2007 2006 2006 2005 2004 (unaudited)

Identifiable intangible assets

Patents . . . 10 $ — $ — $ — $ — $14 $(13) Intellectual property . . . 5 -10 21 (4) 15 (2) 7 (1) Total identifiable intangible

assets . . . $ 21 $ (4) $ 15 $ (2) $21 $(14) The increase in intellectual property since December 31, 2006 was primarily due to the purchase of software related to new industry solutions. The increase in intellectual property from December 31, 2005 to December 31, 2006 was primarily due to the acquisitions described in Note 3 above. The decrease in patents since

December 31, 2005 was due to a patent becoming fully amortized during 2006.

The aggregate amortization expense (actual and estimated) for identifiable intangible assets for the following periods is:

Six months ended June 30,

2007

For the year ended (estimated)

In millions 2007 2008 2009 2010 2011

Amortization expense . . . $2 $3 $4 $4 $4 $2

Note 5 Transactions with NCR

Teradata’s costs and expenses include allocations from NCR for centralized treasury, tax, accounting, legal, internal audit, human resources, severance, pension, public and investor relations, general management, real estate, shared information technology systems, procurement and other statutory functions such as board of directors and centrally managed benefit arrangements. These allocations have been determined on bases that NCR and Teradata considered to be a reasonable reflection of the utilization of services provided or the benefits received by Teradata. The allocation methods include ones based on revenue, headcount, square footage,

transaction processing costs and others considered as a reasonable method in relation to the costs being allocated. See Note 8 for further discussion of pension and post-employment benefit costs. Allocated costs included in the statements of income were as follows:

For the six

months ended For the years ended In millions

2007 2006 2006 2005 2004 (unaudited)

Cost of products and services . . . $18 $20 $ 39 $ 41 $ 45 Selling, general and administrative expenses . . . 32 34 69 83 98 Research and development expenses . . . 4 8 14 15 20 Total allocated operating expenses . . . $54 $62 $122 $139 $163

For purposes of governing certain ongoing relationships between Teradata and NCR at and after the separation and to provide for an orderly transition, Teradata and NCR have entered or will enter into various agreements. The terms of the agreements described below that will be in effect following the separations have not yet been finalized. There may be material changes prior to the separation from NCR. Brief descriptions of each agreement follow.

Separation and Distribution Agreement.The Separation and Distribution Agreement will set forth Teradata’s agreement with NCR regarding the principal transactions necessary to separate us from NCR. It will also set forth other agreements that govern certain aspects of relationships with NCR after the completion of the separation plan. The parties intend to enter into the Separation and Distribution Agreement before the distribution of shares to NCR stockholders. Upon our separation form NCR, the Separation and Distribution Agreement will be effective as between Teradata and NCR with respect to the obligations owed by Teradata to NCR and the obligations owed by NCR to Teradata.

Intellectual Property Agreements.Teradata and the other businesses of NCR use patents, trademarks, copyrights and other types of intellectual property. As part of the separation, such intellectual property will be allocated to NCR or Teradata. In some cases, the intellectual property will be cross-licensed by NCR and Teradata after the spin-off. NCR and Teradata will enter into a Trademark License Agreement, a Trademark Assignment, a Patent Assignment, a Patent License Agreement, a Technology Agreement, a limited Exclusive Patent License, a Third Party Licenses Agreement (license agreement for NCR Applications), and a Domain Name Assignment.

Tax Sharing Agreement.The Tax Sharing Agreement will govern the respective rights, responsibilities, and obligations of NCR and Teradata after the Separation, with respect to tax liabilities and benefits, tax attributes, tax contests and other tax matters regarding income taxes, other taxes and related tax returns. In general, it is expected that NCR will be responsible for all taxes reportable on any separate tax return of NCR (i.e., one that includes NCR or one of its subsidiaries but does not include Teradata or one of its subsidiaries), and will be responsible for all taxes reportable on any joint return (i.e., one that includes NCR or one of its subsidiaries, on the one hand, and Teradata or one of its subsidiaries, on the other hand), and Teradata will be responsible for all taxes reportable on any separate tax return of Teradata (i.e., one that includes Teradata or one of its subsidiaries but does not include NCR or one of its subsidiaries).

Interim Services and Systems Replication Agreement.NCR and Teradata will enter into a Interim Services and Systems Replication Agreement, which will provide for the provision of certain transitional services by Teradata and its subsidiaries to NCR and its subsidiaries, and vice versa. The services may include the provision of administrative and other services identified by the parties. The Interim Services and Systems Replication Agreement will provide for a term of up to 18 months, which may be extended for an additional six months by mutual agreement of the parties. The pricing will be based on actual costs incurred by the party rendering the services plus a fixed percentage.

Employee Benefits Agreement.Prior to the spin-off, NCR and Teradata will enter into an Employee Benefits Agreement, which will address certain employee compensation, benefit and labor-related matters. In general, Teradata will be responsible for all obligations and liabilities relating to current and former employees of Teradata and their dependents and beneficiaries and NCR will be responsible for all obligations and liabilities relating to its current and former employees, even if such former employees performed services in the past for the Teradata business, and their dependents and beneficiaries. The most significant exception to these general terms is that with respect to the U.S. Pension Plan and non-qualified pension plans, and to the extent legal and/or practicable under the laws of non-U.S. jurisdictions, all assets and liabilities relating to any defined benefit pension plans, whether relating to Teradata or NCR employees, will be retained by NCR. If such treatment is not permitted in non-U.S. jurisdictions, Teradata will assume the assets and liabilities with respect to the pension plans relating to Teradata employees in the non-U.S. jurisdictions.

Real Estate Arrangements.At approximately 80 locations globally, real estate is presently used by both the Teradata business and the other businesses of NCR, and it is intended that, at least for some period, those properties will continue to be used by both companies after the spin-off. Some of the shared properties are presently owned by NCR or a subsidiary and others are leased from third parties. In almost all cases, NCR or its subsidiary will retain ownership of the owned properties and retain the leasehold from the third party in the case of the leased properties. A portion of each owned property will be leased to Teradata or its subsidiary, and a portion of each leased property will be subleased to Teradata or its subsidiary. In the case of owned properties, the lease to Teradata or its subsidiary will reflect a fair-market-value rent and a term in almost all cases not in excess of five years.

Master Agreement for Enterprise Data Warehousing Sales and Support.NCR and Teradata will enter into a commercial ongoing Master Agreement for the purchase by NCR of enterprise data warehouse hardware, software licenses, deliverables licenses and services from Teradata. Under this agreement, Teradata will provide maintenance and support services and coverage in support of NCR’s enterprise data warehouse (which includes Teradata hardware, the Teradata operating system and the Teradata database software, along with certain related utilities, tools, applications and deliverables) and certain other applications used by NCR on the Teradata database platform, when NCR and Teradata enter into particular orders for such under the Master Agreement.

Other Commercial Agreements.NCR and Teradata will enter into certain other commercial agreements, each of which will reflect arm’s length, fair market value pricing, terms and conditions. These commercial agreements will include a Network Support Agreement, Service Provider Agreements and a Distributor Agreement.