0000816761-16-000068.txt : 20160701 0000816761-16-000068.hdr.sgml : 20160701 20160701131625 ACCESSION NUMBER: 0000816761-16-000068 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20160701 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20160701 DATE AS OF CHANGE: 20160701 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TERADATA CORP /DE/ CENTRAL INDEX KEY: 0000816761 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 753236470 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-33458 FILM NUMBER: 161745874 BUSINESS ADDRESS: STREET 1: 10000 INNOVATION DRIVE CITY: DAYTON STATE: OH ZIP: 45342 BUSINESS PHONE: 937-242-4800 MAIL ADDRESS: STREET 1: 10000 INNOVATION DRIVE CITY: DAYTON STATE: OH ZIP: 45342 8-K 1 tdc-070120168k.htm FORM 8-K Document



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
__________________
 
FORM 8-K
 
__________________
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 
Date of Report (date of earliest event reported): July 1, 2016
 

 
TERADATA CORPORATION
(Exact name of registrant as specified in its charter)
  
Commission File Number 001-33458  
 
 
 
Delaware
 
75-3236470
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
10000 Innovation Drive
Dayton, Ohio 45342
(Address of principal executive offices and zip code)
 
Registrant’s telephone number, including area code: (866) 548-8348
 
N/A
(Former name or former address, if changed since last report)
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 





Item 2.01    Completion of Acquisition or Disposition of Assets.
On April 25, 2016, Teradata Corporation (“Teradata” or the “Company”) filed a Current Report on Form 8-K/A updating the estimates for the Company’s 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 and rationalizing costs.
On July 1, 2016, pursuant to the Asset Purchase Agreement, dated as of April 22, 2016 (the “Purchase Agreement”), by and between Teradata and TMA Solutions, L.P., a Cayman Islands exempted limited partnership and affiliate of Marlin Equity Partners (“Buyer”), Teradata completed the previously announced sale of Teradata’s marketing applications business (the “TMA Business”) to Buyer. The purchase price received for the TMA Business was approximately $90 million in cash, subject to a post-closing adjustment for working capital, debt and other metrics, which is currently estimated at $92 million. In connection with the closing of the transaction, the parties have entered into a transition services agreement, pursuant to which Teradata will provide certain services to Buyer, including accounting, human resources, order processing and invoicing and information technology services for a service period of up to 15 months after the closing of the transaction. The foregoing description of the Purchase Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Purchase Agreement, which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on April 25, 2016.

The Company's pro forma financial information giving effect to the divestiture of the TMA Business is attached as Exhibit 99.1.
Item 9.01        Financial Statements and Exhibits.
(b) Pro Forma Financial Information
The following unaudited pro forma condensed consolidated financial statements are attached as Exhibit 99.1 and are incorporated herein by reference.
•
Unaudited pro forma condensed consolidated statements of (loss) income for the three months ended March 31, 2016 and the year ended December 31, 2015.
•
Unaudited pro forma condensed consolidated balance sheet as of March 31, 2016.
•
Notes to the unaudited pro forma condensed consolidated financial statements.
(d)    Exhibits:
The following exhibits are attached with this current report on Form 8-K:
 
 
 
Exhibit No.
 
Description
99.1
 
Unaudited pro forma condensed consolidated financial information.





SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
 
 
 
 
 
TERADATA CORPORATION
 
 
 
Date: July 1, 2016
 
By:
 
/s/ Stephen M. Scheppmann
 
 
 
 
Stephen M. Scheppmann
 
 
 
 
Executive Vice President and Chief Financial Officer



    
Index to Exhibits
 
 
 
 
Exhibit No.
 
Description
99.1
 
Unaudited pro forma condensed consolidated financial information.





 EX-99.1 2 tdcexhibit991unauditedprof.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1

Teradata Corporation
Unaudited Pro Forma Condensed Consolidated Financial Information


Overview
On April 25, 2016, Teradata Corporation (“Teradata” or the “Company”) filed a Current Report on Form 8-K/A updating the estimates for the Company’s 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 and rationalizing costs.
On July 1, 2016, pursuant to the Asset Purchase Agreement, dated as of April 22, 2016 (the “Purchase Agreement”), by and between Teradata and TMA Solutions, L.P., a Cayman Islands exempted limited partnership and affiliate of Marlin Equity Partners (“Buyer”), Teradata completed the previously announced sale of Teradata’s marketing applications business (the “TMA Business”) to Buyer. The purchase price received for the TMA Business was approximately $90 million in cash, subject to a post-closing adjustment for working capital, debt and other metrics, which is currently estimated at $92 million. In connection with the closing of the transaction, the parties have entered into a transition services agreement, pursuant to which Teradata will provide certain services to Buyer, including accounting, human resources, order processing and invoicing and information technology services for a service period of up to 15 months after the closing of the transaction. The foregoing description of the Purchase Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Purchase Agreement, which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on April 25, 2016.

Basis of Presentation
The unaudited pro forma condensed consolidated financial statements reflect adjustments to Teradata’s historical financial results as reported under the U.S. Generally Accepted Accounting Principles ("GAAP") in connection with the sale of the TMA Business. The following unaudited pro forma condensed consolidated statements of (loss) income for the three months ended March 31, 2016 and the year ended December 31, 2015 give effect to the divestiture as if it occurred on January 1, 2015, the beginning of the earliest period presented. The unaudited pro forma condensed consolidated balance sheet gives effect to the divestiture as if it occurred as of March 31, 2016, our latest balance sheet date provided in our public filings. The pro forma adjustments are described in the accompanying notes to the unaudited pro forma condensed consolidated financial statements.

The unaudited pro forma condensed consolidated financial statements are being provided for information purposes only and are not necessarily indicative of the results of operations or financial position that would have resulted if the divestiture had actually occurred on the date indicated and are not intended to project the Company’s results of operations or financial position for any future period. The pro forma adjustments are based on available information and assumptions that the Company believes are directly attributable to the sale, are factually supportable, and with respect to the statement of operations, have continuing impact on the consolidated results. The unaudited pro forma condensed consolidated financial statements and the accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto included in Teradata’s most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2016.






Teradata Corporation
Unaudited Pro Forma Condensed Consolidated Statement of (Loss) Income
For the Three Months Ended March 31, 2016
 
 
GAAP
 
Pro Forma
 
 
 
 
 
 
As reported
 
Adjustments (a)
 
Notes
 
Pro forma
(in millions, except per share amounts)
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
Product revenue
 
$
194

 
$
(6
)
 
(b)
 
$
188

Service revenue
 
351

 
(28
)
 
(b)
 
323

Total revenue
 
545

 
(34
)
 
 
 
511

Costs and operating expenses
 
 
 
 
 
 
 
 
Cost of products
 
78

 
—

 
 
 
78

Cost of services
 
198

 
(19
)
 
(b)
 
179

Selling, general and administrative expenses
 
174

 
(23
)
 
(b)
 
151

Research and development expenses
 
57

 
(12
)
 
(b)
 
45

Impairment of goodwill and acquired intangibles
 
80

 
(76
)
 
(b)
 
4

Total costs and operating expenses
 
587

 
(130
)
 
 
 
457

(Loss) income from operations
 
(42
)
 
96

 
 
 
54

Other expense, net
 
 
 
 
 
 
 
 
Interest expense
 
(3
)
 
—

 
 
 
(3
)
Other income, net
 
—

 
—

 
 
 
—

Total other expense, net
 
(3
)
 
—

 
 
 
(3
)
(Loss) income before income taxes
 
(45
)
 
96

 
 
 
51

Income tax expense
 
1

 
13

 
(c)
 
14

Net (loss) income
 
$
(46
)
 
$
83

 
 
 
$
37

Net (loss) income per common share
 
 
 
 
 
 
 
 
Basic
 
$
(0.36
)
 

 
 
 
$
0.29

Diluted
 
$
(0.36
)
 

 
 
 
$
0.28

Weighted average common shares outstanding
 
 
 
 
 
 
 
 
Basic
 
129.4

 
 
 
 
 
129.4

Diluted
 
129.4

 
 
 
 
 
130.9

 
 
 
 
 
 
 
 
 






Teradata Corporation
Unaudited Pro Forma Condensed Consolidated Statement of (Loss) Income
For the Year Ended December 31, 2015
 
 
GAAP
 
Pro Forma
 
 
 
 
 
 
As reported
 
Adjustments (a)
 
Notes
 
Pro forma
(in millions, except per share amounts)
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
Product revenue
 
$
1,057

 
$
(28
)
 
(b)
 
$
1,029

Service revenue
 
1,473

 
(124
)
 
(b)
 
1,349

Total revenue
 
2,530

 
(152
)
 
 
 
2,378

Costs and operating expenses
 
 
 
 
 
 
 
 
Cost of products
 
440

 
(11
)
 
(b)
 
429

Cost of services
 
814

 
(90
)
 
(b)
 
724

Selling, general and administrative expenses
 
765

 
(92
)
 
(b)
 
673

Research and development expenses
 
228

 
(40
)
 
(b)
 
188

Impairment of goodwill and acquired intangibles
 
478

 
(478
)
 
(b)
 
—

Total costs and operating expenses
 
2,725

 
(711
)
 
 
 
2,014

(Loss) income from operations
 
(195
)
 
559

 
 
 
364

Other income, net
 
 
 
 
 
 
 
 
Interest expense
 
(9
)
 
—

 
 
 
(9
)
Other income, net
 
60

 
—

 
 
 
60

Total other income, net
 
51

 
—

 
 
 
51

(Loss) income before income taxes
 
(144
)
 
559

 
 
 
415

Income tax expense
 
70

 
44

 
(c)
 
114

Net (loss) income
 
$
(214
)
 
$
515

 
 
 
$
301

Net (loss) income per common share
 
 
 
 
 
 
 
 
Basic
 
$
(1.53
)
 

 
 
 
$
2.16

Diluted
 
$
(1.53
)
 

 
 
 
$
2.12

Weighted average common shares outstanding
 
 
 
 
 
 
 
 
Basic
 
139.6

 
 
 
 
 
139.6

Diluted
 
139.6

 
 
 
 
 
141.9






Teradata Corporation
Unaudited Pro Forma Condensed Consolidated Balance Sheets
As of March 31, 2016
 
 
GAAP
 
Pro Forma
 
 
 
 
(in millions, except per share amounts)
 
As reported
 
Adjustments (a)
 
Notes
 
Pro Forma
Assets
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
917

 
88

 
(d)
 
$
1,005

Accounts receivable, net
 
519

 
—

 
 
 
519

Inventories
 
54

 
—

 
 
 
54

Assets held for sale
 
139

 
(134
)
 
(e)
 
5

Other current assets
 
48

 
(7
)
 
(f)
 
41

Total current assets
 
1,677

 
(53
)
 
 
 
1,624

Property and equipment, net
 
131

 
—

 
 
 
131

Capitalized software, net
 
190

 
—

 
 
 
190

Goodwill
 
384

 
—

 
 
 
384

Acquired intangible assets
 
17

 
—

 
 
 
17

Deferred income taxes
 
48

 
—

 
 
 
48

Other assets
 
17

 
—

 
 
 
17

Total assets
 
$
2,464

 
$
(53
)
 
 
 
$
2,411

Liabilities and stockholders' equity
 
 
 
 
 
 
 
 
Current liabilities
 
 
 
 
 
 
 
 
Current portion of long-term debt
 
$
30

 
—

 
 
 
$
30

Short-term borrowings
 
80

 
—

 
 
 
80

Accounts payable
 
83

 
—

 
 
 
83

Payroll and benefits liabilities
 
118

 
—

 
 
 
118

Deferred revenue
 
506

 
—

 
 
 
506

Liabilities held for sale
 
55

 
(55
)
 
(e)
 
—

Other current liabilities
 
96

 
13

 
(f)
 
109

Total current liabilities
 
968

 
(42
)
 
 
 
926

Long-term debt
 
560

 
—

 
 
 
560

Pension and other postemployment plan liabilities
 
81

 
—

 
 
 
81

Long-term deferred revenue
 
15

 
—

 
 
 
15

Deferred tax liabilities
 
20

 
(2
)
 
(f)
 
18

Other liabilities
 
26

 
—

 
 
 
26

Total liabilities
 
1,670

 
(44
)
 
 
 
1,626

Stockholders' equity
 
 
 
 
 
 
 
 
Preferred stock
 
—

 
—

 
 
 
—

Common stock
 
1

 
—

 
 
 
1

Paid-in capital
 
1,158

 
—

 
 
 
1,158

Accumulated deficit
 
(297
)
 
(9
)
 
(g)
 
(306
)
Accumulated other comprehensive loss
 
(68
)
 
—

 
 
 
(68
)
Total stockholders' equity
 
794

 
(9
)
 
 
 
785

Total liabilities and stockholders' equity
 
$
2,464

 
$
(53
)
 
 
 
$
2,411






Teradata Corporation
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements


The unaudited pro forma adjustments reflect the following assumptions:

(a)
The pro forma adjustments do not include special items that the Company sometimes excludes to present financial results.

(b)
Elimination of revenue, cost and operating expenses attributable to the TMA Business. The pro forma adjustments exclude the portion of the Marketing Applications business that will be retained by Teradata.

(c)
Adjustment reflects the tax effect of the pro forma adjustments at the applicable statutory income tax rates, including the discrete tax impact of the goodwill impairment that is not deductible for tax purposes.

(d)
Adjustment reflects the approximately $92 million in cash received for the sale of the TMA Business, net of $4 million of transaction-related costs. The actual cash to be received in the third quarter of 2016 is subject to change pending the finalization of working capital and transaction costs.

(e)
Elimination of assets and liabilities related to the TMA Business as if the divestment occurred on March 31, 2016. The remaining $5 million of assets held for sale relates to the sale of the Company's corporate plane.

(f)
Adjustment reflects the $18 million estimated tax expense, of which $13 million is cash taxes associated with the tax gain on the sale of the TMA Business assets, due to having zero tax basis in goodwill. The tax expense associated with the gain was calculated based on the amount of proceeds allocated to the various jurisdictions in accordance with the Purchase Agreement at the local statutory rates.

(g)
Adjustment reflects the estimated after-tax effect on retained earnings as if the divestment occurred on March 31, 2016, including the tax gain on the sale of the TMA Business and the reduction in net assets and liabilities. The actual loss to be reported in the third quarter of 2016 is subject to change pending final determination of the net asset value of the TMA Business, finalization of working capital, transaction costs and other adjustments.