring
 
 
 
 
 
$ 1 
$ 20 
$ 14 
Impairment and Sale of the Marketing Applications Business - Narrative (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended 3 Months Ended 0 Months Ended
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Sep. 30, 2016
Marketing Applications
Dec. 31, 2015
Marketing Applications
Discontinued Operations, Held-for-sale
Jun. 30, 2015
Marketing Applications
Discontinued Operations, Held-for-sale
Jun. 30, 2016
Marketing Applications
Discontinued Operations, Held-for-sale
Dec. 31, 2015
Marketing Applications
Discontinued Operations, Held-for-sale
Jul. 1, 2016
Marketing Applications
Discontinued Operations, Held-for-sale
Mar. 31, 2016
Marketing Applications
Discontinued Operations, Disposed of by Sale
Jul. 1, 2016
Affiliated Entity
Marketing Applications
Discontinued Operations, Disposed of by Sale
Apr. 22, 2016
Affiliated Entity
Marketing Applications
Discontinued Operations, Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment of goodwill
$ 57 
 
 
$ 437 
 
$ 97 
$ 340 
 
 
 
$ 57 
 
 
Impairment of intangible assets
 
 
 
 
 
 
 
 
41 
 
 
 
 
Consideration transferred
 
 
 
 
 
 
 
 
 
 
 
 
90 
Payments to acquire intangible assets
 
 
 
 
 
 
 
 
 
 
19 
 
 
Revenue
 
 
 
 
 
 
 
69 
153 
 
 
 
 
Operating loss
 
 
 
 
 
 
 
112 
(561)
 
 
 
 
Impairment of goodwill, acquired intangibles and other assets
(76)
(80)
(478)
 
 
 
(76)
(478)
 
 
 
 
Assets held for sale
 
 
 
 
 
 
 
 
 
87 
 
 
 
Proceeds from sale of business
 
92 
 
 
 
 
 
 
 
 
Transaction cost
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense (benefit)
 
125 
96 
70 
22 
 
 
 
 
 
 
 
 
Income tax expense, related to goodwill
 
 
 
 
$ 14 
 
 
 
 
 
 
 
 
Quarterly Information (Detail) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Quarterly Financial Information Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
$ 626 
$ 526 
$ 513 
$ 491 
$ 626 
$ 552 
$ 599 
$ 545 
$ 2,156 
$ 2,322 
$ 2,530 
Gross profit
306 
250 
242 
224 
315 
294 
310 
269 
 
 
 
Operating (loss) income
59 
(1)
(1)
98 
89 
87 
(42)
64 
232 
(195)
Net (loss) income
(74)
13 
(4)
(2)
58 
49 
64 
(46)
(67)
125 
(214)
Net (loss) income per share:
 
 
 
 
 
 
 
 
 
 
 
Basic (in usd per share)
$ (0.61)
$ 0.11 
$ (0.03)
$ (0.02)
$ 0.45 
$ 0.38 
$ 0.49 
$ (0.36)
$ (0.53)
$ 0.96 
$ (1.53)
Diluted (in usd per share)
$ (0.61)
$ 0.10 
$ (0.03)
$ (0.02)
$ 0.44 
$ 0.37 
$ 0.49 
$ (0.36)
$ (0.53)
$ 0.95 
$ (1.53)
Impairment of goodwill, acquired intangibles and other assets
 
 
 
 
 
 
 
76 
80 
478 
Impairment of goodwill
 
 
 
 
 
 
 
57 
 
 
437 
Tax Cuts and Jobs Act of 2017, existing income tax expense (benefit)
$ 126 
 
 
 
 
 
 
 
 
 
 
Subsequent Events (Details) (Subsequent Event, USD $)
In Millions, unless otherwise specified
0 Months Ended
Feb. 22, 2018
Feb. 23, 2018
Subsequent Event
 
 
Subsequent Event [Line Items]
 
 
Amount of shares purchased (in shares)
1.4 
 
Shares purchased
$ 49 
 
Remaining authorized amount of shares repurchased
 
$ 462 
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS Valuation and Qualifying Accounts (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Allowance for doubtful accounts
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at Beginning of Period
$ 19 
$ 22 
$ 19 
Provision/reversals Charged to Costs & Expenses
(6)
Charged to Other Accounts
Deductions
Balance at End of Period
12 
19 
22 
Deferred tax valuation allowance
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at Beginning of Period
26 
25 
20 
Provision/reversals Charged to Costs & Expenses
Charged to Other Accounts
Deductions
Balance at End of Period
32 
26 
25 
Marketing Applications |
Allowance for doubtful accounts
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Deductions
$ 5