8-K

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): Aug 6, 2009

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.)

2835 Miami Village 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 2.02 Results of Operations and Financial Condition.

The Company is furnishing the following information as required under Item 2.02 “Results of Operations and Financial Condition” of Form 8-K and Item 7.01 “Regulation FD Disclosure.” Such information, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934.

On August 6, 2009, the Company issued a press release setting forth its second quarter 2009 revenue and earnings per share amounts. A copy of the press release is attached hereto as Exhibit 99.1 and hereby incorporated by reference.

Item 7.01 Regulation FD Disclosure.

The information set forth above under Item 2.02 “Results of Operations and Financial Condition” is furnished pursuant to this Item 7.01 and Exhibit 99.1 is hereby incorporated by reference into this Item 7.01.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits:

The following exhibits are attached with this current report on Form 8-K:

Exhibit No.	Description
99.1	Press Release, dated August 6, 2009, issued by the Company.

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: August 6, 2009	By:	/s/ Stephen M. Scheppmann
		Stephen M. Scheppmann
		Executive Vice President and Chief Financial Officer

Index to Exhibits

Exhibit No.	Description
99.1	Press Release, dated August 6, 2009, issued by the Company.

EX-99.1

Exhibit 99.1

	2835 Miami Village Drive Dayton, OH 45342
	NEWS RELEASE
For media information:	For investor information:
Dian Terry (937) 242-4781 dian.terry@teradata.com	Gregg Swearingen (937) 242-4600 gregg.swearingen@teradata.com

For Release on August 6, 2009

Teradata Announces 2009 Second Quarter Results

DAYTON, Ohio – Teradata Corporation (NYSE: TDC), the world’s largest company solely focused on data warehousing and enterprise analytics, today reported revenue of $421 million for the quarter ended June 30, 2009, a decrease of 7 percent from $455 million in the second quarter of 2008.Revenue decreased 2 percent from the second quarter of 2008, when adjusted for 5 percentage points of negative impact from currency fluctuation.⁽¹⁾

Gross margin in the second quarter was 55.3 percent, versus 54.7 percent in the second quarter of 2008. Product gross margin declined due to lower volume and foreign currency translation, while service gross margin increased due to higher professional services margin, as Teradata effectively managed expenses while increasing the productivity of the company’s professional services resources.

Selling, general and administrative expenses were down $10 million from the second quarter of 2008, while research and development expenses increased $2 million from the prior-year period.

Teradata reported second-quarter net income of $62 million, or $0.36 per diluted share, compared to net income of $69 million, or $0.38 per diluted share, in the second quarter of 2008.

“Teradata delivered another good quarter, and for the first half of 2009, revenues were up 1 percent in constant currency, and earnings per share were the same as prior year. This was a solid start, considering the economic environment. These results also included increased investments in R&D, market coverage and strategic partnerships, which are key to our future. The entire organization executed well, delivering significant customer wins and expansions,

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improving gross margins and managing costs,” said Mike Koehler, president and chief executive officer of Teradata Corporation.

“In the second quarter, we announced our expanded partnership with SAP and released Teradata 13, a very significant database release in terms of performance boost, new features and functionalities. In addition, we released data warehouse firsts such as storage virtualization and automated multi-temperature data management.

“We continue to advance our technology lead in data warehousing across all of our platforms. We have a strong business model, and we are focused on bringing value to our customers today and for years to come.”

Regional Operating Segment Results

Teradata reports its results in three regional operating segments.

Americas

Teradata generated $229 million of revenue in its Americas region in the second quarter of 2009, down 3 percent from $236 million in the second quarter of 2008. Revenue declined 1 percent, when adjusted for 2 percentage points of negative impact from currency translation.⁽¹⁾

Gross margin in the Americas region in the quarter was 58.1 percent, compared to 57.6 percent in the second quarter of 2008. Gross margin in the quarter was higher due to improved professional services gross margin, which benefited from higher utilization rates, lower outside contractor expense and overall cost management.

Europe, Middle East and Africa (EMEA)

Revenue in Teradata’s EMEA region in the second quarter of 2009 was $118 million, down 8 percent from $128 million generated in the second quarter of 2008. Revenue increased 6 percent when adjusted for currency translation, which negatively impacted the revenue comparison in the EMEA region by 14 percentage points.⁽¹⁾

Gross margin in the EMEA region was 54.2 percent, versus 53.1 percent in the second quarter of 2008. Gross margin in EMEA improved in the second quarter of 2009 due to improved professional services margin, which offset the effects of foreign currency translation and an adverse mix of hardware content and third-party products.

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Asia Pacific / Japan (APJ)

Teradata generated $74 million of revenue in its APJ region in the quarter, a 19 percent decrease from $91 million in the second quarter of 2008. The revenue decline in the APJ region was 17 percent, when adjusted for 2 percentage points of negative impact from currency translation.⁽¹⁾

Gross margin in the APJ region in the quarter was 48.6 percent, compared to 49.5 percent in the second quarter of 2008. Gross margin in the APJ region was lower due to the impact of lower product volume and the resulting adverse mix of product versus services revenues, which was somewhat offset by improved professional services margin.

Operating Income

Second-quarter operating income of $84 million was down from $92 million reported in the second quarter of 2008, as gross margin improvement, lower selling, general and administrative expense and the impact of currency translation were offset by lower revenue and volume, higher research and development expense and incremental investment in new sales territories.

Other Items

“Other Income” declined $2 million from the second quarter of 2008 as interest income was offset by normal recurring fees associated with the company’s operational financing activities. The lower interest rate environment negatively impacted interest income, despite Teradata having $271 million more in cash and short-term investments than at the end of the second quarter of 2008.

The effective income tax rate in the second quarter of 2009 was 26.2 percent, versus 26.6 percent in the prior-year period.

Cash Flow

During the second quarter of 2009, Teradata generated $103 million of cash from operating activities, compared to $85 million in the prior-year period. Capital expenditures in the second quarter of 2009 were $20 million, compared to $23 million in the second quarter of 2008. Teradata generated $83 million of free cash flow (cash from operations less capital expenditures

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and additions to capitalized software)⁽²⁾ in the second quarter of 2009, versus generating $62 million in the same period in 2008.

During the first six months of 2009, Teradata generated $268 million of cash from operating activities, compared to $228 million in the prior-year period. Capital expenditures in the first half of 2009 were $40 million, compared to $43 million in the same period in 2008. During the first two quarters of 2009, Teradata generated $228 million of free cash flow, versus $185 million in the same period in 2008.

	For the periods ended June 30 (in millions)
	Three Months						Six Months
	2009			2008			2009			2008
Net Income (GAAP)	$	62		$	69		$	107		$	111
Cash provided by operating activities (GAAP)	$	103		$	85		$	268		$	228
Less capital expenditures for:
Expenditures for property and equipment		(4	)		(7	)		(13	)		(11	)
Additions to capitalized software		(16	)		(16	)		(27	)		(32	)
Total capital expenditures		(20	)		(23	)		(40	)		(43	)
Free Cash Flow (non-GAAP measure) (2)	$	83		$	62		$	228		$	185
Free Cash Flow as a percentage of Net Income(2)		134	%		90	%		213	%		167	%

Balance Sheet

Teradata ended the second quarter of 2009 with $638 million in cash, a $67 million increase from March 31, 2009. In addition, the company used approximately $30 million of cash to repurchase approximately 1.4 million shares during the second quarter of 2009. During the first six months of 2009, the company used approximately $50 million to repurchase approximately 2.7 million shares.

Guidance

Although the global economic environment continues to impact capital expenditures by companies, and limits visibility into demand for the foreseeable future, Teradata expects earnings

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per share to be in the $1.22 to $1.28 range for the full year 2009. For the full year, the company continues to expect selling, general and administrative expenses to be flat to down from 2008. Within this previously discussed expectation, the company expects higher selling expense, as well as higher research and development expense and amortization of capitalized software in the second half of the year, compared to these items in the first half of the year.

2009 Second-Quarter Earnings Conference Call

A conference call is scheduled today at 8:30 a.m. (EDT) to discuss the company’s second-quarter 2009 results. Access to the conference call, as well as a replay of the call, is available on Teradata’s web site at www.teradata.com/investor.

Supplemental financial information regarding Teradata’s operating results is also available on the Investor Relations page of Teradata’s web site.

About Teradata

Teradata Corporation (NYSE: TDC) is the world’s largest company solely focused on raising intelligence through data warehousing, data warehouse appliances, consulting services and enterprise analytics. Teradata is in more than 60 countries and on the web at www.teradata.com.

# # #

Teradata is a trademark or registered trademark of Teradata Corporation in the United States and other countries.

1. The impact of currency is determined by calculating the prior period results using the current-year monthly average currency rates. See the foreign currency schedule on the investor page of the company’s web site www.teradata.com/investor.

	For the Periods Ended June 30
$ millions	Three Months								Six Months
Revenue	2009		2008		% Change As Reported		% Change Constant Currency		2009		2008		% Change As Reported		% Change Constant Currency
Products (hardware/software)	$	185	$	221	(16	)%	(12	)%	$	342	$	386	(11	)%	(6	)%
Professional and installation-related services		127		126	1	%	7	%		233	$	233	—	%	7	%
Maintenance services		109		108	1	%	6	%		213		211	1	%	6	%
Total services		236		234	1	%	6	%		446		444	—	%	6	%
Total revenue	$	421	$	455	(7	)%	(2	)%	$	788	$	830	(5	)%	1	%

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	For the Periods Ended June 30
$ millions	Three Months								Six Months
Revenue	2009		2008		% Change As Reported		% Change Constant Currency		2009		2008		% Change As Reported		% Change Constant Currency
Revenue – by segment
Americas	$	229	$	236	(3	)%	(1	)%	$	434	$	446	(3	)%	(1	)%
EMEA		118		128	(8	)%	6	%		215		231	(7	)%	9	%
APJ		74		91	(19	)%	(17	)%		139		153	(9	)%	(6	)%
Total revenue	$	421	$	455	(7	)%	(2	)%	$	788	$	830	(5	)%	1	%

2. Teradata defines free cash flow as cash provided/used by operating activities less capital expenditures for property and equipment, and additions to capitalized software. Free cash flow does not have a uniform definition under GAAP; therefore Teradata’s definition may differ from other companies’ definitions of this measure. Teradata’s management uses free cash flow to assess the financial performance of the company, and believes it 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 generated after capital expenditures for – among other things – investment in the company’s existing businesses; strategic acquisitions; strengthening the company’s balance sheet; repurchase of company stock; and repayment of the company’s debt obligations, if any. Free cash flow does not represent the residual cash flow available for discretionary expenditures since there may be other nondiscretionary expenditures that are not deducted from the measure.

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Note to Investors

This news release contains forward-looking statements, including statements as to anticipated or expected results, beliefs, opinions and future financial performance, within the meaning of Section 21E of the Securities and Exchange Act of 1934. Forward-looking statements include projections of revenue, profit growth and other financial items, future economic performance and statements concerning analysts’ earnings estimates, among other things. These forward-looking statements are based on current expectations and assumptions and involve risks and uncertainties that could cause Teradata’s actual results to differ materially.

In addition to the factors discussed in this release, other risks and uncertainties could affect our future results, and could cause actual results to differ materially from those expressed in such forward-looking statements. Such factors include those relating to: the current global economic downturn and its impact on the markets in general or on the ability of our suppliers to meet their commitments to us, or the timing of purchases by our current and potential customers, and other general economic and business conditions; the rapidly changing and intensely competitive nature of the information technology industry and the data enterprise warehousing business, including the increased pressure on price/performance for data warehousing solutions; fluctuations in our operating results, unanticipated delays or accelerations in our sales cycles and the difficulty of accurately estimating revenues; risks inherent in operating in foreign countries, including the impact of economic, political, legal, regulatory, compliance, cultural, foreign currency fluctuations and other conditions abroad; the timely development, production or acquisition and market acceptance of new and existing products and services, including our ability to accelerate market acceptance of new products and services; tax rates; turnover of workforce and the ability to attract and retain skilled employees; availability and successful exploitation of new acquisition and alliance opportunities; changes in Generally Accepted Accounting Principles (GAAP) and the resulting impact, if any, on the company’s accounting policies; continued efforts to establish and maintain best-in-class internal information technology and control systems; and other factors described from time to time in the company’s filings with the U.S. Securities and Exchange Commission and the company’s annual reports to stockholders The company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Schedule A

TERADATA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(in millions, except per share amounts)

	For the Periods Ended June 30
	Three Months								Six Months
	2009			2008			% Chg		2009			2008			% Chg
Revenue
Products	$	185		$	221		-16	%	$	342		$	386		-11	%
Services		236			234		1	%		446			444		0	%
Total revenue		421			455		-7	%		788			830		-5	%
Product gross margin		119			146					222			251
% of Revenue		64.3	%		66.1	%				64.9	%		65.0	%
Services gross margin		114			103					211			192
% of Revenue		48.3	%		44.0	%				47.3	%		43.2	%
Total gross margin		233			249					433			443
% of Revenue		55.3	%		54.7	%				54.9	%		53.4	%
Selling, general and administrative expenses		122			132					232			248
Research and development expenses		27			25					57			50
Income from operations		84			92					144			145
% of Revenue		20.0	%		20.2	%				18.3	%		17.5	%
Interest and Other Income, net		—			2					—			5
Income before income taxes		84			94					144			150
% of Revenue		20.0	%		20.7	%				18.3	%		18.1	%
Income tax expense		22			25					37			39
% Tax rate		26.2	%		26.6	%				25.7	%		26.0	%
Net income	$	62		$	69				$	107		$	111
% of Revenue		14.7	%		15.2	%				13.6	%		13.4	%
Net income per common share
Basic	$	0.36		$	0.38				$	0.62		$	0.62
Diluted	$	0.36		$	0.38				$	0.61		$	0.61
Weighted average common shares outstanding
Basic		172.3			179.3					172.8			179.9
Diluted		173.9			181.2					174.1			181.8

Schedule B

TERADATA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in millions)

	June 30,			March 31,			December 31,			June 30,
	2009			2009			2008			2008
Assets
Current assets
Cash and cash equivalents	$	638		$	506		$	402		$	317
Short term investments		—			65			40			50
Accounts receivable, net		342			359			451			445
Inventories		45			52			44			42
Other current assets		73			67			78			55
Total current assets		1,098			1,049			1,015			909
Property and equipment, net		91			91			88			94
Capitalized software, net		93			84			80			74
Goodwill		108			108			110			106
Deferred income taxes		92			100			109			130
Other assets		22			27			28			39
Total assets	$	1,504		$	1,459		$	1,430		$	1,352
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	81		$	80		$	99		$	94
Payroll and benefits liabilities		80			68			83			84
Deferred revenue		302			321			255			283
Other current liabilities		76			68			103			101
Total current liabilities		539			537			540			562
Pension and other postemployment plan liabilities		80			79			83			92
Other liabilities		27			30			30			7
Total liabilities		646			646			653			661
Stockholders’ equity
Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and outstanding		—			—			—			—
Common stock: par value $0.01 per share, 500.0 shares authorized, 181.3, 180.9, 180.5 and 179.8 shares issued at June 30, 2009, March 31, 2009, December 31, 2008 and June 30, 2008, respectively		2			2			2			2
Paid-in capital		592			580			572			537
Treasury Stock		(188	)		(158	)		(137	)		(34	)
Retained earnings		437			374			329			190
Accumulated other comprehensive income		15			15			11			(4	)
Total stockholders’ equity		858			813			777			691
Total liabilities and stockholders’ equity	$	1,504		$	1,459		$	1,430		$	1,352

Schedule C

TERADATA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in millions)

	For the Periods Ended June 30
	Three Months						Six Months
	2009			2008			2009			2008
Operating activities
Net income	$	62		$	69		$	107		$	111
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		13			16			27			33
Stock-based compensation expense		6			5			11			10
Excess tax benefit from stock-based compensation		(1	)		—			(1	)		(1	)
Deferred income taxes		8			10			16			16
Changes in assets and liabilities:
Receivables		17			(26	)		105			76
Inventories		7			6			—			9
Current payables and accrued expenses		15			21			(33	)		(38	)
Deferred revenue		(24	)		(16	)		42			43
Other assets and liabilities		—			—			(6	)		(31	)
Net cash provided by operating activities		103			85			268			228
Investing activities
Proceeds from sales and maturities of short-term investments		65			—			65			—
Purchase of short-term investments		—			(50	)		(25	)		(50	)
Expenditures for property and equipment		(4	)		(7	)		(13	)		(11	)
Additions to capitalized software		(16	)		(16	)		(27	)		(32	)
Purchased software license		—			(2	)		—			(2	)
Other investing activities and business acquisitions, net		2			—			6			(22	)
Net cash used in investing activities		47			(75	)		6			(117	)
Financing activities
Repurchase of common stock		(30	)		(34	)		(50	)		(72	)
Excess tax benefit from stock-based compensation		1			—			1			1
Other financing activities, net		5			3			8			4
Net cash used in financing activities		(24	)		(31	)		(41	)		(67	)
Effect of exchange rate changes on cash and cash equivalents		6			(1	)		3			3
Increase in cash and cash equivalents		132			(22	)		236			47
Cash and cash equivalents at beginning of period		506			339			402			270
Cash and cash equivalents at end of period	$	638		$	317		$	638		$	317

	Schedule D

TERADATA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in millions, except per share amounts)

	For the Periods Ended June 30
	Three Months										Six Months
	2009			2008			% Change As Reported		% Change Constant Currency		2009			2008			% Change As Reported		% Change Constant Currency
Revenue
Americas	$	229		$	236		-3	%	-1	%	$	434		$	446		-3	%	-1	%
EMEA		118			128		-8	%	6	%		215			231		-7	%	9	%
APJ		74			91		-19	%	-17	%		139			153		-9	%	-6	%
Total revenue		421			455		-7	%	-2	%		788			830		-5	%	1	%
Segment gross margin
Americas		133			136							250			250
% of Revenue		58.1	%		57.6	%						57.6	%		56.1	%
EMEA		64			68							117			120
% of Revenue		54.2	%		53.1	%						54.4	%		51.9	%
APJ		36			45							66			73
% of Revenue		48.6	%		49.5	%						47.5	%		47.7	%
Total gross margin		233			249							433			443
% of Revenue		55.3	%		54.7	%						54.9	%		53.4	%
Selling, general and administrative expenses		122			132							232			248
Research and development expenses		27			25							57			50
Income from operations	$	84		$	92						$	144		$	145
% of Revenue		20.0	%		20.2	%						18.3	%		17.5	%