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Press Release: Teradata Reports Fourth-Quarter -2-

· 02/04/2021 16:05
prepared in accordance with GAAP. For the Three For the Twelve (in millions) Months Months ended December 31 ended December 31 ------------------ ------------------ 2020 2019 2020 2019 -------- -------- -------- -------- Cash provided by operating activities (GAAP) $ 56 $ 54 $267 $148 Less capital expenditures for: ---------------------- Expenditures for property and equipment (10) (11) (44) (54) Additions to capitalized software (1) (2) (7) (5) --- --- --- --- Total capital expenditures (11) (13) (51) (59) --- --- --- --- Free Cash Flow (non-GAAP measure) $ 45 $ 41 $216 $ 89 === === === === 3. Teradata reports its results in accordance with GAAP. However, as described below, the Company believes that certain non-GAAP measures such as non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per diluted share, or EPS, all of which exclude certain items (as well as free cash flow) are useful for investors. Our non-GAAP measures are not meant to be considered in isolation to, as substitutes for, or superior to, results determined in accordance with GAAP, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. The following tables reconcile Teradata's actual and projected results and EPS under GAAP to the Company's actual and projected non-GAAP results and EPS for the periods presented, which exclude certain specified items. Our management internally uses supplemental non-GAAP financial measures, such as gross profit, operating income, net income and EPS, excluding certain items, to understand, manage and evaluate our business and support operating decisions on a regular basis. The Company believes such non-GAAP financial measures (1) provide useful information to investors regarding the underlying business trends and performance of the Company's ongoing operations, (2) are useful for period-over-period comparisons of such operations and results, that may be more easily compared to peer companies and allow investors a view of the Company's operating results excluding stock-based compensation expense and special items, (3) provide useful information to management and investors regarding present and future business trends, and (4) provide consistency and comparability with past reports and projections of future results. Teradata's reconciliation of GAAP to non-GAAP results included in this release. For the Three Months For the Twelve Months (in millions, except per share data) ended December 31 ended December 31 -------------------- ---------------------- Gross Profit: 2020 2019 % Chg. 2020 2019 % Chg. ---- ---- -------- ----- ----- -------- GAAP Gross Profit $ 284 $ 248 15% $1,019 $ 955 7% % of Revenue 57.8% 50.2% 55.5% 50.3% Excluding: Stock-based compensation expense 3 3 16 14 Acquisition, integration, reorganization related, and other costs (2) 7 14 11 Amortization of capitalized software 6 5 23 33 ---- ---- ----- ----- Non-GAAP Gross Profit $ 291 $ 263 11% $1,072 $1,013 6% ==== ==== ===== ===== % of Revenue 59.3% 53.2% 58.4% 53.3% Operating Income GAAP Operating Income / (Loss) $ 13 $ (5) $ 16 $ 10 % of Revenue 2.6% (1.0)% 0.9% 0.5% Excluding: Stock-based compensation expense 22 24 101 83 Amortization of acquisition-related intangible assets 1 1 4 6 Acquisition, integration, reorganization related, and other costs 25 23 86 51 Amortization of capitalized software 6 5 23 33 ---- ---- ----- ----- Non-GAAP Operating Income $ 67 $ 48 40% $ 230 $ 183 26% ==== ==== ===== ===== % of Revenue 13.6% 9.7% 12.5% 9.6% Net Income GAAP Net Income / (Loss) $ 5 $ (19) $ 129 $ (20) % of Revenue 1.0% (3.8)% 7.0% (1.1)% Excluding: Stock-based compensation expense 22 24 101 83 Amortization of acquisition-related intangible assets 1 1 4 6 Acquisition, integration, reorganization related, and other costs 25 23 86 51 Amortization of capitalized software 6 5 23 33 IP restructuring tax benefit(i) (1) - (157) - Tax contingency adjustment(ii) 1 - - - CARES Act NOL carryback(iii) (9) - (9) - Income tax adjustments(iv) (8) (9) (31) (32) ---- ---- ----- ----- Non-GAAP Net Income $ 42 $ 25 68% $ 146 $ 121 21% ==== ==== ===== ===== % of Revenue 8.6% 5.1% 8.0% 6.4% For the Three For the Twelve Months ended Months ended December 31 December 31 ---------------- ---------------- 2021 Q1 2021 FY Earnings Per Share: 2020 2019 2020 2019 Guidance Guidance ----- ----- ----- ----- ---------- ---------- GAAP Earnings / (Loss) $0.11 - $0.43 - Per Share $0.04 $(0.17) $1.16 $(0.18) $0.13 $0.51 Excluding: Stock-based compensation expense 0.20 0.21 0.91 0.72 0.20 0.99 Amortization of acquisition-related intangible assets 0.01 0.01 0.04 0.05 0.01 0.03 Acquisition, integration, reorganization related, and other costs 0.23 0.21 0.77 0.45 0.13 0.30 Amortization of capitalized software 0.05 0.04 0.20 0.29 - - IP restructuring tax benefit(i) (0.01) - (1.41) - - - Tax contingency adjustment(ii) 0.01 - - - - - CARES Act NOL carryback net benefit(iii) (0.08) - (0.08) - - - Income tax adjustments(iv) (0.07) (0.08) (0.28) (0.28) (0.07) (0.25) ----- ----- ----- ----- ------ ------ Non-GAAP Diluted $0.38 - $1.50 - Earnings Per Share $ 0.38 $ 0.22 $ 1.31 $ 1.05 $0.40 $1.58 ===== ===== ===== ===== ========== ========== i. The Company's GAAP effective tax rate for the twelve months ended December 31, 2020 includes $156 million of discrete tax benefit related to an intra-entity asset transfer of certain of its intellectual property to one of its Irish subsidiaries, which occurred on January 1, 2020. The one-time tax benefit for this intra-entity asset transfer of $157 million was recorded as a deferred tax asset for GAAP reporting purposes in the first quarter of 2020 but was excluded from non-GAAP results. This was offset by $1 million of tax expense related to withholding taxes associated with the same intra-entity transfer recorded in the second quarter of 2020. ii. The Company's forecasted full-year 2020 GAAP marginal effective tax rate included $3 million of tax expense related to tax contingencies pursuant to FIN 48. For GAAP purposes, this is a component of the marginal rate and is recognized as tax benefit or expense based on the Company's reported GAAP pre-tax income or loss for the quarter. To more accurately reflect the impact of the expense on a quarterly basis

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February 04, 2021 16:05 ET (21:05 GMT)