Teradata

2021 Annual Report

TDC

Dear Fellow Shareholders,

2021 was a year of exceptional progress for Teradata. The Company executed well, driving
strong public cloud growth, growing total reported revenue in every region, actively supporting
our culture of engagement, inclusion, belonging, and authenticity, while advancing our
responsibility as a global corporate citizen. The organization also demonstrated exceptional
resiliency in the face of the ongoing global pandemic.

Our cloud-first strategic focus resulted in Teradata driving more than 90% year over year growth
in public cloud annual recurring revenue and delivering nearly 70% growth in net new cloud
customers in 2021. We won accounts in each of the leading cloud marketplaces, and every win
was a testament to our competitive strength in the large and growing data and analytics market.
We saw continued strong sales execution, sharpening our focus on both new account
acquisition and on new use cases.

Teradata’s purpose is transforming how businesses work and people live through the power of
data, and throughout the year, our dedicated R&D team continued its innovation, keeping
Teradata at the forefront of data and analytics. Our hybrid, multi-cloud data platform helps our
customers achieve the best outcomes from enterprise analytics. Customers increasingly see
Teradata as being uniquely able to seamlessly support their hybrid multi-cloud strategies. Our
partner footprint became both larger and stronger, making our platform even more extensible,
and we received numerous points of validation on our differentiated position from leading
industry analysts.

While 2021 was a very good year for Teradata, we are confidently looking forward to
accelerating in 2022. We are anticipating public cloud ARR growth of approximately 80% in 2022
over 2021 results, while continuing to generate healthy profits and durable streams of free cash
flow.

We are committed to continue successfully executing across the company, keeping our focus on
delivering the best business outcomes for our customers, being a great partner, strengthening
our culture, and generating shareholder value.

Thank you.

Steve McMillan
President and CEO

[THIS(cid:3)PAGE(cid:3)INTENTIONALLY(cid:3)LEFT(cid:3)BLANK]

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

FORM 10-K

☒

☐

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the fiscal year ended December 31, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from

to

Commission File Number 001-33458

TERADATA CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of
incorporation or organization)

75-3236470

(I.R.S. Employer
Identification No.)

17095 Via Del Campo
San Diego, California 92127

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (866) 548-8348

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

Trading Symbol

Name of Each Exchange on
which Registered:

Common Stock, $0.01 par value

TDC

New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15 (d) of the Act. Yes  No 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files). Yes  No 

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company,"
and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer 

Non-accelerated filer 

Accelerated filer

Smaller reporting company

Emerging growth company



☐

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. Yes (cid:31) No 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No 

The aggregate market value of voting stock held by non-affiliates of the registrant as of June 30, 2021, was approximately $5.4 billion.

At January 31, 2022, there were 106.1 million shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Part III:

Portions of the registrant’s Notice of Annual Meeting of Stockholders and Proxy Statement, to be filed with the Securities and
Exchange Commission pursuant to Regulation 14A within 120 days after registrant’s fiscal year end of December 31, 2021 are
incorporated herein by reference.

TABLE OF CONTENTS

Item

Business
1.
1A. Risk Factors
1B. Unresolved Staff Comments
Properties
2.
3.
Legal Proceedings
4. Mine Safety Disclosures

Description
PART I

PART II

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities

5.

[Reserved]

6.
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
7A. Quantitative and Qualitative Disclosures About Market Risk
8.
9.
9A. Controls and Procedures
9B. Other Information
9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

PART III

10. Directors, Executive Officers and Corporate Governance
11. Executive Compensation
12.
13. Certain Relationships and Related Transactions, and Director Independence
14.

Principal Accounting Fees and Services

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

PART IV

15. Exhibits, Financial Statement Schedules
16.

Form 10-K Summary
Signatures

Page

5
15
27
27
28
28

29

30
30
44
44
83
83
84
84

84
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86
93
94

This report contains trademarks, service marks, and registered marks of Teradata Corporation and its subsidiaries,
and other companies, as indicated.

3

PART I

FORWARD-LOOKING STATEMENTS

Forward-looking statements in our public filings or other public statements are subject to known and unknown risks,
uncertainties and other factors that may cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or implied by such forward-looking
statements or other public statements. These forward-looking statements were based on various facts and were
derived utilizing numerous important assumptions and other important factors, and changes in such facts,
assumptions or factors could cause actual results to differ materially from those in the forward-looking statements.
Forward-looking statements include the information concerning our expected future financial and reporting
performance, business strategy and trends, projected plans and objectives, liquidity, financial guidance, capital
allocation, including share repurchase plans, and market conditions. Statements preceded by, followed by or that
otherwise include the words "believe," "expects," "anticipates," "intend," "project," "estimate," "plan," "increase,"
"fluctuate," "strive," "looking ahead," "outlook," "guidance," "forecast," "continue," "likely," "potential," "drive,"
and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could" are
generally forward-looking in nature and not historical facts. You should understand that the factors described under
"Risk Factors" and the following important factors could affect our future results and could cause actual results to
differ materially from those expressed in such forward-looking statements:

• Our ability to timely and effectively execute our strategy, including our initiatives to provide and enhance our

offerings for cloud environments;

• Our ability to rapidly and successfully develop and introduce new solutions that include highly advanced

technology, and the increased difficulty and complexity associated with producing new offerings with greater
capacity, delivery and performance capabilities, which may increase the likelihood of reliability, quality and
operability issues;
The rapidly changing and intensely competitive nature of the information technology ("IT") industry and the
analytic data platform business, including the ongoing consolidation activity, new and emerging analytic data
technologies and competitors, and pressure on achieving continued price/performance gains for analytic data
solutions;
Fluctuations in our operating results, timing of transactions, customer cancellations or non-renewals of
subscription arrangements or support services, unanticipated delays or accelerations in our sales cycles and the
difficulty of accurately estimating revenues;

•

•

• Risks associated with data privacy, cyberattacks and maintaining secure and effective products for our

•

customers, as well as, internal IT and control systems;
The impact of global economic fluctuations on the markets in general or on the ability of our suppliers and
customers to meet their commitments to us, or the timing of purchases by our current and potential customers,
including the potential impacts of the COVID-19 pandemic, inflation, and/or labor availability on global
economies; and

• Risks inherent in operating in foreign countries, including the impact of foreign currency fluctuations, economic,

political, legal, regulatory, compliance, cultural, public health, and other conditions abroad.

Other factors not identified above, including the risk factors described in the section entitled "Risk Factors"
included in this Annual Report on Form 10-K ("Annual Report"), may also cause actual results to differ materially
from those projected by our forward-looking statements. Most of these factors are difficult to anticipate and are

4

generally beyond our reasonable control. We undertake no obligation to release publicly any revisions to any
forward-looking statements, to report events or to report the occurrence of unanticipated events.

Item 1. BUSINESS

Overview. Teradata Corporation ("we," "us," "Teradata," or the "Company") is a provider of a leading connected
multi-cloud data platform for enterprise analytics, focused on helping companies leverage all their data across an
enterprise, at scale. In doing so, we help companies to find answers to their toughest business challenges. All of our
efforts are in support of our purpose of transforming how businesses work and people live through the power of
data.

Teradata has broadened its market opportunity by evolving from an on-premises only, enterprise data warehouse
company to a provider of a connected multi-cloud, data platform for enterprise analytics. We help our customers
integrate and simplify their data and analytics ecosystem, streamline access and management of data, and use
analytics to derive business value from diverse data types. Our target market focuses on organizations that are the
world's most demanding, large-scale users of data.

The largest companies in the world have spent decades building mission-critical, complex, and large-scale on-
premises data environments. However, these companies face significant challenges from ecosystems that have
grown over time, including siloed data and conflicting and duplicative solutions, resulting in environments that are
highly complex and expensive to maintain and manage. Despite these companies investing heavily in technology,
people, and infrastructure, their employees are unable to effectively access the data they need to efficiently run their
businesses or activate data to make decisions that will optimize their business outcomes. In addition, most of these
organizations are also experiencing a dramatic increase in data volumes and complexity due to digital
transformation.

As companies seek greater agility and flexibility demanded by today’s digitalized and highly disruptive economy,
they are turning to cloud infrastructures. By accessing a data and analytics platform integrated within a cloud-based
ecosystem, companies can flexibly access and pay for capabilities on demand while being integrated with the
elasticity of cloud. This provides companies the ability to deploy projects and initiatives with agility and expand as
needed. Given the petabytes of data and the millions of queries executed daily on-premises, we expect that the
journey to cloud will be a significant endeavor for our customers leading to hybrid ecosystems spanning on-
premises and cloud for the foreseeable future. With companies pivoting to invest in the cloud, we believe it is
essential for these enterprises to be able to integrate ecosystems across on-premises and multi-cloud environments,
simplify access to data wherever it resides, and accommodate analytics at massive scale and speed. As a result, we
believe that the market for our solutions and services is large and growing.

Our solution, Teradata Vantage™, is our data platform that allows companies to leverage all of their data across an
enterprise, whether in public or private clouds, on-premises, or in a multi-cloud environment. It is designed to
connect multiple sources of data to drive ecosystem simplification, deliver multi-dimensional scale and integration,
and support customers on their journey to the cloud through an integrated migration. Teradata is a leader in enabling
the migration of a company's data to a cloud based ecosystem by running the same software platform in all
deployments (on-premises or cloud), providing software license portability, data and workload automation tools, as
well as associated services.

Teradata Vantage also contains a secure, highly concurrent and resilient analytics engine that addresses the
scalability demands of our target market, the global 10,000 enterprises. Vantage is an open platform offering full
integration of datasets, tools, analytical languages and functions, including leading commercial and open source
technologies. Teradata offers flexible purchase options for customers, via subscription offerings, or "pay for what

5

you use" consumption pricing. These combined capabilities enable companies to reduce complexity, risk, and cost,
while leveraging data as an asset in solving their business challenges and driving business outcomes, which can
include, among other things:

• Digital identity management,
Financial visibility,
•
• Resilient supply chains,
•
Fraud prevention, and
• Operational resilience.

Our business consulting services include a broad range of offerings, including support for organizations to establish
a data and analytics vision, enable a multi-cloud ecosystem architecture, and identify and operationalize analytical
opportunities to ensure their ecosystem investments deliver significant value. In addition, we offer robust support
and maintenance services for our offerings.

Teradata operates from numerous locations within the United States with the primary locations being San Diego,
California and Atlanta, Georgia. In addition, we have sales, services, research and development, and administrative
offices located in 32 countries.

For the calendar year ended December 31, 2021, we had total revenues of $1.917 billion, of which approximately
54% was derived from the Americas region (North America and Latin America) and 46% from the International
regions (Europe, Middle East, Africa, Asia Pacific and Japan). For financial information about our segments and
geographic information, see "Note 14-Segment, Other Supplemental Information and Concentrations" in the Notes
to Consolidated Financial Statements in this Annual Report.

History. Teradata originated as a startup in a garage in Brentwood, California, and was incorporated in 1979 as a
Delaware corporation, driven by the need for robust computing power to harness the value of aggregated data. After
being acquired, Teradata eventually was spun off and became a publicly-traded company named Teradata
Corporation (NYSE: TDC) on September 30, 2007.

Industry and Market Opportunity. Our view is that data and analytics continue to be a management priority for
industry-leading companies. We believe that companies are facing significant ongoing increases in data volumes
and proliferation of data silos. Furthermore, the agility provided by cloud-based technologies provides significant
benefit, but also creates additional complexity, with the rise of ecosystems that must span multiple cloud and on-
premises environments. These factors all contribute to the increased complexity, cost, and risk associated with
managing data and analytic environments. This is particularly true for our target market of global enterprise
companies, and we believe that these companies require tightly integrated solutions that can accommodate
significant scale and speed. We are focused on both new customer acquisition as well as growth of software
consumption within our large and established customer base.

As described in more detail below, we believe Teradata’s strategy positions us to address this large market
opportunity within the growing multi-billion dollar data management and analytics markets. We believe our
connected data platform will lead to reduced risk and cost for enterprises while enabling data insights and
meaningful business value from analytics. We also believe our experience positions us to support these companies
with the design and implementation of next generation secure, multi-cloud data and analytics ecosystems. We have
tailored Teradata's offerings to provide flexibility and choice of deployment environments, whether on-premises or
in one of the top public clouds, alongside portability of licenses, allowing companies to de-risk their investments.

Our Strategy. Teradata’s strategy is based on our differentiated value proposition for the top 10,000 largest
enterprises in the world. Our strategy is to provide a multi-cloud data platform, Teradata Vantage. Teradata Vantage

6

is a scalable, secure, highly concurrent and resilient data platform that is designed to help companies solve complex
data challenges at scale. We provide a data management solution that enables enterprises to support their data and
analytic ecosystems, and easily grow and scale. Furthermore, as demand shifts to the cloud, we provide customers
with the ability to migrate their on-premises data environment to a cloud-based platform.

We believe we are differentiated by providing our platform offering across a secure, multi-cloud ecosystem. This
includes the ability to simplify the management of an ecosystem that spans on-premises or private cloud platform
instances, alongside deployments in any of the top public cloud offerings including Amazon Web Services
("AWS"), Microsoft Azure, and Google Cloud. Furthermore, we augment these offerings with our "pay as you go"
consumption pricing to provide flexibility for customers to expand capabilities on an as-needed basis. The multi-
cloud capability and consumption pricing combine to enable our customers to de-risk their investments and buying
decisions, as well as provide public cloud vendor flexibility. With cloud elasticity and our multi-dimensional
scalability, customers can quickly grow their analytics to scale to provide robust business outcomes.

As customers increasingly grow their footprint in cloud, our strategy supports existing and new on-premises
customers on that journey with the fastest path to migration that is enabled through license portability, the same
software enabled whether on-premises or in the cloud, a data fabric that connects all environments, as well as data
and workload migration tools and services. Through this differentiated set of offerings for our target market, we
help customers build for the future, now.

By prioritizing the fundamental capabilities of a modern multi-cloud data platform, we strive to reset expectations
and market perceptions as to our cloud capabilities. We offer a competitive and compelling total cost of ownership
by building out best-in-class capabilities that are designed to provide an easy experience for ingestion, exploration,
development, consumption and operationalization of data and analytics. With an outstanding user experience and
the flexibility of cloud, we are attracting new customers to grow from start, to enterprise scale, as well as migrating
our existing customers to the extent they are ready to do so and at the pace they desire.

Furthermore, with increasingly fragmented ecosystems consisting of multiple data inputs, our strategy drives an
open platform approach, enabling integration into cloud and partner ecosystems. This integration extends the data
and analytical capabilities of our offerings, allowing our customers greater flexibility to leverage the tools of their
choice, deployed on top of a scalable and robust data platform. By empowering customers and partners to build how
they like, we believe that we enable hundreds of business outcomes and solutions.

Our strategic objectives are to:

Strengthen our multi-cloud data platform offering by building out next generation cloud capabilities;

•
• Reset market perceptions to establish Teradata’s position in the cloud market;
Enable end-to-end business outcomes through a seamless user experience;
•
Expand our product capabilities through deeper integration with cloud ecosystems;
•
•
Focus on partner enablement to drive solution execution on Teradata Vantage;
• Accelerate our transition to the cloud by supporting our customers on their migration journeys;
• Deepen strategic public cloud service provider relationships;
•

Expand our go-to-market reach by onboarding new customers, vertical investments, expanding customer
success programs and strengthening our partner relationships; and

• Deliver operational excellence through efficient cost management and execution.

Our strategy is further supported by our commitment to be a responsible corporate citizen. We believe it is our
responsibility to make a positive impact on and support important issues, such as addressing the climate crisis and
environmental sustainability, promoting diversity, equity and inclusion and being a company that does not tolerate
any form of racism, supporting communities where we live and work, protecting data privacy, and acting ethically

7

in everything we do. We believe that we actively engage with our people in a way that is supportive of a culture
where they can feel comfortable bringing their authentic and genuine selves to work.

Customers. Teradata concentrates our marketing and go-to-market efforts on enterprise companies, which we
define as the 10,000 largest businesses in the world, which view data as a strategic asset, and we focus on both
business users and technology buyers. We particularly focus on the following industries: Financial Services,
Government, Healthcare, Manufacturing, Retail, Telecommunications, and Travel/Transportation. We believe that
these industries provide a good fit for our analytic solutions and services as they typically have the greatest analytic
potential with large and growing data volumes, as well as complex data management requirements, and large and
varied groups of users. When looking at new customer acquisition, we aim to drive adoption of our Teradata
Vantage software. In addition, we are engaging with our existing customer base to increase the awareness and use of
Teradata's software, and in particular, supporting our customers with their journeys to the cloud and helping them
exploit new uses of data and analytics to drive meaningful business outcomes.

We currently do not have any customer which represents 10% or more of our total revenue. We have been
successful in converting customers from perpetual to subscription-based purchasing options, which results in more
ratable revenue recognition. We believe this will increase the predictability of our revenue and the durability of our
cash flows in the future. Due to the size and complexity of our sales transactions, however, our sales cycle can often
be lengthy.

Seasonality. Historically, our new contract bookings and renewals are seasonal, in line with customer spending
patterns, with lower volume typically in the first quarter and higher volume generally in the fourth quarter of each
calendar year. Such seasonality causes our working capital cash flow requirements to vary from quarter to quarter
depending on the variability in the volume, timing of invoices and subsequent collection, and mix of platform sales.
Historically, cash provided by operating activities is higher in the first half of the year due to collections of the
higher receivable balances at December 31 driven by the higher contract bookings in the fourth quarter and receipts
from annual renewals of our maintenance support agreements. In addition, contract bookings in the third month of
each quarter has historically been significantly higher than in the first and second months. These factors, among
others as more fully described in Item 1A, Risk Factors, in this Annual Report, make forecasting more difficult and
may adversely affect our ability to accurately predict financial results.

Sales, Marketing and Partners

Sales and Marketing. We primarily sell and market our solutions and services through a direct sales force. We have
greater than 80% of our employees in customer-facing and/or revenue-driving roles (including sales, marketing,
consulting, customer service, customer success, and product engineering).

We support our sales force with marketing and training programs that are designed to:

• Grow awareness and increase perception of Teradata as a multi-cloud leader, highlighting our technology

•

leadership, differentiation, cloud, and analytics expertise;
Lead customers on their migration to the cloud with the benefits of multi-cloud and hybrid cloud
capabilities;

• Create demand for, and adoption of, our Teradata Vantage data platform;
•
•

Educate and enable the sales force with the skills and knowledge to deliver our value proposition; and
Provide a robust set of tools for use by our sales teams.

Teradata focuses our brand messaging on the Company’s strength as a provider of a connected multi-cloud data
platform for enterprise analytics. To support the Company’s growth objectives, we employ a broad range of modern
marketing strategies, including programs to inform, educate and generate demand with customers and prospects, as

8

well as keep our leading technology position at the forefront of the media, industry analysts, academics, and other
influencers. These strategies include targeted account-based marketing, our global website, digital marketing, demos
and trials of our software, webinars, virtual conferences and events now, and physical events when again safe to do
so post the global pandemic, public and media relations, social media, and an extensive customer reference
program.

Strategic Partnerships. We seek to extend our sales and marketing reach by partnering with cloud service
providers, alliance partners (including independent software vendors and open-source software distributors), leading
global and regional systems integrators, consultants, and universities that we believe complement our differentiated
offerings. Strategic partnerships are a key element in our ability to leverage the value and expand the scope of our
data and analytics offering in the marketplace.

• Cloud Service Providers: Teradata has established partnerships with the top three global public cloud

service providers: AWS, Microsoft Azure, and Google Cloud. We work to continuously strengthen these
partnerships so that Teradata can provide companies around the globe access to Teradata’s Vantage offering
in the public cloud, both in an As-A-Service or Do-It-Yourself model to accommodate customer
preferences.

• Alliance Partners: Teradata has a focus on working collaboratively with independent software vendors in
several areas, including tools, data and application integration solutions, data mining, analytics, business
intelligence, and specific analytic and industry solutions. Our goal is to provide choices to our customers
with partner offerings that are optimized and certified to work with Teradata Vantage to deliver end-to-end
data and analytic solutions and to provide comprehensive capabilities that support the customer’s analytic
ecosystem.

•

Systems Integrators and Consultants: We also work with a range of systems integrators and consultants
who engage in the design, implementation, and integration of data warehouse and analytic solutions and
analytic applications for our joint customers. Our strategic partnerships with select global and regional
consulting and systems integration firms provide broad industry and technology expertise in the design of
business solutions that leverage Teradata technology to enable enterprise analytics.

Competition. We compete in a large and growing data management and analytics market that is attractive to both
current and new competitors. Participants in our general market include traditional competitors such as IBM,
Oracle, SAP, as well as new cloud-only data vendors (such as Amazon, Google, Snowflake), and open-source
providers. We believe our focus on multi-cloud ecosystem simplification, providing solutions for the most scalable
and complex workloads, and providing a product designed to achieve desired business outcomes of our customers,
enables us to successfully compete within our target market. We believe that our Teradata Vantage platform is
highly differentiated, delivers substantive scale and integration, and is uniquely positioned to provide significant
business value to our customers. Furthermore, we provide our customers with the opportunity to de-risk their
buying decisions with the ability to deploy across the top public clouds, private cloud and on-premises, coupled
with flexibility in purchasing and portable licensing. For more information on competition, see Item 1A, Risk
Factors, in this Annual Report.

We believe that the principal competitive factors for our products and services include: data and analytics
experience; business outcome delivery; multi-cloud offerings and experience; customer references; technology
leadership; product quality; performance, scalability, availability, and manageability; support and consulting
services capabilities; management of technologies in a complex analytical ecosystem; industry knowledge; and total
cost of ownership. We believe we have a competitive advantage in providing complete, integrated, and optimized
data and analytic capabilities that address customers’ business, technical, and architectural requirements. Our

9

differentiation is especially strong in our target market of the world’s leading enterprises and their mission-critical,
complex, large-scale environments and requirements.

Research and Development ("R&D"). We remain focused on designing and developing data warehouse
technologies that anticipate our customers' evolving needs and support our customers in solving their most complex
business challenges. Our teams are focused on extending our Teradata Vantage data platform to have consistent and
differentiated capabilities for our customers’ multi-cloud and hybrid ecosystems. This includes simplifying the
journey to cloud, as well as enabling a transformative cloud experience. With a focus on opening up the platform,
we are building out deep integration with cloud data and analytic ecosystems, including advanced analytics and
artificial intelligence tools. Furthermore, with a strong focus on partnerships, our R&D team is extending our
platform to enable deeper partner integration with a broader range of solution and services providers.

We believe our extensive and talented R&D workforce is one of our core strengths. Our R&D team is located in
multiple locations around the world to take advantage of global engineering talent. We anticipate that we will
continue to have significant R&D expenditures, which may include complementary strategic acquisitions, to help
support the flow of innovative, high-quality cloud-based data and analytic offerings with a superior user experience,
as well as services, which are vital to our leading competitive position. For information regarding the accounting
and costs included in R&D activities, see "Note 1-Description of Business, Basis of Presentation and Significant
Accounting Policies" in the Notes to Consolidated Financial Statements in this Annual Report.

Intellectual Property and Technology. The Company owns 632 patents in the United States. The Company also is
the exclusive licensee of four additional patents in the United States and counterpart patents in foreign countries.
Many of the patents that we own are licensed to others, and we are licensed to use certain patents owned by others.
While our portfolio of patents and patent applications in aggregate is of significant value to our Company, we do not
believe that any individual patent is by itself of material importance to our business.

In addition, the Company owns copyrights and trade secrets in our code base that comprises all of the Teradata
software offerings, including analytic data platforms and analytic applications. Teradata’s software offerings reflect
the investment of hundreds of person-years of development work.

The source code versions of our offerings are protected as trade secrets and, in all major markets, as unpublished
copyright works. We take great efforts to protect our rights in all software offerings and related intellectual property;
however, there can be no assurance that these measures will be successful. The Company owns the Teradata® word
and logo trademarks, which are registered in the United States and in many foreign countries, as well as other trade
names, service marks, and trademarks.

Sources of Materials. Our hardware components are assembled and configured by Flex Ltd. ("Flex"). Our platform
line is designed to leverage the components from manufacturers that we believe are industry leaders. Our data
storage devices and memory components utilize industry-standard technologies but are selected and configured to
work optimally with our software and hardware platform. Flex also procures a wide variety of components used in
the assembly 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 business continuity of
supply. Given our strategy to outsource product assembly activities to Flex and to source certain components from
single suppliers, a disruption in production at Flex or at a supplier, a global shortage of components, commodity,
transportation, and/or inflationary pressures could impact the timing or profitability of customer shipments. In
addition, a significant change in the forecasts to any of these preferred suppliers could result in purchase obligations
for components that may be in excess of demand. Although the Company has not experienced significant
disruptions in its supplier relationships due to the COVID-19 pandemic, inflationary challenges, or otherwise, the
ongoing pandemic and current inflation environment could present potential supply chain uncertainty, and the

(cid:20)(cid:19)(cid:3)

Company has implemented programs to mitigate these potential risks. For more information, see Item 1A, Risk
Factors in this Annual Report.

Human Capital

Teradata’s people management objectives are to attract, retain, and develop the highest quality of diverse and
inclusive talent, which allows our employees to thrive while positioning us to execute our Company strategy and
drive profitable growth. Our future success depends on our ability to attract and retain highly skilled and innovative
talent in all functional areas of our Company, with a heightened focus on sales and cloud talent. Competition for
acquiring top talent and retaining our highly skilled people is intense throughout the IT industry. Our programs are
designed to align to our core principles and focus on meaningful work, enabled management, a positive and
inclusive workplace environment, career growth opportunities, and transparent and trustworthy leadership. We also
provide complete flexibility to our workforce to choose whether they will work remote or hybrid, as well as offering
competitive pay, and comprehensive health and wellness benefits and programs.

As of December 31, 2021, we had approximately 7,200 employees globally, with approximately 30% employed in
the United States and 70% across the rest of the world. Our global workforce is critical to our overall business
strategy across target markets. During fiscal 2021, our overall headcount decreased slightly as we continue to align
our talent needs to drive our Company’s cloud-first and profitable growth strategy.

Culture Transformation. At Teradata, we transform how businesses work and people live through the power of
data. We are deliberate in ensuring our culture supports our purpose and strategy. We embody our core principles in
all we do; and we recognize and reward behavior aligned to our core principles. We believe every employee plays a
role in transforming our culture to meet the needs of the future. We are committed to work, learn, and grow together
to help ensure our success.

We are committed to the following Core Principles to make sure we are fulfilling our purpose and truly bringing our
brand to life:

• Accountability to Each Other
• Agility in Execution, and
• Customer and Market Driven.

We value every member of the team because bringing together different voices makes us stronger and accelerates
the momentum we need to create true transformation together.

Diversity, Equity, and Inclusion. Teradata’s core strength is our people, and creating an inclusive workplace where
everyone feels safe and welcome being their genuine and authentic selves is a key focus for us. We are an equal
opportunity employer, committed to sustaining a world-class team by providing an environment that is intentionally
inclusive and fully encourages and leverages diversity in all aspects of our business.

We have many people and culture initiatives, with a strong focus on diversity, equity, and inclusion ("DEI").

• Our executive team and employee allies have signed a pledge committing to DEI and anti-racism.
• We have a DEI Advisory Board to support the Company’s mission to eradicate racism and inequality in the

workplace.

• We provide resources and tools for our employees to help them engage within culturally- and

geographically-dispersed work teams to enable a culture of growth, learning, and collaboration.

• We continue to empower our Inclusion Communities, which are networks of employees who unite based on
shared characteristics, life experiences, or common interests. These communities are designed to provide
support, networking and enhanced career and personal development. These networks include Teradata

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Alliance of Black Employees, Blend (a community for employees in India), Veterans Community, Teradata
Pride, HISPA (Hispanic and Latin Allies), Women of Teradata, Green Agenda, Terabytes (work-life
integration), Toastmasters International, and Asian and Pacific Islander Inclusion Community.
In further support of the communities where we operate and live, we offer a global Diversity in Technology
Scholarship Program for underrepresented minorities and women who are pursuing STEM-related degrees;
and
Teradata earned a score of 100 out of 100 in the Human Rights Campaign Corporate Equality Index 2022
(CEI), a benchmarking survey and report that measures corporate policies and practices related to LGBTQ+
equality.

•

•

We believe that a diverse workforce is critical to the Company’s success, and we will continue to focus on the
hiring, retention and advancement of underrepresented minorities and women in technology.

Health, Safety, and Wellness. We are committed to the health, safety, and wellness of our employees. We provide
our employees and their families a variety of flexible and convenient health and wellness programs. Continuing in
2021, in response to the COVID-19 pandemic, we took several actions to promote the health and well-being of our
employees, as described below under "COVID-19 Update" in Item 7, Management Discussion and Analysis Of
Financial Condition and Results of Operations ("MD&A").

Compensation and Benefits. A key to our attraction, retention, and engagement strategies are the robust
compensation and benefit programs we provide that are designed to meet the varied and evolving needs of a global
and diverse workforce. In addition to our competitive base pay, these programs (which vary by country/region)
include sales incentives, annual bonuses, stock awards, an Employee Stock Purchase Plan, a 401(k) Savings Plan
with a company match, healthcare and insurance benefits, paid time off, family leave, and paid parental leave. As an
example of our commitment to DEI, we ensure that all of our benefits provide coverage for domestic partners.

Talent Development. Teradata is committed to supporting the professional development of our employees by
providing resources and tools that enable employees to manage their careers. Our talent programs provide
employees with the resources to develop their careers, build leadership skills, and lead within their organizations.
We have launched on-demand learning resources, such as LinkedIn Learning and Country Navigator, which give
employees flexibility in when and how they learn. Our Learning Labs focus on understanding Culture
Transformation and our Core Principles, Inclusive Leadership, and Building Your Personal Brand. We also provide
executive and leadership development programs to help develop leaders at all levels.

Community Engagement. We believe that building connections between our employees, their families, and our
communities creates a more meaningful, fulfilling, and enjoyable workplace. We support local STEM education
programs to ensure emerging leaders in our communities have opportunities to explore their interests. Our Teradata
Cares program empowers our employees to help build strong and vibrant communities, improve quality of life, and
make a positive difference where we live and work through volunteerism and giving. We support our employees’
giving and volunteer efforts by providing matching donations for employee contributions to qualified not-for-profit
agencies, project grants, Annual Days of Caring, and supporting communities where we have employee populations.
To further enable employees to support the charity of their choice, we afford every employee four days a year,
during normal working hours, for volunteer efforts of their choice.

Properties and Facilities. Our corporate headquarters is located in San Diego, California. As of December 31,
2021, we operated 58 facilities in 32 countries throughout the world. We own our San Diego complex, while all
other facilities are leased.

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Information About Our Executive Officers. The following table and biographies sets forth information as of
February 25, 2022 regarding the individuals who are serving as our executive officers.

Name

Stephen McMillan
Hillary Ashton
Claire Bramley
Todd Cione
Kathleen Cullen-Cote
Michael Hutchinson
Margaret Treese
Jacqueline Woods

Age
51
50
44
52
57
56
55
60

Position(s)
President and Chief Executive Officer
Chief Product Officer
Chief Financial Officer
Chief Revenue Officer
Chief Human Resources Officer
Chief Customer Officer
Chief Legal Officer
Chief Marketing Officer

Stephen McMillan. Stephen McMillan is the Company’s President and Chief Executive Officer and has served in
this role since joining the Company in June 2020. Mr. McMillan has served on the Company’s Board of Directors
since June 2020. Previously, he served as the Executive Vice President of Global Services for F5 Networks, Inc., a
transnational company that specializes in application services and application delivery networking, from October
2017 when he joined F5 until May 2020. Prior to joining F5, from September 2015 until October 2017, he was
Senior Vice President, Customer Success and Managed Cloud Services at Oracle, where he was responsible for
developing, overseeing, and expanding a customer success organization focused on the company’s strategic SaaS
portfolio. From May 2012 to September 2015, he served as Senior Vice President, Managed Cloud Services at
Oracle. Prior to joining Oracle, Mr. McMillan spent 19 years at IBM, where he held a number of leadership roles
focused on global managed services, consulting, and IT.

Hillary Ashton. Hillary Ashton is the Company’s Chief Product Officer and has served in this role since August
2020. Prior to that Ms. Ashton served as the Executive Vice President of Teradata Products from November 2019,
when she joined the Company, until August 2020. Prior to joining Teradata, she served as Executive Vice President
and General Manager of PTC’s Augmented Reality (AR) business unit from July 2018 until November 2019. In this
role, she was responsible for all operational aspects of the Vuforia business and its product lines, including
executive leadership and vision, strategy, sales, and marketing. From 2014 to 2018, she served as SVP of Analytics
SaaS solutions at Manthan and as Director, Customer Intelligence Solutions at SAS from 2003 to 2014.

Claire Bramley. Claire Bramley is the Company's Chief Financial Officer and has served in this role since joining
Teradata in June 2021. She served as the Global Controller for HP Inc. from December 2018 until June 2021. From
June 2015 until December 2018, she served as HP's Regional Head for Finance for EMEA, and from January 2013
to May 2015, she served as Vice President, Corporate Financial Planning and Analysis at HP. Prior to that, Ms.
Bramley served as HP's Finance Director of Worldwide Personal Systems Financial Planning & Analysis from
September 2011 to December 2012.

Todd Cione. Todd Cione is the Company’s Chief Revenue Officer and has served in this role since joining Teradata
in January 2021. Mr. Cione served as the Head of U.S. Enterprise Accounts for Apple, Inc., from the time he joined
the company in July 2017 until December 2020. Prior to joining Apple, from 2016 until 2017, he was Senior Vice
President, Oracle Digital, North America Applications, and from 2013 to 2015, he served as Chief Revenue Officer
at Rackspace. Prior to joining Rackspace, Mr. Cione spent 15 years at Microsoft, where he most recently served as
the Asia-Pacific Chief Operating Officer, based in Singapore.

Kathleen Cullen-Cote. Kathleen Cullen-Cote is the Company’s Chief Human Resources Officer and has served in
this role since joining Teradata in July 2019. Prior to joining Teradata, Ms. Cullen-Cote served in human resource
leadership roles at PTC Inc., a global computer software and services company, from 2002 to June 2019, including

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Executive Vice President and Chief Human Resources Officer from April 2019 to July 2019; Corporate Vice
President, Human Resources from 2012 until March 2019; Senior Vice President, Human Resources, from
December 2010 to 2012; and Vice President, Human Resources, from October 2009 until December 2010. Prior to
that, Ms. Cullen-Cote served in human resource leadership roles at Imark Communications, Johnson and Johnson,
Raytheon, and Barry Controls.

Michael Hutchinson. Michael Hutchinson is the Company's Chief Customer Officer and has served in this role
since January 2022. Previously, from June 2021 when he joined the Company until December 2022, he served as
Senior Vice President World-Wide Customer Success, Consulting and Renewals. Prior to joining Teradata, Mr.
Hutchinson served as the Senior Vice President and Chief Customer Officer at Verint from August 2020 to May
2021 and as its Senior Vice President, Global Professional Services and Support from April 2018 until August 2020.
From 1990-2018, he held several positions with Oracle Corporation most recently as the Group Vice President,
North America Customer Success from December 2015 to March 2018.

Margaret Treese. Margaret Treese is the Company’s Chief Legal Officer and has served in this role since
November 2020. Previously, from 2018 until January 2020, she served as Teradata’s Deputy General Counsel and
Secretary. From 2007 until 2018, she served as the Chief Corporate and Governance Counsel and Assistant
Secretary and was named Corporate Secretary of Teradata in 2018. Prior to joining Teradata, from 1995 to 2007,
Ms. Treese held positions of increasing responsibility at NCR, including Law Vice President and Chief Americas
Region Counsel for the Teradata Division Law Group, Chief Corporate Counsel and Assistant Secretary.

Jacqueline Woods. Jacqueline Woods is the Company's Chief Marketing Officer and has served in this role since
joining Teradata in December 2021. Previously, she served as the Global Chief Marketing Officer for NeilsenIQ
from 2019 until November 2021. Prior to that, Ms. Woods was with IBM Corporation serving as the company's
Chief Marketing Officer of IBM Global Partner Ecosystem Division from 2017 until 2019, the Chief Marketing
Officer of IBM Global Financing from 2015 until 2017, and held other executive roles at IBM between 2010-2015.
Ms. Woods also serves on the Board of Directors of Winnebago Industries, Inc.

There are no family relationships between any of the executive officers or directors of Teradata.

There are no contractual obligations regarding the election of our executive officers or directors.

Information. Teradata makes available through its website, free of charge, its Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, and all amendments to such reports, as soon as
reasonably practicable after these reports are electronically filed or furnished to the U.S. Securities and Exchange
Commission ("SEC") pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act"). These reports and other information are available, free of charge, at www.sec.gov. Teradata will furnish,
without charge to a security holder upon written request, the Notice of Meeting and Proxy Statement for the 2022
Annual Meeting of Stockholders. Teradata will furnish the Code of Conduct and any other exhibit at cost (the Code
of Conduct is also available through Teradata’s website at http://www.teradata.com/code-of-conduct/). Document
requests are available by calling or writing to:

Teradata - Investor Relations
17095 Via Del Campo
San Diego, CA 92127
Phone: 858-485-2088
Website: www.teradata.com

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Item 1A. RISK FACTORS

You should carefully consider each of the following risk factors and all other information set forth in this Annual
Report. Based on the information currently known to us, we believe that the following information identifies the
most significant risk factors affecting our company in each of these categories of risks. However, the risks and
uncertainties our Company faces are not limited to those set forth in the risk factors described below. Additional
risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely
affect our business.

In addition, past financial performance may not be a reliable indicator of future performance, and historical trends
should not be used to anticipate results or trends in future periods.

If any of the following risks and uncertainties develops into actual events or occurrences, these events could have a
material adverse effect on our business, financial condition or results of operations. In such case, the trading price
of our common stock could decline.

RISKS RELATED TO OUR BUSINESS AND OPERATIONS

Our failure to successfully execute our cloud-first strategy and achieve the anticipated benefits of our business
transformation, which includes successfully developing and launching cloud-based products and product
enhancements and/or enabling our data platform to operate effectively in cloud environments, could have a
material adverse effect on our competitive position, business, brand and reputation, financial condition, results
of operations and cash flows.

The successful implementation of our cloud-first strategy and completion of our business transformation presents
organizational and infrastructure challenges. We may not be able to implement and realize some or all of the
anticipated benefits from our strategy or our business transformation plan on a timely basis, or at all. Even if the
anticipated benefits and savings are substantially realized, there may be unforeseen consequences, internal control
issues, or business impacts. Additionally, because of our restructuring efforts in connection with our business
transformation, we may experience a loss of continuity, loss of accumulated knowledge or loss of efficiency during
transitional periods. Reorganization and restructuring may require a significant amount of management and other
employees' time and focus, which may divert attention from operating activities and growing our business.

A core component of our business strategy is to expand and enhance our product offerings, particularly for analytic
solutions in a cloud-based environment, to include newer features, functionality, and development options and to
keep pace with price-to-performance gains. Shortened product life cycles due to customer demands and competitive
pressures impact the pace at which we must introduce and implement new technology as part of our product
offerings. This requires a high-level anticipation of customer needs and technology trends, as well as innovation by
both our software developers and the suppliers of the third-party software components included in our solutions. In
addition, bringing new offerings to the market entails a costly and lengthy process, may increase our risk of liability
and cause us to incur significant technical, legal or other costs. It is uncertain whether these new offerings and
deployment models will prove successful or whether we will be able to develop the necessary business models,
infrastructure and systems to support the business. This includes acquiring, retaining and developing the right
people to execute our business strategy in a competitive job market. In addition, market acceptance of new product
and service offerings will be dependent in part on our ability to include functionality and usability that address
customer requirements, and to optimally price our offerings and services to meet customer demand and cover our
costs. Our go-to-market, cloud, and multi-cloud strategies also must adjust to customers' changing buying
preferences, and there can be no assurance that our go-to-market approach will adequately and completely address
such preferences.

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As part of our business strategy, we also continue to dedicate a significant amount of resources to our R&D efforts
in order to maintain and advance our competitive position, including our initiatives to provide and improve our
offerings for cloud environments and to enable our data platform to operate effectively in cloud environments.
However, we may not receive significant revenues from these investments for several years, if at all. R&D expenses
represent a significant portion of our discretionary fixed costs.

If we are unable to successfully execute on our cloud-first strategy and/or continue to respond to market demands,
develop leading technologies, timely deliver offerings to the market, and maintain our leadership in analytic data
solutions performance and scalability, our competitive position, business, brand and reputation, financial condition,
results of operations and cash flows may be adversely affected.

As we develop new offerings with enhanced capacity, delivery and performance capabilities, the increased
difficulty and complexity associated with producing these offerings may increase the likelihood of reliability,
quality, operability, and/or security issues.

From time to time, errors or security flaws are identified in our offerings, which in certain cases are discovered after
the offerings are introduced and delivered to customers. This risk is enhanced when offerings are first introduced or
when new versions are released. In particular, when we develop offerings with more advanced technology, the
production of such offerings involve increased difficulty and complexity and as a result may increase the likelihood
of reliability, quality, operability, and/or security issues with such offerings. Our products and services may also fail
to perform to the full specifications and expectations of our customers, including as part of transitioning customers
to the cloud, in particular those that involve customer and/or third-party dependencies. Additionally, third-party
components that we integrate into our solutions can have undetected quality issues that can impact the performance
of our offerings. We may not be able to detect or remedy all errors, including those that may be deemed critical by
our customers, prior to release or deployment.

Such reliability, quality, operability, and security issues may negatively impact our ability to retain current
customers, including due to customer cancellations or non-renewals, as well as our ability to obtain new customers
and could expose us to liability, performance and warranty claims, as well as harm our brand and reputation. These
and other risks associated with new offerings may have a material adverse impact on our results of operations and
future performance.

If our existing customers fail to renew, or cancel, their subscription license arrangements or support agreements,
or if customers do not renew on terms favorable to us, our business could be adversely affected.

Teradata’s platform offerings have been expanded to include a variety of subscription options, which impact the
timing of when revenues are recognized and related cash flows are collected. In addition, with our transition to
subscription revenues, we currently derive a significant portion of our overall revenues from subscription services in
which we have limited renewal experience, which carries additional risk. The IT industry generally has been
experiencing increasing pricing pressure from customers when purchasing or renewing support agreements. In
addition, as our on-premises customers migrate all or a portion of their data analytics solutions to a cloud-based
environment, some customers may select a cloud-based offering of one of our competitors and consequently cancel
all or a portion of their arrangements with us. Mergers and acquisitions in certain industries that we serve could
result in a reduction of the software and hardware being supported and put pressure on our subscription and support
terms with customers who have merged. Given these factors, there can be no assurance that our current customers
will renew their subscription and/or support agreements or agree to the same terms when they renew, which could
result in our reducing or losing subscription and/or support fees which could adversely impact operating results.

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Unanticipated delays or accelerations in our sales cycles makes accurate estimation of our revenues difficult and
could result in significant fluctuations in our quarterly operating results.

The length of our sales cycle varies depending on several factors over which we may have little or no control,
including the size and complexity of a potential transaction, whether a sale involves a cloud offering, the level of
competition that we encounter in our selling activities and our current and potential customers’ internal budgeting
and approval process, as well as overall macro-economic conditions. Because of a generally long sales cycle, we
may expend significant effort over a long period of time in an attempt to obtain an order, but ultimately not
complete the sale, or the order ultimately received may be smaller than anticipated. The long sales cycle for our
products also makes it difficult to predict the quarter in which sales will occur. Delays in sales could cause
significant variability in our results for any particular period.

We may experience variability in our operating results based on the purchasing behavior of our customers.

Our business has substantially shifted from traditional, perpetual pricing and revenue model to a subscription-based
model in which less revenue is recognized upfront at the time the customer enters into a transaction. The pace and
extent to which customers will continue to purchase and renew our offerings on a subscription basis is variable and,
therefore, has impacts on our results and operations. In addition, we have flexible pricing options for our cloud
customers, including consumption-based, "pay as you go" pricing. Under such a pricing model, we generally
recognize revenue based on consumption. To the extent that customers opt for such a flexible pricing model, we
may not be able to accurately forecast the timing of customer consumption of our offerings. As a result, our actual
results may differ from our projections. Furthermore, our on-premises subscription arrangements may provide the
customers with the right to cancel our agreement upon certain notice periods, which we may change in the future.
Such arrangements may impact the timing of revenue recognition for these customers and result in fluctuations in
our quarterly operating results.

Demand for the offerings and services we sell could decline if we fail to maintain positive brand perception and
recognition.

We strive to maintain a brand that reflects our commitment to customer service and innovation. We believe that
recognition and the reputation of our brand is key to our success, including our ability to retain our existing
customers and attract new customers. We have a distinguished history as an on-premises platform provider and one
of our strategic objectives is to establish our position in the cloud market. A misperception in the market regarding
our cloud capabilities could negatively impact our ability to migrate existing on-premises customers to our cloud-
based solutions and/or acquire new customers for our cloud business.

In addition, damage to the reputation of our brands could result in, among other things, declines in customer loyalty,
customer cancellations or non-renewals, lower employee retention and productivity, and vendor relationship issues,
all of which could materially affect our revenue and profitability.

Our future results depend in part on our relationships with key suppliers, strategic partners and other third
parties.

Our development, marketing, and distribution plans depend in part on our ability to form strategic alliances with
third parties that have complementary offerings, software, services, and skills. Our strategic partners include
consultants and system integrators, software and technology providers, hardware support service providers, and
indirect channel distributors in certain countries. These relationships involve risks, including our partners changing
their business focus, entering strategic alliances with other companies, being acquired by our competitors, failing to
meet performance criteria or improperly using our confidential information. If we fail to maintain or expand our

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relationships with strategic partners or if we are forced to seek alternative technology or technology for new
solutions that may not be available on commercially reasonable terms, our business may be adversely affected.

As part of our cloud-first strategy, the growth of our business is dependent on our relationships with public cloud
service providers, Amazon, Google, and Microsoft. Our strategic partnerships with Amazon, Google and Microsoft
for our cloud offerings on AWS, Google and Azure, respectively, require significant investments to ensure that our
solutions are optimized in these cloud environments. In addition, these cloud service providers maintain
relationships with certain of our competitors, and our competitors may in the future establish relationships with
additional competing cloud data platform providers. Any of these cloud service providers may decide to modify or
terminate our business relationship or may otherwise enter into preferred relationships with one or more competing
cloud data platform providers. If we are unsuccessful in meeting performance requirements or obtaining future
returns on these investments, or if we are otherwise unable to maintain adequate relationships with any of these
cloud service providers, our financial results may be adversely impacted.

Third-party vendors provide important elements to our solutions; if we do not maintain our relationships with these
vendors or if these vendors cease to be going concerns, interruptions in the supply of our offerings may result. There
are some components of our solutions that we purchase from single sources due to price, quality, technology or
other reasons. For example, we rely on Flex as a key single source contract manufacturer for our on-premises
hardware systems. In addition, we buy servers from Dell Technologies Inc. and storage disk systems from NetApp,
Inc. Some components supplied by third parties may be critical to our solutions, and several of our suppliers may
terminate their agreements with us without cause with 180-days' notice. In addition, we rely on certain vendors for
hardware support services and parts supply. If we were unable to purchase necessary services, parts, components or
offerings from a particular vendor and had to find an alternative supplier, our shipments and deliveries could be
delayed. Also, quality issues, commodity, transportation, wage, or other inflationary pressures, a disruption in our
supply chain or the need to find alternative suppliers could impact the costs and/or timing associated with procuring
necessary offerings, components and services. In any case, our operations could be adversely impacted. Similarly,
our suppliers’ offerings and services have certain dependencies with respect to their own supply chain networks, and
supply and/or inflation issues among our suppliers may also adversely impact our business.

A breach of security, disruption, or failure of our information systems or those of our third-party providers could
adversely impact our business and financial results.

Our operations are dependent on our ability to protect our computer equipment and the information stored in our
databases (and the computer equipment and database information of certain suppliers and other third parties) from
damage by, among other things, earthquake, fire, natural disaster, cyber-attacks, power loss, telecommunications
failures, unauthorized intrusions or exploitations, malicious or unintended insider actions that cause loss of data or
loss of systems, including phishing schemes, and other events. The occurrence of one or more of these events could
result in system failures and other interruptions in our operations, which could have a material adverse effect on our
business, financial condition or results of operations. Additionally, we offer the ability for our employees to choose
a remote work location. This increases vulnerability to our systems as additional endpoints need to be managed.

Prior to our transition to a subscription-based business, our customers generally purchased or leased on-premises
hardware systems used in connection with our software solutions, which our customers deployed and operated. With
respect to these types of customer on-premises solutions, the customer, directly or through its selected services
providers, manages all aspects of the data controls and security with respect to any confidential, private or otherwise
sensitive information stored or processed through these solutions, including any personally identifiable data or
information, such as non-public data regarding our customers’ employees, customers' customers, consumers, data
subjects, individuals’ identities, individual financial accounts and health information. By contrast, our software-as-a-
service or cloud offerings generally require us to deploy or operate solutions for our customers, directly or through

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the use of third-party services providers, either on-premises at customer-selected data center facilities, or at third-
party-hosted data center facilities. With respect to these cloud and software-as-a-service offerings, we and such
service providers have increased roles, responsibilities and risk exposures regarding some or all aspects of the data
controls and security with respect to any confidential, private or otherwise sensitive information stored or processed
through these solutions on our systems or those of selected third-party providers. If unauthorized access to or use of
such information or systems occurs, despite data security measures and third-party commitments to protect them,
our results of operation, reputation, and relationships with our customers could be adversely impacted.

Experienced computer programmers, Nation State Sponsored Advanced Persistent Code ("NSSAPC") attackers
(from countries such as Iran, China, Russia and certain European Eastern Bloc countries) and hackers may be able
to penetrate our network security or that of our third-party providers and misappropriate or compromise our
intellectual property or other confidential information or that of our customers, create system disruptions or cause
shutdowns. Computer programmers and hackers also may be able to develop and deploy viruses, worms, and other
malicious software programs that attack our offerings or otherwise exploit any security vulnerabilities of our
offerings. In addition, phishing-scheme-perpetrators may be able to lure employees or contractors into providing
such perpetrators with information that may enable them to avoid some of our network security controls or those of
third-party providers which could result in system disruptions or a loss of confidential and proprietary information.

We have been subject to actual and potential cyber-attacks, and there can be no assurance that our defensive
measures will be adequate to prevent them in the future. There is risk that these types of activities will recur and
persist, that one or more of them may be successful in the future, that one or more of them may have been or will be
successful but not detected, prevented, remediated or mitigated by us, and the costs to us to eliminate, detect,
prevent, remediate, mitigate or alleviate cyber or other security problems, viruses, worms, malicious software
programs, phishing schemes and security vulnerabilities could be significant, and our efforts to address these
problems may not be successful and could adversely impact our future results of operations. In addition, while we
maintain insurance coverage to cover certain liabilities related to cyber attacks and/or data breaches, such coverage
may not adequately cover all costs, expenses, liability and damages that we or our customers may incur as a result
of such incidents.

Increases in the cost of components used in our product, employee compensation, and/or increases in our other
costs of doing business, have, and could continue to, adversely affect our profit margins.

Our hardware components are assembled and configured by Flex. Flex also procures a wide variety of components
used in the assembly process on our behalf. Although many of these components are available from multiple
sources, we utilize preferred supplier relationships to better ensure more consistent quality, cost and delivery.
Components used in our products require commodities as part of their manufacturing. In addition, we have a global
employee population. As such, increased costs, including as a result of COVID-19 and/or commodity and other
inflation, and/or increased tariffs on certain items imported from foreign countries have affected our profit margins
and could continue to result in declines in our profit margins. Historically, we have mitigated certain cost increases,
in part, by increasing prices on some of our products and collaborating with suppliers, in particular Flex, reviewing
alternative sourcing options, and engaging in internal cost reduction efforts, all as appropriate. However, we may
not be able to fully offset increased costs. Further, if any price increases we adopt are not accepted by our customers
and the market, our net sales, profit margins, earnings, and market share could be adversely affected.

Inadequate internal control over financial reporting and accounting practices could lead to errors, which could
adversely impact our ability to assure timely and accurate financial reporting.

Internal control over financial reporting, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance that the control objectives will be met. These inherent limitations include system errors, the
potential for human error and unauthorized actions of employees or contractors, inadequacy of controls, temporary

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lapses in controls due to shortfalls in transition planning and oversight of resources, and other factors. Consequently,
such controls may not prevent or detect misstatements in our reported financial results as required under the
Securities and Exchange Commission ("SEC") and the New York Stock Exchange ("NYSE") rules, which could
increase our operating costs or impair our ability to operate our business. Controls may also become inadequate due
to changes in circumstances, and it is necessary to replace, upgrade or modify our internal information systems from
time to time. In addition, unforeseen risks may arise in connection with financial reporting systems due to
inefficient business processes, business process reengineering projects, or changes in accounting standards.

If management is not successful in maintaining a strong internal control environment, material weaknesses could
occur, causing investors to lose confidence in our reported financial information. This could lead to a decline in our
stock price, limit our ability to access the capital markets in the future, and require us to incur additional costs to
improve our internal control systems and procedures.

Our business is affected by the global economies in which we operate and the economic climate of the industries
we serve.

Our business and results of operations are affected by international, national and regional economic conditions. In
particular, the IT industry in which we operate is susceptible to significant changes in the strength of the economy
and the financial health of companies and governmental entities that make spending commitments for new
technologies. Accordingly, adverse global economic, inflationary, and market conditions, including in certain
economic sectors in which many of our customers operate (such as retail, manufacturing, financial services or
government), may adversely impact our business. For example, adverse changes to the economy could impact the
timing of purchases by our current and potential customers or the ability of our customers to fulfill their obligations
to us. In addition, decreased or more closely scrutinized spending in our customers’ businesses and in the industries
we serve, may adversely impact our business. Uncertainty about future economic conditions may make it difficult
for us to forecast operating results and to make decisions about future investments. In addition, our inability or
failure to quickly respond to inflation and the resulting buying behaviors of our customers could harm our business,
results of operations and financial condition. The Company’s success in periods of economic uncertainty may also
be dependent, in part, on our ability to reduce costs in response to changes in demand, inflation or other activity.

Generating substantial revenues from our international operations poses several risks.

In 2021, the percentage of our total revenues from outside of the United States was 52%. We have exposure to more
than 30 functional currencies. The risks associated with the geographic scope of our business operations include,
among other things the following:

• Cultural, management, and staffing challenges associated with operating in countries around the world,

•
•

•
•
•

•

•

including developing countries;
The imposition of additional and/or different governmental controls and regulations;
Longer payment cycles for sales in foreign countries and difficulties in enforcing contracts and collecting
accounts receivable;
Fluctuations in the value of local currencies;
Tariffs or other restrictions on foreign trade or investment;
Foreign trade policy changes, trade regulations, and/or disputes may adversely affect sales of our solutions
and services and may result in longer sales cycles;
The imposition of sanctions against a country, company, person or entity with whom we do business that
would restrict or prohibit our business; and
Foreign government activities that favor domestic companies, including those that may require companies
to procure goods and services from locally-based suppliers.

(cid:21)(cid:19)(cid:3)

Any of these events, among others, could materially and adversely affect our financial condition and operating
results.

Our offerings are subject to United States export controls and, when exported from the United States, or re-exported
to another country, must be authorized under applicable United States export regulations. Changes in our offerings
or changes in export regulations may create delays in the introduction of our offerings in international markets,
prevent our customers with international operations from deploying our offerings throughout their global systems
or, in some cases, prevent the export of our offerings to certain countries or customers altogether. Any change in
export regulations or related legislation, shift in approach to the enforcement or scope of existing regulations, or
change in the countries, persons or technologies targeted by these regulations could result in decreased use of our
offerings by, or in our decreased ability to export or sell our offerings to, existing or potential customers with
international operations.

There is active enforcement and ongoing focus by the SEC and other governmental authorities on the United States
Foreign Corrupt Practices Act, the U.K. Bribery Act of 2010 and similar anti-bribery, anti-corruption laws in other
countries. Given the breadth and scope of our international operations, we may not be able to detect improper or
unlawful conduct by our international partners and employees, despite our high ethics, governance and compliance
standards, which could put the Company at risk regarding possible violations of such laws and could result in
various civil or criminal fines, penalties or administrative sanctions, and related costs, which could negatively
impact the Company's business, brand, results of operations or financial condition.

The Company's business, results of operations, and financial condition could in the future be materially
adversely affected by the COVID-19 pandemic.

The degree to which the COVID-19 pandemic in the future affects our business, financial condition, and results of
operations will depend on future developments, which are highly uncertain and cannot be predicted, including, but
not limited to, the duration and spread of the unprecedented pandemic, its severity, the development of one or more
COVID-19 variants, the actions to contain the virus or respond to its impact, the successful distribution of vaccines
and their effectiveness, and how quickly and to what extent normal economic and operating conditions can resume.
The COVID-19 pandemic or any other adverse public health development could also inhibit our ability to execute
our strategic initiatives including, without limitation, improving the experience of our customers, investing in
identified strategic growth platforms, and shifting the mix of revenue in our business to cloud as well as
subscription revenue.

Furthermore, negative economic conditions related to the COVID-19 pandemic have impacted, and may in the
future impact our ability to close transactions and/or collect receivables from customers on a timely basis, or at all;
and may also impact our customers' willingness to maintain or increase spending on data analytics, their ability to
obtain adequate financing for the purchase of our products and services, or the amount of disposable income
available to consumers, which may adversely impact the businesses of our customers in consumer-facing industries.
In addition, we have experienced, especially at the beginning of the COVID-19 pandemic, delays and cancellations
of consulting projects due to work from home and also because of the discretionary nature of consulting projects
which were delayed or suspended as a result of more conservative spending patterns by our customers in light of the
economic impacts of the pandemic.

Further, the global supply chain risks present a level of uncertainty to our global business and operations due to the
international and domestic pandemic recovery efforts.

The spread of COVID-19 has caused us to implement new programs and modify our business practices, and we may
take further actions as may be required by government authorities or that we determine is in the best interests of our

(cid:21)(cid:20)(cid:3)

employees, customers, distributors, suppliers and contractors. There is no certainty that such measures will be
sufficient to mitigate the risks posed by the virus, and our ability to perform critical functions could be harmed.

Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business,
including as a result of any economic recession that may occur in the future. The COVID-19 pandemic could also
exacerbate or trigger other risks, any of which could have a material adverse effect on our business, results of
operations and financial condition.

Our business and operations could be disrupted by weather conditions, including conditions exacerbated by
global climate change.

We are a global business, as such, weather conditions in a particular geographic region could disrupt our business
and operations in that geographic region or in others, as well as those of our customers, supply chains, data
warehouses, distribution channels, and public cloud infrastructure providers. Examples of weather conditions that
could impact our business and operations include tornadoes, hurricanes, earthquakes, floods, tsunamis, typhoons,
and fire. In addition, the negative effects of unfavorable weather conditions could pose physical risks to our
facilities and data warehouses, result in power outages and shortages, and/or result in failures of global critical
infrastructure and/or telecommunications systems, each of which could negatively impact our business and
operations.

Any disruption at or near any of our facilities or other operations, or those of our customers, vendors, data
warehouses, distribution channels, and public cloud service providers could adversely affect our business.

Disruptions could occur as a result of supply chain challenges; decreases in work force availability; natural
disasters; inclement weather; man-made disasters or other external events, such as terrorist acts or acts of war,
pandemics and/or epidemics, including COVID-19, boycotts and sanctions, widespread criminal activities, or
protests and/or social unrest, or other events, at or in proximity to any of our facilities or those of our customers,
vendors, data warehouses, distribution channels, and public cloud service providers. Such events and disruptions
could make it difficult or impossible to deliver products and services to our customers or perform critical business
functions and could adversely affect our business.

Increased scrutiny from the public, investors, and others regarding our environmental, social, and governance
("ESG") practices could impact our reputation.

We formed a cross-functional ESG leadership team in 2021 that has oversight by each of our Chief Legal Officer
and Chief Financial Officer to further develop and implement an enterprise-wide ESG strategy. We also have
published an ESG report that includes our policies and practices on a variety of ESG matters, including the value
creation opportunities provided by our products and services, DEI, employee health and safety, community giving,
green house gas emissions and reduction ambitions, corporate governance, data privacy, and talent management.
These efforts may result in increased investor, media, employee, and other stakeholder attention to such initiatives,
and such stakeholders may not be satisfied with our ESG practices or initiatives. Additionally, organizations that
inform investors on ESG matters have developed rating systems for evaluating companies on their approach to
ESG. Unfavorable ratings may lead to negative investor sentiment, which could negatively impact our stock price.
Any failure, or perceived failure, to respond to ESG concerns could harm our business and reputation.

RISKS RELATED TO OUR INDUSTRY

The IT industry is intensely competitive and evolving, and competitive pressures could adversely affect our
pricing practices or demand for our offerings and services.

We operate in the intensely competitive IT industry, which is characterized by rapidly changing technology,
evolving industry standards and models for consuming and delivering business and IT services, frequent new

(cid:21)(cid:21)(cid:3)

product introductions, and frequent price and cost reductions. In general, as a participant in the data analytic
solutions market, we face:

• Changes in customer IT spending preferences and other shifts in market demands, which drive changes in

the Company's competition;

• Changes in pricing, marketing and product strategies, such as potential aggressive price discounting and the

use of different pricing models by our competitors;

• Rapid changes in product delivery models, such as on-premises solutions versus cloud solutions;
• Rapid changes in computing technology and capabilities that challenge our ability to maintain

differentiation at the lower range of business intelligence analytic functions;
• New and emerging analytic technologies, competitors, and business models;
• Continued emergence of open-source software that often rivals current technology offerings at a much

lower cost despite its limited functionality;

• Changing competitive requirements and deliverables in developing and emerging markets; and
• Continuing trend toward consolidation of companies, which could adversely affect our ability to compete,

including if our key partners merge or partner with our competitors.

Our competitors include established companies within our industry, including Amazon, Google, IBM, Oracle,
Microsoft, and SAP, which are well-capitalized companies with widespread distribution, brand recognition and
penetration of platforms and service offerings. The significant purchasing and market power of these larger
competitors, which have greater financial resources than we do, could allow them to surpass our market penetration
and marketing efforts to promote and sell their offerings and services. In addition, many other companies participate
in specific areas of our business, such as enterprise applications, analytic platforms and business intelligence
software. In some cases, we may partner with a company in one area of our business and compete with them in
another. In particular, in delivering our Teradata Vantage platform in a cloud environment to certain of our
customers, we partner with each of Amazon, Google, and Microsoft, which are public cloud service providers. The
status of our business relationships with these companies can influence our ability to compete for analytic data
solutions opportunities in such areas. In addition, we see additional competition from both established and emerging
cloud-only data vendors and open-source providers. Failure to compete successfully with new or existing
competitors in these and other areas could have a material adverse impact on our ability to generate additional
revenues or sustain existing revenue levels.

Privacy concerns and laws such as the European Union’s General Data Protection Regulation, evolving
regulation of cloud computing, cross-border data transfer restrictions and other domestic or foreign regulations
may limit the use and adoption of our solutions and services and adversely affect our business.

Regulation related to the provision of services over the Internet is evolving, as federal, state and foreign
governments continue to adopt new, or modify existing, laws and regulations addressing data privacy and the
collection, processing, storage, transfer and use of data. In some cases, new data privacy laws and regulations, such
as the European Union’s General Data Protection Regulation that took effect in May 2018, the California Consumer
Privacy Act, which took effect in January 2020, and an amended Act on the Protection of Personal Information in
Japan, expected to take effect in spring 2022, impose new obligations directly on the Company as both a data
controller and a data processor, as well as on many of our customers. These new laws may require us to make
changes to our solutions and services to enable Teradata and/or our customers to comply with the new legal
requirements and may also increase our potential liability exposure through higher potential penalties for non-
compliance. Further, laws such as the European Union’s proposed e-Privacy Regulation are increasingly aimed at
the use of personal information for marketing purposes, and the tracking of individuals’ online activities. These new
or proposed laws and regulations are subject to differing interpretations and may be inconsistent among

(cid:21)(cid:22)(cid:3)

jurisdictions. These and other requirements could reduce demand for our solutions and services, require us to take
on more onerous obligations in our contracts, restrict our ability to store, transfer and process data or, in some cases,
impact our ability to offer our solutions and services in certain locations or our customers' ability to deploy our
solutions globally. For example, legal challenges in Europe regarding how companies transfer personal data from
the European Economic Area to the United States could result in further limitations on the ability to transfer data
across borders, particularly if governments are unable or unwilling to reach new or maintain existing agreements
that support cross-border data transfers, such as a replacement for the EU-U.S. and Swiss-U.S. Privacy Shield
framework. Additionally, certain countries have passed or are considering passing laws requiring local data
residency. The costs of compliance with, and other burdens imposed by, privacy laws, regulations and standards
may limit the use and adoption of our solutions and services, reduce overall demand for our solutions and services,
make it more difficult to meet expectations from or commitments to customers, lead to significant fines, penalties or
liabilities for noncompliance, or slow the pace at which we close sales transactions, any of which could harm our
business.

In addition to government activity, privacy advocacy and other industry groups have established or may establish
new self-regulatory standards that may place additional burdens on our ability to provide our solutions and services
globally. Our customers expect us to meet voluntary certification and other standards established by third parties,
such as related International Organization for Standardization ("ISO") standards. If we are unable to maintain these
certifications or meet these standards, it could adversely affect our ability to provide our solutions to certain
customers and could harm our business.

Furthermore, concerns regarding data privacy may cause our customers’ customers to resist providing the data
necessary to allow our customers to use our solutions and services effectively. Even the perception that the privacy
of personal information is not satisfactorily protected or does not meet regulatory requirements could inhibit sales of
our offerings or services and could limit adoption of our cloud-based solutions.

RISKS RELATED TO HUMAN CAPITAL

We depend on key employees and face competition in hiring and retaining qualified employees.

Our employees and access to talent are critical to our success. Our future success depends on our ability to attract
and retain the services of senior management and key personnel in all areas of our Company, including engineering
and development, marketing and sales professionals, and consultants. Competition for highly skilled personnel and
acquired talent in the IT industry is intense. We have experienced, and may continue to experience, voluntary
workforce attrition, including the loss of senior management and key personnel, in part due to the highly-
competitive job market in our industry. Furthermore, to advance our cloud-first strategy, we are required to attract
and retain talent with expertise in cloud-based technologies, particularly with respect to our engineering and
development teams. No assurance can be made that key personnel will remain with us, and it may be difficult and
costly to replace such employees and/or obtain qualified talent who are not employees. Competition is heightened
for diverse talent as companies, including us, develop and enhance DEI initiatives. Our failure to execute on our key
culture initiatives, hire, retain or replace our key personnel could have a material adverse impact on our business
operations.

RISKS RELATED TO LEGAL AND REGULATORY MATTERS

We face uncertainties regarding legal proceedings, complex and changing laws and regulations, and other
related matters.

In the normal course of business, we are subject to proceedings, lawsuits, claims and other matters, including those
that relate to the environment, health and safety, employee benefits, export compliance, intellectual property, a

(cid:21)(cid:23)(cid:3)

variety of local laws and regulations, and other regulatory compliance and general matters. See "Note 10-
Commitments and Contingencies" in the Notes to Consolidated Financial Statements in this Annual Report.
Because such matters are subject to many uncertainties, their outcomes are not predictable. There can be no
assurances that the amounts required to satisfy alleged liabilities from such matters will not impact future operating
results.

In addition, we are subject to diverse and complex laws and regulations, including those relating to corporate
governance, public disclosure and reporting, which are rapidly changing and subject to many possible changes in
the future. From time to time, we may conduct internal investigations in connection with our efforts to ensure
compliance with such laws and regulations, the costs or results of which could impact our financial results. In
addition, we may be subject to unexpected costs in connection with new public disclosure or other regulatory
requirements that are issued from time to time. Laws and regulations impacting our customers, such as those
relating to privacy, data protection and digital marketing, could also impact our future business. Because we do
business in the government sector, we are generally subject to audits and investigations which could result in
various civil or criminal fines, penalties or administrative sanctions, including debarment from future government
business, which could negatively impact the Company’s results of operations or financial condition.

In addition, our facilities and operations, including former facilities and former operations for which we may have
liabilities, are subject to a wide range of environmental protection laws. There can be no assurances that the costs
required to comply with applicable environmental laws will not adversely impact future operating results.

Management time and resources are spent to understand and comply with changing laws, regulations and standards
relating to such matters as corporate governance, accounting principles, public disclosure, SEC regulations, and the
rules of the NYSE where our shares are listed. Rapid changes in accounting standards, and federal securities laws
and regulations, among others, may substantially increase costs to our organization, challenge our ability to timely
comply with all of them and could have an impact on our future operating results.

Inadequate protection of Teradata’s intellectual property or infringement of intellectual property that is owned by
others could impact our business and financial condition.

As a technology company, our intellectual property portfolio is crucial to our continuing ability to be a leading
multi-cloud data and analytics platform provider. We strive to protect and enhance our proprietary intellectual
property rights through patent, copyright, trademark and trade secret laws, as well as through technological
safeguards. These efforts include protection of the offerings and application, diagnostic and other software we
develop.

If we are not successful in protecting our intellectual property, our business could be materially adversely impacted.
We may be unable to prevent third parties from using our technology without our authorization or independently
developing technology that is similar to ours, particularly in those countries where the laws do not protect our
proprietary rights as fully as in the United States (such as Iran, China and certain European Eastern Bloc countries
who may use NSSAPC to advance their own industries). With respect to our pending patent applications, we may
not be successful in securing patents for these claims, and our competitors may already have applied for patents
that, once issued, will prevail over our patent rights or otherwise limit our ability to sell our offerings.

While we take steps to provide for confidentiality obligations of employees and third parties with whom we do
business (including customers, suppliers and strategic partners), there is a risk that such parties will breach such
obligations and jeopardize our intellectual property rights. Many customers have outsourced the administration and
management of their data and analytics environments to third parties, including some of our competitors, who then
have access to our confidential information. Although we have agreements in place to mitigate this risk, there can be

(cid:21)(cid:24)(cid:3)

no assurance that such protections will be sufficient. In addition, our ability to capture and re-use field-based
developed intellectual property is important to future business opportunities and margins.

We have seen a trend towards aggressive enforcement of intellectual property rights as the functionality of offerings
in our industry increasingly overlaps and the volume of issued software patents continues to grow. As a result, we
have been, and in the future could be, subject to infringement claims which, regardless of their validity, could:

• Be expensive, time consuming, and divert management attention away from normal business operations;
• Require us to pay monetary damages or enter into non-standard royalty and licensing agreements;
• Require us to modify our product sales and development plans; or
• Require us to satisfy indemnification obligations to our customers.

Regardless of whether these claims have any merit, they can be burdensome to defend or settle and can harm our
business, reputation, financial condition and results of operations.

A change in our effective tax rate can have a significant adverse impact on our business.

A number of factors may adversely impact our future effective tax rates, such as:

The jurisdictions in which our profits are determined to be earned and taxed;
The resolution of issues arising from tax audits with various tax authorities;

•
•
• Changes in the valuation of our deferred tax assets and liabilities;
• Adjustments to estimated taxes upon finalization of various tax returns; and
• Changes in available tax credits, especially surrounding tax credits in the United States for our research and

development activities.

Tax rules may change in a manner that adversely affects our future reported results of operations or the way we
conduct our business. Further changes in the tax laws of foreign jurisdictions could arise as a result of the base
erosion and profit shifting project that was undertaken by the Organization for Economic Co-operation and
Development ("OECD"). The OECD, which represents a coalition of member countries, recommended changes to
numerous long-standing tax principles related to transfer pricing. Our income tax obligations are based in part on
our corporate structure and inter-company arrangements, including the manner in which we develop, value, and use
our intellectual property and the valuations of our inter-company transactions. Tax authorities may disagree with
certain positions we have taken and assess additional taxes. We regularly assess the likely outcomes of these audits
to determine the appropriateness of our tax provision; however, there can be no assurance that we will accurately
predict the outcomes of these audits, and the actual outcomes of these audits could have a material impact on our
financial condition or results of operations. In addition, governmental authorities in the United States and
throughout the world may increase or impose new income taxes or indirect taxes, or revise interpretations of
existing tax rules and regulations, as a means of financing the costs of stimulus and other measures enacted or taken,
or that may be enacted or taken in the future. Such actions could have an adverse effect on our results of operations
and cash flows.

RISKS RELATED TO OUR FINANCIAL CONDITION

Our indebtedness could adversely affect our financial condition and limit our financial flexibility.

The Company's indebtedness could:

•
•
•

Expose us to interest rate risk;
Increase our vulnerability to general adverse economic and industry conditions;
Limit our ability to obtain additional financing or refinancing at attractive rates;

(cid:21)(cid:25)(cid:3)

• Require the dedication of a substantial portion of our cash flow from operations to the payment of principal
of, and interest on, our indebtedness, thereby reducing the availability of such cash flow to fund our growth
strategy, working capital, capital expenditures, share repurchases and other general corporate purposes;
Limit our flexibility in planning for, or reacting to, changes in our business and the industry; and
Place us at a competitive disadvantage relative to our competitors with less debt.

•
•

Further, our outstanding indebtedness is subject to financial and other covenants, which may be affected by changes
in economic or business conditions or other events that are beyond our control. If we fail to comply with the
covenants under any of our indebtedness, we may be in default under the loan, which may entitle the lenders to
accelerate the debt obligations. To avoid defaulting on our indebtedness, we may be required to take actions such as
reducing or delaying capital expenditures, reducing or eliminating stock repurchases, selling assets, restructuring or
refinancing all or part of our existing debt, or seeking additional equity capital, any of which may not be available
on terms that are favorable to us, if at all.

Fluctuations in foreign currency exchange rates have affected our operating results and could continue to
impact our revenue and net earnings.

Because the functional currency of most of our foreign activities is the applicable local currency, but our financial
reporting currency is the U.S. dollar, we are required to translate the assets, liabilities, expenses, and revenues of our
foreign activities into U.S. dollars at the applicable exchange rate in preparing our Consolidated Financial
Statements. We operate in 32 countries and are exposed to various foreign currencies in the Americas region (North
America and Latin America), EMEA region (Europe, Middle East, and Africa) and APJ region (Asia Pacific and
Japan). Accordingly, we face foreign currency exchange rate risk arising from transactions in the normal course of
business. Foreign currency exchange rates have affected our revenue and net earnings and could continue to impact
our revenue and net earnings. While we actively manage our foreign currency market risk in the normal course of
business by entering into various derivative instruments to hedge against such risk, these derivative instruments
involve risks and may not effectively limit our underlying exposure to foreign currency exchange rate fluctuations
or minimize our net earnings and cash volatility associated with foreign currency exchange rate changes. Further,
the failure of one or more counterparties to our foreign currency exchange rate contracts to fulfill their obligations
to us could adversely affect our operating results.

Item 1B.

UNRESOLVED STAFF COMMENTS

None.

Item 2.

PROPERTIES

As of December 31, 2021, Teradata operated 58 facilities in 32 countries consisting of approximately 1.1 million
square feet throughout the world. Approximately 44% of this square footage is owned and the rest is leased. Within
the total facility portfolio, Teradata operates 9 facilities where R&D activity occurs totaling approximately 360
thousand square feet, of which approximately 64% is owned. The remaining approximately 700 thousand square
feet of space includes office, repair, warehouse and other miscellaneous sites, and is 33% owned and 67% leased.
Teradata believes its facilities are suitable and adequate to meet its current needs. Teradata’s corporate headquarters
is in San Diego, California.

(cid:21)(cid:26)(cid:3)

Item 3.

LEGAL PROCEEDINGS

The information required to be set forth under this Item 3 is incorporated by reference to Note 10, Commitments
and Contingencies—Legal Proceedings of the Notes to Consolidated Financial Statements included in this Annual
Report on Form 10-K.

Item 4.

MINE SAFETY DISCLOSURES

N/A.

(cid:21)(cid:27)(cid:3)

PART II

Item 5.

MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Teradata common stock trades on the New York Stock Exchange under the symbol "TDC." There were
approximately 24,865 registered holders of Teradata common stock as of February 3, 2022.

Teradata has not paid cash dividends and does not anticipate the payment of cash dividends to holders of Teradata
common stock in the immediate future. The declaration of dividends in the future would be subject to the discretion
of Teradata’s Board of Directors.

The information under the caption "Stock Ownership" and the caption "Current Equity Compensation Plan
Information" in Part III, Item 12 of this Annual Report on Form 10-K is also incorporated by reference in this
section.

The following graph compares the relative performance of Teradata stock, the Standard & Poor’s ("S&P") 500
Stock Index and the S&P Information Technology Index. This graph covers the five-year period from December 31,
2016 to December 31, 2021. In each case, assumes a $100 investment on December 31, 2016, and reinvestment of
all dividends, if any.

Comparison of 5 Year Cumulative Total Return

450

400

350

300

250

200

150

100

50

0

2016

2017

2018

2019

2020

2021

Teradata Corporation

S&P 500 Index

S&P Information Technology Index

Company/Index
Teradata Corporation
S&P 500 Index
S&P Information Technology Index

2016

2017

As of December 31,
2019

2018

2020

2021

$
$
$

100
100
100

$
$
$

142
119
137

$
$
$

141
112
135

$
$
$

99
144
199

$
$
$

83 $
168 $
284 $

156
213
378

(cid:21)(cid:28)(cid:3)

Purchases of Equity Securities by the Issuer and Affiliated Purchases

Section 16 officers occasionally transfer vested shares earned under restricted share awards to the Company at the
current market price to cover their withholding taxes. For the year ended December 31, 2021, the total of these
purchases was 400,932 shares at an average price of $41.35 per share.

The following table provides information relating to the Company’s repurchase of common stock for the year ended
December 31, 2021:

Period

First quarter total
Second quarter total
Third quarter total
October 2021
November 2021
December 2021

Fourth quarter total

2021 Full year total

Total
Number
of Shares
Purchased

Average
Price
Paid
per Share

2,587,904
847,293
1,084,120
342,346
646,088
315,471

1,303,905

5,823,222

$
$
$
$
$
$

$

$

32.94
42.52
53.48
56.70
50.20
41.64

49.84

41.94

Total
Number
of Shares
Purchased
as Part of
Publicly
Announced
Dilution
Offset
Program (1)
532,631
125,965
218,421
14,918
15,180
21,264

Total
Number
of Shares
Purchased
as Part of
Publicly
Announced
General
Share
Repurchase
2,055,273
721,328
865,699
327,428
630,908
294,207

51,362

1,252,543

928,379

4,894,843

Maximum
Dollar
Value
that May
Yet Be
Purchased
Under the
Dilution
Offset
Program

3,379,199
4,074,322
1,410,950
1,570,088
1,155,436
371,196

Maximum
Dollar
Value
that May
Yet Be
Purchased
Under the
General Share
Repurchase
Program
$ 351,832,159
$ 321,236,126
$ 275,145,619
$ 256,592,369
$1,225,015,586
$1,212,770,526

371,196

$1,212,770,526

371,196

$1,212,770,526

$
$
$
$
$
$

$

$

1.

2.

The dilution offset program allows the Company to repurchase Teradata common stock to the extent of cash received from the exercise
of stock options and the ESPP to offset dilution from shares issued pursuant to these plans.

The general share repurchase program authorized by the Board allows the Company to repurchase outstanding shares of Teradata
common stock. Share repurchases made by the Company are reported on a trade date basis. On November 1, 2021, Teradata's Board of
Directors authorized an additional $1 billion to be utilized to repurchase Teradata common stock under this share repurchase program.
The general share repurchase program expires on December 31, 2025.

Item 6.

[Reserved]

Item 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS ("MD&A")

You should read the following discussion in conjunction with the consolidated financial statements and the notes to
those statements included in this Annual Report on Form 10-K ("Annual Report"). This Annual Report contains
certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of
1995. Certain statements contained in the MD&A are forward-looking statements that involve risks and
uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations,
estimates, assumptions and projections about our industry, business and future financial results. Our actual results
could differ materially from the results contemplated by these forward-looking statements due to several factors,
including those discussed in other sections of this Annual Report. See "Risk Factors" and "Forward-looking
Statements."

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OVERVIEW

Teradata is a provider of a leading connected multi-cloud data platform for enterprise analytics, focused on helping
companies leverage all their data across an enterprise, at scale. In doing so, we help companies to find answers to
their toughest business challenges. All of our efforts are in support of our purpose of transforming how businesses
work and people live through the power of data. Our platform is composed of our data platform – Teradata Vantage
– which is designed to run across on-premises, private cloud and public cloud environments. This platform is
supported by business consulting and support services that enable customers to extract insights from across a
company’s entire data and analytics ecosystem. Teradata’s strategy is discussed under Part I, Item I of this Annual
Report on Form 10-K.

We are continuing to execute on our key priorities, including significant product expansion of our Teradata Vantage
multi-cloud data platform offering, expanding our footprint with existing customers and adding new customers,
increasing our focus on diversity and inclusiveness, and driving operational excellence and agility across the
company.

To allow for greater transparency regarding the progress we are making toward achieving our strategic objectives,
we utilize the following financial and performance metrics:

• Annual Recurring Revenue ("ARR") - annual value at a point in time of all recurring contracts, including

subscription, cloud, software upgrade rights, and maintenance. ARR does not include managed services and
third-party software.

•

Public Cloud ARR (included within total ARR) - annual value at a point in time of all contracts related to
public cloud implementations of Teradata Vantage and does not include ARR related to private or managed
cloud implementations.

• Cloud Net Expansion Rate - Teradata calculates its last-twelve months dollar-based cloud net expansion rate
as of a fiscal quarter end as follows. We identify the ARR for active cloud customers in the fiscal quarter
ending one year prior to the given fiscal quarter (the "base period"). We then identify the cloud ARR in the
given fiscal quarter (the "current period") from the same set of active cloud customers as the base period,
including increases in usage, as well as reductions and cancellations, and additional conversions of on-
premises revenues to the cloud for customers active in the base period, all in constant currency. The
quarterly dollar-based, cloud net expansion rate is calculated by taking the ARR from the current period and
dividing by the ARR from the base period. The last twelve-month dollar-based cloud net expansion rate is
calculated by taking the average of the quarterly dollar-based cloud net expansion rate from the last fiscal
quarter and the prior three fiscal quarters.

COVID-19 Update

During the twelve months ended December 31, 2021, the effects of the coronavirus ("COVID-19") pandemic and
the related actions by governments around the world to attempt to contain the spread of the virus impacted our
business globally as described below.

In response to the pandemic, we took actions to manage expenses and costs appropriately in light of the uncertainty
COVID-19 has created, which has had a positive impact on our operating performance. We continue to monitor
COVID-19 impacts to our business and have undertaken additional expense management and cost measures to
further drive our operating performance and provide agility in the event of an unforeseen reduction in demand
should it occur. During 2021, we also experienced increased volatility in foreign currency exchange rates, in part
related to the uncertainty from COVID-19, as well as actions taken by governments and central banks in response to

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COVID-19. Certain foreign currency rates have depreciated significantly against the U.S. dollar during this period.
We expect continued volatility in foreign currency exchange rates in 2022.

Our supply chain has been relatively stable with respect to manufacturing and distribution capabilities during
COVID-19; however, our supply chain is susceptible to volatility due to ongoing uncertainty as a result of ongoing
international and domestic pandemic response and recovery efforts. Operationally, we have been able to run our
business without significant interruptions, with the vast majority of employees working remotely. While consulting
revenue is still impacted by work from home and travel restrictions, we have modified our business approach where
applicable to work with customers remotely. Our customers’ reduction in discretionary spending in light of COVID-
19 uncertainties has also impacted our consulting business, with consulting projects being delayed or suspended by
our customers. We implemented several employee engagement and communication programs designed to support
employees’ health and well-being while also enhancing their productivity during the pandemic.

Our priorities in formulating and implementing our response to the COVID-19 pandemic and related business
disruption include the following:

People - protecting the health and well-being of our employees,

•
• Customers - proactively connecting with our customers to support their needs and meet our service level

•

•

commitments, while continuing to help them gain real business value from their data assets,
Supply Chain - proactively working to monitor existing inventory, supplier availability and securing
inventory for future quarters,
Financial - responsibly managing expenses and costs to provide financial agility during the extended period
of global economic uncertainty,

• Global Community - having our technology contribute to customers, partners and communities, particularly
in healthcare and government, where collectively we can positively impact efforts in combating COVID-19,
and
Future of Work - learning from productivity improvements and understanding our employees' preferences
for their work location to implement a work model that reflects the future of work for the Company.

•

As of the date of this Annual Report on Form 10-K, we are continuing to execute our pandemic response plan, and
the Teradata Pandemic Response Team is refining and executing return-to-office plans. Under our return-to-office
plans, none of our employees are required to return to an office environment and can choose to continue to work
remotely or under a hybrid model. For employees choosing to return to the office environment, certain safety
protocols will be required to be followed. Customer-facing teams are also proactively working to identify ways to
assist customers, meet service level commitments, and engage with customers via virtual events.

Despite these efforts, there remains a fair degree of uncertainty regarding the potential impact of the pandemic on
our business, from both a financial and operational perspective, and the scope and costs associated with additional
measures that may be necessary in response to the pandemic going forward. We will continue our diligent efforts to
monitor and respond as appropriate to the impacts of the pandemic on our business, including the status of our
workforce, supply chain, customers, suppliers, and vendors, based on the priorities described above. Our actions
will continue to be informed by the requirements and recommendations of the federal, state or local authorities. We
intend to remain agile and have contingency plans in place to appropriately respond to conditions as they unfold.
For more information, see "Risk Factors" under Part I, Item 1A of this Annual Report on Form 10-K.

2021 FINANCIAL OVERVIEW

As more fully discussed in later sections of this MD&A, the following are the financial highlights for 2021:

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• Revenue of $1,917 million increased by 4% in 2021 as compared to 2020, with an underlying 12% increase in
recurring revenue primarily driven by our transition from perpetual to subscription-based transactions. The
increase in recurring revenue was partially offset by a 28% decrease in perpetual software licenses, hardware
and other revenue and a 10% decrease in consulting services revenue. The decline in consulting service
revenue is primarily due to our focus on higher-margin engagements.

• Gross profit was 61.9% in 2021, an increase from 55.5% in 2020, primarily due to a higher recurring revenue

mix as compared to the prior year.

• Operating expenses in 2021 decreased by 5% as compared to 2020, primarily driven by a lower employee

cost base resulting from the workforce reduction measures taken in 2020.
• Operating income was $231 million in 2021, up from $16 million in 2020.
• Net income was $147 million in 2021 versus net income of $129 million in 2020, primarily due to improved
revenue mix and lower operating expenses. Diluted net earnings per share was $1.30 in 2021 compared to
diluted earnings per share of $1.16 in 2020.

RESULTS FROM OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

In July 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2019-07,
"Codification Updates to SEC Sections-Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No.
33-10532, Disclosure Update and Simplification", which makes a number of changes meant to simplify certain
disclosures in financial condition and results of operations, particularly by eliminating year-to-year comparisons
between prior periods previously disclosed. In accordance with the relevant aspects of the rule covering the current
year annual report, we now include disclosures on results of operations for fiscal year 2021 versus 2020 only. For
discussion of fiscal year 2020 versus 2019 see "Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations" in our Annual Report filed with the SEC for the fiscal year ended December
31, 2020.

Revenue

In millions

Recurring
Perpetual software license, hardware and other
Consulting services

Total revenue

2021

1,464
77
376
1,917

$

$

% of
Revenue

76.4 % $
4.0 %
19.6 %
100 % $

2020

1,309
107
420
1,836

% of
Revenue

71.3 %
5.8 %
22.9 %
100 %

2021 compared to 2020 - Total revenue increased 4% in 2021 and included a 1% positive impact from foreign
currency fluctuations. Recurring revenue grew 12% in 2021 and included a 1% positive impact from foreign
currency fluctuations. Recurring revenue was positively impacted primarily due to a higher base of revenue driven
by continued growth in public cloud and subscription ARR during 2020 and 2021. Additionally, on-premises
customer transactions involving substantive long-term commitments resulted in revenue being recognized on a
recurring annual basis rather than a recurring quarterly basis resulting in approximately $30 million of net positive
impact in 2021 compared to 2020. For full year 2022, recurring revenue is expected to grow at a low-to-mid-single-
digit percentage year-over-year. Taking into consideration the growth in recurring revenue offset by reduced
perpetual software licenses, hardware and other revenue and reduced consulting services revenue, total revenue is
expected to be flat-to-low-single-digit percentage growth year-over-year.

Revenues from perpetual software licenses, hardware and other were down 28% in 2021, as customers continue to
transition to our subscription-based offerings, consistent with our overall strategy. Aligned with our strategy, we
expect perpetual software licenses, hardware and other revenue to decline in 2022.

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Consulting services revenue decreased 10%, including a 2% positive impact from foreign currency fluctuations,
primarily due to the realignment and focus of our consulting resources on higher-margin engagements that are
intended to drive increased software consumption within our targeted customer base. Consistent with our continued
focus on higher-margin engagements that further our strategy, we are forecasting a low-double-digit decline year-
over-year in 2022 consulting services revenue.

As a portion of the Company’s operations and revenue occur outside the United States, and in currencies other than
the U.S. dollar, the Company is exposed to fluctuations in foreign currency exchange rates. Based on currency rates
as of January 31, 2022, Teradata is estimating a 2.0%-to-2.5% negative impact from currency translation on our
2022 full-year total revenues.

Included below are financial and performance growth metrics that we used to monitor the progress of our
transformation, success of our business strategy, and overall financial condition of Teradata for 2021:

• ARR was $1.492 billion at the end of 2021, a 5% increase from $1.425 billion at the end of 2020; and
•

Public Cloud ARR was $202 million at the end of 2021, a 91% increase from $106 million at the end of
2020.

Our ARR is composed of three main categories: (1) Public Cloud ARR, (2) ARR related to on-premises
subscription-based contracts and private cloud ("Subscription ARR"), and (3) ARR related to our legacy perpetual
maintenance and software upgrade rights. At December 31, 2021, our ARR consisted of:

•
•
•

$202 million in Public Cloud ARR;
$898 million in Subscription ARR; and
$392 million in maintenance and software upgrade rights ARR.

Public Cloud ARR increased 91% versus the prior year primarily due to on-premises customers migrating to
Teradata Vantage in the cloud along with strong net expansion rates in excess of 130%. Subscription ARR increased
8% in 2021 from the prior year due to expansions of existing customers and new customer logos. Our maintenance
and software upgrade rights ARR declined 20% compared to 2020. This was expected as the Company continued its
transition to a subscription model and customers increasingly purchased Teradata on a subscription and/or public
cloud basis. Our overall ARR growth was driven by increased participation by cloud specialists on our account
teams, increasing partner involvement on existing customer migrations and new logo accounts. For the full year
2022, Public Cloud ARR is expected to increase by approximately 80% year-over-year. Total ARR is expected to
grow at a mid-to-high-single-digit percentage year-over-year.

Gross Profit

The Company often uses specific terms and definitions to describe variances in gross profit. The terms and
definitions most often used are as follows:

• Revenue Mix - The proportion of recurring, consulting, and perpetual software licenses and hardware that
generates the total revenue of the Company. Changes in revenue mix can have an impact on gross profit
even if total revenue remains unchanged.

• Recurring Revenue Mix - The proportion of various recurring revenue offerings that comprise the total of
recurring revenue. For example, a higher mix of on-premises subscriptions including hardware rentals could
have a negative impact on total recurring gross profit.

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• Deal Mix - Refers to the type of transactions closed within the period that generate the total perpetual

software license and hardware revenue. For example, a higher mix of Teradata versus third-party products
can impact profitability.

Gross profit for the following years ended December 31 was as follows:

In millions

Gross profit

Recurring
Perpetual software licenses, hardware and other
Consulting services

Total gross profit

2021

% of
Revenue

2020

% of
Revenue

$

$

1,099
34
53
1,186

75.1 % $
44.2 %
14.1 %
61.9 % $

938
43
38
1,019

71.7 %
40.2 %
9.0 %
55.5 %

2021 compared to 2020 - The increase in recurring revenue gross profit, as a percentage of revenue was primarily
driven by a higher amount of recurring revenue at an improved gross margin rate primarily resulting from improved
operating efficiencies of our subscription and cloud offerings and partially offset by the higher mix as a result of our
customers transitioning to cloud. Upfront revenue recognition of certain renewed and expanded on-premises
customer arrangements, as discussed above, also had a positive impact on recurring revenue gross margin.

The increase in perpetual software licenses, hardware and other gross profit as a percentage of revenue was
primarily driven by deal mix and opportunities with lower hardware mix as compared to prior year.

Consulting services gross profit as a percentage of revenue increased as compared to the prior year primarily due to
improved resource mix utilization as well as increased profit dollar realization from our continued strategic focus to
improve consulting margins by executing on higher-value projects. The Company expects to continue to focus our
consulting organization on Teradata Vantage-oriented offerings and reduce our footprint in non-core consulting
engagements.

For 2022, we expect overall gross profit as a percentage of revenue to be slightly lower than 2021. Recurring gross
margin is expected to be lower due to a higher mix of cloud revenue at a similar gross margin rate as 2021. We are
also investing in activities that continue to drive increased adoption and consumption of Teradata Vantage, including
greater efficiencies with cloud service providers, offset by enhancements to our consumption pricing model. In
addition, we are forecasting less of a positive impact from upfront recurring revenue that benefited our results in
2021. Consulting services margin is expected to be at a similar gross margin rate as 2021, and we anticipate lower
gross margin rates in perpetual software licenses, hardware and other in 2022 compared to 2021.

Operating Expenses

In millions

Operating expenses

Selling, general and administrative expenses

Research and development expenses

Total operating expenses

2021

% of
Revenue

2020

% of
Revenue

$

$

646

309

955

33.7 % $

16.1 %

669

334

49.8 % $

1,003

36.4 %

18.2 %

54.6 %

2021 compared to 2020 - The decrease in selling, general and administrative ("SG&A") expense was primarily
driven by a lower employee cost base resulting from workforce reduction measures in 2020, reduced travel and
marketing spend as compared to the prior year pre-pandemic period (January - March 2020), and continued cost
discipline as compared to prior year. This decrease in SG&A expense was partially offset by higher variable
incentive compensation that was tied to Teradata's financial performance, higher cloud sales incentive compensation

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expenses, and additional investments in our go-to-market operations to further our transformation and cloud-first
strategic focus.

R&D expenses decreased in 2021 as compared to the prior year. R&D expenses were impacted by a lower employee
cost base resulting from workforce reduction measures in 2020 and continued cost discipline as compared to the
prior year partially offset by an increase in spending to focus our R&D efforts on accelerating our transformation
and cloud-first strategy and related cloud initiatives, as well as higher variable incentive compensation expense due
to Teradata's positive financial performance.

We expect total operating expenses to increase in 2022 as we are accelerating our investments in cloud R&D, go-to-
market, and customer success to drive growth and lifetime value with new and existing customers.

Other Expense, net

In millions

Interest income
Interest expense
Other

Total Other Expense, net

2021

2020

$

$

6

$

(26)
(19)
(39) $

4

(27)
(17)
(40)

Other expense, net in 2021 and 2020, is comprised primarily of interest expense on long-term debt and finance
leases, as well as benefit costs for our pension and postemployment plans, partially offset by interest income earned
on our cash and cash equivalents.

Provision for Income Taxes

The effective income tax rate for the following years ended December 31 was as follows:

Effective Tax Rate

2021

2020

23.4 %

637.5 %

The 2021 effective tax rate included a net $8 million of discrete tax benefit, of which $3 million of tax benefit was
related to true-up adjustments to reconcile the Company’s 2020 U.S. tax return versus the preliminary estimate as
booked in its tax provision for the year ended December 31, 2020 and $2 million of tax benefit related to a
reduction in the Transition Tax based on the Company’s amended 2017 tax return. In addition, the Company
recognized $4 million of incremental tax benefit related to stock-based compensation. These tax benefits were
partially offset by $1 million of discrete tax expense related to adjustments to the Company’s accrual for
unrecognized tax benefits in accordance with FIN 48.

The 2020 effective tax rate included a net $157 million of discrete tax benefit. The net discrete tax benefit of $157
million was recorded and relates to the transfer of foreign intellectual property as more fully described in Note 6 of
Notes to Consolidated Financial Statements. In addition, the Company recognized a net $13 million of tax benefit
resulting from the CARES Act of 2020, which allows U.S. corporations a one-time opportunity to claim income tax
refunds by allowing a 5-year net operating loss ("NOL") carry-back for taxable losses incurred in the tax year 2020.
Teradata intends to carry back its 2020 NOL to claim a refund for taxes it paid in 2015, which created a one-time
income tax benefit for the difference between the 35% 2015 carry back tax rate and the current 21% federal
statutory rate. These tax benefits were partially offset by $9 million tax expense related to stock-based
compensation and $4 million of incremental global intangible low-taxed income ("GILTI") tax. These discrete net
tax benefits resulted in full-year total income tax benefit in 2020 of $153 million, on a pre-tax net loss of $24
million, causing a tax rate of 637.5%.

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The Company is expecting its full-year effective tax rate for 2022 to be approximately 32%, which takes into
consideration, among other things, the forecasted earnings mix by jurisdiction and the estimated discrete items to be
recognized in 2022. The forecasted tax rate is based on the overseas profits being taxed at an overall effective tax
rate of approximately 27%, as compared to the federal statutory tax rate of 21% in the U.S.

Revenue and Gross Profit by Operating Segment

Teradata manages its business under three geographic regions, which are also the Company’s operating segments:
(1) Americas region (North America and Latin America); (2) EMEA region (Europe, Middle East, and Africa) and
(3) APJ region (Asia Pacific and Japan). For purposes of discussing results by segment, management excludes the
impact of certain items, consistent with the manner by which management evaluates the performance of each
segment. This format is useful to investors because it allows analysis and comparability of operating trends. It also
includes the same information that is used by Teradata management to make decisions regarding the segments and
to assess financial performance. The chief operating decision maker, who is our President and Chief Executive
Officer, evaluates the performance of the segments based on revenue and multiple profit measures, including
segment gross profit. For management reporting purposes, assets are not allocated to the segments. Our segment
results are reconciled to total company results reported under GAAP in Note 14 of Notes to Consolidated Financial
Statements.

The following table presents revenue and operating performance by segment for the years ended December 31:

In millions

Segment revenue
Americas
EMEA
APJ

Total segment revenue

Segment gross profit

Americas
EMEA
APJ

Total segment gross profit

2021 compared to 2020

Americas

2021

% of
Revenue

2020

% of
Revenue

$

$

$

1,044
543
330
1,917

690
337
188

54.5 % $
28.3 %
17.2 %
100 % $

1,025
485
326
1,836

66.1 % $
62.1 %
57.0 %

631
273
168

$

1,215

63.4 % $

1,072

55.8 %
26.4 %
17.8 %
100 %

61.6 %
56.3 %
51.5 %

58.4 %

Americas revenue increased 2% with no underlying impact from foreign currency fluctuations. An increase in
Americas recurring revenue of 8% was partially offset by a decrease of 49% in perpetual software licenses and
hardware revenue and a decrease in consulting revenue of 15%. Segment gross profit, as a percentage of revenues,
was higher primarily due to an overall higher mix of recurring revenue.

EMEA

EMEA revenue increased 12%, which included a 3% favorable impact from foreign currency fluctuations. An
increase of 19% in EMEA recurring revenue and 1% in consulting revenue was partially offset by a decrease of 5%
in perpetual software licenses and hardware revenue. EMEA segment gross profit, as a percentage of revenues, was
higher primarily due to a higher mix of recurring revenue.

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APJ

APJ revenue increased 1%, which included a 3% favorable impact from foreign currency fluctuations. An increase
in APJ recurring revenue of 16% was partially offset by a decrease of 24% in perpetual software licenses and
hardware revenue and a decrease in consulting revenue of 17%. APJ segment gross profit, as a percentage of
revenues, was higher primarily due to a higher mix of recurring revenue.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Teradata ended 2021 with $592 million in cash and cash equivalents, a $63 million increase from December 31,
2020, after using approximately $244 million for repurchases of Company common stock during the year. Cash
provided by operating activities increased by $196 million to $463 million in 2021 compared to 2020. Teradata used
approximately $40 million of cash in 2021 for reorganizing and restructuring its operations and go-to-market
functions to align to its cloud-first strategy, as compared to $58 million used in 2020 for this purpose. The increase
in cash provided by operating activities was primarily due to improved profitability and differences in timing of
various components of working capital.

Teradata’s management uses a non-GAAP measure called "free cash flow," which is not a measure defined under
GAAP. We define free cash flow as net cash provided by operating activities less capital expenditures for property
and equipment and additions to capitalized software. Free cash flow is one measure of assessing the financial
performance of the Company, and this may differ from the definition used by other companies. The components that
are used to calculate free cash flow are GAAP measures taken directly from the Consolidated Statements of Cash
Flows. We believe that free cash flow information is useful for investors because it relates the operating cash flow
of the Company to the capital that is spent to continue and improve business operations. In particular, free cash flow
indicates the amount of cash available after capital expenditures for, among other things, investments in the
Company’s existing businesses, strategic acquisitions, and repurchase of Teradata common stock. Free cash flow
does not represent the residual cash flow available for discretionary expenditures since there may be other non-
discretionary expenditures that are not deducted from the measure. This non-GAAP measure should not be
considered a substitute for, or superior to, cash flows from operating activities under GAAP.

The table below shows net cash provided by operating activities and capital expenditures for the following periods:

In millions
Net cash provided by operating activities

Less:

Expenditures for property and equipment
Additions to capitalized software

Free cash flow

2021

2020

$

463

$

267

(28)
(3)

$

432

$

(44)
(7)

216

Financing activities and certain other investing activities are not included in our calculation of free cash flow.
There were no other investing activities in 2021 and 2020.

Teradata’s financing activities for the year ended December 31, 2021 primarily consisted of cash outflows of $244
million for share repurchases, repayment of our term loan of $44 million and $92 million of payments on finance
leases, partially offset by $24 million net inflows from other financing activities.

Teradata’s financing activities for the year ended December 31, 2020 primarily consisted of cash outflows of $100
million for share repurchases, repayment of our term loan of $25 million and $70 million of payments on finance
leases, partially offset by $9 million net inflows from other financing activities.

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The Company purchased 5.8 million shares of its common stock at an average price per share of $41.94 in 2021 and
4.8 million shares of its common stock at an average price per share of $20.81 in 2020.

Share repurchases were made under two share repurchase programs initially authorized by our Board of Directors in
2008. The first of these programs (the "dilution offset program") authorizes the Company to repurchase Teradata
common stock to the extent of cash received from the exercise of stock options and the Teradata Employee Stock
Purchase Plan ("ESPP") to offset dilution from shares issued pursuant to these plans. As of December 31, 2021,
under the Company’s second share repurchase program (the "general share repurchase program"), the Company
had approximately $1,213 million of authorization remaining to repurchase outstanding shares of Teradata common
stock. Share repurchases made by the Company are reported on a trade date basis. As part of its general share
repurchase program, on February 9, 2022, the Company entered into a $250 million accelerated share repurchase
agreement with JP Morgan as described in more detail in Note 17 of Notes to Consolidated Financial Statements.

Proceeds from the ESPP and the exercise of stock options, net of tax paid for shares withheld upon equity award
settlement, were $24 million in 2021 and $9 million in 2020. These proceeds are included in other financing
activities, net in the Consolidated Statements of Cash Flows.

Our total cash and cash equivalents held outside the United States in various foreign subsidiaries was $401 million
as of December 31, 2021 and $338 million as of December 31, 2020. The remaining balance held in the United
States was $191 million as of December 31, 2021 and $191 million as of December 31, 2020. The Company
considers a majority of its foreign earnings as not indefinitely reinvested outside the United States. Effective
January 1, 2018, the United States moved to a territorial system of international taxation and, as such, will generally
not subject future foreign earnings to United States taxation upon repatriation in future years.

Management believes current cash, cash generated from operations and the $400 million available under the Credit
Facility will be sufficient to satisfy future working capital, research and development activities, capital
expenditures, pension contributions, and other financing requirements for at least the next twelve months. The
Company principally holds its cash and cash equivalents in bank deposits and highly-rated money market funds.

The Company’s ability to generate positive cash flows from operations is dependent on general economic
conditions, competitive pressures, and other business and risk factors described in this Annual Report. If the
Company is unable to generate sufficient cash flows from operations, or otherwise to comply with the terms of the
credit facility and term loan agreement, the Company may be required to seek additional financing alternatives.

Long-Term Debt. Our long-term debt and minimum debt obligations as of December 31, 2021, including our
Credit Facility are discussed in Note 12 of Notes to Consolidated Financial Statements.

Leases. In the normal course of business, the Company enters into operating and finance leases that impact, or
could impact, our liquidity. Leases and minimum lease obligations as of December 31, 2021 are described in detail
in Note 13 of Notes to Consolidated Financial Statements.

Contractual and Other Commercial Commitments. In the normal course of business, we enter into various
contractual obligations that impact, or could impact, our liquidity. The following table and discussion outline our
material obligations at December 31, 2021, with projected cash payments in the periods shown:

In millions

Transition tax
Purchase obligations

Total transition tax and purchase obligations

Total
Amounts
69
$
611
680

$

$

$

2022

2023-
2024

2025-
2026

— $
170
170

$

40
279
319

$

$

29
162
191

2027 and
Thereafter
—
$
—
—

$

(cid:22)(cid:28)(cid:3)

Transition tax is the remaining payable balance as of December 31, 2021 of the one-time tax on accumulated
foreign earnings resulting from the 2017 Tax Act. The payments associated with this deemed repatriation will be
paid over seven years ending in 2025. Purchase obligations are committed purchase orders and other contractual
commitments for goods and services and include non-cancelable contractual payments for fixed or minimum
amounts to be purchased in relation to service agreements with various vendors for ongoing telecommunications,
information technology, hosting and other services.

Additionally, the Company had $43 million of unrecognized tax benefits recorded on its balance sheet as of
December 31, 2021, of which $22 million is recorded in non-current liabilities, $2 million is reflected as a current
liability in taxes payable, and $19 million is reflected as an offset to deferred tax assets related to certain tax
attribute carryforwards. These items are not included in the table of obligations shown above. The settlement period
for the non-current income tax liabilities cannot be reasonably estimated as the timing and the amount of the
payments, if any, will depend on possible future tax examinations with the various tax authorities. However, the
Company expects that $2 million in payments will be due within the next 12 months.

We also have postemployment and international pension obligations that may affect future cash flow. These items
are not included in the table of obligations shown above. The Company is also potentially subject to concentration
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. Postemployment and pension obligations are described in detail in "Note 8—Employee Benefit Plans" in
the Notes to Consolidated Financial Statements.

Off-Balance Sheet Arrangements. We do not participate in transactions that generate relationships with
unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special
purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements
or for other contractually narrow or limited purposes.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our financial statements are prepared in accordance with GAAP. In connection with the preparation of these
financial statements, we are required to make assumptions, estimates and judgments that affect the reported amounts
of assets, liabilities, revenues, expenses and the related disclosure of contingent liabilities. These assumptions,
estimates and judgments are based on historical experience and assumptions that are believed to be reasonable at the
time. However, because future events and their effects cannot be determined with certainty, the determination of
estimates requires the exercise of judgment. Our critical accounting policies are those that require assumptions to be
made about matters that are highly uncertain. Different estimates could have a material impact on our financial
results. Judgments and uncertainties affecting the application of these policies and estimates may result in materially
different amounts being reported under different conditions or circumstances. Our management periodically reviews
these estimates and assumptions to ensure that our financial statements are presented fairly and are materially
correct.

In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not
require significant management judgment in its application. There are also areas in which management’s judgment

(cid:23)(cid:19)(cid:3)

in selecting among available alternatives would not produce a materially different result. The significant accounting
policies and estimates that we believe are the most critical to aid in fully understanding and evaluating our reported
financial results are discussed in the paragraphs below. Teradata’s senior management has reviewed these critical
accounting policies and related disclosures with the Audit Committee of Teradata’s Board of Directors. For
additional information regarding our accounting policies and other disclosures required by GAAP, see "Note 1—
Description of Business, Basis of Presentation and Significant Accounting Policies" in the Notes to Consolidated
Financial Statements.

Revenue Recognition

On January 1, 2018, we adopted ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"). This
standard replaced existing revenue recognition rules with a comprehensive revenue measurement and recognition
standard and expanded disclosure requirements. Refer to Notes 1 and 3, of our audited consolidated financial
statements included in this Annual Report on Form 10-K for discussion of our revenue recognition policies.

Revenue recognition for complex contractual arrangements requires judgment, including a review of specific
contracts, past experience, creditworthiness of customers, international laws and other factors. Specifically, complex
arrangements with nonstandard terms and conditions may require significant contract interpretation to determine the
appropriate accounting. We must also apply judgment in determining all performance obligations in the contract and
in determining the standalone selling price of each performance obligation, considering the price charged for each
product when sold on a standalone basis and applicable renewal rates for services and subscriptions. Changes in
judgments about these factors could impact the timing and amount of revenue recognized between periods.

The Company reviews the standalone selling price 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, 2021 there was no material impact to revenue resulting
from changes in the standalone selling price, nor does the Company expect a material impact from such changes in
the near term.

Income Taxes

In accounting for income taxes, we recognize deferred tax assets and liabilities based on the differences between the
financial statement carrying amounts and the tax basis of assets and liabilities. The deferred tax assets and liabilities
are determined based on the enacted tax rates expected to apply in the periods in which the deferred tax assets or
liabilities are expected to be settled or realized. The Company made an accounting policy election in 2018 related to
the 2017 Tax Act to provide for the tax expense related to GILTI in the year the tax is incurred.

Effective January 1, 2018, the United States moved to a territorial system of international taxation, and as such will
generally not subject future foreign earnings to United States taxation upon repatriation in future years. The
Company considers a majority of its foreign earnings not indefinitely reinvested outside of the United States.
However, these distributions may be subject to non-U.S. withholding taxes if profits are distributed from certain
jurisdictions; accordingly, the Company has recorded $4 million of deferred foreign tax expense with respect to
certain earnings that are not considered permanently reinvested. Deferred taxes have not been provided on earnings
considered indefinitely reinvested.

We account for uncertainty in income taxes by prescribing thresholds and attributes for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a tax return. We 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. We record any interest and/or

(cid:23)(cid:20)(cid:3)

penalties related to uncertain tax positions in the income tax expense line on our Consolidated Statements of
Income. As of December 31, 2021, the Company has a total of $43 million of unrecognized tax benefits, of which
$22 million is included in the other liabilities section of the Company’s consolidated balance sheet as a non-current
liability and $2 million is reflected as a current liability in taxes payable. The remaining balance of $19 million of
uncertain tax positions relates to certain tax attributes generated by the Company which are netted against the
underlying deferred tax assets recorded on the balance sheet.

We regularly review our deferred tax assets for recoverability and establish a valuation allowance if it is more likely
than not that some portion or all of a deferred tax asset will not be realized. We have recorded $58 million in 2021
and $51 million in 2020 for valuation allowances, a majority of which offset our California R&D tax credit
carryfoward, as the Company expects to continue to generate excess California R&D tax credits into the foreseeable
future.

On January 1, 2020, we transferred certain of our intellectual property among our wholly-owned subsidiaries, which
resulted in the recognition of deferred tax assets of $157 million. The recognition of deferred tax assets from intra-
entity transfers of intellectual property required us to make significant estimates and assumptions to determine the
fair value of such intellectual property. Significant assumptions in valuing the intellectual property include, but are
not limited to, internal revenue and expense forecasts, and the discount rate. The sustainability of our future tax
benefits is dependent upon the acceptance of these valuation estimates and assumptions by the taxing authorities.

Stock-based Compensation

We issue service-based and performance-based restricted share units. We measure compensation cost for service-
based restricted share unit awards at fair value and recognize compensation expense over the service period. Our
performance-based restricted share units vest only if specific performance conditions are satisfied. The number of
shares that will be earned pursuant to our performance-based restricted share unit awards can vary based on actual
performance. No shares will vest if the threshold objectives are not met. In the event the objectives are exceeded,
additional shares will vest up to a maximum payout. The cost of our performance-based restricted share awards is
expensed over the performance period based upon management’s estimate and analysis of the probability of
meeting the performance criteria. Because the actual number of shares to be awarded is not known until the end of
the performance period, the actual compensation expense related to our performance-based restricted share unit
awards could differ from our current expectations. We account for forfeitures for both service-based and
performance-based restricted share units as they occur instead of estimating forfeitures at the time of grant and
revising those estimates in subsequent periods if actual forfeitures differ from our estimates.

Goodwill and Acquired Intangible Assets

The Company reviews goodwill for impairment annually and whenever events or changes in circumstances indicate
the carrying value of goodwill may not be recoverable. For 2019, the Company performed a quantitative
impairment test. In this test, the Company compares the fair value of each reporting unit to its carrying value. The
Company typically determines the fair value of its reporting units using a weighting of fair values derived from the
income and market approaches. Under the income approach, the Company calculates the fair value of a reporting
unit based on the present value of estimated future cash flows. The market approach estimates fair value based on
market multiples of revenue and earnings derived from comparable companies with similar operating and
investment characteristics as the reporting unit. If the fair value of the reporting unit exceeds the carrying value of
the net assets assigned to that unit, goodwill is not impaired. If the carrying value of the net assets assigned to the
reporting unit exceeds the fair value of the reporting unit, then the Company records an impairment loss equal to the
difference. In the fourth quarter of 2021, the Company performed its annual impairment test of goodwill and
determined that no impairment to the carrying value of goodwill was necessary.

(cid:23)(cid:21)(cid:3)

Determining the fair value of goodwill and acquired intangibles is judgmental in nature and involves the use of
significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating
margins used to calculate projected future cash flows, discount rates and future economic and market conditions.
The Company’s estimates are based upon assumptions believed to be reasonable, but which are inherently uncertain
and unpredictable. These valuations require the use of management’s assumptions, which may not reflect
unanticipated events and circumstances that may occur.

Leases

On January 1, 2019, the Company adopted ASU No. 2016-02, "Leases (Topic 842)", which requires leases with
durations greater than twelve months to be recognized on the balance sheet. We determine if a contract contains a
lease at inception. Our material operating leases primarily consist of automobiles in certain countries and real estate,
including office, storage and parking space. Our operating leases generally have remaining terms of 2-5 years. Our
finance leases primarily consist of equipment financed for the purpose of delivering services to our customers and
generally have terms of 3 years.

Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities
represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an
underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease
payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present
value of lease payments not yet paid, when available, we use the rate implicit in the lease. However, real estate
leases do not typically provide a readily determinable implicit rate. Therefore, we estimate the incremental
borrowing rate to discount the lease payments based on information available at lease commencement. The
incremental borrowing rate used in the calculation of the lease liability is based on the secured rate associated with
financed lease obligations for each location of leased property. Many of our leases include variable rental escalation
clauses which are recognized when incurred. Some of our leases also include renewal options and/or termination
options that are factored into the determination of lease payments and lease terms when it is reasonably certain that
the Company will exercise these options. Lease agreements do not contain any material residual value guarantees or
material restrictive covenants. Leases with an initial term of 12 months or less are not recorded on the balance sheet.
Changes in judgments and estimates, such as the likelihood of renewal options, impairments, or the incremental
borrowing rate could impact the amounts of assets or liabilities recorded or could impact the amount of cost or
expense recognized between periods.

Pension and Postemployment Benefits

We measure pension and postemployment benefit costs and credits using actuarial valuations. Actuarial assumptions
attempt to anticipate future events and are used in calculating the expense and liability relating to these plans. These
factors include assumptions we make about interest rates, expected investment return on plan assets, total and
involuntary turnover rates, and rates of future compensation increases. In addition, our actuarial consultants also use
subjective factors such as withdrawal rates and mortality rates to develop our valuations. We review and update
these assumptions on an annual basis at the beginning of each fiscal year. We are required to consider current
market conditions, including changes in interest rates, in making these assumptions. The actuarial assumptions that
we use may differ materially from actual results due to changing market and economic conditions, higher or lower
withdrawal rates, or longer or shorter life spans of participants. These differences may result in a significant impact
to the measurement of our pension and postemployment benefit obligations and to the amount of pension and
postemployment benefits expense we have recorded or may record. For example, as of December 31, 2021, a one-
half percent increase/decrease in the discount rate would change the projected benefit obligation of our pension
plans by approximately $11 million, and a one-half percent increase/decrease in our involuntary turnover
assumption would change our postemployment benefit obligation by approximately $8 million.

(cid:23)(cid:22)(cid:3)

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

A discussion of recently issued accounting pronouncements is described in "Note 1—Description of Business, Basis
of Presentation and Significant Accounting Policies" in the Notes to Consolidated Financial Statements in this
Annual Report, and we incorporate such discussion by reference.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company employs a foreign currency hedging strategy to limit potential losses in earnings or cash flows from
adverse foreign currency exchange rate movements. Foreign currency exposures arise from transactions
denominated in a currency other than the Company’s functional currency and from foreign denominated revenue
and profit translated into U.S. dollars. The Company operates in 32 countries and is exposed to various foreign
currencies in the Americas region (North America and Latin America), EMEA region (Europe, Middle East, and
Africa) and APJ region (Asia Pacific and Japan). Exposures are hedged with foreign currency forward contracts
with maturity dates of twelve months or less. The potential loss in fair value at December 31, 2021, for such
contracts resulting from a hypothetical 10% adverse change in all foreign currency exchange rates is approximately
$4 million. This loss would be mitigated by corresponding gains on the underlying exposures.

In June 2018, Teradata executed a five-year interest rate swap with a $500 million initial notional amount to hedge
the floating interest rate of its term loan, as more fully described in "Note 12 - Debt" in the Notes to Consolidated
Financial Statements in this Annual Report. The Company uses interest rate swaps to manage interest rate risks on
future interest payments caused by interest rate changes on its variable rate term loan facility. The notional amount
of the hedge will step-down according to the amortization schedule of the term loan. The fair value of these
contracts and swaps are measured at the end of each reporting period using observable inputs other than quoted
prices, specifically market spot and forward exchange rates. The fair value of interest rate swaps recorded in other
liabilities at December 31, 2021 was $12 million. A hypothetical 50 basis point increase/decrease in interest rates
would result in an increase/decrease to the fair value of the hedge of approximately $2 million.

For additional information regarding the Company’s foreign currency hedging strategy and interest rate swaps, see
"Note 9 - Derivative Instruments and Hedging Activities" in the Notes to Consolidated Financial Statements in this
Annual Report.

Item 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Teradata Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Teradata Corporation and its subsidiaries (the
"Company") as of December 31, 2021 and 2020, and the related consolidated statements of income (loss), of
comprehensive income (loss), of changes in stockholders' equity and of cash flows for each of the three years in the
period ended December 31, 2021, including the related notes and financial statement schedule listed in the index

(cid:23)(cid:23)(cid:3)

appearing under Item 15(a)(2) (collectively referred to as the "consolidated financial statements"). We also have
audited the Company's internal control over financial reporting as of December 31, 2021, based on criteria
established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2021 in conformity with accounting principles
generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial
reporting, included in Management’s Annual Report on Internal Control Over Financial Reporting appearing under
Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the
Company's internal control over financial reporting based on our audits. We are a public accounting firm registered
with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent
with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of
material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting
was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audits also included performing such other procedures as we considered necessary in the circumstances. We believe
that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.

(cid:23)(cid:24)(cid:3)

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that (i)
relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our
especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter
in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.

Revenue Recognition - Evaluation of Nonstandard Terms and Conditions with Customers

As described in Notes 1 and 3 to the consolidated financial statements, the Company has $1,917 million of total
revenue for the year ended December 31, 2021, of which a significant portion is generated from revenue with
contracts which contain multiple performance obligations. When the Company enters into contracts with multiple
performance obligations, management allocates the contract’s transaction price to each performance obligation
using the relative standalone selling price of each distinct good or service in the contract. As disclosed by
management, revenue recognition for complex contractual arrangements requires judgment, including a review of
specific contracts and other factors. Specifically, complex arrangements with nonstandard terms and conditions may
require significant contract interpretation to determine the appropriate accounting, including the determination
whether promised goods or services are capable of being distinct and distinct within the context of the contract. If
these criteria are not met, the promised goods or services are combined with other goods or services and accounted
for as a combined performance obligation.

The principal considerations for our determination that performing procedures relating to revenue recognition,
specifically related to the evaluation of nonstandard terms and conditions with customers, is a critical audit matter
are the significant judgment by management in evaluating the impact of nonstandard terms and conditions with
customers on revenue recognition and determining the appropriate revenue recognition. This in turn led to
significant auditor judgment, subjectivity, and effort in performing procedures to evaluate the impact of nonstandard
terms and conditions on revenue recognition.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming
our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of
controls relating to the revenue recognition process, including controls over the evaluation of the impact of
nonstandard terms and conditions with customers on revenue recognition. These procedures also included, among
others (i) evaluating and testing management’s process for determining whether the criteria for revenue recognition
have been met based on the specific terms and performance under the arrangement, and (ii) examining revenue
arrangements on a test basis, which included evaluating the impact of nonstandard terms and conditions with
customers on revenue recognition.

/s/ PricewaterhouseCoopers LLP
Atlanta, GA
February 25, 2022

We have served as the Company’s auditor since 2007.

(cid:23)(cid:25)(cid:3)

TERADATA CORPORATION
Consolidated Statements of Income (Loss)
In millions, except per share amounts

For the Years Ended December 31
2020

2021

2019

Revenue

Subscription software licenses
Services and other

Total recurring
Perpetual software licenses, hardware and other
Consulting services

Total revenue
Cost of revenue

Subscription software licenses
Services and other

Total recurring
Perpetual software licenses, hardware and other
Consulting services

Total cost of revenue
Gross profit
Operating expenses
Selling, general and administrative expenses
Research and development expenses

Total operating expenses
Income from operations
Other expense, net
Interest expense
Interest income
Other expense

Total other expense, net
Income (loss) before income taxes

Income tax expense (benefit)

Net income (loss)

Net income (loss) per weighted average common share

Basic
Diluted

Weighted average common shares outstanding

Basic
Diluted

$

$

$
$

$

$

$
$

303
1,161
1,464
77
376
1,917

12
353
365
43
323
731
1,186

646
309
955
231

(26)
6
(19)
(39)

192

45
147

1.35
1.30

108.6
112.9

$

$

$
$

217
1,092
1,309
107
420
1,836

29
342
371
64
382
817
1,019

669
334
1,003
16

(27)
4
(17)
(40)

(24)

(153)
129

1.18
1.16

109.3
111.6

152
1,065
1,217
140
542
1,899

29
302
331
110
503
944
955

618
327
945
10

(26)
12
(9)
(23)

(13)

7
(20)

(0.18)
(0.18)

114.2
114.2

The accompanying notes are an integral part of the consolidated financial statements.

(cid:23)(cid:26)(cid:3)

TERADATA CORPORATION
Consolidated Statements of Comprehensive Income (Loss)
In millions

For the Years Ended December 31
2020

2021

2019

Net income (loss)
Other comprehensive income (loss):

Foreign currency translation adjustments

Derivatives:

Unrealized gain (loss) on derivatives, before tax
Unrealized gain (loss) on derivatives, tax portion

Unrealized gain (loss) on derivatives, net of tax

Defined benefit plans:

Reclassification of loss to net income (loss)
Defined benefit plan adjustment, before tax
Defined benefit plan adjustment, tax portion

Defined benefit plan adjustment, net of tax

Other comprehensive income (loss)

Comprehensive income (loss)

$

147

$

129

$

(12)

14
(3)
11

11
(2)
(3)
6
5

7

(8)
2
(6)

9
(15)
3
(3)
(2)

$

152

$

127

$

(20)

(10)

(12)
3
(9)

6
(37)
10
(21)
(40)

(60)

The accompanying notes are an integral part of the consolidated financial statements.

(cid:23)(cid:27)(cid:3)

TERADATA CORPORATION
Consolidated Balance Sheets
In millions, except per share amounts

At December 31

2021

2020

Assets
Current assets

Cash and cash equivalents
Accounts receivable, net
Inventories
Other current assets

Total current assets
Property and equipment, net
Right of use assets - operating lease, net
Goodwill
Capitalized contract costs, net
Deferred income taxes
Other assets

Total assets

Liabilities and stockholders’ equity

Current liabilities

Current portion of long-term debt
Current portion of finance lease liability
Current portion of operating lease liability
Accounts payable
Payroll and benefits liabilities
Deferred revenue
Other current liabilities

Total current liabilities
Long-term debt
Finance lease liability
Operating lease liability
Pension and other postemployment plan liabilities
Long-term deferred revenue
Deferred tax liabilities
Other liabilities

Total liabilities
Commitments and contingencies (Note 10)
Stockholders’ equity

Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and
outstanding at December 31, 2021 and 2020, respectively

Common stock: par value $0.01 per share, 500.0 shares authorized, 107.2 and 108.8
shares issued and outstanding at December 31, 2021 and 2020, respectively

Paid-in capital
Accumulated deficit
Accumulated other comprehensive loss

Total stockholders’ equity
Total liabilities and stockholders’ equity

$

$

$

$

$

$

592
336
26
152
1,106
288
26
396
111
202
40
2,169

88
77
12
67
148
552
89
1,033
324
53
18
138
27
7
109
1,709

—

1

1,808
(1,211)
(138)
460

$

2,169

$

529
331
29
155
1,044
339
38
401
98
222
51
2,193

44
75
15
50
170
499
99
952
411
70
28
152
38
6
136
1,793

—

1

1,656
(1,114)
(143)
400

2,193

The accompanying notes are an integral part of the consolidated financial statements.

(cid:23)(cid:28)(cid:3)

TERADATA CORPORATION
Consolidated Statements of Cash Flows
In millions

For the Years Ended December 31
2020

2019

2021

ratin

g activities

Ope
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization
Stock-based compensation expense
Deferred income taxes
Changes in assets and liabilities:

Receivables
Inventories
Account payables and accrued expenses
Deferred revenue
Other assets and liabilities

Net cash provided by operating activities
Investing activities
Expenditures for property and equipment
Additions to capitalized software

Net cash used in investing activities
Financing activities
Repayments of long-term borrowings
Repurchases of common stock
Payments of finance leases
Other financing activities, net

Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of year

Cash, cash equivalents and restricted cash at end of year

Reconciliation of cash, cash equivalents and restricted cash to the Consolidated
Balance Sheets

Cash and cash equivalents
Restricted cash

Total cash, cash equivalents and restricted cash

Supplemental cash flow disclosure:

Assets acquired by finance lease
Assets acquired by operating lease
Annual variable incentive payout settled in equity
Cash paid during the year for:
Income taxes
Interest

$

147

$

129

$

(20)

149
112
14

(5)
3
17
42
(16)
463

(28)
(3)
(31)

(44)
(244)
(92)
24
(356)
(14)
62
533

172
101
(118)

67
2
—
4
(90)
267

(44)
(7)
(51)

(25)
(100)
(70)
9
(186)
7
37
496

$

$

$

$
$
$

$
$

595

$

533

$

592
3
595

76
9
17

44
26

$

$

$
$
$

$
$

529
4
533

$

$

$
85
8
$
— $

39
27

$
$

150
83
(3)

190
(3)
(153)
(62)
(34)
148

(54)
(5)
(59)

(19)
(300)
(33)
44
(308)
(1)
(220)
716

496

494
2
496

115
6
—

33
26

The accompanying notes are an integral part of the consolidated financial statements.

(cid:24)(cid:19)(cid:3)

TERADATA CORPORATION
Consolidated Statements of Changes in Stockholders’ Equity
In millions

December 31, 2018
Net loss
Employee stock compensation, employee stock
purchase programs and option exercises, net of tax

Repurchases of common stock, retired
Pension and postemployment benefit plans, net of tax

Unrealized loss on derivatives, net of tax
Currency translation adjustment

December 31, 2019
Net income
Employee stock compensation, employee stock
purchase programs and option exercises, net of tax

Repurchases of common stock, retired
Pension and postemployment benefit plans, net of tax

Unrealized loss on derivatives, net of tax
Currency translation adjustment

December 31, 2020
Net income
Employee stock compensation, employee stock
purchase programs and option exercises, net of tax

Repurchases of common stock, retired
Pension and postemployment benefit plans, net of tax

Unrealized gain on derivatives, net of tax
Currency translation adjustment

December 31, 2021

Common Stock

Shares

Amount

Paid-in

Capital

Deficit)

Retained
Earnings
(Accumulated

Accumulated
Other
Comprehensive

117
—

2

(8)

—

—
—

111
—

2

(5)

—

—
—

108
—

5

(6)

—

—
—

$

1

—

—

—

—

—
—

$

1

—

—

—

—

—
—

$

1

—

—

—

—

—
—

$

$ 1,418
—

127

(823) $
(20)

—

—

—

—
—

(300)

—

—
—

$ 1,545
—

$

(1,143) $

129

111

—

—

—

—
—

(100)

—

—
—

$ 1,656
—

$

(1,114) $

147

152

—

—

—

—
—

(244)

—

—
—

(Loss)
income

Total

(101) $ 495

—

—

—

—

—

—

—

—

—

(20)

127

(300)

(21)

(9)
(10)

(21)

(9)
(10)

(141) $ 262
129

111

(100)

(3)

(6)
7

(3)

(6)
7

(143) $ 400
147

152

(244)

6

11
(12)

6

11
(12)

107

$

1

$ 1,808

$

(1,211) $

(138) $ 460

The accompanying notes are an integral part of the consolidated financial statements.

(cid:24)(cid:20)(cid:3)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 Description of Business, Basis of Presentation and Significant Accounting Policies

Description of the Business. Teradata Corporation ("we," "us," "Teradata," or the "Company") is a provider of a
leading connected multi-cloud data platform for enterprise analytics, focused on helping companies leverage all
their data across an enterprise, at scale. Our platform is composed of our data platform – Teradata Vantage – which
is designed to run across on-premises, private cloud and public cloud environments. This platform is supported by
business consulting and support services that enable customers to extract insights from across a company’s entire
data and analytics 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").

Recurring revenue consists of our on-premises and cloud subscriptions, which have varying term lengths from one
month to five years. Recurring revenue is intended to depict the revenue recognition model for these subscription
transactions. The recurrence of these revenue streams in future periods depends on several factors, including
contractual periods and customers' renewal decisions. Perpetual software licenses, hardware and other revenue
consists of hardware and perpetual software licenses recognized upfront and revenue related to third party products.
Consulting services revenue consists of consulting, implementation and installation services.

Prior period amounts have been revised to conform to the current year presentation. At the beginning of the first
quarter of 2021, the Company changed its historical presentation for certain components within its revenue and cost
categories. To better reflect the strategy and shift in the business, the Company adopted and revised the presentation
beginning in the first quarter of 2021, including reclassifying the following amounts:

• Managed services revenue of $108 million and managed services costs of $80 million for the year ended

December 31, 2020 from Recurring to Consulting services.

• Managed services revenue of $111 million and managed services costs of $85 million for the year ended

December 31, 2019 from Recurring to Consulting services.

•

•

Third party revenue of $34 million and third party costs of $26 million for the year ended December 31,
2020 from Recurring to Perpetual software licenses, hardware and other.

Third party revenue of $34 million and third party costs of $26 million for the year ended December 31,
2019 from Recurring to Perpetual software licenses, hardware and other.

This change in presentation does not affect the Company's total revenues, total costs of revenues or overall total
gross profit (defined as total revenue less total cost of revenue).

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, leases, 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.

(cid:24)(cid:21)(cid:3)

Revenue Recognition

The Company adopted Financial Accounting Standards Board ("FASB") Standards Update No. 2014-09, Revenue
from Contracts with Customers ("Topic 606") as of January 1, 2018 for all contracts not completed as of the date of
adoption. The core principle of Topic 606 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 Company expects
to be entitled in exchange for those goods or services. To achieve that core principle, the Company performs the
following five steps:

identify the contract with a customer,
identify the performance obligations in the contract,

1.
2.
3. determine the transaction price,
4. allocate the transaction price to the performance obligations in the contract, and
recognize revenue when (or as) the Company satisfies a performance obligation.
5.

The Company only applies the above five-step model to contracts when it is probable that the Company will collect
the consideration it is entitled to in exchange for goods or services it transfers to the customer. The Company
applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors
including the customer’s historical payment experience, published credit, and financial information pertaining to the
customer.

Revenue is measured based on consideration specified in a contract with a customer, and excludes any sales, value
add, and other taxes the Company collects concurrent with revenue-producing activities. A performance obligation
is a promise in a contract to transfer a distinct good or service to the customer. The Company recognizes revenue
when it satisfies a performance obligation by transferring control over a good or service to a customer. Estimates of
variable consideration are included in revenue to the extent that it is probable that a significant reversal of
cumulative revenue will not occur once the uncertainty is resolved. The Company uses the expected value method
or the most likely amount method depending on the nature of the variable consideration. Our estimates of variable
consideration and determination of whether to include estimated amounts in the transaction price are based largely
on an assessment of our anticipated performance and all information (historical, current and forecasted) that is
reasonably available to us. If actual results in the future vary from the Company’s estimates, the Company adjusts
these estimates in the period such variances become known. Typically, the amount of variable consideration is not
material.

For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each
performance obligation using the relative standalone selling price of each distinct good or service in the contract.
The Company must apply judgment to determine whether promised goods or services are capable of being distinct
and distinct within the context of the contract. If these criteria are not met, the promised goods or services are
combined with other goods or services and accounted for as a combined performance obligation. Revenue is then
recognized either at a point in time or over time depending on our evaluation of when the customer obtains control
of the promised goods or services. This evaluation requires significant judgment and the decision to combine a
group of contracts or separate the combined or single contract into multiple performance obligations could change
the amount of revenue recorded in a given period. In addition, the Company has developed assumptions that require
judgment to determine the standalone selling price for each performance obligation identified in the contract. The
Company determines the standalone selling price for a good or service by considering multiple factors including,
geographies, market conditions, product life cycles, competitive landscape, internal costs, gross margin objectives,
purchase volumes and pricing practices. The Company reviews the standalone selling price for each of its
performance obligations 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.

(cid:24)(cid:22)(cid:3)

Teradata delivers its platform and services primarily through direct sales channels, as well as through other
independent software vendors and distributors and value-added resellers. Standard payment terms may vary based
on the country in which the contract is executed, but are generally between 30 days and 90 days. The following is a
description of the principal activities and performance obligations from which the Company generates its revenue:

•

•

•

Subscriptions - The Company sells on-premises and cloud subscriptions to its customers through its
subscription licenses, cloud and hardware rental offerings. Teradata’s on-premises subscription licenses
include a right-to-use license and revenue is recognized upfront at a point in time unless the customer has a
contractual right to cancel, where revenue is recognized period-to-period based on the cancellation terms.
Subscription licenses are reported within the subscription software licenses caption on the Consolidated
Statements of Income (Loss). The subscription software license support and unspecified software license
upgrade rights on a when-and-if-available basis that are included in the subscription are reported within the
recurring services and other caption and recognized ratably over the contract term. Cloud arrangements
include a right-to-access software license on third party hosted hardware such as the public cloud. Revenue
is recognized ratably, or as consumed, over the contract term and included within the recurring services and
other caption. Cloud arrangements 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. For the Company's hardware rental offering, the Company
owns the hardware and typically finances the hardware to more closely align the use of cash with the
expected cash inflows from contracts with customers. The revenue for these arrangements is generally
recognized straight-line over the term of the contract and is included within the recurring services and other
caption. Hardware rentals are generally accounted for as operating leases and considered outside the scope
of Topic 606.

Perpetual maintenance and software upgrade rights - Revenue for maintenance and unspecified
software upgrade rights on a when-and-if-available basis are recognized straight-line over the term of the
contract and included within the recurring services and other caption.

Perpetual software licenses, hardware and other - Revenue for software is generally recognized when
the customer has the ability to use and benefit from its right to use the license. Hardware is typically
recognized upon delivery once title and risk of loss have been transferred (when control has passed). Other
revenue includes the sale of all third-party related products.

• Consulting services - The Company accounts for individual services as separate performance obligations if

a service is separately identifiable from other items in a combined arrangement and if a customer can
benefit from it on its own or with other resources that are readily available to the customer. Revenue for
consulting, managed services, implementation and installation services is recognized as services are
provided by measuring progress toward the complete satisfaction of the Company’s obligation. Progress for
services that are contracted for at a fixed price is generally measured based on hours incurred as a portion of
total estimated hours. Progress for services that are contracted for on a time and materials basis is generally
based on hours expended. These input methods (e.g. hours incurred or expended) of revenue recognition are
considered a faithful depiction of our efforts to satisfy services contracts and therefore reflect the transfer of
services to a customer under such contracts.

Significant Accounting Policies and Practical Expedients

The following are the Company’s significant accounting policies not already disclosed elsewhere and practical
expedients relating to revenue from contracts with customers:

(cid:24)(cid:23)(cid:3)

•

•

•

•

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific
revenue-producing transaction, that are collected by the Company from a customer, are excluded from
revenue.

Shipping and handling costs associated with outbound freight after control over a product has transferred to
a customer are accounted for as fulfillment cost and are included in cost of revenues.

The Company does not adjust for the effects of a significant financing component if the period between
performance and customer payment is one year or less.

The Company expenses the costs to obtain a contract as incurred when the expected amortization period is
one year or less.

Shipping and Handling. Product shipping and handling are included in cost in the Consolidated Statements of
Income (Loss).

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 expected credit
losses methodology 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.

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. The Company's estimate of depreciation expense incorporates management
assumptions regarding the useful economic lives and residual values of its assets. Equipment is generally
depreciated over 3 to 5 years and buildings over 25 to 45 years. Leasehold improvements are depreciated over the
life of the lease or the asset, whichever is shorter. Customer rental equipment is typically depreciated over the
associated customer rental period, which is typically 3 years. Total depreciation expense on the Company’s property
and equipment for December 31 was as follows:

In millions

Depreciation expense

2021

2020

2019

$

139

$

138

$

104

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 database software that will be sold, leased or otherwise marketed are
expensed as incurred based on the frequency and agile nature of development. The Company uses agile
development methodologies to help respond to new technologies and trends and rapidly changing customer needs.
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 2021, 2020 and 2019 due to the relatively

(cid:24)(cid:24)(cid:3)

short duration between the completion of the working model and the point at which a product is ready for general
release.

The following table identifies the activity relating to capitalized software for the following periods:

In millions

Beginning balance at January 1

Capitalized
Amortization

Ending balance at December 31

Internal-use Software
2020

2021

2019

External-use Software
2020

2019

2021

$

$

13

$

13

$

3
(6)
10

$

7
(7)
13

$

15

5
(7)
13

$

$

— $

—
—
— $

23

$

—
(23)
— $

57

—
(34)
23

The aggregate amortization expense (actual and estimated) for internal-use software for the following periods is:

In millions

Actual

2021

2022

For the years ended (estimated)
2025
2024
2023

2026

Internal-use software amortization expense

$

6

$

5

$

4

$

3

$

3

$

3

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 is calculated based on the present value of
future cash flows and 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 2021.

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 5 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. Research and
development costs primarily include labor-related costs, contractor fees, and overhead expenses directly related to
research and development support.

Leases. In February 2016, the FASB issued guidance, which requires a lessee to account for leases as finance or
operating leases. Both types of 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 and cash flow 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. The Company
adopted the new standard as of January 1, 2019 using the modified retrospective adoption approach utilizing the
optional transition method with prior periods not recast and have elected certain of the practical expedients allowed
under the standard. See Note 13 for more information.

Pension and Postemployment Benefits. The Company accounts for its pension benefit and its non-U.S.
postemployment benefit obligations using actuarial models. The measurement of plan obligations was made as of
December 31, 2021. 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

(cid:24)(cid:25)(cid:3)

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 non-U.S. 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. See Note 8 for additional
information.

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. The Company made an accounting
policy election in 2018 related to the 2017 Tax Act to provide for the tax expense related to global intangible low-
taxed income ("GILTI") in the year the tax is incurred. 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 the deferred income tax assets will not be realized. See Note
6 for additional information.

Stock-based Compensation. Stock-based payments to employees, including restricted shares and restricted share
units, are recognized in the financial statements based on their fair value. See Note 7 for additional information.

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 7 for share information on the Company’s stock compensation plans.

The components of basic and diluted earnings (loss) per share for the years ended December 31 are as follows:

In millions, except earnings (loss) per share

Net income (loss) attributable to common stockholders

Weighted average outstanding shares of common stock

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

Common stock and common stock equivalents

Earnings (loss) per share:

Basic
Diluted

2021

2020

2019

$

147

$

129

$

(20)

108.6

4.3

112.9

109.3

2.3

111.6

114.2

—

114.2

$
$

1.35
1.30

$
$

1.18
1.16

$
$

(0.18)
(0.18)

For 2019 due to the net loss attributable to Teradata common stockholders, potential common shares that would
cause dilution, such as employee stock options, restricted shares and other stock awards, have been excluded from
the diluted share count because their effect would have been anti-dilutive. For 2019 the fully diluted shares would
have been 115.5 million.

(cid:24)(cid:26)(cid:3)

Options to purchase 0.2 million shares in 2021 and 2 million shares in 2020 and 2019 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

Reference Rate Reform. In March 2020, the Financial Accounting Standards Board ("FASB") issued new guidance
to provide relief to companies that will be impacted by the expected change in benchmark interest rates, as
participating banks will no longer be required to submit London Interbank Offered Rate ("LIBOR") quotes by the
U.K. Financial Conduct Authority. The new guidance allows companies to, provided the only change to existing
contracts are a change to an approved benchmark interest rate, account for modifications as a continuance of the
existing contract without additional analysis. For new and existing contracts, companies may elect to apply the
amendments as of March 12, 2020 through December 31, 2022. The Company is currently evaluating this new
guidance to determine the impact it may have on our condensed consolidated financial statements or related
disclosures.

The Company assessed Accounting Standards Updates not listed above and determined that they were not
applicable or were not expected to have a material impact on the Company's financial statements.

Recently Adopted Guidance

Accounting for Income Taxes. In December 2019, the FASB issued new guidance to simplify the accounting for
income taxes. The new guidance changes various subtopics of accounting for income taxes including, but not
limited to, accounting for "hybrid" tax regimes, tax basis step-up in goodwill obtained in a transaction that is not a
business combination, intra-period tax allocation exception to incremental approach, ownership changes in
investments, interim-period accounting for enacted changes in tax law, and year-to-date loss limitation in interim-
period tax accounting. We adopted the guidance in the first quarter of 2021. The adoption did not have a material
impact on our consolidated financial statements or related disclosures.

(cid:24)(cid:27)(cid:3)

Note 2 Supplemental Financial Information

In millions

Accounts receivable
Trade
Other

Accounts receivable, gross
Less: allowance for doubtful accounts

Total accounts receivable, net

Inventories

Finished goods
Service parts

Total inventories

Other current assets

Income tax receivable
Other

Total other current assets

Property and equipment

Land
Buildings and improvements
Finance lease assets
Machinery and other equipment

Property and equipment, gross
Less: accumulated depreciation

Total property and equipment, net

Other current liabilities

Sales and value-added taxes
Pension and other postemployment plan liabilities
Other

Total other current liabilities

Deferred revenue

Deferred revenue, current
Long-term deferred revenue

Total deferred revenue

Other long-term liabilities

Transition tax
Uncertain tax positions
Other

Total other long-term liabilities

(cid:24)(cid:28)(cid:3)

At December 31

2021

2020

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

344
1
345
(9)
336

17
9
26

85
67
152

8
90
329
463
890
(602)
288

31
14
44
89

552
27

579

69
22
18

109

$

342
3
345
(14)
331

18
11
29

74
81
155

8
91
252
516
867
(528)
339

33
12
54
99

499
38

537

82
18
36

136

Note 3 Revenue from Contracts with Customers

Disaggregation of Revenue from Contracts with Customers

The following table presents a disaggregation of revenue for the years ended December 31:

In millions

Americas

Recurring
Perpetual software licenses and hardware
Consulting services

Total Americas
EMEA
Recurring
Perpetual software licenses and hardware
Consulting services

Total EMEA
APJ

Recurring
Perpetual software licenses and hardware
Consulting services

Total APJ
Total Revenue

Contract Balances

2021

2020

2019

$

879
24
141
1,044

$

813
47
165
1,025

$

797
50
210
1,057

371
37
135
543

312
39
134
485

254
58
180
492

214
16
100
330
$ 1,917

184
21
121
326
$ 1,836

166
32
152
350
$ 1,899

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, contract assets,
and customer advances and deposits (deferred revenue or contract liabilities) on the consolidated balance sheet.
Accounts receivable include amounts due from customers that are unconditional. Contract assets relate to the
Company’s rights to consideration for goods delivered or services completed and recognized as revenue but billing
and the right to receive payment is conditional upon the completion of other performance obligations. Contract
assets are included in other current assets on the balance sheet and are transferred to accounts receivable when the
rights become unconditional. Deferred revenue consists of advance payments and billings in excess of revenue
recognized. Deferred revenue is classified as either current or noncurrent based on the timing of when the Company
expects to recognize revenue. These assets and liabilities are reported on a contract-by-contract basis at the end of
each reporting period. The following table provides information about receivables, contract assets and deferred
revenue from contracts with customers:

In millions

Accounts receivable, net
Contract assets
Current deferred revenue
Long-term deferred revenue

December 31,
2021

December 31,
2020

$

$
$
$

336

10
552
27

$

$
$
$

331

11
499
38

Revenue recognized during the year ended December 31, 2021 from amounts included in deferred revenue at the
beginning of the period was approximately $497 million.

Transaction Price Allocated to Unsatisfied Obligations

(cid:25)(cid:19)(cid:3)

The following table includes estimated revenue expected to be recognized in the future related to the Company's
unsatisfied (or partially satisfied) obligations at December 31, 2021:

In millions

Total at
December 31,
2021

Year 1

Year 2 and
Thereafter

Remaining unsatisfied obligations

$

2,629

$

1,623

$

1,006

The amounts above represent the price of firm orders for which work has not been performed or goods have not
been delivered and exclude unexercised contract options outside the stated contractual term that do not represent
material rights to the customer. Although the Company believes that the contract value in the above table is firm,
approximately $1,547 million of the amount includes customer-only general cancellation for convenience terms that
the Company is contractually obligated to perform unless the customer notifies the Company otherwise. The
Company expects to recognize revenue of approximately $479 million in the next year from contracts that are non-
cancelable. The Company believes the inclusion of this information is important to understanding the obligations
that the Company is contractually required to perform and provides useful information regarding remaining
obligations related to these executed contracts.

Note 4 Contract Costs

The Company capitalizes sales commissions and other contract costs that are incremental direct costs of obtaining
customer contracts if the expected amortization period of the asset is greater than one year. These costs are recorded
in Capitalized contract costs on the Company’s balance sheet. The capitalized amounts are calculated based on the
sales commissions for individual multi-term contracts. The judgments made in determining the amount of costs
incurred include whether the commissions are in fact incremental and would not have occurred absent the customer
contract. Costs to obtain a contract are amortized as selling, general and administrative expenses on a straight-line
basis over the expected period of benefit, which is typically four years. These costs are periodically reviewed for
impairment. The following table identifies the activity relating to capitalized contract costs:

In millions

Capitalized contract costs

In millions

Capitalized contract costs

Note 5 Goodwill

December 31,
2020

98

December 31,
2019

91

$

$

$

$

Capitalized

Amortization

December 31,
2021

58

$

(45)

$

111

Capitalized

Amortization

December 31,
2020

40

$

(33)

$

98

The following table identifies the activity relating to goodwill by operating segment:

In millions

Goodwill
Americas
EMEA
APJ

Total goodwill

Balance at
December 31,
2020

Currency
Translation
Adjustments

Balance at
December 31,
2021

$

$

253
92
56
401

$

$

— $
(2)
(3)
(5) $

253
90
53
396

In the fourth quarter of 2021, the Company performed its annual impairment test and determined that no impairment
to the carrying value of goodwill was necessary. The Company reviewed its three reporting units in its 2021
goodwill impairment assessment, as each of the 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

(cid:25)(cid:20)(cid:3)

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 2021.

Note 6 Income Taxes

For the years ended December 31, income (loss) before income taxes consisted of the following:

In millions

Income (loss) income before income taxes
United States
Foreign

Total income (loss) before income taxes

2021

2020

2019

$

$

67
125
192

$

$

(41) $
17
(24) $

(85)
72
(13)

For the years ended December 31, income tax expense (benefit) consisted of the following:

In millions

Income tax expense (benefit)
Current

Federal
State and local
Foreign

Deferred

Federal
State and local
Foreign

Total income tax expense (benefit)

Effective income tax rate

2021

2020

2019

$

$

(1)
5
27

3
1
10
45

$

$

(45)
1
9

34
6
(158)
(153)

$

$

(3)
—
13

(10)
(1)
8
7

23.4%

637.5%

(53.8%)

The following table presents the principal components of the difference between the effective tax rate and the
United States federal statutory income tax rate for the years ended December 31:

Income tax expense at the U.S. federal tax rate
Foreign income tax differential
U.S. tax on foreign earnings
State and local income taxes
U.S. permanent book/tax differences
U.S. research and development tax credits
Change in valuation allowance
Tax impact of NOL carry-back under the CARES act.
Tax impact of stock compensation
Deferred tax impact from intra-entity IP transfer
Tax Impact of uncertain tax positions
Other, net

Effective income tax rate

2021

2020

2019

21.0 %
2.8 %
0.3 %
(1.3)%
(2.3)%
(2.6)%
3.2 %
— %
0.8 %
— %
2.0 %
(0.5)%
23.4 %

21.0 %
(20.8)%
(16.7)%
25.0 %
(4.2)%
25.0 %
(25.0)%
79.2 %
(66.7)%
654.2 %
(29.2)%
(4.3)%
637.5 %

21.0 %
(49.2)%
(8.4)%
58.2 %
(17.0)%
68.5 %
(49.1)%
— %
(49.3)%
— %
(24.6)%
(3.9)%
(53.8)%

The 2021 effective tax rate included a net $8 million of discrete tax benefit, of which $3 million of tax benefit was
related to true-up adjustments to reconcile the Company’s 2020 U.S. tax return versus the preliminary estimate as
booked in its tax provision for the year ended December 31, 2020 and $2 million of tax benefit related to a
reduction in the Transition Tax based on the Company’s amended 2017 tax return. In addition, the Company
recognized $4 million of incremental tax benefit related to stock-based compensation. These tax benefits were
partially offset by $1 million of discrete tax expense related to adjustments to the Company’s accrual for
unrecognized tax benefits in accordance with FIN 48.

(cid:25)(cid:21)(cid:3)

The 2020 effective tax rate included $157 million of net discrete tax benefit. A discrete tax benefit of $157 million
related to the transfer of foreign intellectual property was recorded in 2020 as more fully described below. In
addition, the Company recognized a net $13 million of tax benefit resulting from the CARES Act of 2020, which
allows U.S. corporations a one-time opportunity to claim income tax refunds by allowing a 5-year net operating loss
("NOL") carry-back for taxable losses incurred in the tax year 2020. Teradata intends to carry back its 2020 NOL to
claim a refund for taxes it paid in 2015, which created a one-time income tax benefit for the difference between the
35% 2015 carry back tax rate and the current 21% federal statutory rate. These tax benefits were partially offset by
$9 million tax expense related to stock-based compensation and $4 million of incremental GILTI tax. These discrete
net tax benefits resulted in full-year total income tax benefit in 2020 of $153 million, on a pre-tax net loss of
$24 million, causing a tax rate of 637.5%.

On January 1, 2020, we transferred certain of our intellectual property among our wholly-owned subsidiaries, which
resulted in the recognition of deferred tax assets of $157 million. The recognition of deferred tax assets from intra-
entity transfers of intellectual property required the Company to make significant estimates and assumptions to
determine the fair value of such intellectual property, using a discounted cash flow model. Significant assumptions
in valuing the intellectual property include, but are not limited to, internal revenue and expense forecasts, and the
discount rate. The sustainability of its future tax benefits is dependent upon the acceptance of these valuation
estimates and assumptions by the taxing authorities.

The 2019 effective tax rate was impacted by $3 million tax expense related to stock-based compensation and $3
million of incremental GILTI tax, which resulted in full-year income tax expense in 2019 of $7 million, on a pre-tax
net loss of $13 million, causing a negative tax rate of 53.8%.

Deferred income tax assets and liabilities included in the balance sheets at December 31 were as follows:

In millions

Deferred income tax assets
Employee pensions and other liabilities
Other balance sheet reserves and allowances
Operating lease liabilities
Tax loss and credit carryforwards
Deferred revenue
Intangibles and capitalized software

Total deferred income tax assets
Valuation allowance

Net deferred income tax assets
Deferred income tax liabilities
Right of use assets - operating lease
Property and equipment
Other

Total deferred income tax liabilities
Total net deferred income tax assets

2021

2020

$

$

65
8
7
86
6
159
331

(58)
273

6
41
31
78
195

$

$

62
13
10
105
7
155
352

(51)
301

9
52
25
86
215

As of December 31, 2021, Teradata has NOL and tax credit carryforwards totaling $86 million (tax effected and
before any valuation allowance offset and application of recognition criteria for uncertain tax positions). Of the total
tax carryforwards, $7 million are NOLs in the United States and certain foreign jurisdictions, a small portion of
which will begin to expire in 2023; $6 million are United States foreign tax credit carryforwards which expire in
2029, which have a $5 million valuation allowance offset; $3 million are federal R&D credits, which will begin to
expire in 2040; and $70 million are California R&D tax credits that have an indefinite carryforward period, which
have a $51 million valuation allowance offset and $18 million of FIN 48 reserve recorded.

(cid:25)(cid:22)(cid:3)

The Company considers a majority of its foreign earnings to not be indefinitely reinvested outside of the United
States, and any distributions of profits from non-U.S. subsidiaries are not expected to cause a significant United
States 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 recorded $4 million of deferred foreign withholding tax
expense with respect to certain earnings which are not considered permanently reinvested as they would be taxable
upon remittance. Deferred taxes have not been provided on earnings considered indefinitely reinvested.

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, 2021, the Company’s uncertain tax positions totaled approximately $43 million, of which $22
million is reflected in the other liabilities section of the Company’s balance sheet as a non-current liability and
$2 million is reflected as a current liability within taxes payable. The remaining balance of $19 million of uncertain
tax positions relates to certain tax attributes generated by the Company, which are netted against the underlying
deferred tax assets recorded on the balance sheet. The entire balance of $43 million in uncertain tax positions would
cause a decrease in the effective income tax rate upon recognition. Teradata has recorded $3 million of interest
accruals related to its uncertain tax liabilities as of December 31, 2021.

Below is a roll-forward of the Company’s liability related to uncertain tax positions at December 31:

In millions
Balance at January 1
Gross increases for prior period tax positions
Gross increases for current period tax positions
Decreases due to the lapse of applicable statute of limitations
Decreases relating to settlements with taxing authorities

Balance at December 31

2021

2020

$

$

39
5
3
(4)
—
43

$

$

37
6
2
(2)
(4)
39

The Company and its subsidiaries file income tax returns in the United States and various state jurisdictions, as well
as numerous foreign jurisdictions. As of December 31, 2021, 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 2018-2021 are still open for assessment by tax authorities in its
major jurisdictions.

Note 7 Employee Stock-based Compensation Plans

The Company recorded stock-based compensation expense for the years ended December 31 as follows:

In millions

Stock options
Restricted share units
Employee stock repurchase program

Total stock-based compensation before income taxes
Tax benefit

Total stock-based compensation, net of tax

2021

2020

2019

$

$

— $
109
3
112
(19)
93

$

1
98
2
101
(5)
96

$

$

3
77
3
83
(10)
73

The Teradata Corporation 2007 Stock Incentive Plan (the "2007 SIP"), as amended, and the Teradata 2012 Stock
Incentive Plan (the "2012 SIP"), as amended, 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

(cid:25)(cid:23)(cid:3)

be made under the 2007 SIP after that time. A total of approximately 31.4 million shares were authorized to be
issued under the 2012 SIP. In May 2020, the Teradata Board of Directors adopted the Teradata New Employee
Stock Inducement Plan (the "NESIP"), effective June 1, 2020. Pursuant to the NESIP, the Company may grant
equity incentive compensation as a material inducement for certain individuals to commence employment with
Teradata within the meaning of Rule 303A.08 of the NYSE Listed Company Manual. A total of 2.2 million shares
are reserved for grant under the NESIP, the Teradata Incentive Stock Purchase Plan, and new CEO award, subject to
adjustment as provided in the NESIP. The NESIP is scheduled to terminate on June 1, 2023, or such earlier date that
the Board shall determine.

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 all plans.

As of December 31, 2021, the Company’s primary types of stock-based compensation were restricted shares,
restricted share units and the employee stock purchase program (the "ESPP").

Stock Options

No options were granted in 2021, 2020 and 2019.

The following table summarizes the Company's stock option activity for the year ended December 31, 2021:

Shares in thousands

Outstanding at January 1, 2021
Granted
Exercised
Canceled
Forfeited

Outstanding at December 31, 2021

Weighted-
Average
Exercise
Price per
Share

Average
Remaining
Contractual
Term (in
years)

Aggregate
Intrinsic
Value (in
millions)

Shares
Under
Option

1,788

$
— $
(836) $
(139) $
(32) $
781

$

40.14
—
36.82
54.33
41.35

41.12

41.12
41.12

3.30 $

—

2.70 $
2.70 $

5
5

Fully vested and expected to vest at December 31, 2021
Exercisable at December 31, 2021

781

781

$
$

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

Intrinsic value of options exercised
Cash received from option exercises
Tax benefit realized from option exercises

Restricted Shares and Restricted Share Units

2021

2020

2019

$
$
$

12
31
2

$
$
$

— $
— $
— $

9
32
2

The 2012 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.
Performance-based grants are subject to future performance measurements over a one-to three-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

(cid:25)(cid:24)(cid:3)

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. 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.

The following table reports restricted shares and restricted share unit activity during the year ended December 31,
2021:

Shares in thousands

Unvested shares at January 1, 2021
Granted
Vested
Forfeited/canceled

Unvested shares at December 31, 2021

Weighted-
Average
Grant
Date Fair
Value
per Share

Number of
Shares

$
7,512
4,545
$
(3,538) $
(1,148) $
7,371

$

27.00
41.18
30.94
30.01

33.38

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.

Weighted-average fair value of restricted share units granted
Total fair value of shares vested (in millions)

2021

2020

2019

$
$

41.18
93

$
$

20.74
80

$
$

44.13
41

As of December 31, 2021, there was $144 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 1.0 years.

The following table represents the composition of Teradata restricted share unit grants in 2021:

Weighted-
Average
Grant
Date Fair
Value

Number of
Shares

3,801
744
4,545

$
$

$

41.26
40.79

41.18

Shares in thousands

Service-based restricted share units
Performance-based restricted share units

Total restricted share unit grants

Employee Stock Purchase Program

The Company’s ESPP, effective on October 1, 2007, and as amended effective as of January 30, 2018, provides
eligible employees of Teradata and its designated subsidiaries an opportunity to purchase the Company’s common

(cid:25)(cid:25)(cid:3)

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 is 15% of the average market price and is considered compensatory.

The ESPP was amended as of August 2, 2021 to move from monthly purchases to purchases at the end of the 6-
month purchase period. Additionally, a look-back feature was added to the plan whereby the purchase discount is
based off the lower of the market prices at the beginning or end of each 6-month purchase period (September to
February, and March to August). The ESPP discount remains at 15% of the relevant 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 7 million shares were authorized to be issued under the ESPP, with approximately 1.1 million shares
remaining under that authorization at December 31, 2021. 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

Employee stock purchases
Aggregate cost

Note 8 Employee Benefit Plans

2021

2020

2019

0.3
10

$

0.7
14

$

0.6
20

$

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:

In millions

Service cost
Interest cost
Expected return on plan
assets
Settlement charge
Curtailment gain

Amortization of actuarial
loss
Total costs

$

$

2021

2020

2019

Pension

Postemployment

Pension

Postemployment

Pension

Postemployment

$

7
1

(2)

—
(2)

3

7

$

11
1

—

—
—

8

20

$

$

7
2

(2)

1
—

2

$

10

$

11
1

—

—
—

7

19

$

$

$

7
3

(2)

—
—

1

9

$

11
1

—

—
—

5

17

(cid:25)(cid:26)(cid:3)

The underfunded amount of pension and postemployment obligations is recorded as a liability in the Company’s
consolidated balance sheet. The following tables present the changes in benefit obligations, plan assets, funded
status and the reconciliation of the funded status to amounts recognized in the consolidated balance sheets and in
accumulated other comprehensive income at December 31:

In millions

Change in benefit obligation
Benefit obligation at January 1
Service cost
Interest cost
Plan participant contributions
Actuarial (gain) loss
Benefits paid
Curtailment
Settlement
Plan Amendment
Currency translation adjustments

Benefit obligation at December 31
Change in 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
Settlements

Fair value of plan assets at December 31
Funded status (underfunded)

Amounts Recognized in the Consolidated Balance
Sheet

Non-current assets
Current liabilities
Non-current liabilities

Net amounts recognized

Amounts Recognized in Accumulated Other
Comprehensive Income (Loss)

Unrecognized Net actuarial loss
Unrecognized Prior service cost

Total

$

$

$

$

$

$

$

$

Pension

Postemployment

2021

2020

2021

2020

164
7
1
1
(7)
—
(2)
(10)
—
(11)
143

72
2
7
—
(5)
1
(10)
67
(76)

8
(2)
(82)
(76)

19
—
19

$

$

$

$

$

$

$

$

149
7
2
1
14
(1)
(5)
(11)
—
8
164

69
4
5
(1)
5
1
(11)
72
(92)

8
(2)
(98)
(92)

31
—
31

$

$

$

$

$

$

$

$

64
11
1
—
10
(18)
—
—
—
—
68

$

$

— $
—
—
—
—
—
—
—
(68)

$

— $
(12)
(56)
(68)

$

69
4
73

$

$

61
11
1
—
12
(24)
—
—
3
—
64

—
—
—
—
—
—
—
—
(64)

—
(10)
(54)
(64)

66
5
71

The following table presents the accumulated pension benefit obligation at December 31:

In millions

Accumulated pension benefit obligation

2021

2020

$

134

$

153

The following table presents pension plans with accumulated benefit obligations in excess of plan assets at
December 31:

(cid:25)(cid:27)(cid:3)

In millions

Projected benefit obligation
Accumulated benefit obligation
Fair value of plan assets

2021

2020

$
$
$

115
109
31

$
$
$

132
123
33

The following table presents the pre-tax net changes in projected benefit obligations recognized in other
comprehensive income:

In millions

Actuarial (gain) loss arising during the year
Amortization of loss included in net periodic benefit cost
Recognition of gain (loss) due to curtailment
Recognition of loss due to settlement
Foreign currency exchange

Total recognized in other comprehensive income (loss)

Pension

2021

2020

Postemployment
2020
2021

$

$

(9) $
(3)
2
—
(2)
(12) $

7
(2)
(5)
(2)
3
1

$

$

10
(8)
—
—
—
2

$

$

15
(7)
—
—
—
8

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

Discount rate
Rate of compensation increase
Expected return on plan assets
Interest crediting rate assumption

Discount rate
Rate of compensation increase
Involuntary turnover rate

2020
0.9%
2.8%
N/A
0.9%

2021
1.3%
3.0%
N/A
0.9%
Postemployment
Benefit Obligations

2021
2.0%
3.0%
4.0%

2020
1.6%
3.0%
3.5%

2021
0.9%
2.9%
3.4%
0.9%

2021
1.6%
3.0%
3.5%

2020
1.2%
3.0%
3.5%
0.9%
Postemployment
Benefit Cost

2020
1.8%
3.0%
3.0%

2019
2.2%
3.4%
3.0%
0.8%

2019
2.5%
3.0%
2.5%

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. Amortization of deferred gains and losses are recognized in the
Consolidated Statements of Income (Loss) as a component of Other expense.

(cid:25)(cid:28)(cid:3)

Plan Assets. The weighted-average asset allocations at December 31, by asset category are as follows:

Equity securities
Debt securities
Insurance (annuity) contracts
Real estate
Other

Total

Actual Asset Allocation
as of December 31
2020
2021
34%
33%
44%
53%
12%
11%
8%
3%
—%
2%
100%
100%

Target Asset

Allocation
32%
54%
11%
3%
—%
100%

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.

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 11.

The following is a description of the valuation methodologies used for pension assets as of December 31, 2021.

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 pension plan at year end, as reported
to the pension plan by the trustee, which represents the fair value of shares held by the pension 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, 2021:

(cid:26)(cid:19)(cid:3)

In millions

Equity funds
Bond/fixed-income funds
Real estate indirect investments
Insurance contracts

Total assets at fair value

December 31, 2021
22
$
36
2
7
67

$

Fair Value Measurements at Reporting Date Using
Significant
Quoted Prices
Other
in Active
Observable
Markets
Inputs
for Identical
Assets
(Level 1)

Significant
Unobservable
Inputs

(Level 3)

(Level 2)

$

$

— $
—
—
—
— $

22
36
2
—
60

$

$

—
—
—
7
7

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, 2021:

In millions

Balance as of January 1, 2021
Purchases, sales and settlements, net

Balance as of December 31, 2021

Insurance
Contracts

$

$

8
(1)
7

The following table sets forth by level, within the fair value hierarchy, the pension plan assets at fair value as of
December 31, 2020:

In millions

Money market funds
Equity funds
Bond/fixed-income funds
Real estate indirect investments
Insurance contracts

Total assets at fair value

December 31, 2020
1
$
25
32
6
8
72

$

Fair Value Measurements at Reporting Date Using
Significant
Quoted Prices
Other
in Active
Observable
Markets
for Identical
Inputs
Assets
(Level 1)

Significant
Unobservable
Inputs

(Level 3)

(Level 2)

$

$

— $
—
—
—
—
— $

1
25
32
6
—
64

$

$

—
—
—
—
8
8

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, 2020:

In millions

Balance as of January 1, 2020
Purchases, sales and settlements, net

December 31, 2020

Cash Flows Related to Employee Benefit Plans

Insurance
Contracts

$

$

8
—
8

Cash Contributions. In 2022, the Company expects to contribute approximately $3 million to the international
pension plans.

(cid:26)(cid:20)(cid:3)

Estimated Future Benefit Payments. The Company expects to make the following benefit payments, estimated
based on the assumptions used to measure the Company's benefit obligation at the end of the year, reflecting past
and future service from its pension and postemployment plans:

In millions

Year
2022
2023
2024
2025
2026
2026 - 2030

Pension
Benefits

Postemployment
Benefits

$
$
$
$
$
$

6
6
6
7
7
39

$
$
$
$
$
$

12
12
12
12
12
58

Savings Plans. United States 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 United States and International subsidiary
savings plans for the years ended December 31:

In millions

U.S. savings plan

International subsidiary savings plans

Note 9 Derivative Instruments and Hedging Activities

2021

2020

2018

$

$

16

14

$

$

19

13

$

$

21

16

As a portion of Teradata’s operations is conducted outside the United States and in currencies other than the U.S.
dollar, the Company is exposed to potential gains and losses from changes in foreign currency exchange rates. In an
attempt to mitigate the impact of currency fluctuations, the Company uses foreign exchange forward contracts to
hedge transactional exposures resulting predominantly from foreign currency denominated inter-company
receivables and payables. The forward contracts are designated as fair value hedges of specified foreign currency
denominated inter-company receivables and payables and generally mature in three months or less. The fair values
of foreign exchange contracts are based on market spot and forward exchange rates and represent estimates of
possible value that may not be realized in the future. Across its portfolio of contracts, Teradata has both long and
short positions relative to the U.S. dollar. As a result, Teradata’s net involvement is less than the total contract
notional amount of the Company’s foreign exchange forward contracts.

Gains and losses from foreign exchange forward contracts are fully recognized each period and reported along with
the offsetting gain or loss of the related hedged item, either in cost of revenues or in other income (expense),
depending on the nature of the related hedged item.

In June 2018, Teradata executed a five-year interest rate swap with a $500 million initial notional amount to hedge
the floating interest rate of its Term Loan, as more fully described in Note 12. The Company uses interest rate swaps
to manage interest rate risks on future interest payments caused by interest rate changes on its variable rate term
loan. The notional amount of the hedge will step-down according to the amortization schedule of the term loan. The
notional amount of the hedge was $413 million as of December 31, 2021.

The Company performed an initial effectiveness assessment in the third quarter of 2018 on the interest rate swap,
and the hedge was determined to be effective. The hedge is being evaluated qualitatively on a quarterly basis for
effectiveness. Changes in fair value are recorded in Accumulated Other Comprehensive Loss and periodic

(cid:26)(cid:21)(cid:3)

settlements of the swap will be recorded in interest expense along with the interest on amounts outstanding under
the term loan.

The following table identifies the contract notional amount of the Company’s hedging instruments at December 31:

In millions

Contract notional amount of foreign exchange forward contracts
Net contract notional amount of foreign exchange forward contracts
Contract notional amount of interest rate swap

2021

2020

$
$
$

110
$
41 $
$
413

90
29
456

All derivatives are recognized in the consolidated balance sheets at their fair value. The notional amounts represent
agreed-upon amounts on which calculations of dollars to be exchanged are based and are an indication of the extent
of Teradata’s involvement in such instruments. These notional amounts do not represent amounts exchanged by the
parties and, therefore, are not a measure of the instruments. Refer to Note 11 for disclosures related to the fair value
of all derivative assets and liabilities.

The Company does not hold or issue derivative financial instruments for trading purposes, nor does it hold or issue
leveraged derivative instruments. By using derivative financial instruments to hedge exposures to changes in foreign
exchange and interest rates, the Company exposes itself to credit risk. The Company manages exposure to
counterparty credit risk by entering into derivative financial instruments with highly rated institutions that can be
expected to fully perform under the terms of the applicable contracts.

Note 10 Commitments and Contingencies

Legal Proceedings

In the ordinary course of business, the Company is subject to proceedings, lawsuits, governmental investigations,
claims and other matters, including those that relate to the environment, health and safety, employee benefits, export
compliance, intellectual property, tax matters and other regulatory compliance and general matters. It is not
currently a party to any litigation, nor is it aware of any pending or threatened litigation against it that the Company
believes would materially affect its business, operating results, financial condition or cash flows, other than the
following.

On June 19, 2018, the Company and certain of its subsidiaries filed a lawsuit (the "TD-SAP 1" suit) in the U.S.
District Court for the Northern District of California against SAP SE, SAP America, Inc., and SAP Labs, LLC
(collectively, "SAP"). In the TD-SAP 1 lawsuit, the Company alleged, among other things, that SAP
misappropriated certain of the Company’s trade secrets within the Company’s enterprise data analytics and
warehousing products and used such trade secrets to help develop, improve, introduce, and sell one or more
competing products. The Company further alleged that SAP employed anticompetitive practices using its substantial
market position in the enterprise resource planning applications market to pressure the Company’s customers and
prospective customers to use one or more of SAP's competing products and reduce or eliminate customers' and
prospective customers' use of the Company's offerings. The Company sought an injunction barring SAP’s alleged
conduct, monetary damages, and other available legal and equitable relief. In July 2019, SAP filed patent
infringement counterclaims against the Company based on five of SAP’s U.S. patents. On August 31, 2020, the
Company filed a second lawsuit against SAP (the "TD-SAP 2" suit) in the U.S. District Court for the Northern
District of California, in which the Company alleged infringement by SAP of four of the Company's U.S. patents.
On February 16, 2021, SAP filed additional patent infringement counterclaims against the Company in response. On
the same day, SAP also filed a lawsuit in Germany (the "TD-SAP 3" suit) for infringement of a single German
patent. In November 2021, the district court dismissed the Company’s antitrust claims and most of its trade secret
claims in the TD-SAP 1 suit. In December 2021, the Company appealed that decision to the U.S. Court of Appeals
for the Federal Circuit in Washington, D.C. In the meantime, the Company and SAP have entered into a partial
settlement agreement that has resulted in full dismissal of all claims and counterclaims in the TD-SAP 2 suit in

(cid:26)(cid:22)(cid:3)

California and the TD-SAP 3 suit in Germany as well as a stay of all claims and counterclaims remaining in the TD-
SAP 1 suit pending resolution of the Company’s appeal. Currently, it is not possible to determine the likelihood of a
loss or a reasonably estimated range of loss, if any, pertaining to any of SAP’s remaining patent counterclaims in the
TD-SAP 1 lawsuit.

Other Contingencies. The Company provides its customers with certain indemnification rights. In general, the
Company agrees to indemnify the customer if a third party asserts patent or other infringement on the part of the
customer for its use of the Company’s offerings. The Company has indemnification obligations under its charter and
bylaws to its officers and directors, and has entered into indemnification agreements with the officers and directors
of its subsidiaries. From time to time, the Company also enters into agreements in connection with its acquisition
and divestiture activities that include indemnification obligations by the Company. The fair value of these
indemnification obligations is typically not readily determinable due to the conditional nature of the Company’s
potential obligations and the specific facts and circumstances involved with each particular agreement. As such, the
Company has generally not recorded a liability in connection with these indemnification arrangements. Historically,
payments made by the Company under these types of agreements have not had a material effect on the Company’s
consolidated financial condition, results of operations or cash flows.

Concentrations of Risk. The Company is potentially subject to concentrations of credit risk on accounts receivable
and financial instruments such as hedging instruments, and cash and cash equivalents. Credit risk includes the risk
of nonperformance by counterparties. The maximum potential loss may exceed the amount recognized on the
balance sheet. Exposure to credit risk is managed through credit approvals, credit limits, selecting major
international financial institutions (as counterparties to hedging transactions) and monitoring procedures. Teradata’s
business often involves large transactions with customers, and if one or more of those customers were to default in
its obligations under applicable contractual arrangements, the Company could be exposed to potentially significant
losses. However, management believes that the reserves for potential losses were adequate at December 31,
2021 and December 31, 2020.

The Company is also potentially subject to concentrations of supplier risk. Our hardware components are assembled
exclusively by Flex Ltd. ("Flex"). Flex procures a wide variety of components used in the manufacturing process on
behalf of the Company. Although many of these components are available from multiple sources, Teradata utilizes
preferred supplier relationships to provide more consistent and optimal quality, cost and delivery. Typically, these
preferred suppliers maintain alternative processes and/or facilities to ensure continuity of supply. Given the
Company’s strategy to outsource its manufacturing activities to Flex and to source certain components from single
suppliers, a disruption in production at Flex or at a supplier could impact the timing of customer shipments and/or
Teradata’s operating results. In addition, a significant change in the forecasts to any of these preferred suppliers
could result in purchase obligations for components that may be in excess of demand.

Note 11 Fair Value Measurements

Fair value measurements are established utilizing a three-tier fair value hierarchy, which prioritizes the inputs used
in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active
markets for identical assets or liabilities; Level 2, defined as significant other observable inputs, such as quoted
prices in active markets for similar assets or liabilities, or quoted prices in less-active markets for identical assets;
and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to
develop its own assumptions. Financial assets and liabilities are classified in their entirety based on the lowest level
of input that is significant to the fair value measurement.

The Company’s assets and liabilities measured at fair value on a recurring basis include money market funds,
interest rate swaps and foreign currency exchange contracts. A portion of the Company’s excess cash reserves are
held in money market funds which generate interest income based on the prevailing market rates. Money market

(cid:26)(cid:23)(cid:3)

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
using derivative financial instruments, specifically, foreign exchange forward contracts. Additionally, in June 2018,
Teradata executed a five-year interest rate swap with a $500 million initial notional amount to hedge the floating
interest rate on its term-loan. The fair value of these contracts and swaps are measured at the end of each interim
reporting period using observable inputs other than quoted prices, specifically market spot and forward exchange
rates. As such, these derivative instruments are classified within Level 2 of the valuation hierarchy. Fair value of
unrealized gains for open contracts are recorded in other assets and the fair value of unrealized losses are recorded
in other liabilities in the Company's balance sheet. The fair value of foreign exchange forward contracts recorded in
other assets and other liabilities at December 31, 2021 and 2020 were not material. Realized gains and losses from
the Company’s fair value hedges net of corresponding gains or losses on the underlying exposures were immaterial
for years ended December 31, 2021, 2020 and 2019.

The Company’s assets and liabilities measured at fair value on a recurring basis and subject to fair value disclosure
requirements at December 31, 2021 and December 31, 2020 were as follows:

Fair Value Measurements at Reporting Date Using
Quoted Prices
in Active
Markets
for Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs

Significant
Unobservable
Inputs

(Level 3)

(Level 2)

148
16

12
27

$
$

$
$

148
16

$
$

— $
— $

— $
— $

12
27

$
$

—
—

—
—

In millions

Total

Assets
Money market funds at December 31, 2021
Money market funds at December 31, 2020
Liabilities
Interest rate swap at December 31, 2021
Interest rate swap at December 31, 2020

$
$

$
$

Note 12 Debt

In June 2018, Teradata replaced its existing five-year, $400 million revolving credit facility with a new $400
million revolving credit facility (the "Credit Facility"). The Credit Facility ends in June 2023, at which point any
remaining outstanding borrowings would be due for repayment unless extended by agreement of the parties for up
to two additional one-year periods. In addition, under the terms of the Credit Facility, Teradata from time to time
and subject to certain conditions may increase the lending commitments under the Credit Facility in an aggregate
principal amount up to an additional $200 million, to the extent that existing or new lenders agree to provide such
additional commitments. The outstanding principal amount of the Credit Facility bears interest at a floating rate
based upon, at Teradata’s option, a negotiated base rate or a Eurodollar rate plus, in each case, a margin based on
Teradata’s leverage ratio. The Credit Facility is unsecured but is guaranteed by certain of Teradata’s material
domestic subsidiaries and contains certain representations and warranties, conditions, affirmative, negative and
financial covenants, and events of default customary for such facilities. As of December 31, 2021 and 2020, the
Company had no borrowings outstanding under the Credit Facility, leaving $400 million in additional borrowing
capacity available under the Credit Facility. The Company was in compliance with all covenants as of December 31,
2021 and 2020.

Also, in June 2018, Teradata closed on a senior unsecured $500 million five-year term loan. The term loan is
payable in quarterly installments, which commenced on June 30, 2019, with 1.25% of the initial principal amount

(cid:26)(cid:24)(cid:3)

due on each of the first eight payment dates; 2.50% of the initial principal amount due on each of the next four
payment dates; 5.0% of the initial principal amount due on each of the next three payment dates; and all remaining
principal due on June 11, 2023. The outstanding principal amount of the term loan bears interest at a floating rate
based upon a negotiated base rate or a Eurodollar rate plus, in each case, a margin based on the leverage ratio of the
Company. The term loan principal outstanding was $413 million at December 31, 2021 and $456 million at
December 31, 2020. As disclosed in Note 9, Teradata entered into an interest rate swap to hedge the floating interest
rate of the term loan. As a result of the swap, Teradata’s fixed rate on the term loan equals 2.86% plus the applicable
leverage-based margin as defined in the term loan agreement. As of December 31, 2021 and 2020, the all-in fixed
rates are 4.23% and 4.36%, respectively. Remaining unamortized deferred issuance costs of approximately $1
million were being amortized over the five-year term of the term loan. The Company was in compliance with all
covenants as of December 31, 2021 and 2020.

Annual contractual maturities of outstanding principal on the term loan at December 31, 2021, are as follows:

In millions

2022
2023

Total

88
325
413

$

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.

Note 13. Leases

Lessee

The Company adopted ASU No. 2016-02, "Leases (Topic 842)," on January 1, 2019, which requires leases with
durations greater than twelve months to be recognized on the balance sheet. The Company adopted the standard
using the modified retrospective approach utilizing the optional transition method. Prior year financial statements
were not recast using this approach. The Company elected the package of practical expedients available for expired
or existing contracts, which allowed us to carryforward our historical assessments of (1) whether contracts are or
contain leases, (2) lease classification and (3) initial direct costs. Adoption of the new standard resulted in the
recording of additional net lease assets and lease liabilities of approximately $68 million and $66 million,
respectively, as of January 1, 2019. The standard did not materially impact our consolidated net earnings or cash
flows.

The Company leases property and equipment under finance and operating leases. The Company's operating leases
primarily consist of automobiles in certain countries and real estate, including office, storage and parking spaces.
The duration of these leases range from 2 to 5 years. The Company's finance leases primarily consist of equipment
financed for the purpose of delivering services to our customers. For leases with terms greater than 12 months, the
Company recorded the related asset and obligation at the present value of lease payments over the term. Many of
our leases include variable rental escalation clauses which are recognized when incurred. Some of our leases also
include renewal options and/or termination options that are factored into the determination of lease payments and
lease terms when it is reasonably certain that the Company will exercise these options. Lease agreements do not
contain any material residual value guarantees or material restrictive covenants. Leases with an initial term of 12
months or less are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a
straight-line basis over the lease term. For real estate leases beginning in 2019 and later, we account for lease
components (e.g., fixed payments including rent, real estate taxes and insurance costs) separately from the non-lease

(cid:26)(cid:25)(cid:3)

components (e.g., common-area maintenance costs). For automobile leases we account for lease and non-lease
components together.

When available, the Company uses the rate implicit in the lease to discount lease payments to present value.
However, real estate leases do not typically provide a readily determinable implicit rate. Therefore, the Company
must estimate the incremental borrowing rate to discount the lease payments based on information available at lease
commencement. The incremental borrowing rate used in the calculation of the lease liability is based on the secured
rate associated with financed lease obligations for each location of leased property.

The table below presents the lease-related assets and liabilities recorded on the balance sheet at December 31:

In millions, except weighted average calculations Classification on the Balance Sheet

2021

2020

Assets

Operating lease assets
Finance lease assets

Total lease assets

Liabilities
Current

Operating

Finance
Non current
Operating
Finance

Total lease liabilities

Weighted-average remaining lease term

Operating leases
Finance leases

Weighted-average discount rate

Operating leases(1)
Finance leases

Right of use assets - operating lease, net
Property and equipment, net

Current portion of operating lease
liability

Current portion of finance lease liability

Operating lease liability
Finance lease liability

$

$

$

$

26
170
196

12

77

18
53
160

$

$

$

$

38
170
208

15

75

28
70
188

2.81 years
1.86 years

3.35 years
2.03 years

5.00 %
3.98 %

5.00 %
4.33 %

(1) Upon adoption of the new lease standard, discount rates used for existing leases were established based on the Company's
incremental borrowing rate at January 1, 2019. For new leases entered after January 1, 2019, the discount rate was determined
based on the Company's incremental borrowing rate at lease commencement.

Lessee Costs

The table below presents certain information related to the lease costs for finance and operating leases recognized in
the Company's consolidated statements of income (loss) for the years ended December 31:

In millions

Finance lease cost

Depreciation of leased assets
Interest of lease liabilities

Operating lease cost
Sub-lease income from real estate properties owned and leased

Total lease cost

2021

2020

$

$

78
6
17
(5)
96

$

$

55
6
24
(6)
79

(cid:26)(cid:26)(cid:3)

Other Information

The table below presents supplemental cash flow information related to cash paid for amounts included in the
measurement of lease liabilities for the year ended December 31:

In millions

Operating cash flows for operating leases
Operating cash flows for finance leases
Financing cash flows for finance leases

Undiscounted Cash Flows

2021

2020

$
$
$

19 $
6 $
92 $

23
6
70

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining
years to the finance lease liabilities and operating lease liabilities recorded on the balance sheet at December 31,
2021:

In millions

2022
2023
2024
2025
2026
Thereafter

Total minimum lease payments
Less: amount of lease payments representing interest

Present value of future minimum lease payments
Less: current obligations under leases

Long-term lease obligations

Operating
Leases

Finance
Leases

$

$

16
9
7
2
1
—
35
(5)
30
(12)
18

$

$

80
44
11
—
—
—
135
(5)
130
(77)
53

The table below provides the undiscounted cash flows for the Company's finance lease liabilities and operating
lease obligations as of December 31, 2020:

In millions

2021
2022
2023
2024
2025
Thereafter

Total minimum lease payments
Less: amount of lease payments representing interest

Present value of future minimum lease payments
Less: current obligations under leases

Long-term lease obligations

Lessor

Operating
Leases

Finance
Leases

$

$

19
14
9
5
3
1
51
(8)
43
(15)
28

$

$

80
56
17
—
—
—
153
(8)
145
(75)
70

The Company receives rental revenue for leasing hardware offerings to its customers. For our hardware rental
offering, the Company owns or leases the hardware and may or may not provide managed services. Leases
sometimes include options to renew but typically do not include lessee purchase options. The revenue for these
operating leases is generally recognized straight-line over the term of the contract and is included within the

(cid:26)(cid:27)(cid:3)

recurring revenue caption on the consolidated statements of income (loss). Equipment used for this revenue is
reported within Property and equipment, net on the consolidated balance sheet.

The following table includes rental revenue for the years ended December 31:

In millions

Rental revenue*

*Rental revenue includes hardware maintenance.

2021

2020

2019

$

162

$

100

$

76

The following table includes estimated rental revenue expected to be recognized in the future based on executed
contracts at December 31, 2021:

In millions
2022
2023
2024-25

Total

Rental Revenue
154
99
44
297

$

$

Note 14 Segment, Other Supplemental Information and Concentrations

Teradata manages its business under three geographic regions, which are also the Company’s operating segments:
(1) Americas region (North America and Latin America); (2) EMEA region (Europe, Middle East and Africa) and
(3) APJ region (Asia Pacific and Japan). For purposes of discussing results by segment, management excludes the
impact of certain items, consistent with the manner by which management evaluates the performance of each
segment. This format is useful to investors because it allows analysis and comparability of operating trends. It also
includes the same information that is used by Teradata management to make decisions regarding the segments and
to assess financial performance. The chief operating decision maker, who is our President and Chief Executive
Officer, evaluates the performance of the segments based on revenue and multiple profit measures, including
segment gross profit. For management reporting purposes assets are not allocated to the segments. Prior periods
have been restated to conform to the current year presentation.

The following table presents segment revenue and segment gross profit for the Company for the years ended
December 31:

In millions

Segment revenue
Americas
EMEA
APJ

Total revenue
Segment gross profit
Americas
EMEA
APJ

Total segment gross profit
Stock-based compensation expense
Acquisition, integration and reorganization-related costs
Amortization of capitalized software costs

Total gross profit
Selling, general and administrative expenses
Research and development expenses

Total income from operations

(cid:26)(cid:28)(cid:3)

2021

2020

2019

$

$

1,044
543
330
1,917

690
337
188
1,215
18
11
—
1,186
646
309
231

$

$

1,025
485
326
1,836

631
273
168
1,072
16
14
23
1,019
669
334
16

$

$

1,057
492
350
1,899

626
239
148
1,013
14
11
33
955
618
327
10

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 revenues by geographic area for the years ended December 31:

In millions

United States
Americas (excluding United States)

EMEA

APJ

Total revenue

2021

2020

2019

$

$

922

122

543

330

$

921

104

485

326

953

104

492

350

$

1,917

$

1,836

$

1,899

The following table presents property and equipment, net by geographic area at December 31:

In millions

United States
Americas (excluding United States)
EMEA
APJ

Property and equipment, net

2021

2020

210
14
36
28
288

$

$

248
18
43
30
339

$

$

Concentrations. No single customer accounts for more than 10% of the Company's revenue. As of December 31,
2021, 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. 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.

Note 15 Accumulated Other Comprehensive (Loss) Income

The following table provides information on changes in accumulated other comprehensive (loss) income, net of tax
("AOCI"), for the years ended December 31:

In millions

Balance as of December 31, 2018

Other comprehensive loss before reclassifications
Amounts reclassified from AOCI

Net other comprehensive loss
Balance as of December 31, 2019

Other comprehensive (loss) income before reclassifications
Amounts reclassified from AOCI

Net other comprehensive (loss) income

Balance as of December 31, 2020

Other comprehensive income (loss) before reclassifications
Amounts reclassified from AOCI

Net other comprehensive income (loss)

Balance as of December 31, 2021

Defined
benefit
plans

Foreign
currency
translation
adjustments

Total
AOCI

Derivatives

$

$

$

$

(6) $
(9)
—
(9)
(15) $
(6)
—
(6)
(21) $
11
—
11

(10) $

(44) $
(27)
6
(21)
(65) $
(12)
9
(3)
(68) $
(1)
7
6

(62) $

(51) $
(10)
—
(10)
(61) $
7
—
7
(54) $
(12)
—
(12)

(66) $

(101)
(46)
6
(40)
(141)
(11)
9
(2)
(143)
(2)
7
5

(138)

(cid:27)(cid:19)(cid:3)

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

Other Expense
Tax portion

Total reclassifications

Other Expense
Income tax benefit

Net (loss) income

2021

2020

2019

(11)
4
(7) $

(10)
1
(9) $

$

(7)
1
(6)

Further information on the Company’s defined benefit plans is included in Note 8.

Note 16 Reorganization and Business Transformation

2018 Plan

In June 2018, the Company approved a plan to consolidate certain of its operations, including transitioning
its corporate headquarters to San Diego, California from its location in Dayton, Ohio. This plan, which was being
executed in connection with Teradata’s comprehensive business transformation, better aligned the Company’s skills
and resources to effectively pursue opportunities in the marketplace. The Company recognized costs of $23
million in 2018, $14 million in 2019 and $1 million in 2020 for employee separation benefits, transition support,
facilities lease related costs, outside service, legal and other exit-related costs. The employee separation benefit
costs were expensed over the time period that the employees had to work to earn them. All actions were completed
as of December 31, 2020 and the Company incurred costs and charges of approximately $38 million related to the
plan. The majority of the costs were attributable to the Americas operating segment and recorded as selling, general
and administrative expenses with no impact on our segment gross profit. Cash paid related to this plan was $11
million in 2018, $19 million in 2019 and $2 million in 2020. Included in the total costs of $38 million for the plan
are non cash expenses of $6 million for accelerated amortization recorded in 2019 for right-of-use assets associated
with the lease on its prior corporate headquarters. The remaining lease liability is included in our operating lease
obligations as of December 31, 2020 and 2021.

2020 Plan

In September 2020, the Company offered a voluntary separation program ("VSP") to certain tenured employees.
This global program was generally made available to active employees in good standing who (1) were at least 55
years old as of October 1, 2020 and (2) had at least ten years of service with Teradata. This program was
implemented as part of the Company's efforts to improve its cost structure. On November 2, 2020, the Company
approved a plan to realign and reduce its workforce and rationalize its real estate footprint. The workforce measures
involve involuntary headcount reduction actions. These actions are separate from the VSP. The rationalization of the
Company’s real estate footprint involves terminating leases relating to certain of the Company’s offices globally
and transitioning impacted employees to a permanent virtual working environment, co-working space or a smaller
facility, depending on business need. The Company is continuing to evaluate and implement additional measures
that would be expected to result in further cost savings.

The Company expects that the costs relating to these workforce reduction and real estate rationalization measures
will include one-time employee separation benefits, transition support, outside services and other exit-related costs.
The Company incurred total costs and charges related to these actions of $55 million, consisting primarily of the
following:

•

•

$12 million for employee severance and other employee-related costs, which is separate from the
$28 million for costs related to the Voluntary Separation Program,

$7 million charge for facilities lease related costs, and

(cid:27)(cid:20)(cid:3)

•

$8 million for outside service, legal and other associated costs.

The Company incurred $42 million of these costs and charges in 2020 with the remaining $13 million costs and
charges incurred in 2021. Cash expenditures related to these actions are $60 million. Approximately $12 million
of the cash expenditures relate to cash payments to international employees and did not have a material impact on
the Consolidated Statements of Income (Loss) due to the Company accounting for its International 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.

The Company recognized costs of $13 million ($9 million cash and $4 million non-cash) in 2021 and
$42 million ($38 million cash and $4 million non-cash) in 2020 for the VSP, employee separation benefits, facilities
lease related costs, outside service, legal and other associated costs. Certain benefits were expensed over the time
period that the employees worked to earn them to the extent the required service period extends beyond the nominal
period. In 2021, $4 million of these costs were recorded in Costs of revenue, $6 million were recorded in Selling,
general and administrative expenses and $3 million were recorded in Research and development expenses. In 2020,
$10 million of these costs were recorded to Costs of revenue, $25 million were recorded to Selling, general and
administrative expenses and $7 million were recorded to Research and development expenses. There was no impact
to the segment gross profit.

Cash paid related to the plan listed above was $37 million in 2021 and $23 million in 2020. Not included in the
table below are approximately $10 million in 2021 and $2 million in 2020 of cash payments for international
employees which did not have a material impact on the Consolidated Statements of Income (Loss) as noted above.

The 2021 activity and the reserves related to the 2020 plan are as follows:

In millions

VSP
Employee severance and other employee-related costs

Facilities lease related costs, outside service, legal and other
associated costs

Total

Balance at
December
31, 2020

Expense
accruals

Cash
payments

Balance at
December
31, 2021

$

$

16 $
2

—

18 $

2
3

4

9

$

$

(18) $
(5)

(4)

(27) $

—
—

—

—

In addition, the Company incurred non-cash costs not reflected in the table above of $1 million in 2021 and
$2 million in 2020 in stock-based compensation for accelerated vesting tied to the VSP and $3 million in 2021 and
$2 million in 2020 for accelerated amortization of right-of-use assets and fixed assets associated with the
termination of leases relating to certain of the Company’s offices globally. The remaining lease liability is included
in our operating lease obligations as of December 31, 2021 and is not included in the table above.

Note 17 Subsequent Events

On February 9, 2022, Teradata entered into an accelerated share repurchase agreement ("ASR") with JPMorgan
Chase Bank, National Association ("JPMorgan Chase") to purchase shares of its common stock from JPMorgan
Chase for an aggregate purchase price of $250 million. Teradata is purchasing these shares as part of its $1 billion
open market share repurchase authorization, under which approximately $913 million will remain available after
giving effect to the ASR.

Under the ASR, Teradata paid JPMorgan Chase $250 million at the commencement of the agreement and received
an initial delivery of approximately 3.9 million shares of Teradata common stock, based on the closing price of the
common stock of $50.89 on February 8, 2022. The final number of shares that will be delivered to Teradata under

(cid:27)(cid:21)(cid:3)

the ASR will be based on the average of the daily volume-weighted average trading prices of Teradata’s common
stock during the term of the ASR, less a discount.

At settlement, under certain circumstances JPMorgan Chase may be required to deliver additional shares of Teradata
common stock to Teradata, or in other circumstances, Teradata may be required to deliver, at its discretion, either
shares of its common stock or cash to JPMorgan Chase. Under the ASR, the terms of the transaction are subject to
certain adjustments, including adjustments arising if Teradata were to enter into or announce certain specified
transactions or take certain corporate actions before the final settlement.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Item 9.

None.

Item 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Teradata maintains a system of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of
the Securities Exchange Act of 1934 (the "Exchange Act")) that are designed to provide reasonable assurance that
information required to be disclosed in its reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information
is accumulated and communicated to management, including, as appropriate, the chief executive officer and the
chief financial officer, to allow timely decisions regarding required disclosures. In designing and evaluating the
disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our
disclosure controls and procedures were effective to provide reasonable assurance as of December 31, 2021.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting
as such term is defined in Rule 13a-15(f) under the Exchange Act. Teradata’s internal control over financial
reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the Company are being made only in accordance with authorizations of
management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may

(cid:27)(cid:22)(cid:3)

become inadequate because of changes in conditions, or that the degree or compliance with the policies or
procedures may deteriorate.

Management assessed the effectiveness of Teradata’s internal control over financial reporting as of the end of the
period covered by this report. In making this assessment, management used the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control – Integrated Framework
(2013). Based on its assessment and those criteria, management concluded that Teradata’s internal control over
financial reporting was effective as of December 31, 2021.

Teradata’s independent registered public accounting firm has issued their report on the effectiveness of Teradata’s
internal control over financial reporting as of December 31, 2021, which appears in this Annual Report.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the last fiscal
quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.

Item 9B. OTHER INFORMATION

None.

Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT

INSPECTIONS

Not applicable.

PART III

Item 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information required to be included in Part III Item 10 is set forth under the captions "Election of Directors" Our
Corporate Governance," and "Committees of the Board" in Teradata’s Notice of Annual Meeting of Stockholders
and Proxy Statement to be filed with the SEC within 120 days after the end of our fiscal 2021 year (the "2022 Proxy
Statement") and is incorporated herein by reference. The information under the heading "Executive Officers of the
Registrant" in Part I Item 1 of this Annual Report on Form 10-K is also incorporated by reference in this section.

Item 11.

EXECUTIVE COMPENSATION

Information required to be included in Part III Item 11 is set forth under the captions "Director Compensation,"
"Compensation Discussion and Analysis," "Compensation Tables," "Potential Payments Upon Termination or
Change in Control," "Compensation and Human Resource Committee" and "Board Compensation and Human
Resource Committee Report on Executive Compensation" in Teradata’s 2022 Proxy Statement and incorporated
herein by reference.

(cid:27)(cid:23)(cid:3)

Item 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS

Information required to be included in Part III Item 12 is set forth under the caption “Stock Ownership” and the
caption “Current Equity Compensation Plan Information” under Item 3 of Teradata’s 2022 Proxy Statement and
incorporated herein by reference.

Item 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE

Information required to be included in Part III Item 13 is set forth under the captions "Related Person Transactions"
and "Board Independence and Related Transactions" in Teradata’s 2022 Proxy Statement and incorporated herein by
reference.

Item 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

Information required to be included in Part III Item 14 is set forth under the caption "Fees Paid to Independent
Registered Public Accounting Firm" in Teradata’s 2022 Proxy Statement and incorporated herein by reference.

(cid:27)(cid:24)(cid:3)

PART IV

Item 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) Index

1. Financial Statements: The consolidated financial statements of the Company and the Report of Independent
Registered Public Accounting Firm as set forth in Part II, Item 8 of this Annual Report:

Report of Independent Registered Public Accounting Firm (PCAOB ID 238)
Consolidated Statements of Income (Loss) for the years ended December 31, 2021, 2020 and 2019
Consolidated Statements of Consolidated Statements of Comprehensive Income (Loss) for the years
ended December 31, 2021, 2020 and 2019

Consolidated Balance Sheets at December 31, 2021 and 2020
Consolidated Statements of Cash Flows for the years ended December 31, 2021 2020 and 2019
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31,
2021, 2020 and 2019
Notes to Consolidated Financial Statements

44

47

48

49

50

51

52

2. Financial Statement Schedule: Financial Statement Schedule II – Valuation and Qualifying Accounts is included
in this Annual Report on page 87. All other schedules are not required under the related instructions or are not
applicable.

Exhibits: See Index of Exhibits below for a listing of all exhibits to this Annual Report.

(b) Exhibits identified in parentheses below, on file with the SEC, are incorporated herein by reference as exhibits
hereto.

Reference
Number per
Item
601 of
Regulation S-K

3.1

3.2

4.1

4.2

Description

Amended and Restated Certificate of Incorporation of Teradata Corporation as amended and
restated on September 24, 2007 (incorporated by reference to Exhibit 3.1 to the Current
Report on Form 8-K dated September 25, 2007 (SEC file number 001-33458)).

Amended and Restated By-Laws of Teradata Corporation, as amended and restated on July
26, 2016 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K dated
August 1, 2016).

Common Stock Certificate of Teradata Corporation (incorporated by reference to Exhibit 4.1
to the Quarterly Report on Form 10-Q dated November 13, 2007 (SEC file number 001-
33458)).

Description of the Registrant’s Securities (incorporated by reference to Exhibit 4.2 to the
Annual Report on Form 10-K dated February 28, 2020).

10.1

Form of Technology Agreement (incorporated by reference to Exhibit 10.6 to the Registration
Statement on Form 10).

(cid:27)(cid:25)(cid:3)

10.2*

10.3*

10.4*

10.5*

10.6

10.7*

10.7.1*

10.7.2*

10.7.3*

10.7.4*

10.7.5*

10.7.6*

10.7.7*

Teradata Employee Stock Purchase Plan (Amended and Restated as of February 1, 2021)
(incorporated by reference from Appendix B to the Proxy Statement of Teradata Corporation
filed with the SEC on March 18, 2021).

Teradata Management Incentive Plan, as amended and restated on February 20, 2018
(incorporated by reference to Exhibit 10.3 to the Annual Report on Form 10-K dated
February 23, 2018).

Teradata Change in Control Severance Plan, as amended and restated on July 18, 2018
(incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q dated
November 5, 2018).

Teradata Executive Severance Plan, effective as of February 1, 2017 (incorporated by
reference to Exhibit 10.1 to the Current Report on Form 8-K dated February 3, 2017).

Teradata Corporation Director Compensation Program, as amended and restated and effective
on April 17, 2018 (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form
10-Q dated August 6, 2018 (SEC file number 001-33458)).

Teradata 2012 Stock Incentive Plan (Amended and Restated as of March 1, 2021)
(incorporated by reference from Appendix A to the Proxy Statement of Teradata Corporation
filed with the SEC on March 18, 2021).

Form of Stock Option Agreement Under the Teradata 2012 Stock Incentive Plan, approved on
April 19, 2012 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K
dated April 26, 2012).

Form of Stock Option Agreement Under the Teradata 2012 Stock Incentive Plan, approved on
December 2, 2013 (incorporated by reference to Exhibit 10.9.6 to the Annual Report on Form
10-K dated February 27, 2014).

Form of Stock Option Agreement Under the Teradata 2012 Stock Incentive Plan, approved on
December 1, 2014 (incorporated by reference to Exhibit 10.9.11 to the Annual Report on
Form 10-K dated February 27, 2015).

Form of Stock Option Agreement Under the Teradata 2012 Stock Incentive Plan, approved on
December 1, 2015 (incorporated by reference to Exhibit 10.9.16 to the Annual Report on
Form 10-K dated February 26, 2016).

Form of Director Restricted Share Unit Grant Statement under the Teradata 2012 Stock
Incentive Plan, approved on April 26, 2016 (incorporated by reference to Exhibit 10.2 to the
Current Report on Form 8-K dated April 29, 2016).

Form of Stock Option Agreement Under the Teradata 2012 Stock Incentive Plan, approved on
November 28, 2016 (incorporated by reference to Exhibit 10.10.23 to the Annual Report on
Form 10-K dated February 27, 2017).

Form of Restricted Share Unit Agreement Under the Teradata 2012 Stock Incentive Plan,
approved on February 4, 2019 (incorporated by reference to Exhibit 10.8.29 to the Annual
Report, as amended, on Form 10-K/A dated March 1, 2019).

(cid:27)(cid:26)(cid:3)

10.7.8*

10.7.9*

10.7.10*

10.7.11*

10.7.12*

10.7.13*

10.7.14*

10.7.15*

10.7.16*

10.8

10.8.1

10.9*

Form of Restricted Share Unit Agreement For Non-U.S. Employees Under the Teradata 2012
Stock Incentive Plan, approved on February 4, 2019 (incorporated by reference to Exhibit
10.8.30 to the Annual Report, as amended, on Form 10-K/A dated March 1, 2019).

Form of Performance-Based Restricted Share Unit Agreement Under the Teradata 2012 Stock
Incentive Plan, approved on February 4, 2019 (incorporated by reference to Exhibit 10.8.31
to the Annual Report, as amended, on Form 10-K/A dated March 1, 2019).

Form of Restricted Share Unit Agreement Under the Teradata 2012 Stock Incentive Plan,
approved on February 27, 2020 (incorporated by reference to Exhibit 10.1 to the Quarterly
Report on Form 10-Q dated May 11, 2020).

Form of Restricted Share Unit Agreement for Non-U.S. Employees Under the Teradata 2012
Stock Incentive Plan, approved on February 27, 2020 (incorporated by reference to Exhibit
10.2 to the Quarterly Report on Form 10-Q dated May 11, 2020).

Form of Performance-Based Restricted Share Unit Agreement Under the Teradata 2012 Stock
Incentive Plan, approved on February 27, 2020 (incorporated by reference to Exhibit 10.3 to
the Quarterly Report on Form 10-Q dated May 11, 2020).

Form of Restricted Share Unit Agreement for Non-U.S. Employees Under the Teradata 2012
Stock Incentive Plan, approved on February 27, 2020 (incorporated by reference to Exhibit
10.4 to the Quarterly Report on Form 10-Q dated May 11, 2020).

Form of Restricted Share Unit Agreement Under the Teradata 2012 Stock Incentive Plan,
approved on February 26, 2021 (incorporated by reference to Exhibit 10.2 to the Quarterly
Report on Form 10-Q dated May 7, 2021).

Form of Restricted Share Unit Agreement for Non-U.S. Employees Under the Teradata 2012
Stock Incentive Plan, approved on February 26, 2021 (incorporated by reference to Exhibit
10.3 to the Quarterly Report on Form 10-Q dated May 7, 2021).

Form of Performance-Based Restricted Share Unit Agreement Under the Teradata 2012 Stock
Incentive Plan, approved on February 26, 2021 (incorporated by reference to Exhibit 10.4 to
the Quarterly Report on Form 10-Q dated May 7, 2021).

Purchase and Manufacturing Services Agreement, effective April 27, 1998, by and between
NCR Corporation and Solectron Corporation, now known as Flex Ltd. (filed as Exhibit 10.1
to NCR Corporation’s Form 10-Q (SEC File No. 001-00395) for the fiscal quarter ended
June 30, 1998 and incorporated herein by reference).

Amendment No. 1 to Purchase and Manufacturing Services Agreement, dated January 29,
2000, between NCR Corporation and Solectron Corporation, now known as Flex Ltd.
(incorporated by reference to Exhibit 10.22 to the Registration Statement on Form 10).

Offer Letter from Teradata Corporation to Daniel Harrington dated September 20, 2007
(incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K dated February
9, 2009 (SEC file number 001-33458)).

10.9.1*

Amendment to the Offer Letter from Teradata Corporation to Daniel Harrington effective
December 31, 2008 (incorporated by reference to Exhibit 10.6 to the Current Report on Form
8-K dated February 9, 2009 (SEC file number 001-33458)).

(cid:27)(cid:27)(cid:3)

10.10*

10.11*

10.11.1*

10.12*

10.12.1*

10.12.2*

10.12.3*

Amended offer letter from Teradata Corporation to Mark Culhane dated October 31, 2017
and February 20, 2018 (incorporated by reference to Exhibit 10.16 to the Annual Report on
Form 10-K dated February 23, 2018)

Offer letter between Kathy Cullen-Cote and the Company dated June 21, 2019 (incorporated
by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q dated August 5, 2019).

Amendment to Offer Letter between Kathy Cullen-Cote and the Company dated July 30,
2021 (incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q dated
August 6, 2021).

Offer letter from Teradata Corporation to Stephen McMillan dated May 5, 2020 (incorporated
by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q dated August 10, 2020).

Form of Restricted Share Unit Agreement (New Hire Grant) Inducement Grant to new CEO,
approved on May 5, 2020 (incorporated by reference to Exhibit 4.6 to the Registration
Statement on Form S-8 dated June 2, 2020 (SEC file number 001-33458)).

Restricted Share Unit Agreement (Graded Vesting) Inducement Grant to new CEO, approved
on May 5, 2020 (incorporated by reference to Exhibit 4.7 to the Registration Statement on
Form S-8 dated June 2, 2020 (SEC file number 001-33458)).

Performance-Based Restricted Share Unit Agreement (2020-2022 Performance Period
Award) Inducement Grant to new CEO, approved on May 5, 2020 (incorporated by reference
to Exhibit 4.5 to the Registration Statement on Form S-8 dated June 2, 2020 (SEC file
number 001-33458)).

10.12.4*

Executive Severance Plan Participation Agreement to new CEO, approved on May 5, 2020
(incorporated by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q dated
August 10, 2020).

10.13*

10.14*

10.15*

10.16*

Offer Letter from Teradata Corporation to Hillary Ashton dated August 31, 2020
(incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q dated
November 6, 2020).

Offer letter from Teradata Corporation to Margaret Treese dated September 28, 2020.
(incorporated by reference to Exhibit 10.18 to the Annual Report on Form 10-K dated
February 26, 2021).

Teradata New Employee Stock Inducement Plan (incorporated by reference to Exhibit 10.3 to
the Current Report on Form 8-K dated June 2, 2020 (SEC file number 001-33458)).

Offer Letter from Teradata Corporation to Todd Cione dated December 4, 2020 (incorporated
by reference to Exhibit 10.23 to the Annual Report on Form 10-K dated February 26, 2021).

10.16.1*

Form of Restricted Share Unit Agreement (Special New Hire Grant) Under the Teradata New
Employee Stock Inducement Plan to new Chief Revenue Officer (incorporated by reference
to Exhibit 10.1 to the Quarterly Report on Form 10-Q dated May 7, 2021).

(cid:27)(cid:28)(cid:3)

10.17*

10.17.1*

10.17.2*

10.18*

10.19*

10.20*

10.20.1*

10.21*

10.22

10.23

10.24

10.25

21

23.1

31.1

Offer Letter from Teradata Corporation to Claire Bramley dated May 18, 2021 (incorporated
by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q dated August 6, 2021).

Executive Severance Plan Participation Agreement to new CFO (incorporated by reference to
Exhibit 10.3 to the Quarterly Report on Form 10-Q dated August 6, 2021).

Restricted Share Unit Agreement (Graded Vesting) Inducement Grant to new CFO
(incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q dated
August 6, 2021).

Separation Letter between Mark Culhane and the Company executed on September 11, 2021
(incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q dated
November 5, 2021).

Release of Claims between Mark Culhane and the Company executed on September 11, 2021
(incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q dated
November 5, 2021).

Offer Letter from Teradata Corporation to Jacqueline Woods dated November 8, 2021 (filed
herewith).

Form of Restricted Share Unit Agreement (Special New Hire Grant) Under the Teradata 2012
Stock Incentive Plan to new Chief Marketing Officer (filed herewith).

Offer Letter from Teradata Corporation to Michael Hutchinson dated December 22, 2021
(filed herewith).

Revolving Credit Agreement dated as of June 11, 2018 among Teradata Corporation, Bank of
America, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A., as Syndication Agent,
Citibank, N.A., MUFG Bank, LTD., U.S. Bank National Association, and Wells Fargo Bank,
National Association, as Co-Documentation Agents, and the other lenders party thereto
(incorporated by reference to Exhibit 1.1 to the Current Report on Form 8-K dated June 13,
2018).

Term Loan Agreement dated as of June 11, 2018 among Teradata Corporation, JPMorgan
Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent,
Citibank, N.A., MUFG Bank, LTD., U.S. Bank National Association, and Wells Fargo Bank,
National Association, as Co-Documentation Agents, and the other lenders party thereto
(incorporated by reference to Exhibit 1.2 to the Current Report on Form 8-K dated June 13,
2018).

Asset Purchase Agreement, by and between Teradata Corporation and TMA Solutions, L.P.,
dated as of April 22, 2016 (incorporated by reference to Exhibit 2.1 to the Current Report on
Form 8-K dated April 25, 2016).**

Master Confirmation-Uncollared Accelerated Share Repurchase, dated February 9, 2022
between Teradata Corporation and JPMorgan Chase Bank, National Association (filed
herewith).

Subsidiaries of Teradata Corporation.

Consent of Independent Registered Public Accounting Firm.

Certification pursuant to Rule 13a-14(a) dated February 25, 2022.

(cid:28)(cid:19)(cid:3)

31.2

32

101

Certification pursuant to Rule 13a-14(a) dated February 25, 2022.

Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 dated February 25, 2022.

Inline interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated
Statement of Income (Loss) for the twelve month periods ended December 31, 2021, 2020
and 2019, (ii) the Consolidated Statement of Comprehensive Income (Loss) for the twelve
month periods ended December 31, 2021, 2020 and 2019, (iii) the Consolidated Balance
Sheets at December 31, 2021 and 2020, (iv) the Consolidated Statement of Cash Flows for
the twelve month periods ended December 31, 2021, 2020 and 2019, (v) the Consolidated
Statement of Changes in Stockholders’ Equity for the twelve month periods ended December
31, 2021, 2020 and 2019, (vi) Financial Statement Schedule II, and (vii) the notes to the

104

Cover page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*

**

Management contracts or compensatory plans, contracts or arrangements.

Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any
of the omitted schedules upon request by the U.S. Securities and Exchange Commission.

(cid:28)(cid:20)(cid:3)

TERADATA CORPORATION

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
(In millions)

Column A

Column B

Column C

Column D

Column E

Description

Allowance for doubtful accounts

Year ended December 31, 2021
Year ended December 31, 2020
Year ended December 31, 2019

Deferred tax valuation allowance

Year ended December 31, 2021
Year ended December 31, 2020
Year ended December 31, 2019

Provision/
reversals
Charged
to Costs
&
Expenses

Balance at
Beginning
of Period

Charged
to Other
Accounts

Deductions

Balance
at End of
Period

$
$
$

$
$
$

14
18
14

51
45
39

$
$
$

$
$
$

$
$
$

$
$
$

— $
— $
— $

— $
— $
— $

(4) $
(1) $
— $

— $
— $
— $

9
14
18

58
51
45

(cid:28)(cid:21)(cid:3)

Item 16.

FORM 10-K SUMMARY

None.

(cid:28)(cid:22)(cid:3)

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: February 25, 2022

By:

TERADATA CORPORATION

/s/ Claire Bramley
Claire Bramley
Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by

the following persons on behalf of the registrant and in the capacities and on the date indicated.

Signature

Title

/s/ Stephen McMillan
Stephen McMillan

/s/ Claire Bramley
Claire Bramley

/s/ Michael P. Gianoni
Michael P. Gianoni

/s/ Lisa R. Bacus
Lisa R. Bacus

/s/ Timothy C.K. Chou
Timothy C.K. Chou

/s/ Daniel R. Fishback
Daniel R. Fishback

/s/ Cary T. Fu
Cary T. Fu

/s/ Kimberly K. Nelson
Kimberly K. Nelson

/s/ Joanne B. Olsen
Joanne B. Olsen

/s/ John G. Schwarz
John G. Schwarz

President and Chief Executive Officer and Director

Chief Financial Officer

(Principal Financial and Accounting Officer)

Chairman of the Board

Director

Director

Director

Director

Director

Director

Director

(cid:28)(cid:23)(cid:3)

Leadership
Stephen McMillan
President and Chief Executive Officer

Hillary H. Ashton
Chief Product Officer

Claire Bramley
Chief Financial Officer

Stephen A. Brobst
Chief Technology Officer

Nicolas Chapman
Chief Strategy Officer

Todd M. Cione
Chief Revenue Officer

Kathleen R. Cullen-Cote
Chief People Officer

Michael D. Hutchinson
Chief Customer Officer

Margaret A. Treese
Chief Legal Officer

Jacqueline D. Woods
Chief Marketing Officer

Board of Directors
Michael P. Gianoni
Chairman, Teradata Corporation
President and Chief Executive Officer
Blackbaud, Inc.

Lisa R. Bacus
Retired Executive Vice President and
Chief Marketing Officer
Cigna Corporation

Timothy C.K. Chou
Former President
Oracle on Demand, a division of
Oracle Corporation

Daniel R. Fishback
Co-Chief Executive Officer and
Chairman of the Board
UserZoom Inc.

Cary T. Fu
Co-Founder and retired Chairman and
Chief Executive Officer
Benchmark Electronics, Inc.

Stephen McMillan
President and Chief Executive Officer
Teradata Corporation

Kimberly K. Nelson
EVP and Chief Financial Officer
SPS Commerce, Inc.

Joanne B. Olsen
Former EVP, Cloud Services and
Support, Oracle Corporation

John G. Schwarz
Co-Founder and Chairman of the Board
Visier Inc.

CORPORATE INFORMATION

Annual Meeting of Stockholders
Stockholders are invited to attend
Teradata’s Annual Meeting of
Stockholders at 8:00 a.m. Pacific Time
on Tuesday, May 10, 2022. The virtual
meeting will be held at:

www.virtualshareholdermeeting.com/TDC2022

Stockholder Account Inquiries
Information regarding “registered”
stockholder accounts is available from
Teradata’s stock transfer agent,
Computershare Shareholder Services, at
https://www-us.computershare.com/investor
or by contacting:

Teradata Corporation
c/o Computershare Shareholder Services
P.O. Box 505000
Louisville, KY 40233

E-mail: web.queries@computershare.com
Phone:888-730-8825 (U.S.)

781-575-4592 (International)

TDD for the hearing impaired:

800-952-9245 (U.S.)
781-575-4592 (International)

Company Information
Information regarding Teradata’s filings
with the U.S. Securities and Exchange
Commission (“SEC”), annual report on
Form 10-K, quarterly reports, and other
financial information can be accessed at
www.teradata.com/investor, or obtained
without charge by contacting:

Teradata Investor Relations
17095 Via Del Campo
San Diego, CA 92127
Phone: 858-485-2088
E-mail: investor.relations@teradata.com

CEO and CFO Certifications
In 2021, the company’s CEO provided the
New York Stock Exchange (“NYSE”) with
the annual CEO certification regarding
Teradata’s compliance with the NYSE’s
corporate governance listing standards. In
addition, the company’s CEO and CFO
filed with the SEC all required certifications
regarding the quality of Teradata’s public
disclosures in its fiscal 2021 periodic
reports.

TERADATA CORPORATION
17095 Via Del Campo
San Diego, CA 92127
www.teradata.com