Earnings per Share

3 Months Ended

Mar. 31, 2022

Basic earnings per share is calculated by dividing net income 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 resulting from stock options, restricted stock awards and other stock awards. The components of basic and diluted earnings per share are as follows:


	Three Months Ended March 31,
In millions, except per share amounts	2022		2021
Net income attributable to common stockholders	$	36	$	53
Weighted average outstanding shares of common stock	105.0		108.7
Dilutive effect of employee stock options, restricted stock and other stock awards	3.6		4.1
Common stock and common stock equivalents	108.6		112.8
Net income per share:
Basic	$	0.34	$	0.49
Diluted	$	0.33	$	0.47

Options to purchase 0.1 million shares of common stock for the three months ended March 31, 2022 and 1.2 million shares of common stock for the three months ended March 31, 2021 were not included in the computation of diluted earnings per share because the exercise prices of these options were greater than the average market price of the common shares for the period, and therefore would have been anti-dilutive.

Accelerated Share Repurchase Agreement ("ASR")

On February 9, 2022 Teradata entered into an ASR agreement 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. Pursuant to the ASR, the Company received an initial delivery of 3,930,045 shares of common stock based on the $50.89 closing price of the common stock on February 8, 2022. As a result, approximately $50 million remains at JPMorgan Chase for additional repurchases until the completion of the ASR. The ASR

agreement was entered into pursuant to the Company's open market share repurchase authorization as discussed in the Financial Condition, Liquidity and Capital Resources section of Item 2 in this Quarterly Report on Form 10-Q. The final number of shares that will be delivered to Teradata under 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. The Company expects to receive the remaining shares no later than August 9, 2022. The effect of the potential share settlement is excluded in the diluted EPS calculation as the effect is anti-dilutive.