Reorganization and Business Transformation

3 Months Ended

Mar. 31, 2016

Restructuring and Related Activities [Abstract]

Reorganization and Business Transformation

In the fourth quarter of 2015 the Company announced a plan to realign Teradata’s business by reducing its cost structure and focusing on the Company’s core data and analytics business. This business transformation includes exiting the marketing applications business (see Note 13), rationalizing costs, and modifying the Company’s go-to-market approach. The Company incurred the following costs for the three months ended March 31, 2016 related to these actions:


•	$9 million for employee severance and other employee-related costs,


•	$80 million charge for asset write-downs, and


•	$8 million for professional services, legal and other associated costs.

From the amounts incurred above, $80 million was for non-cash write-downs of goodwill, acquired intangibles and other assets (see Note 4). In addition to the costs and charges incurred above, the Company made cash payments of $8 million for employee severance that did not have a material impact on its Statement of Operations due to Teradata accounting for its postemployment benefits under Accounting Standards Codification 712, Compensation - Nonretirement Postemployment Benefits (“ASC 712”), which uses actuarial estimates and defers the immediate recognition of gains or losses. Because the Company accounts for postemployment benefits under ASC 712, it did not record any liability associated with ASC 420, Exit or Disposal Cost Obligations.