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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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26-1119726
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(State or other jurisdiction
of incorporation or organization)
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(I.R.S. Employer Identification No.)
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4655 Great America Parkway
Santa Clara, California |
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95054
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
¨
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Accelerated filer
¨
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Non-accelerated filer
x
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Smaller Reporting Company
¨
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Emerging growth company
¨
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(Do not check if a smaller
reporting company)
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Item
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Description
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Page
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1.
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2.
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3.
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4.
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1.
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1A.
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2.
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3.
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4.
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5.
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6.
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Item 1.
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Financial Statements.
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Successor
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Predecessor
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Successor
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Predecessor
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||||||||||||
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Three months ended
June 30, 2018 |
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Three months ended
June 30, 2017 |
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Period from December 16, 2017
through June 30, 2018 |
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Period from October 1, 2017 through December 15, 2017
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Nine months ended
June 30, 2017 |
||||||||||
REVENUE
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Products
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$
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300
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$
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345
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|
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$
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664
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$
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253
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$
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1,094
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Services
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392
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458
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848
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351
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1,388
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|||||
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692
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803
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1,512
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604
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2,482
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COSTS
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Products:
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||||||||||
Costs
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114
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121
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257
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84
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394
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Amortization of technology intangible assets
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44
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5
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92
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3
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16
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|||||
Services
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182
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184
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410
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155
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560
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|||||
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340
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310
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759
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242
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970
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GROSS PROFIT
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352
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493
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753
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362
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1,512
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OPERATING EXPENSES
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Selling, general and administrative
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281
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295
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613
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264
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923
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Research and development
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51
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59
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110
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38
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178
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Amortization of intangible assets
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39
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57
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86
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10
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170
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Impairment of indefinite-lived intangible assets
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—
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65
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—
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—
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65
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Goodwill impairment
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—
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52
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—
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—
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52
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Restructuring charges, net
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30
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8
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80
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14
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22
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|||||
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401
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536
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889
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326
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1,410
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OPERATING (LOSS) INCOME
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(49
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)
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(43
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)
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(136
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)
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36
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102
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Interest expense
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(56
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)
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(17
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)
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(112
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)
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(14
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(229
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)
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Other income (expense), net
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37
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(9
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)
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32
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(2
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(27
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)
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Reorganization items, net
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—
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(35
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)
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—
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3,416
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(77
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)
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(LOSS) INCOME BEFORE INCOME TAXES
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(68
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)
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(104
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)
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(216
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)
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3,436
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(231
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)
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(Provision for) benefit from income taxes
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(20
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)
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6
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235
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(459
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)
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22
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NET (LOSS) INCOME
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$
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(88
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)
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$
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(98
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)
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$
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19
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$
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2,977
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$
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(209
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)
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Net (loss) income per share:
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Basic
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$
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(0.80
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)
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$
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(0.22
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)
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$
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0.17
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$
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5.19
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$
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(0.47
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)
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Diluted
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$
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(0.80
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)
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$
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(0.22
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)
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$
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0.17
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$
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5.19
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$
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(0.47
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)
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Weighted average shares outstanding:
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Basic
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109.8
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497.2
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109.8
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497.3
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497.0
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Diluted
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109.8
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497.2
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111.0
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497.3
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497.0
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Successor
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Predecessor
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Successor
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Predecessor
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||||||||||||
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Three months ended
June 30, 2018 |
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Three months ended
June 30, 2017 |
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Period from December 16, 2017
through June 30, 2018 |
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Period from October 1, 2017 through December 15, 2017
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Nine months ended
June 30, 2017 |
||||||||||
Net (loss) income
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$
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(88
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)
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$
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(98
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)
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$
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19
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$
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2,977
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$
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(209
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)
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Other comprehensive (loss) income:
|
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Pension, post-retirement and postemployment benefit-related items, net of income taxes of $58 for the period from October 1, 2017 through December 15, 2017 and $1 and $16 for the three and nine months ended June 30, 2017, respectively
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—
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25
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—
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655
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54
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Cumulative translation adjustment, net of income taxes of $2 and $1 for the three and nine months ended June 30, 2017, respectively
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(4
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)
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(44
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)
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(29
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)
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3
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(18
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)
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Change in interest rate swaps, net of income taxes of ($3) for the three months ended June 30, 2018 and the period from December 16, 2017 through June 30, 2018
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(12
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)
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—
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(12
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)
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—
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—
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|||||
Other comprehensive (loss) income
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(16
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)
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(19
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)
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(41
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)
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658
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36
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|||||
Elimination of Predecessor Company accumulated other comprehensive loss
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—
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—
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—
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790
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—
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|||||
Total comprehensive (loss) income
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$
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(104
|
)
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$
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(117
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)
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$
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(22
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)
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$
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4,425
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$
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(173
|
)
|
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Successor
|
|
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Predecessor
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||||
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June 30, 2018
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September 30, 2017
|
||||
ASSETS
|
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Current assets:
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Cash and cash equivalents
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$
|
685
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$
|
876
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Accounts receivable, net
|
367
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|
536
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|
||
Inventory
|
102
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|
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|
96
|
|
||
Other current assets
|
238
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|
|
|
269
|
|
||
TOTAL CURRENT ASSETS
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1,392
|
|
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|
1,777
|
|
||
Property, plant and equipment, net
|
260
|
|
|
|
200
|
|
||
Deferred income taxes, net
|
21
|
|
|
|
—
|
|
||
Intangible assets, net
|
3,318
|
|
|
|
311
|
|
||
Goodwill
|
2,771
|
|
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3,542
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Other assets
|
64
|
|
|
|
68
|
|
||
TOTAL ASSETS
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$
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7,826
|
|
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$
|
5,898
|
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LIABILITIES
|
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||||
Current liabilities:
|
|
|
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|
||||
Debt maturing within one year
|
$
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—
|
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$
|
725
|
|
Long-term debt, current portion
|
29
|
|
|
|
—
|
|
||
Accounts payable
|
326
|
|
|
|
282
|
|
||
Payroll and benefit obligations
|
119
|
|
|
|
127
|
|
||
Deferred revenue
|
479
|
|
|
|
614
|
|
||
Business restructuring reserve
|
57
|
|
|
|
35
|
|
||
Other current liabilities
|
129
|
|
|
|
90
|
|
||
TOTAL CURRENT LIABILITIES
|
1,139
|
|
|
|
1,873
|
|
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Non-current liabilities:
|
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|
||||
Long-term debt, net of current portion
|
3,099
|
|
|
|
—
|
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||
Pension obligations
|
731
|
|
|
|
513
|
|
||
Other post-retirement obligations
|
213
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|
|
|
—
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||
Deferred income taxes, net
|
486
|
|
|
|
32
|
|
||
Business restructuring reserve
|
52
|
|
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|
34
|
|
||
Other liabilities
|
388
|
|
|
|
170
|
|
||
TOTAL NON-CURRENT LIABILITIES
|
4,969
|
|
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|
749
|
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LIABILITIES SUBJECT TO COMPROMISE
|
—
|
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7,705
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TOTAL LIABILITIES
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6,108
|
|
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|
10,327
|
|
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Commitments and contingencies (Note 20)
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||||
Predecessor equity awards on redeemable shares
|
—
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7
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|
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Predecessor preferred stock, $0.001 par value, 250,000 shares authorized at September 30, 2017
|
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Convertible Series B preferred stock; 48,922 shares issued and outstanding at September 30, 2017
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—
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393
|
|
||
Series A preferred stock; 125,000 shares issued and outstanding at September 30, 2017
|
—
|
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184
|
|
||
Successor preferred stock, $0.01 par value; 55,000,000 authorized, no shares issued or outstanding at June 30, 2018
|
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STOCKHOLDERS' EQUITY (DEFICIT)
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Predecessor common stock, $0.001 par value; 750,000,000 shares authorized, 494,768,243 issued and outstanding at September 30, 2017
|
—
|
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—
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Successor common stock, $0.01 par value; 550,000,000 shares authorized, 110,160,835 issued and 109,954,972 outstanding at June 30, 2018
|
1
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|
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—
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||
Additional paid-in capital
|
1,739
|
|
|
|
2,389
|
|
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Retained earnings (accumulated deficit)
|
19
|
|
|
|
(5,954
|
)
|
||
Accumulated other comprehensive loss
|
(41
|
)
|
|
|
(1,448
|
)
|
||
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)
|
1,718
|
|
|
|
(5,013
|
)
|
||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
$
|
7,826
|
|
|
|
$
|
5,898
|
|
|
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Common Stock
|
|
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|
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|
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|||||||||||||
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Number
|
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Par Value
|
|
Additional
Paid-in Capital |
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(Accumulated
Deficit) Retained Earnings |
|
Accumulated
Other Comprehensive (Loss) Income |
|
Total
Stockholders' (Deficit) Equity |
|||||||||||
Balance as of September 30, 2017 (Predecessor)
|
|
494.8
|
|
|
$
|
—
|
|
|
$
|
2,389
|
|
|
$
|
(5,954
|
)
|
|
$
|
(1,448
|
)
|
|
$
|
(5,013
|
)
|
Issuance of common stock, net of shares redeemed and cancelled, under employee stock option plan
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||
Amortization of share-based compensation
|
|
|
|
|
|
3
|
|
|
|
|
|
|
3
|
|
|||||||||
Accrued dividends on Series A preferred stock
|
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
(2
|
)
|
|||||||||
Accrued dividends on Series B preferred stock
|
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
(4
|
)
|
|||||||||
Reclassifications to equity awards on redeemable shares
|
|
|
|
|
|
1
|
|
|
|
|
|
|
1
|
|
|||||||||
Net income
|
|
|
|
|
|
|
|
2,977
|
|
|
|
|
2,977
|
|
|||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
658
|
|
|
658
|
|
|||||||||
Balance as of December 15, 2017 (Predecessor)
|
|
494.8
|
|
|
—
|
|
|
2,387
|
|
|
(2,977
|
)
|
|
(790
|
)
|
|
(1,380
|
)
|
|||||
Cancellation of Predecessor equity
|
|
(494.8
|
)
|
|
|
|
(2,387
|
)
|
|
2,977
|
|
|
790
|
|
|
1,380
|
|
||||||
Balance as of December 15, 2017 (Predecessor)
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
Number
|
|
Par Value
|
|
Additional
Paid-in Capital |
|
Retained Earnings (Accumulated
Deficit) |
|
Accumulated
Other Comprehensive (Loss) Income |
|
Total
Stockholders' Equity (Deficit) |
|||||||||||
Balance as of December 15, 2017 (Predecessor)
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Issuance of Successor common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock issued for settlement of Predecessor debt
|
|
103.9
|
|
|
1
|
|
|
1,575
|
|
|
|
|
|
|
1,576
|
|
|||||||
Common stock issued to Pension Benefit Guaranty Corporation
|
|
6.1
|
|
|
|
|
92
|
|
|
|
|
|
|
92
|
|
||||||||
Balance as of December 15, 2017 (Predecessor)
|
|
110.0
|
|
|
$
|
1
|
|
|
$
|
1,667
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 16, 2017 (Successor)
|
|
110.0
|
|
|
$
|
1
|
|
|
$
|
1,667
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,668
|
|
|
Issuance of common stock under the equity incentive plan
|
|
0.2
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||
Shares repurchased and retired for tax withholding on vesting of restricted stock units
|
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
(2
|
)
|
|||||||||
Equity component of convertible notes, net of issuance costs and income taxes
|
|
|
|
|
|
67
|
|
|
|
|
|
|
67
|
|
|||||||||
Purchase of convertible note bond hedge, net of income taxes
|
|
|
|
|
|
(64
|
)
|
|
|
|
|
|
(64
|
)
|
|||||||||
Issuance of call spread warrants
|
|
|
|
|
|
58
|
|
|
|
|
|
|
58
|
|
|||||||||
Amortization of share-based compensation
|
|
|
|
|
|
13
|
|
|
|
|
|
|
13
|
|
|||||||||
Net income
|
|
|
|
|
|
|
|
19
|
|
|
|
|
19
|
|
|||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
(41
|
)
|
|
(41
|
)
|
|||||||||
Balance as of June 30, 2018 (Successor)
|
|
110.2
|
|
|
$
|
1
|
|
|
$
|
1,739
|
|
|
$
|
19
|
|
|
$
|
(41
|
)
|
|
$
|
1,718
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
Period from December 16, 2017
through June 30, 2018 |
|
|
Period from October 1, 2017 through December 15, 2017
|
|
Nine months ended
June 30, 2017 |
||||||
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
19
|
|
|
|
$
|
2,977
|
|
|
$
|
(209
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
|
|
|
|
|
|
|||||||
Depreciation and amortization
|
264
|
|
|
|
31
|
|
|
263
|
|
|||
Share-based compensation
|
13
|
|
|
|
—
|
|
|
10
|
|
|||
Amortization of debt issuance costs
|
1
|
|
|
|
—
|
|
|
36
|
|
|||
Accretion of debt discount
|
2
|
|
|
|
—
|
|
|
25
|
|
|||
Impairment of long-lived asset
|
—
|
|
|
|
—
|
|
|
3
|
|
|||
Impairment of indefinite-lived intangible assets
|
—
|
|
|
|
—
|
|
|
65
|
|
|||
Goodwill impairment
|
—
|
|
|
|
—
|
|
|
52
|
|
|||
Provision for uncollectible receivables
|
—
|
|
|
|
(1
|
)
|
|
1
|
|
|||
Deferred income taxes, net
|
(207
|
)
|
|
|
455
|
|
|
(38
|
)
|
|||
Post-retirement curtailment
|
—
|
|
|
|
—
|
|
|
(4
|
)
|
|||
Loss on disposal/sale of long-lived assets, net
|
3
|
|
|
|
1
|
|
|
—
|
|
|||
Change in fair value of emergence date warrants
|
9
|
|
|
|
—
|
|
|
—
|
|
|||
Unrealized (gain) loss on foreign currency transactions
|
(33
|
)
|
|
|
—
|
|
|
4
|
|
|||
Reorganization items:
|
|
|
|
|
|
|
||||||
Net gain on settlement of liabilities subject to compromise
|
—
|
|
|
|
(1,778
|
)
|
|
—
|
|
|||
Payment to Pension Benefit Guaranty Corporation
|
—
|
|
|
|
(340
|
)
|
|
—
|
|
|||
Payment to pension trust
|
—
|
|
|
|
(49
|
)
|
|
—
|
|
|||
Payment of unsecured claims
|
—
|
|
|
|
(58
|
)
|
|
—
|
|
|||
Fresh start adjustments, net
|
—
|
|
|
|
(1,697
|
)
|
|
—
|
|
|||
Non-cash and financing related reorganization items, net
|
—
|
|
|
|
26
|
|
|
39
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
23
|
|
|
|
40
|
|
|
85
|
|
|||
Inventory
|
24
|
|
|
|
(2
|
)
|
|
20
|
|
|||
Accounts payable
|
42
|
|
|
|
(40
|
)
|
|
(62
|
)
|
|||
Payroll and benefit obligations
|
(73
|
)
|
|
|
16
|
|
|
(50
|
)
|
|||
Business restructuring reserve
|
39
|
|
|
|
(7
|
)
|
|
(40
|
)
|
|||
Deferred revenue
|
149
|
|
|
|
28
|
|
|
(59
|
)
|
|||
Other assets and liabilities
|
(98
|
)
|
|
|
(16
|
)
|
|
(16
|
)
|
|||
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES
|
177
|
|
|
|
(414
|
)
|
|
125
|
|
|||
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
||||||
Capital expenditures
|
(36
|
)
|
|
|
(13
|
)
|
|
(40
|
)
|
|||
Capitalized software development costs
|
—
|
|
|
|
—
|
|
|
(2
|
)
|
|||
Acquisition of businesses, net of cash acquired
|
(157
|
)
|
|
|
—
|
|
|
(4
|
)
|
|||
Proceeds from sale of long-lived assets
|
1
|
|
|
|
—
|
|
|
—
|
|
|||
Restricted cash
|
55
|
|
|
|
21
|
|
|
(77
|
)
|
|||
Other investing activities, net
|
—
|
|
|
|
—
|
|
|
3
|
|
|||
NET CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES
|
(137
|
)
|
|
|
8
|
|
|
(120
|
)
|
|||
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
||||||
Proceeds from Term Loan Credit Agreement
|
—
|
|
|
|
2,896
|
|
|
—
|
|
|||
Repayment of debtor-in-possession financing
|
—
|
|
|
|
(725
|
)
|
|
—
|
|
|||
Repayment of first lien debt
|
—
|
|
|
|
(2,061
|
)
|
|
—
|
|
|||
Proceeds from debtor-in-possession financing
|
—
|
|
|
|
—
|
|
|
712
|
|
|||
Repayment of Term Loan Credit Agreement due to refinancing
|
(2,918
|
)
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from Term Loan Credit Agreement due to refinancing
|
2,911
|
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of convertible notes
|
350
|
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of call spread warrants
|
58
|
|
|
|
—
|
|
|
—
|
|
|||
Purchase of convertible note bond hedge
|
(84
|
)
|
|
|
—
|
|
|
—
|
|
|||
Repayment of foreign asset-based revolving credit facility
|
—
|
|
|
|
—
|
|
|
(55
|
)
|
|||
Repayment of domestic asset-based revolving credit facility
|
—
|
|
|
|
—
|
|
|
(77
|
)
|
|||
Repayment of long-term debt, including adequate protection payments
|
(15
|
)
|
|
|
(111
|
)
|
|
(155
|
)
|
|||
Debt issuance costs
|
(10
|
)
|
|
|
(97
|
)
|
|
(1
|
)
|
|||
Repayments of borrowings on revolving loans under the senior secured credit agreement
|
—
|
|
|
|
—
|
|
|
(18
|
)
|
|||
Repayments of borrowings under sale-leaseback transaction
|
(7
|
)
|
|
|
(4
|
)
|
|
(15
|
)
|
|||
Other financing activities, net
|
(1
|
)
|
|
|
—
|
|
|
(4
|
)
|
|||
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES
|
284
|
|
|
|
(102
|
)
|
|
387
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(5
|
)
|
|
|
(2
|
)
|
|
1
|
|
|||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
319
|
|
|
|
(510
|
)
|
|
393
|
|
|||
Cash and cash equivalents at beginning of period
|
366
|
|
|
|
876
|
|
|
336
|
|
|||
Cash and cash equivalents at end of period
|
$
|
685
|
|
|
|
$
|
366
|
|
|
$
|
729
|
|
1.
|
Background and Basis of Presentation
|
|
December 16, 2017 (Successor)
|
||||||||||
(In millions, except per share amounts)
|
As Previously Reported
|
|
Adjustments
|
|
Revised
|
||||||
Condensed Consolidated Balance Sheet:
|
|
|
|
|
|
||||||
Cash
|
$
|
340
|
|
|
$
|
26
|
|
|
$
|
366
|
|
Accounts receivable
|
417
|
|
|
(26
|
)
|
|
391
|
|
|||
Goodwill
|
2,632
|
|
|
26
|
|
|
2,658
|
|
|||
Total Assets
|
7,583
|
|
|
26
|
|
|
7,609
|
|
|||
Additional paid-in capital (Successor)
|
1,641
|
|
|
26
|
|
|
1,667
|
|
|||
Total Stockholders' Equity
|
1,642
|
|
|
26
|
|
|
1,668
|
|
|||
Total Liabilities and Stockholders' Equity
|
7,583
|
|
|
26
|
|
|
7,609
|
|
|||
Successor common stock value per share
|
$
|
14.93
|
|
|
$
|
0.23
|
|
|
$
|
15.16
|
|
|
Period from October 1, 2017 through December 15, 2017 (Predecessor)
|
||||||||||
(In millions)
|
As Previously Reported
|
|
Adjustments
|
|
Revised
|
||||||
Condensed Consolidated Statement of Cash Flows:
|
|
|
|
|
|
||||||
Change in Accounts receivable
|
$
|
14
|
|
|
$
|
26
|
|
|
$
|
40
|
|
Net gain on settlement of Liabilities subject to compromise
|
(1,804
|
)
|
|
26
|
|
|
(1,778
|
)
|
|||
Fresh start adjustments
|
(1,671
|
)
|
|
(26
|
)
|
|
(1,697
|
)
|
|||
Net Cash Used from Operating Activities
|
(440
|
)
|
|
26
|
|
|
(414
|
)
|
|||
Net decrease in cash and cash equivalents
|
(536
|
)
|
|
26
|
|
|
(510
|
)
|
•
|
Debtor-in-Possession Credit Agreement.
The Company paid in full the debtor-in-possession credit agreement (the "DIP Credit Agreement") in the amount of
$725 million
;
|
•
|
Predecessor Equity and Indebtedness.
The Debtors' obligations under stock certificates, equity interests, and / or any other instrument or document directly or indirectly evidencing or creating any indebtedness or obligation of, or ownership interest in, the Debtors or giving rise to any claim or equity interest were cancelled, except as provided under the Plan of Reorganization;
|
•
|
Successor Equity.
The Company's certificate of incorporation was amended and restated to authorize the issuance of
605.0 million
shares of Successor Company stock, consisting of
55.0 million
shares of preferred stock, par value
$0.01
per share, and
550.0 million
shares of common stock, par value
$0.01
per share, of which
110.0 million
shares of common stock were issued (as discussed below);
|
•
|
Exit Financing.
The Successor Company entered into (1) a term loan credit agreement (the "Term Loan Credit Agreement") for a principal amount of
$2,925 million
maturing on
December 15, 2024
, and (2) a
$300 million
asset-based revolving credit facility (the "ABL Credit Agreement") maturing on
December 15, 2022
;
|
•
|
First Lien Debt Claims.
All the Predecessor Company's outstanding obligations under the variable rate term B-3, B-4, B-6, and B-7 loans and the
7%
and
9%
senior secured notes (collectively, the "Predecessor first lien obligations") were cancelled, and the holders of claims under the Predecessor first lien obligations received
99.3 million
shares of Successor Company common stock. In addition, the holders of the Predecessor first lien obligations received cash in the amount of
$2,061 million
;
|
•
|
Second Lien Debt Claims.
All the Predecessor Company's outstanding obligations under the
10.50%
senior secured notes (the "Predecessor second lien obligations") were cancelled, and the holders of claims under the Predecessor second lien obligations received
4.4 million
shares of Successor Company common stock. In addition, holders of the Predecessor second lien obligations received warrants to purchase
5.6 million
shares of Successor Company common stock at an exercise price of
$25.55
per warrant (the "Emergence Date Warrants");
|
•
|
Claims of Pension Benefit Guaranty Corporation ("PBGC").
The Predecessor Company's outstanding obligations under the Avaya Inc. Pension Plan for Salaried Employees ("APPSE") were terminated and transferred to the PBGC. The PBGC received
6.1 million
shares of Successor Company common stock and
$340 million
in cash; and
|
•
|
General Unsecured Claims.
Holders of the Predecessor Company's general unsecured claims will receive their pro rata share of the general unsecured recovery pool. A liquidating trust was established in the amount of
$58 million
for the benefit of the general unsecured claims. Included in the
110.0 million
Successor Company common stock issued are
0.2 million
additional shares of common stock that have been issued (but are not outstanding) for the benefit of the general unsecured creditors. The general unsecured creditors will receive a total of
$58 million
in cash and common stock. Any excess cash and / or common stock not distributed to the general unsecured creditors will be distributed to the holders of the Predecessor first lien obligations.
|
(In millions, except per share amount)
|
As Previously Reported
|
|
Adjustments
|
|
Revised
|
||||||
Enterprise value
|
$
|
5,721
|
|
|
$
|
—
|
|
|
$
|
5,721
|
|
Plus:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
340
|
|
|
26
|
|
|
366
|
|
|||
Less:
|
|
|
|
|
|
||||||
Minimum cash required for operations
|
(120
|
)
|
|
—
|
|
|
(120
|
)
|
|||
Fair value of Term Loan Credit Agreement
(1)
|
(2,896
|
)
|
|
—
|
|
|
(2,896
|
)
|
|||
Fair value of capitalized leases
|
(20
|
)
|
|
—
|
|
|
(20
|
)
|
|||
Fair value of pension and other post-retirement obligations, net of tax
(2)
|
(856
|
)
|
|
—
|
|
|
(856
|
)
|
|||
Change in net deferred tax liabilities from reorganization
|
(510
|
)
|
|
—
|
|
|
(510
|
)
|
|||
Fair value of Successor Emergence Date Warrants
(3)
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
|||
Fair value of Successor common stock
|
$
|
1,642
|
|
|
$
|
26
|
|
|
$
|
1,668
|
|
Shares issued at December 15, 2017 upon emergence
|
110.0
|
|
|
—
|
|
|
110.0
|
|
|||
Successor common stock value per share
|
$
|
14.93
|
|
|
$
|
0.23
|
|
|
$
|
15.16
|
|
(1)
|
The fair value of the Term Loan Credit Agreement was determined based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices and was estimated to be
99%
of par value.
|
(2)
|
The following assumptions were used when measuring the fair value of the U.S. pension, non-U.S. pension, and post-retirement benefit plans: weighted-average return on assets of
7.75%
,
3.80%
and
5.90%
, and weighted-average discount rate to measure plan obligations of
3.70%
,
1.52%
and
3.77%
, respectively.
|
(3)
|
The fair value of the Emergence Date Warrants was estimated using the Black-Scholes-Merton ("Black-Scholes") pricing model.
|
(In millions)
|
As Previously Reported
|
|
Adjustments
|
|
Revised
|
||||||
Enterprise value
|
$
|
5,721
|
|
|
$
|
—
|
|
|
$
|
5,721
|
|
Plus:
|
|
|
|
|
|
||||||
Non-debt current liabilities
|
955
|
|
|
—
|
|
|
955
|
|
|||
Non-debt non-current liabilities
|
2,090
|
|
|
—
|
|
|
2,090
|
|
|||
Excess cash and cash equivalents
|
220
|
|
|
26
|
|
|
246
|
|
|||
Less:
|
|
|
|
|
|
||||||
Pension and other post-retirement obligations, net of deferred taxes
|
(856
|
)
|
|
—
|
|
|
(856
|
)
|
|||
Capital lease obligations
|
(20
|
)
|
|
—
|
|
|
(20
|
)
|
|||
Change in net deferred tax liabilities from reorganization
|
(510
|
)
|
|
—
|
|
|
(510
|
)
|
|||
Emergence Date Warrants issued
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
|||
Reorganization value of Successor assets
|
$
|
7,583
|
|
|
$
|
26
|
|
|
$
|
7,609
|
|
|
As Previously Reported
|
||||||||||||||||||
(In millions)
|
Predecessor Company
December 15,
2017 |
|
Reorganization Adjustments
|
|
|
|
Fresh Start Adjustments
|
|
|
|
Successor Company
December 16,
2017 |
||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
744
|
|
|
$
|
(404
|
)
|
|
(1)
|
|
$
|
—
|
|
|
|
|
$
|
340
|
|
Accounts receivable, net
|
523
|
|
|
—
|
|
|
|
|
(106
|
)
|
|
(21)
|
|
417
|
|
||||
Inventory
|
98
|
|
|
—
|
|
|
|
|
29
|
|
|
(22)
|
|
127
|
|
||||
Other current assets
|
366
|
|
|
(58
|
)
|
|
(2)
|
|
(66
|
)
|
|
(23)
|
|
242
|
|
||||
TOTAL CURRENT ASSETS
|
1,731
|
|
|
(462
|
)
|
|
|
|
(143
|
)
|
|
|
|
1,126
|
|
||||
Property, plant and equipment, net
|
194
|
|
|
—
|
|
|
|
|
116
|
|
|
(24)
|
|
310
|
|
||||
Deferred income taxes, net
|
—
|
|
|
48
|
|
|
(3)
|
|
(17
|
)
|
|
(25)
|
|
31
|
|
||||
Intangible assets, net
|
298
|
|
|
—
|
|
|
|
|
3,137
|
|
|
(26)
|
|
3,435
|
|
||||
Goodwill
|
3,541
|
|
|
—
|
|
|
|
|
(909
|
)
|
|
(27)
|
|
2,632
|
|
||||
Other assets
|
70
|
|
|
6
|
|
|
(4)
|
|
(27
|
)
|
|
(28)
|
|
49
|
|
||||
TOTAL ASSETS
|
$
|
5,834
|
|
|
$
|
(408
|
)
|
|
|
|
$
|
2,157
|
|
|
|
|
$
|
7,583
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Debt maturing within one year
|
$
|
725
|
|
|
$
|
(696
|
)
|
|
(5)
|
|
$
|
—
|
|
|
|
|
$
|
29
|
|
Accounts payable
|
325
|
|
|
(49
|
)
|
|
(6)
|
|
—
|
|
|
|
|
276
|
|
||||
Payroll and benefit obligations
|
123
|
|
|
23
|
|
|
(7)
|
|
—
|
|
|
|
|
146
|
|
||||
Deferred revenue
|
627
|
|
|
50
|
|
|
(8)
|
|
(341
|
)
|
|
(29)
|
|
336
|
|
||||
Business restructuring reserve
|
35
|
|
|
3
|
|
|
(9)
|
|
—
|
|
|
|
|
38
|
|
||||
Other current liabilities
|
97
|
|
|
65
|
|
|
(6,10)
|
|
(3
|
)
|
|
(30)
|
|
159
|
|
||||
TOTAL CURRENT LIABILITIES
|
1,932
|
|
|
(604
|
)
|
|
|
|
(344
|
)
|
|
|
|
984
|
|
||||
Non-current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt, net of current portion
|
—
|
|
|
2,771
|
|
|
(11)
|
|
96
|
|
|
(31)
|
|
2,867
|
|
||||
Pension obligations
|
539
|
|
|
246
|
|
|
(12)
|
|
—
|
|
|
|
|
785
|
|
||||
Other post-retirement obligations
|
—
|
|
|
212
|
|
|
(13)
|
|
—
|
|
|
|
|
212
|
|
||||
Deferred income taxes, net
|
28
|
|
|
113
|
|
|
(14)
|
|
548
|
|
|
(32)
|
|
689
|
|
||||
Business restructuring reserve
|
26
|
|
|
4
|
|
|
(9)
|
|
4
|
|
|
(33)
|
|
34
|
|
||||
Other liabilities
|
180
|
|
|
233
|
|
|
(8,15)
|
|
(43
|
)
|
|
(29,34)
|
|
370
|
|
||||
TOTAL NON-CURRENT LIABILITIES
|
773
|
|
|
3,579
|
|
|
|
|
605
|
|
|
|
|
4,957
|
|
||||
LIABILITIES SUBJECT TO COMPROMISE
|
7,585
|
|
|
(7,585
|
)
|
|
(16)
|
|
—
|
|
|
|
|
—
|
|
||||
TOTAL LIABILITIES
|
10,290
|
|
|
(4,610
|
)
|
|
|
|
261
|
|
|
|
|
5,941
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity awards on redeemable shares
|
6
|
|
|
(6
|
)
|
|
(17)
|
|
—
|
|
|
|
|
—
|
|
||||
Preferred stock:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Series B
|
397
|
|
|
(397
|
)
|
|
(17)
|
|
—
|
|
|
|
|
—
|
|
||||
Series A
|
186
|
|
|
(186
|
)
|
|
(17)
|
|
—
|
|
|
|
|
—
|
|
||||
STOCKHOLDERS' (DEFICIT) EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Common stock (Successor)
|
—
|
|
|
1
|
|
|
(18)
|
|
—
|
|
|
|
|
1
|
|
||||
Additional paid-in capital (Successor)
|
—
|
|
|
1,641
|
|
|
(18)
|
|
—
|
|
|
|
|
1,641
|
|
||||
Common stock (Predecessor)
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Additional paid-in capital (Predecessor)
|
2,387
|
|
|
(2,387
|
)
|
|
(17)
|
|
—
|
|
|
|
|
—
|
|
||||
(Accumulated deficit) retained earnings
|
(5,978
|
)
|
|
4,872
|
|
|
(19)
|
|
1,106
|
|
|
(36)
|
|
—
|
|
||||
Accumulated other comprehensive (loss) income
|
(1,454
|
)
|
|
664
|
|
|
(20)
|
|
790
|
|
|
(35)
|
|
—
|
|
||||
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY
|
(5,045
|
)
|
|
4,791
|
|
|
|
|
1,896
|
|
|
|
|
1,642
|
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
|
$
|
5,834
|
|
|
$
|
(408
|
)
|
|
|
|
$
|
2,157
|
|
|
|
|
$
|
7,583
|
|
|
Adjustments
|
||||||||||||||||||
(In millions)
|
Predecessor Company
December 15,
2017 |
|
Reorganization Adjustments
|
|
|
|
Fresh Start Adjustments
|
|
|
|
Successor Company
December 16,
2017 |
||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
26
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
26
|
|
Accounts receivable, net
|
(26
|
)
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(26
|
)
|
||||
Inventory
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Other current assets
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
TOTAL CURRENT ASSETS
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Deferred income taxes, net
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Intangible assets, net
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Goodwill
|
—
|
|
|
—
|
|
|
|
|
26
|
|
|
(27)
|
|
26
|
|
||||
Other assets
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
TOTAL ASSETS
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
26
|
|
|
|
|
$
|
26
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Debt maturing within one year
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
Accounts payable
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Payroll and benefit obligations
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Deferred revenue
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Business restructuring reserve
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Other current liabilities
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
TOTAL CURRENT LIABILITIES
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Non-current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Pension obligations
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Other postretirement obligations
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Deferred income taxes, net
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Business restructuring reserve
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Other liabilities
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
TOTAL NON-CURRENT LIABILITIES
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
LIABILITIES SUBJECT TO COMPROMISE
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
TOTAL LIABILITIES
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity awards on redeemable shares
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Preferred stock:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Series B
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Series A
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
STOCKHOLDERS' (DEFICIT) EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Common stock (Successor)
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Additional paid-in capital (Successor)
|
—
|
|
|
26
|
|
|
(18)
|
|
—
|
|
|
|
|
26
|
|
||||
Common stock (Predecessor)
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Additional paid-in capital (Predecessor)
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
(Accumulated deficit) retained earnings
|
—
|
|
|
(26
|
)
|
|
(19)
|
|
26
|
|
|
(36)
|
|
—
|
|
||||
Accumulated other comprehensive (loss) income
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY
|
—
|
|
|
—
|
|
|
|
|
26
|
|
|
|
|
26
|
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
26
|
|
|
|
|
$
|
26
|
|
|
Revised
|
||||||||||||||||||
(In millions)
|
Predecessor Company
December 15,
2017
|
|
Reorganization Adjustments
|
|
|
|
Fresh Start Adjustments
|
|
|
|
Successor Company
December 16,
2017
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
770
|
|
|
$
|
(404
|
)
|
|
(1)
|
|
$
|
—
|
|
|
|
|
$
|
366
|
|
Accounts receivable, net
|
497
|
|
|
—
|
|
|
|
|
(106
|
)
|
|
(21)
|
|
391
|
|
||||
Inventory
|
98
|
|
|
—
|
|
|
|
|
29
|
|
|
(22)
|
|
127
|
|
||||
Other current assets
|
366
|
|
|
(58
|
)
|
|
(2)
|
|
(66
|
)
|
|
(23)
|
|
242
|
|
||||
TOTAL CURRENT ASSETS
|
1,731
|
|
|
(462
|
)
|
|
|
|
(143
|
)
|
|
|
|
1,126
|
|
||||
Property, plant and equipment, net
|
194
|
|
|
—
|
|
|
|
|
116
|
|
|
(24)
|
|
310
|
|
||||
Deferred income taxes, net
|
—
|
|
|
48
|
|
|
(3)
|
|
(17
|
)
|
|
(25)
|
|
31
|
|
||||
Intangible assets, net
|
298
|
|
|
—
|
|
|
|
|
3,137
|
|
|
(26)
|
|
3,435
|
|
||||
Goodwill
|
3,541
|
|
|
—
|
|
|
|
|
(883
|
)
|
|
(27)
|
|
2,658
|
|
||||
Other assets
|
70
|
|
|
6
|
|
|
(4)
|
|
(27
|
)
|
|
(28)
|
|
49
|
|
||||
TOTAL ASSETS
|
$
|
5,834
|
|
|
$
|
(408
|
)
|
|
|
|
$
|
2,183
|
|
|
|
|
$
|
7,609
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Debt maturing within one year
|
$
|
725
|
|
|
$
|
(696
|
)
|
|
(5)
|
|
$
|
—
|
|
|
|
|
$
|
29
|
|
Accounts payable
|
325
|
|
|
(49
|
)
|
|
(6)
|
|
—
|
|
|
|
|
276
|
|
||||
Payroll and benefit obligations
|
123
|
|
|
23
|
|
|
(7)
|
|
—
|
|
|
|
|
146
|
|
||||
Deferred revenue
|
627
|
|
|
50
|
|
|
(8)
|
|
(341
|
)
|
|
(29)
|
|
336
|
|
||||
Business restructuring reserve
|
35
|
|
|
3
|
|
|
(9)
|
|
—
|
|
|
|
|
38
|
|
||||
Other current liabilities
|
97
|
|
|
65
|
|
|
(6,10)
|
|
(3
|
)
|
|
(30)
|
|
159
|
|
||||
TOTAL CURRENT LIABILITIES
|
1,932
|
|
|
(604
|
)
|
|
|
|
(344
|
)
|
|
|
|
984
|
|
||||
Non-current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt, net of current portion
|
—
|
|
|
2,771
|
|
|
(11)
|
|
96
|
|
|
(31)
|
|
2,867
|
|
||||
Pension obligations
|
539
|
|
|
246
|
|
|
(12)
|
|
—
|
|
|
|
|
785
|
|
||||
Other post-retirement obligations
|
—
|
|
|
212
|
|
|
(13)
|
|
—
|
|
|
|
|
212
|
|
||||
Deferred income taxes, net
|
28
|
|
|
113
|
|
|
(14)
|
|
548
|
|
|
(32)
|
|
689
|
|
||||
Business restructuring reserve
|
26
|
|
|
4
|
|
|
(9)
|
|
4
|
|
|
(33)
|
|
34
|
|
||||
Other liabilities
|
180
|
|
|
233
|
|
|
(8,15)
|
|
(43
|
)
|
|
(29,34)
|
|
370
|
|
||||
TOTAL NON-CURRENT LIABILITIES
|
773
|
|
|
3,579
|
|
|
|
|
605
|
|
|
|
|
4,957
|
|
||||
LIABILITIES SUBJECT TO COMPROMISE
|
7,585
|
|
|
(7,585
|
)
|
|
(16)
|
|
—
|
|
|
|
|
—
|
|
||||
TOTAL LIABILITIES
|
10,290
|
|
|
(4,610
|
)
|
|
|
|
261
|
|
|
|
|
5,941
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity awards on redeemable shares
|
6
|
|
|
(6
|
)
|
|
(17)
|
|
—
|
|
|
|
|
—
|
|
||||
Preferred stock:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Series B
|
397
|
|
|
(397
|
)
|
|
(17)
|
|
—
|
|
|
|
|
—
|
|
||||
Series A
|
186
|
|
|
(186
|
)
|
|
(17)
|
|
—
|
|
|
|
|
—
|
|
||||
STOCKHOLDERS' (DEFICIT) EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Common stock (Successor)
|
—
|
|
|
1
|
|
|
(18)
|
|
—
|
|
|
|
|
1
|
|
||||
Additional paid-in capital (Successor)
|
—
|
|
|
1,667
|
|
|
(18)
|
|
—
|
|
|
|
|
1,667
|
|
||||
Common stock (Predecessor)
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||
Additional paid-in capital (Predecessor)
|
2,387
|
|
|
(2,387
|
)
|
|
(17)
|
|
—
|
|
|
|
|
—
|
|
||||
(Accumulated deficit) retained earnings
|
(5,978
|
)
|
|
4,846
|
|
|
(19)
|
|
1,132
|
|
|
(36)
|
|
—
|
|
||||
Accumulated other comprehensive (loss) income
|
(1,454
|
)
|
|
664
|
|
|
(20)
|
|
790
|
|
|
(35)
|
|
—
|
|
||||
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY
|
(5,045
|
)
|
|
4,791
|
|
|
|
|
1,922
|
|
|
|
|
1,668
|
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
|
$
|
5,834
|
|
|
$
|
(408
|
)
|
|
|
|
$
|
2,183
|
|
|
|
|
$
|
7,609
|
|
(In millions)
|
|
||
Sources:
|
|
||
Proceeds from Term Loan Credit Agreement, net of original issue discount
|
$
|
2,896
|
|
Release of restricted cash
|
76
|
|
|
Total sources of cash
|
2,972
|
|
|
Uses:
|
|
||
Repayment of DIP Credit Agreement
|
(725
|
)
|
|
Payment of DIP Credit Agreement accrued interest
|
(1
|
)
|
|
Cash paid to Predecessor first lien debt-holders
|
(2,061
|
)
|
|
Cash paid to PBGC
|
(340
|
)
|
|
Payment for professional fees escrow account
|
(56
|
)
|
|
Funding payment for Avaya represented employee pension plan
|
(49
|
)
|
|
Payment of accrued professional & administrative fees
|
(27
|
)
|
|
Costs incurred for Term Loan Credit Agreement and ABL Credit Agreement
|
(59
|
)
|
|
Payment for general unsecured claims
|
(58
|
)
|
|
Total uses of cash
|
(3,376
|
)
|
|
Net uses of cash
|
$
|
(404
|
)
|
2.
|
Other Current Assets.
|
(In millions)
|
|
||
Release of restricted cash
|
$
|
(76
|
)
|
Reclassification of prepaid debt issuance costs related to the Term Loan Credit Agreement
|
(42
|
)
|
|
Payment of fees related to the ABL Credit Agreement
|
5
|
|
|
Restricted cash for bankruptcy related professional fees
|
55
|
|
|
Total other current assets
|
$
|
(58
|
)
|
3.
|
Deferred Income Taxes.
The adjustment represents the release of the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of the bankruptcy reorganization.
|
4.
|
Other Assets.
The adjustment represents the re-establishment of foreign prepaid taxes.
|
5.
|
Debt Maturing Within One Year.
The adjustment represents the net effect of the Company’s repayment of
$725 million
for the DIP Credit Agreement and Term Loan Credit Agreement principal payments of
$29 million
due over the next year.
|
6.
|
Accounts Payable
. The net decrease of
$49 million
includes
$50 million
for professional fees that were reclassified to Other current liabilities for accrued bankruptcy related professional fees that will be paid from an escrow account and a payment of
$3 million
for bankruptcy related professional fees, partially offset by reinstatement of
$4 million
contract cure costs from liabilities subject to compromise.
|
7.
|
Payroll and Benefi
t
Obligations.
The Company reinstated
$23 million
of liabilities subject to compromise related to the post-employment and post-retirement benefit obligations.
|
8.
|
Deferred Revenue.
The reinstatement of liabilities subject to compromise was
$79 million
of which
$50 million
is included in deferred revenue and
$29 million
in other liabilities.
|
9.
|
Business Restructuring Reserve.
The reinstatement of liabilities subject to compromise was
$7 million
, of which
$3 million
is current and
$4 million
is non-current.
|
(In millions)
|
|
||
Reclassification of accrued bankruptcy related professional fees
|
$
|
50
|
|
Reinstatement of other current liabilities
|
16
|
|
|
Payment of accrued interest on the DIP Credit Agreement
|
(1
|
)
|
|
Total other current liabilities
|
$
|
65
|
|
12.
|
Pension Obligations.
In accordance with the Plan of Reorganization, the Company reinstated from liabilities subject to compromise
$295 million
related to the Avaya Pension Plan for represented employees and also contributed
$49 million
to the related pension trust.
|
13.
|
Other Post-retirement Obligations.
Other post-retirement benefit obligations of
$212 million
were reinstated from liabilities subject to compromise.
|
14.
|
Deferred Income Taxes
. The adjustment represents the reinstatement of the deferred tax liability that was included in liabilities subject to compromise.
|
15.
|
Other Liabilities
. The increase of
$233 million
primarily relates to the reinstatement of employee benefits, tax liabilities and deferred revenue from liabilities subject to compromise. Also included is the value of the Emergence Date Warrants issued to the holders of the Predecessor second lien obligations.
|
(In millions)
|
As Previously Reported
|
|
Adjustments
|
|
Revised
|
||||||
Pre-petition first lien debt
|
$
|
734
|
|
|
$
|
(23
|
)
|
|
$
|
711
|
|
Pre-petition second lien debt
|
1,357
|
|
|
(1
|
)
|
|
1,356
|
|
|||
Avaya pension plan for salaried employees
|
(514
|
)
|
|
(2
|
)
|
|
(516
|
)
|
|||
General unsecured creditors' claims
|
227
|
|
|
—
|
|
|
227
|
|
|||
Net gain on settlement of Liabilities subject to compromise
|
$
|
1,804
|
|
|
$
|
(26
|
)
|
|
$
|
1,778
|
|
17.
|
Cancellation of Predecessor Preferred and Common Stock.
All common stock, Series A and B preferred stock and all other equity awards of the Predecessor Company were cancelled on the Emergence Date without any recovery on account thereof.
|
18.
|
Issuance of Successor Common Stock and Emergence Date Warrants.
In settlement of the Company's
$5,721 million
Predecessor first lien obligations and Predecessor second lien obligations, the holders of the Predecessor first lien obligations received a total of
99.3 million
shares of common stock (fair value of
$1,509 million
) and
$2,061 million
in cash and the holders of the Predecessor second lien obligations received a total of
4.4 million
shares of common stock (fair value of
$67 million
) and
5.6 million
Emergence Date Warrants to purchase a like amount of common shares (fair value of
$17 million
). In addition, as part of the Plan of Reorganization, the Company completed a distressed termination of the APPSE in accordance with the Stipulation Settlement with the PBGC, the PBGC received
$340 million
in cash and
6.1 million
shares of common stock (fair value of
$92 million
).
|
19.
|
Accumulated Deficit.
|
(In millions)
|
As Previously Reported
|
|
Adjustments
|
|
Revised
|
||||||
Accumulated deficit:
|
|
|
|
|
|
||||||
Net gain on settlement of liabilities subject to compromise
|
$
|
1,804
|
|
|
$
|
(26
|
)
|
|
$
|
1,778
|
|
Expense for certain professional fees
|
(26
|
)
|
|
—
|
|
|
(26
|
)
|
|||
Benefit from income taxes
|
118
|
|
|
—
|
|
|
118
|
|
|||
Cancellation of Predecessor equity awards
|
6
|
|
|
—
|
|
|
6
|
|
|||
Cancellation of Predecessor Preferred stock Series B
|
397
|
|
|
—
|
|
|
397
|
|
|||
Cancellation of Predecessor Preferred stock Series A
|
186
|
|
|
—
|
|
|
186
|
|
|||
Cancellation of Predecessor Common stock
|
2,387
|
|
|
—
|
|
|
2,387
|
|
|||
Total
|
$
|
4,872
|
|
|
$
|
(26
|
)
|
|
$
|
4,846
|
|
20.
|
Accumulated Comprehensive Loss.
The changes to Accumulated comprehensive loss relate to the settlement of the APPSE and the Avaya Supplemental Pension Plan ("ASPP") and associated taxes.
|
21.
|
Accounts Receivable.
This adjustment relates to a change in accounting policy for the way the Company will present uncollected deferred revenue upon emergence from bankruptcy. The Company will offset such deferred revenue against the related account receivable.
|
22.
|
Inventory
. This adjustment relates to the write-up of inventory to fair value based on estimated selling prices, less costs of disposal.
|
23.
|
Other Current Assets
. This adjustment reflects the write-off of certain prepaid commissions, deferred installation costs and debt issuance costs that do not meet the definition of an asset upon emergence.
|
24.
|
Property, Plant and Equipment
. An adjustment of
$116 million
was recorded to increase the net book value of property, plant and equipment to its estimated fair value based on estimated current acquisition price, plus costs to make the property fully operational.
|
25.
|
Deferred Income Tax.
T
he adjustment represents the release of the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of future taxable income from the reversal of deferred tax liabilities that were established as part of fresh start accounting.
|
26.
|
Intangible Assets.
The Company recorded an adjustment to intangible assets for
$3,137 million
as follows:
|
|
Successor
|
|
|
Predecessor
|
|
|
||||||
(In millions)
|
December 16, 2017 Post-emergence
|
|
|
December 15, 2017 Pre-emergence
|
|
Difference
|
||||||
Customer relationships and other intangible assets
|
$
|
2,155
|
|
|
|
$
|
96
|
|
|
$
|
2,059
|
|
Technology and patents
|
905
|
|
|
|
12
|
|
|
893
|
|
|||
Trademarks and trade names
|
375
|
|
|
|
190
|
|
|
185
|
|
|||
Total
|
$
|
3,435
|
|
|
|
$
|
298
|
|
|
$
|
3,137
|
|
27.
|
Goodwill.
Predecessor goodwill of
$3,541 million
was eliminated and Successor goodwill of
$2,658 million
was established based on the calculated reorganization value.
|
(In millions)
|
As Previously Reported
|
|
Adjustments
|
|
Revised
|
||||||
Reorganization value of Successor Company
|
$
|
7,583
|
|
|
$
|
26
|
|
|
$
|
7,609
|
|
Less: Fair value of Successor Company assets
|
(4,951
|
)
|
|
—
|
|
|
(4,951
|
)
|
|||
Reorganization value of Successor Company assets in excess of fair value - goodwill
|
$
|
2,632
|
|
|
$
|
26
|
|
|
$
|
2,658
|
|
28.
|
Other Assets.
The
$27 million
decrease to other assets is related to prepaid commissions that do not meet the definition of an asset upon emergence as there is no future benefit to the Successor Company.
|
29.
|
Deferred Revenue.
The fair value of deferred revenue, which principally relates to payments on annual maintenance contracts, was determined by deducting selling costs and associated profit from the Predecessor deferred revenue balance to arrive at the costs and profit associated with fulfilling the liability. Additionally, the decrease includes the impact of an accounting policy change whereby the Successor Company no longer recognizes deferred revenue relating to sales transactions that have been billed, but for which the related account receivable has not yet been collected.
|
30.
|
Other Current Liabilities.
The decrease of
$3 million
to other current liabilities is related to the fair value of real estate leases determined to be above or below market using the income approach based on the difference between the contractual rental rate and the estimated market rental rate, discounted utilizing a risk-related discount rate.
|
31.
|
Long-term Debt
. The fair value of the Term Loan Credit Agreement was determined based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices.
|
32.
|
Deferred Income Taxes.
The adjustment represents the establishment of deferred tax liabilities related to book/tax differences created by fresh start accounting adjustments. The amount is net of the release of the valuation allowance on deferred tax assets, which management believes more likely than not will be realized as a result of future taxable income from the reversal of such deferred tax liabilities.
|
33.
|
Business Restructuring Reserve.
The Company recorded an increase to its non-current business restructuring reserves based on estimated future cash flows applied to a current discount rate at emergence.
|
34.
|
Other Liabilities.
A decrease in other liabilities of
$43 million
relates to deferred revenue and real estate leases as previously discussed.
|
35.
|
Accumulated Other Comprehensive Loss.
The remaining balance in Accumulated comprehensive loss was reversed to Reorganization expenses, net.
|
36.
|
Fresh Start Adjustments.
The following table reflects the cumulative impact of the fresh start adjustments as discussed above, the elimination of the Predecessor Company's accumulated other comprehensive loss and the adjustments required to eliminate accumulated deficit:
|
(In millions)
|
As Previously Reported
|
|
Adjustments
|
|
Revised
|
||||||
Eliminate Predecessor Intangible assets
|
$
|
(298
|
)
|
|
$
|
—
|
|
|
$
|
(298
|
)
|
Eliminate Predecessor Goodwill
|
(3,541
|
)
|
|
—
|
|
|
(3,541
|
)
|
|||
Establish Successor Intangible assets
|
3,435
|
|
|
—
|
|
|
3,435
|
|
|||
Establish Successor Goodwill
|
2,632
|
|
|
26
|
|
|
2,658
|
|
|||
Fair value adjustment to Inventory
|
29
|
|
|
—
|
|
|
29
|
|
|||
Fair value adjustment to Other current assets
|
(66
|
)
|
|
—
|
|
|
(66
|
)
|
|||
Fair value adjustment to Property, plant and equipment
|
116
|
|
|
—
|
|
|
116
|
|
|||
Fair value adjustment to Other assets
|
(27
|
)
|
|
—
|
|
|
(27
|
)
|
|||
Fair value adjustment to Deferred revenue
|
235
|
|
|
—
|
|
|
235
|
|
|||
Fair value adjustment to Business restructuring reserves
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||
Fair value adjustment to Other current liabilities
|
3
|
|
|
—
|
|
|
3
|
|
|||
Fair value adjustment to Long-term debt
|
(96
|
)
|
|
|
|
(96
|
)
|
||||
Fair value adjustment to Other liabilities
|
43
|
|
|
—
|
|
|
43
|
|
|||
Release Predecessor Accumulated comprehensive loss
|
(790
|
)
|
|
—
|
|
|
(790
|
)
|
|||
Fresh start adjustments included in Reorganization items, net
|
1,671
|
|
|
26
|
|
|
1,697
|
|
|||
Tax impact of fresh start adjustments
|
(565
|
)
|
|
—
|
|
|
(565
|
)
|
|||
Gain on fresh start accounting, net
|
$
|
1,106
|
|
|
$
|
26
|
|
|
$
|
1,132
|
|
6.
|
Goodwill and Intangible Assets
|
|
As Previously Reported
|
||||||||||
(In millions)
|
Global
Communications
Solutions
|
|
Avaya Global Services
|
|
Total
|
||||||
Cost
|
$
|
2,669
|
|
|
$
|
2,501
|
|
|
$
|
5,170
|
|
Accumulated impairment
|
(1,576
|
)
|
|
(52
|
)
|
|
(1,628
|
)
|
|||
September 30, 2017 (Predecessor)
|
$
|
1,093
|
|
|
$
|
2,449
|
|
|
$
|
3,542
|
|
Adjustments
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Impact of fresh start accounting
|
68
|
|
|
(977
|
)
|
|
(909
|
)
|
|||
December 15, 2017 (Predecessor)
|
$
|
1,160
|
|
|
$
|
1,472
|
|
|
$
|
2,632
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
December 16, 2017 (Successor)
|
$
|
1,160
|
|
|
$
|
1,472
|
|
|
$
|
2,632
|
|
|
Adjustments
|
||||||||||
(In millions)
|
Global
Communications
Solutions
|
|
Avaya Global Services
|
|
Total
|
||||||
Cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accumulated impairment
|
—
|
|
|
—
|
|
|
—
|
|
|||
September 30, 2017 (Predecessor)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Impact of fresh start accounting
|
11
|
|
|
15
|
|
|
26
|
|
|||
December 15, 2017 (Predecessor)
|
$
|
11
|
|
|
$
|
15
|
|
|
$
|
26
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
December 16, 2017 (Successor)
|
$
|
11
|
|
|
$
|
15
|
|
|
$
|
26
|
|
|
Revised
|
||||||||||
(In millions)
|
Global
Communications
Solutions
|
|
Avaya Global Services
|
|
Total
|
||||||
Cost
|
$
|
2,669
|
|
|
$
|
2,501
|
|
|
$
|
5,170
|
|
Accumulated impairment
|
(1,576
|
)
|
|
(52
|
)
|
|
(1,628
|
)
|
|||
September 30, 2017 (Predecessor)
|
1,093
|
|
|
2,449
|
|
|
3,542
|
|
|||
Adjustments
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Impact of fresh start accounting
|
79
|
|
|
(962
|
)
|
|
(883
|
)
|
|||
December 15, 2017 (Predecessor)
|
$
|
1,171
|
|
|
$
|
1,487
|
|
|
$
|
2,658
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
December 16, 2017 (Successor)
|
$
|
1,171
|
|
|
$
|
1,487
|
|
|
$
|
2,658
|
|
Spoken acquisition
|
120
|
|
|
—
|
|
|
120
|
|
|||
Impact of foreign currency fluctuations
|
(3
|
)
|
|
(4
|
)
|
|
(7
|
)
|
|||
June 30, 2018 (Successor)
|
$
|
1,288
|
|
|
$
|
1,483
|
|
|
$
|
2,771
|
|
|
Successor
|
||||||||||||||
|
As of June 30, 2018
|
||||||||||||||
(In millions)
|
Technology
and patents |
|
Customer
relationships and other intangibles |
|
Trademarks
and trade names |
|
Total
|
||||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||||
Cost
|
$
|
960
|
|
|
$
|
2,156
|
|
|
$
|
43
|
|
|
$
|
3,159
|
|
Accumulated amortization
|
(92
|
)
|
|
(84
|
)
|
|
(2
|
)
|
|
(178
|
)
|
||||
Finite-lived intangible assets, net
|
868
|
|
|
2,072
|
|
|
41
|
|
|
2,981
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Indefinite-lived intangible assets
|
5
|
|
|
—
|
|
|
332
|
|
|
337
|
|
||||
Intangible assets, net
|
$
|
873
|
|
|
$
|
2,072
|
|
|
$
|
373
|
|
|
$
|
3,318
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Predecessor
|
||||||||||||||
|
As of September 30, 2017
|
||||||||||||||
(In millions)
|
Technology
and patents |
|
Customer
relationships and other intangibles |
|
Trademarks
and trade names |
|
Total
|
||||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||||
Cost
|
$
|
1,427
|
|
|
$
|
2,196
|
|
|
$
|
—
|
|
|
$
|
3,623
|
|
Accumulated amortization
|
(1,411
|
)
|
|
(2,091
|
)
|
|
—
|
|
|
(3,502
|
)
|
||||
Finite-lived intangible assets, net
|
16
|
|
|
105
|
|
|
—
|
|
|
121
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||||
Cost
|
—
|
|
|
—
|
|
|
545
|
|
|
545
|
|
||||
Accumulated impairment
|
—
|
|
|
—
|
|
|
(355
|
)
|
|
(355
|
)
|
||||
Indefinite-lived intangible assets, net
|
—
|
|
|
—
|
|
|
190
|
|
|
190
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Intangible assets, net
|
$
|
16
|
|
|
$
|
105
|
|
|
$
|
190
|
|
|
$
|
311
|
|
7.
|
Supplementary Financial Information
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
(In millions)
|
Three months ended
June 30, 2018 |
|
|
Three months ended
June 30, 2017 |
|
Period from December 16, 2017
through June 30, 2018 |
|
|
Period from October 1, 2017 through December 15, 2017
|
|
Nine months ended
June 30, 2017 |
||||||||||
OTHER INCOME (EXPENSE), NET
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
$
|
1
|
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Foreign currency gains, net
|
25
|
|
|
|
2
|
|
|
24
|
|
|
|
—
|
|
|
1
|
|
|||||
Income from TSA, net
|
1
|
|
|
|
—
|
|
|
5
|
|
|
|
3
|
|
|
—
|
|
|||||
Other pension and post-retirement benefit credits (costs), net
|
4
|
|
|
|
(12
|
)
|
|
9
|
|
|
|
(8
|
)
|
|
(29
|
)
|
|||||
Change in fair value of Emergence Date Warrants
|
6
|
|
|
|
—
|
|
|
(9
|
)
|
|
|
—
|
|
|
—
|
|
|||||
Gain on sale of long-lived assets
|
—
|
|
|
|
—
|
|
|
1
|
|
|
|
—
|
|
|
—
|
|
|||||
Other, net
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
1
|
|
|
(1
|
)
|
|||||
Total other income (expense), net
|
$
|
37
|
|
|
|
$
|
(9
|
)
|
|
$
|
32
|
|
|
|
$
|
(2
|
)
|
|
$
|
(27
|
)
|
|
|
Successor
|
|
|
Predecessor
|
||||
(In millions)
|
|
Three months ended
June 30, 2018 |
|
|
Three months ended
June 30, 2017
|
||||
REORGANIZATION ITEMS, NET
|
|
|
|
|
|
||||
Bankruptcy-related professional fees
|
|
$
|
—
|
|
|
|
$
|
(31
|
)
|
DIP Credit Agreement financing costs
|
|
—
|
|
|
|
—
|
|
||
Contract rejection fees
|
|
—
|
|
|
|
(4
|
)
|
||
Net gain on settlement of liabilities subject to compromise
|
|
—
|
|
|
|
—
|
|
||
Net gain on fresh start adjustments
|
|
—
|
|
|
|
—
|
|
||
Other items, net
|
|
—
|
|
|
|
—
|
|
||
Reorganization items, net
|
|
$
|
—
|
|
|
|
$
|
(35
|
)
|
Cash payments for reorganization items
|
|
$
|
—
|
|
|
|
$
|
33
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||||||
|
|
|
|
|
As Previously Reported
|
|
Adjustments
|
|
Revised
|
|
|
||||||||||
(In millions)
|
|
Period from December 16, 2017
through June 30, 2018 |
|
|
Period from October 1, 2017 through December 15, 2017
|
|
Period from October 1, 2017 through December 15, 2017
|
|
Period from October 1, 2017 through December 15, 2017
|
|
Nine months ended
June 30, 2017 |
||||||||||
REORGANIZATION ITEMS, NET
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bankruptcy-related professional fees
|
|
$
|
—
|
|
|
|
$
|
(56
|
)
|
|
$
|
—
|
|
|
$
|
(56
|
)
|
|
$
|
(59
|
)
|
DIP Credit Agreement financing costs
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|||||
Contract rejection fees
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||
Net gain on settlement of liabilities subject to compromise
|
|
—
|
|
|
|
1,804
|
|
|
(26
|
)
|
|
1,778
|
|
|
—
|
|
|||||
Net gain on fresh start adjustments
|
|
—
|
|
|
|
1,671
|
|
|
26
|
|
|
1,697
|
|
|
—
|
|
|||||
Other items, net
|
|
—
|
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|||||
Reorganization items, net
|
|
$
|
—
|
|
|
|
$
|
3,416
|
|
|
$
|
—
|
|
|
$
|
3,416
|
|
|
$
|
(77
|
)
|
Cash payments for reorganization items
|
|
$
|
1
|
|
|
|
$
|
2,524
|
|
|
$
|
—
|
|
|
$
|
2,524
|
|
|
$
|
39
|
|
8.
|
Business Restructuring Reserves and Programs
|
(In millions)
|
Employee Separation Costs
|
|
Lease Obligations
|
|
Total
|
||||||
2018 restructuring charges
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
12
|
|
Cash payments
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||
Balance as of December 15, 2017 (Predecessor)
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Balance as of December 16, 2017 (Successor)
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
9
|
|
2018 restructuring charges
|
68
|
|
|
10
|
|
|
78
|
|
|||
Cash payments
|
(16
|
)
|
|
(10
|
)
|
|
(26
|
)
|
|||
Impact of foreign currency fluctuations
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Balance as of June 30, 2018 (Successor)
|
$
|
59
|
|
|
$
|
—
|
|
|
$
|
59
|
|
(In millions)
|
Employee Separation Costs
|
|
Lease Obligations
|
|
Total
|
||||||
Balance as of September 30, 2017 (Predecessor)
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
5
|
|
Cash payments
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||
Balance as of December 15, 2017 (Predecessor)
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Balance as of December 16, 2017 (Successor)
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Cash payments
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Balance as of June 30, 2018 (Successor)
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
(In millions)
|
Employee Separation Costs
|
|
Lease Obligations
|
|
Total
|
||||||
Balance as of September 30, 2017 (Predecessor)
|
$
|
51
|
|
|
$
|
24
|
|
|
$
|
75
|
|
Cash payments
|
(3
|
)
|
|
(17
|
)
|
|
(20
|
)
|
|||
Expense
|
1
|
|
|
1
|
|
|
2
|
|
|||
Adjustments - fresh start and reorganization items
|
$
|
4
|
|
|
$
|
(1
|
)
|
|
$
|
3
|
|
Balance as of December 15, 2017 (Predecessor)
|
$
|
53
|
|
|
$
|
7
|
|
|
$
|
60
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Balance as of December 16, 2017 (Successor)
|
$
|
53
|
|
|
$
|
7
|
|
|
$
|
60
|
|
Expense
|
1
|
|
|
1
|
|
|
2
|
|
|||
Cash payments
|
(12
|
)
|
|
(2
|
)
|
|
(14
|
)
|
|||
Impact of foreign currency fluctuations
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance as of June 30, 2018 (Successor)
|
$
|
42
|
|
|
$
|
6
|
|
|
$
|
48
|
|
9.
|
Financing Arrangements
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
June 30, 2018
|
|
|
September 30, 2017
|
||||||||||||
(In millions)
|
Principal amount
|
|
Net of discounts and issuance costs
|
|
|
Principal amount
|
|
Net of discounts and issuance costs
|
||||||||
Term Loan Credit Agreement
|
$
|
2,910
|
|
|
$
|
2,876
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Convertible 2.25% senior notes due June 15, 2023
|
350
|
|
|
252
|
|
|
|
—
|
|
|
—
|
|
||||
DIP Credit Agreement due January 19, 2018
|
—
|
|
|
—
|
|
|
|
725
|
|
|
725
|
|
||||
First lien debt:
|
|
|
|
|
|
|
|
|
||||||||
Senior secured term B-3 loans
|
—
|
|
|
—
|
|
|
|
594
|
|
|
594
|
|
||||
Senior secured term B-4 loans
|
—
|
|
|
—
|
|
|
|
1
|
|
|
1
|
|
||||
Senior secured term B-6 loans
|
—
|
|
|
—
|
|
|
|
519
|
|
|
519
|
|
||||
Senior secured term B-7 loans
|
—
|
|
|
—
|
|
|
|
2,012
|
|
|
2,012
|
|
||||
7% senior secured notes
|
—
|
|
|
—
|
|
|
|
982
|
|
|
982
|
|
||||
9% senior secured notes
|
—
|
|
|
—
|
|
|
|
284
|
|
|
284
|
|
||||
Second lien debt:
|
|
|
|
|
|
|
|
|
||||||||
10.50% senior secured notes
|
—
|
|
|
—
|
|
|
|
1,440
|
|
|
1,440
|
|
||||
Total debt
|
$
|
3,260
|
|
|
3,128
|
|
|
|
$
|
6,557
|
|
|
6,557
|
|
||
Debt maturing within one year
|
|
|
(29
|
)
|
|
|
|
|
(725
|
)
|
||||||
Long-term debt, net of current portion
(1)
|
|
|
$
|
3,099
|
|
|
|
|
|
$
|
5,832
|
|
1.
|
the Successor Company entered into the Term Loan Credit Agreement and the ABL Credit Agreement;
|
2.
|
the DIP Credit Agreement was paid in full;
|
3.
|
the holders of the Predecessor first lien obligations received cash and Successor Company common stock (aggregate fair value of
$3,570 million
) and the Company cancelled
$4,281 million
of the Predecessor first lien obligations; and
|
4.
|
the holders of the Predecessor second lien obligations received Successor Company common stock and Emergence Date Warrants to purchase common stock (aggregate fair value of
$84 million
) and the Company cancelled
$1,440 million
of the Predecessor second lien obligations.
|
1.
|
In the case of Base Rate Loans denominated in U.S. dollars, at a rate per annum equal to
0.75%
(subject to a
0.25%
step-up or step-down based on availability) plus the highest of (i) the Federal Funds Rate plus
0.50%
, (ii) the U.S. prime rate as publicly announced by Citibank, N.A. and (iii) the LIBOR Rate for an interest period of one month;
|
2.
|
In the case of LIBOR Rate Loans denominated in U.S. dollars, at a rate per annum equal to
1.75%
(subject to a
0.25%
step-up or step-down based on availability) plus the applicable LIBOR Rate;
|
3.
|
In the case of Canadian Prime Rate Loans denominated in Canadian dollars, at a rate per annum equal to
0.75%
(subject to a
0.25%
step-up or step-down based on availability) plus the highest of (i) the “Base Rate” as publicly announced by Citibank, N.A., Canadian branch and (ii) the rate of interest per annum equal to the average rate applicable to Canadian Dollar Bankers Rate ("CDOR Rate") for an interest period of
30
days;
|
4.
|
In the case of CDOR Rate Loans denominated in Canadian dollars, at a rate per annum equal to
1.75%
(subject to a
0.25%
step-up or step-down based on availability) plus the applicable CDOR Rate;
|
5.
|
In the case of LIBOR Rate Loans denominated in Sterling, at a rate per annum equal to
1.75%
(subject to a
0.25%
step-up or step-down based on availability) plus the applicable LIBOR Rate;
|
6.
|
In the case of Euro Interbank Offered Rate ("EURIBOR Rate") Loans denominated in Euro, at a rate per annum equal to
1.75%
(subject to a
0.25%
step-up or step-down based on availability) plus the applicable LIBOR Rate; and
|
7.
|
In the case of Overnight LIBOR Rate Loans, at a rate per annum equal to
1.75%
(subject to a
0.25%
step-up or step-down based on availability) plus the applicable Overnight LIBOR Rate.
|
•
|
during any calendar quarter commencing after the calendar quarter ending on
September 30, 2018
(and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least
20
trading days (whether or not consecutive) during a period of
30
consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to
130%
of the conversion price on each applicable trading day;
|
•
|
during the
five
business day period after any
five
consecutive trading day period (the “Measurement Period”) in which the trading price per
$1,000
principal amount of the Convertible Notes for each trading day of the Measurement Period was less than
98%
of the product of the last reported sales price of the Company's common stock and the conversion rate on each such trading day; or
|
•
|
upon the occurrence of specified corporate events.
|
(In millions)
|
|
June 30, 2018
|
||
Principal
|
|
$
|
350
|
|
Less:
|
|
|
||
Unamortized debt discount
|
|
(91
|
)
|
|
Unamortized issuance costs
|
|
(7
|
)
|
|
Net carrying amount
|
|
$
|
252
|
|
(In millions)
|
|
June 30, 2018
|
||
Debt discount for conversion option
|
|
$
|
92
|
|
Less:
|
|
|
||
Issuance costs
|
|
(3
|
)
|
|
Net carrying amount
|
|
$
|
89
|
|
10.
|
Derivative Instruments and Hedging Activities
|
|
|
|
As Previously Reported
|
|
Revised
|
|||
|
June 30, 2018
|
|
December 15, 2017
|
|
December 15, 2017
|
|||
Expected volatility
|
50.96
|
%
|
|
54.57
|
%
|
|
54.38
|
%
|
Risk-free interest rates
|
2.68
|
%
|
|
2.20
|
%
|
|
2.20
|
%
|
Expected remaining life (in years)
|
4.46
|
|
|
5.00
|
|
|
5.00
|
|
Price per share of common stock
|
$20.08
|
|
$14.93
|
|
$15.16
|
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
|
|
|
June 30, 2018
|
|
|
September 30, 2017
|
||||||||||||
(In millions)
|
|
Balance Sheet Caption
|
|
Asset
|
|
Liability
|
|
|
Asset
|
|
Liability
|
||||||||
Derivatives Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
|
Other current liabilities
|
|
$
|
—
|
|
|
$
|
11
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate contracts
|
|
Other liabilities
|
|
—
|
|
|
5
|
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
—
|
|
|
16
|
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Emergence Date Warrants
|
|
Other liabilities
|
|
—
|
|
|
26
|
|
|
|
—
|
|
|
—
|
|
||||
Total derivative fair value
|
|
|
|
$
|
—
|
|
|
$
|
42
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||||||||||
|
|
Three months ended
June 30, 2018 |
|
Period from December 16, 2017 through June 30, 2018
|
|
|
Period from October 1, 2017 through December 15, 2017
|
||||||||||||||||||
(In millions)
|
|
Interest Expense
|
|
Other Comprehensive Income (Loss)
|
|
Interest Expense
|
|
Other Comprehensive Income (Loss)
|
|
|
Interest Expense
|
|
Other Comprehensive Income (Loss)
|
||||||||||||
Financial Statement Line Item in which Cash Flow Hedges are Recorded
|
|
$
|
(56
|
)
|
|
$
|
(16
|
)
|
|
$
|
(112
|
)
|
|
$
|
(41
|
)
|
|
|
$
|
(14
|
)
|
|
$
|
658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Impact of cash flow hedging relationships:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loss recognized in AOCI - on interest rate swaps
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
|
|
—
|
|
|
—
|
|
||||||
Interest expense reclassified from AOCI
|
|
(2
|
)
|
|
2
|
|
|
(2
|
)
|
|
2
|
|
|
|
—
|
|
|
—
|
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
(In millions)
|
|
Location of Derivative Pre-tax Gain (Loss)
|
Three months ended
June 30, 2018 |
|
Period from December 16, 2017
through June 30, 2018 |
|
|
Period from October 1, 2017 through December 15, 2017
|
||||||
Emergence Date Warrants
|
|
Other income (expense), net
|
$
|
6
|
|
|
$
|
(9
|
)
|
|
|
$
|
—
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
|
June 30, 2018
|
|
|
September 30, 2017
|
||||||||||||
(In millions)
|
|
Asset
|
|
Liability
|
|
|
Asset
|
|
Liability
|
||||||||
Gross amounts recognized in the consolidated balance sheet
|
|
$
|
—
|
|
|
$
|
42
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||
Net amounts
|
|
$
|
—
|
|
|
$
|
42
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
11.
|
Fair Value Measures
|
|
Successor
|
||||||||||||||
|
June 30, 2018
|
||||||||||||||
|
Fair Value Measurements Using
|
||||||||||||||
(In millions)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Other Non-Current Assets:
|
|
|
|
|
|
|
|
||||||||
Investments
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
—
|
|
Spoken acquisition Earn-outs
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||
Emergence Date Warrants
|
26
|
|
|
—
|
|
|
—
|
|
|
26
|
|
||||
Total liabilities
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
41
|
|
|
Predecessor
|
||||||||||||||
|
September 30, 2017
|
||||||||||||||
|
Fair Value Measurements Using
|
||||||||||||||
(In millions)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Other Non-Current Assets:
|
|
|
|
|
|
|
|
||||||||
Investments
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(In millions)
|
Emergence Date Warrants
|
|
Spoken Acquisition Earn-outs
|
|
Total
|
||||||
September 30, 2017 (Predecessor)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Issuance of Emergence Date Warrants
|
17
|
|
|
—
|
|
|
17
|
|
|||
December 15, 2017 (Predecessor)
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
17
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
December 16, 2017 (Successor)
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
17
|
|
Contingent consideration
|
—
|
|
|
14
|
|
|
14
|
|
|||
Change in fair value
(1)
|
15
|
|
|
—
|
|
|
15
|
|
|||
March 31, 2018 (Successor)
|
32
|
|
|
14
|
|
|
46
|
|
|||
Accretion of interest
(1)
|
—
|
|
|
1
|
|
|
1
|
|
|||
Change in fair value
(1)
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||
June 30, 2018 (Successor)
|
$
|
26
|
|
|
$
|
15
|
|
|
$
|
41
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
June 30, 2018
|
|
|
September 30, 2017
|
||||||||||||
(In millions)
|
Principal
Amount
|
|
Fair
Value
|
|
|
Principal
Amount
|
|
Fair
Value
|
||||||||
Term Loan Credit Agreement due December 15, 2024
|
$
|
2,910
|
|
|
$
|
2,919
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Convertible 2.25% senior notes due June 15, 2023
|
350
|
|
|
342
|
|
|
|
—
|
|
|
—
|
|
||||
DIP Credit Agreement due January 19, 2018
|
—
|
|
|
—
|
|
|
|
725
|
|
|
732
|
|
||||
Variable rate Term B-3 Loans due October 26, 2017
|
—
|
|
|
—
|
|
|
|
594
|
|
|
503
|
|
||||
Variable rate Term B-4 Loans due October 26, 2017
|
—
|
|
|
—
|
|
|
|
1
|
|
|
1
|
|
||||
Variable rate Term B-6 Loans due March 31, 2018
|
—
|
|
|
—
|
|
|
|
519
|
|
|
440
|
|
||||
Variable rate Term B-7 Loans due May 29, 2020
|
—
|
|
|
—
|
|
|
|
2,012
|
|
|
1,709
|
|
||||
7% senior secured notes due April 1, 2019
|
—
|
|
|
—
|
|
|
|
982
|
|
|
832
|
|
||||
9% senior secured notes due April 1, 2019
|
—
|
|
|
—
|
|
|
|
284
|
|
|
241
|
|
||||
10.50% senior secured notes due March 1, 2021
|
—
|
|
|
—
|
|
|
|
1,440
|
|
|
67
|
|
||||
Total
|
$
|
3,260
|
|
|
$
|
3,261
|
|
|
|
$
|
6,557
|
|
|
$
|
4,525
|
|
12.
|
Income Taxes
|
13.
|
Benefit Obligations
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
(In millions)
|
Three months ended
June 30, 2018 |
|
|
Three months ended
June 30, 2017 |
|
Period from December 16, 2017
through June 30, 2018 |
|
|
Period from October 1, 2017 through December 15, 2017
|
|
Nine months ended
June 30, 2017 |
||||||||||
Pension Benefits - U.S.
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Components of Net Periodic Benefit (Credit) Cost
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Service cost
|
$
|
1
|
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
|
$
|
1
|
|
|
$
|
3
|
|
Interest cost
|
9
|
|
|
|
24
|
|
|
19
|
|
|
|
22
|
|
|
73
|
|
|||||
Expected return on plan assets
|
(17
|
)
|
|
|
(44
|
)
|
|
(35
|
)
|
|
|
(38
|
)
|
|
(134
|
)
|
|||||
Amortization of unrecognized prior service cost
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
1
|
|
|||||
Amortization of previously unrecognized net actuarial loss
|
—
|
|
|
|
26
|
|
|
—
|
|
|
|
20
|
|
|
77
|
|
|||||
Settlement loss
(1)
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|||||
Net periodic benefit (credit) cost
|
$
|
(7
|
)
|
|
|
$
|
7
|
|
|
$
|
(14
|
)
|
|
|
$
|
5
|
|
|
$
|
20
|
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
(In millions)
|
Three months ended
June 30, 2018 |
|
|
Three months ended
June 30, 2017 |
|
Period from December 16, 2017
through June 30, 2018 |
|
|
Period from October 1, 2017 through December 15, 2017
|
|
Nine months ended
June 30, 2017 |
||||||||||
Pension Benefits - Non-U.S.
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Components of Net Periodic Benefit Cost
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Service cost
|
$
|
1
|
|
|
|
$
|
1
|
|
|
$
|
3
|
|
|
|
$
|
2
|
|
|
$
|
5
|
|
Interest cost
|
3
|
|
|
|
2
|
|
|
5
|
|
|
|
3
|
|
|
6
|
|
|||||
Expected return on plan assets
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
(1
|
)
|
|||||
Amortization of previously unrecognized net actuarial loss
|
—
|
|
|
|
4
|
|
|
—
|
|
|
|
1
|
|
|
12
|
|
|||||
Net periodic benefit cost
|
$
|
4
|
|
|
|
$
|
7
|
|
|
$
|
8
|
|
|
|
$
|
6
|
|
|
$
|
22
|
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
(In millions)
|
Three months ended
June 30, 2018 |
|
|
Three months ended
June 30, 2017 |
|
Period from December 16, 2017
through June 30, 2018 |
|
|
Period from October 1, 2017 through December 15, 2017
|
|
Nine months ended
June 30, 2017 |
||||||||||
Post-retirement Benefits - U.S.
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Components of Net Periodic Benefit Cost (Credit)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Service cost
|
$
|
1
|
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
4
|
|
|
|
4
|
|
|
7
|
|
|
|
3
|
|
|
10
|
|
|||||
Expected return on plan assets
|
(3
|
)
|
|
|
(2
|
)
|
|
(5
|
)
|
|
|
(2
|
)
|
|
(7
|
)
|
|||||
Amortization of unrecognized prior service cost
|
—
|
|
|
|
(5
|
)
|
|
—
|
|
|
|
(3
|
)
|
|
(13
|
)
|
|||||
Amortization of previously unrecognized net actuarial loss
|
—
|
|
|
|
3
|
|
|
—
|
|
|
|
2
|
|
|
9
|
|
|||||
Curtailment
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
(4
|
)
|
|||||
Net periodic benefit cost (credit)
|
$
|
2
|
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
Range
|
||||||
Exercise price
|
$
|
19.46
|
|
-
|
$
|
21.79
|
|
Expected volatility
(1)
|
49.25
|
%
|
-
|
56.59
|
%
|
||
Expected life (in years)
(2)
|
5.86 years
|
|
-
|
6.65 years
|
|||
Risk-free interest rate
(3)
|
2.35
|
%
|
-
|
2.95
|
%
|
||
Dividend yield
(4)
|
|
|
—
|
%
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
(In millions, except per share amounts)
|
Three months ended
June 30, 2018 |
|
|
Three months ended
June 30, 2017 |
|
Period from December 16, 2017
through June 30, 2018 |
|
|
Period from October 1, 2017 through December 15, 2017
|
|
Nine months ended
June 30, 2017 |
||||||||||
Net (loss) income per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Numerator
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income
|
$
|
(88
|
)
|
|
|
$
|
(98
|
)
|
|
$
|
19
|
|
|
|
$
|
2,977
|
|
|
$
|
(209
|
)
|
Dividends to preferred stockholders
|
—
|
|
|
|
(8
|
)
|
|
—
|
|
|
|
(6
|
)
|
|
(23
|
)
|
|||||
Undistributed earnings
|
(88
|
)
|
|
|
(106
|
)
|
|
19
|
|
|
|
2,971
|
|
|
(232
|
)
|
|||||
Percentage allocated to common stockholders
(1)
|
100.0
|
%
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
86.9
|
%
|
|
100.0
|
%
|
|||||
Numerator for basic and diluted earnings per common share
|
$
|
(88
|
)
|
|
|
$
|
(106
|
)
|
|
$
|
19
|
|
|
|
$
|
2,582
|
|
|
$
|
(232
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Denominator
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Denominator for basic earnings per weighted average common shares
|
109.8
|
|
|
|
497.2
|
|
|
109.8
|
|
|
|
497.3
|
|
|
497.0
|
|
|||||
Effect of dilutive securities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Restricted stock units
|
—
|
|
|
|
—
|
|
|
1.2
|
|
|
|
—
|
|
|
—
|
|
|||||
Stock options
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|||||
Convertible Notes
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|||||
Call Spread Warrants
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|||||
Emergence Date Warrants
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|||||
Denominator for diluted earnings per weighted average common shares
|
109.8
|
|
|
|
497.2
|
|
|
111.0
|
|
|
|
497.3
|
|
|
497.0
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Per common share net (loss) income
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(0.80
|
)
|
|
|
$
|
(0.22
|
)
|
|
$
|
0.17
|
|
|
|
$
|
5.19
|
|
|
$
|
(0.47
|
)
|
Diluted
|
$
|
(0.80
|
)
|
|
|
$
|
(0.22
|
)
|
|
$
|
0.17
|
|
|
|
$
|
5.19
|
|
|
$
|
(0.47
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(1)
Basic weighted average common stock outstanding
|
109.8
|
|
|
|
497.2
|
|
|
109.8
|
|
|
|
497.3
|
|
|
497.0
|
|
|||||
Basic weighted average common stock and common stock equivalents (preferred shares)
|
109.8
|
|
|
|
497.2
|
|
|
109.8
|
|
|
|
572.4
|
|
|
497.0
|
|
|||||
Percentage allocated to common stockholders
|
100.0
|
%
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
86.9
|
%
|
|
100.0
|
%
|
17.
|
Operating Segments
|
18.
|
Accumulated Other Comprehensive Loss
|
(In millions)
|
Foreign Currency Translation
|
|
Interest Rate Swaps
|
|
Total
|
||||||
Balance at March 31, 2018 (Successor)
|
$
|
(25
|
)
|
|
$
|
—
|
|
|
$
|
(25
|
)
|
Other comprehensive income (loss) before reclassifications
|
(4
|
)
|
|
(17
|
)
|
|
(21
|
)
|
|||
Amounts reclassified to earnings
|
—
|
|
|
2
|
|
|
2
|
|
|||
Benefit from income taxes
|
—
|
|
|
3
|
|
|
3
|
|
|||
Balance at June 30, 2018 (Successor)
|
$
|
(29
|
)
|
|
$
|
(12
|
)
|
|
$
|
(41
|
)
|
(In millions)
|
Unamortized pension, post-retirement and postemployment benefit-related items
|
|
Foreign Currency Translation
|
|
Interest Rate Swaps
|
|
Other
|
|
Total
|
||||||||||
Balance at September 30, 2017 (Predecessor)
|
$
|
(1,375
|
)
|
|
$
|
(72
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(1,448
|
)
|
Other comprehensive (loss) income before reclassifications
|
(24
|
)
|
|
3
|
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
|||||
Amounts reclassified to earnings
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|||||
Pension settlement
|
721
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
721
|
|
|||||
Provision for income taxes
|
(58
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58
|
)
|
|||||
Balance at December 15, 2017 (Predecessor)
|
(720
|
)
|
|
(69
|
)
|
|
—
|
|
|
(1
|
)
|
|
(790
|
)
|
|||||
Elimination of Predecessor Company accumulated other comprehensive loss
|
720
|
|
|
69
|
|
|
—
|
|
|
1
|
|
|
790
|
|
|||||
Balance at December 15, 2017 (Predecessor)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 16, 2017 (Successor)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other comprehensive loss before reclassifications
|
—
|
|
|
(29
|
)
|
|
(17
|
)
|
|
—
|
|
|
(46
|
)
|
|||||
Amounts reclassified to earnings
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Benefit from income taxes
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||
Balance at June 30, 2018 (Successor)
|
$
|
—
|
|
|
$
|
(29
|
)
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
(41
|
)
|
(In millions)
|
Unamortized pension, postretirement and postemployment benefit-related items
|
|
Foreign Currency Translation
|
|
Other
|
|
Total
|
||||||||
Balance at March 31, 2017 (Predecessor)
|
$
|
(1,598
|
)
|
|
$
|
(7
|
)
|
|
$
|
(1
|
)
|
|
$
|
(1,606
|
)
|
Other comprehensive loss before reclassifications
|
—
|
|
|
(42
|
)
|
|
—
|
|
|
(42
|
)
|
||||
Amounts reclassified to earnings
|
26
|
|
|
—
|
|
|
—
|
|
|
26
|
|
||||
Provision for income taxes
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
(3
|
)
|
||||
Balance at June 30, 2017 (Predecessor)
|
$
|
(1,573
|
)
|
|
$
|
(51
|
)
|
|
$
|
(1
|
)
|
|
$
|
(1,625
|
)
|
•
|
The Company paid in full amounts outstanding under the debtor-in-possession credit agreement (the "DIP Credit Agreement");
|
•
|
The Debtors' obligations under stock certificates, equity interests, and / or any other instrument or document directly or indirectly evidencing or creating any indebtedness or obligation of, or ownership interest in, the Debtors or giving rise to any claim or equity interest were cancelled, except as provided under the Plan of Reorganization and as noted below;
|
•
|
The Company's certificate of incorporation was amended and restated to authorize the issuance of
605.0 million
shares of stock, consisting of
55.0 million
shares of preferred stock, par value
$0.01
per share, and
550.0 million
shares of common stock, par value
$0.01
per share;
|
•
|
The Company entered into a term loan credit agreement (the "Term Loan Credit Agreement") with a principal amount of
$2,925 million
and a
$300 million
asset-based revolving credit facility (the "ABL Credit Agreement");
|
•
|
The Company issued
99.3 million
shares of common stock to the holders of the Predecessor's first lien obligations that were extinguished in the bankruptcy. In addition, these holders received
$2,061 million
in cash;
|
•
|
The Company issued
4.4 million
shares of common stock to the holders of the Predecessor's second lien obligations that were extinguished in the bankruptcy. In addition, these holders received warrants to purchase
5.6 million
shares of common stock at an exercise price of
$25.55
per warrant (the "Emergence Date Warrants");
|
•
|
The Company issued
6.1 million
shares of common stock to the Pension Benefit Guaranty Corporation ("PBGC"). In addition, the PBGC received
$340 million
in cash; and
|
•
|
The Debtors established a liquidating trust in the amount of
$58 million
for the benefit of general unsecured creditors. In addition, the Company issued
0.2 million
additional shares of common stock for the benefit of its former general unsecured creditors. The general unsecured creditors will receive a total of
$58 million
in cash and these shares of common stock. Any excess cash and / or common stock not distributed to the general unsecured creditors will be distributed to the holders of the Predecessor first lien obligations.
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Predecessor
|
||||||||||||
(In millions)
|
Three months ended
June 30, 2018 |
|
|
Three months ended
June 30, 2017 |
|
Period from December 16, 2017
through June 30, 2018 |
|
|
Period from October 1, 2017 through December 15, 2017
|
|
Nine months ended
June 30, 2018 |
|
Nine months ended
June 30, 2017 |
||||||||||||
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Products
|
$
|
300
|
|
|
|
$
|
345
|
|
|
$
|
664
|
|
|
|
$
|
253
|
|
|
$
|
917
|
|
|
$
|
1,094
|
|
Services
|
392
|
|
|
|
458
|
|
|
848
|
|
|
|
351
|
|
|
1,199
|
|
|
1,388
|
|
||||||
|
692
|
|
|
|
803
|
|
|
1,512
|
|
|
|
604
|
|
|
2,116
|
|
|
2,482
|
|
||||||
COSTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Products:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Costs
|
114
|
|
|
|
121
|
|
|
257
|
|
|
|
84
|
|
|
341
|
|
|
394
|
|
||||||
Amortization of technology intangible assets
|
44
|
|
|
|
5
|
|
|
92
|
|
|
|
3
|
|
|
95
|
|
|
16
|
|
||||||
Services
|
182
|
|
|
|
184
|
|
|
410
|
|
|
|
155
|
|
|
565
|
|
|
560
|
|
||||||
|
340
|
|
|
|
310
|
|
|
759
|
|
|
|
242
|
|
|
1,001
|
|
|
970
|
|
||||||
GROSS PROFIT
|
352
|
|
|
|
493
|
|
|
753
|
|
|
|
362
|
|
|
1,115
|
|
|
1,512
|
|
||||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling, general and administrative
|
281
|
|
|
|
295
|
|
|
613
|
|
|
|
264
|
|
|
877
|
|
|
923
|
|
||||||
Research and development
|
51
|
|
|
|
59
|
|
|
110
|
|
|
|
38
|
|
|
148
|
|
|
178
|
|
||||||
Amortization of intangible assets
|
39
|
|
|
|
57
|
|
|
86
|
|
|
|
10
|
|
|
96
|
|
|
170
|
|
||||||
Impairment of indefinite-lived intangible assets
|
—
|
|
|
|
65
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
65
|
|
||||||
Goodwill impairment
|
—
|
|
|
|
52
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
52
|
|
||||||
Restructuring charges, net
|
30
|
|
|
|
8
|
|
|
80
|
|
|
|
14
|
|
|
94
|
|
|
22
|
|
||||||
|
401
|
|
|
|
536
|
|
|
889
|
|
|
|
326
|
|
|
1,215
|
|
|
1,410
|
|
||||||
OPERATING (LOSS) INCOME
|
(49
|
)
|
|
|
(43
|
)
|
|
(136
|
)
|
|
|
36
|
|
|
(100
|
)
|
|
102
|
|
||||||
Interest expense
|
(56
|
)
|
|
|
(17
|
)
|
|
(112
|
)
|
|
|
(14
|
)
|
|
(126
|
)
|
|
(229
|
)
|
||||||
Other income (expense), net
|
37
|
|
|
|
(9
|
)
|
|
32
|
|
|
|
(2
|
)
|
|
30
|
|
|
(27
|
)
|
||||||
Reorganization items, net
|
—
|
|
|
|
(35
|
)
|
|
—
|
|
|
|
3,416
|
|
|
3,416
|
|
|
(77
|
)
|
||||||
(LOSS) INCOME BEFORE INCOME TAXES
|
(68
|
)
|
|
|
(104
|
)
|
|
(216
|
)
|
|
|
3,436
|
|
|
3,220
|
|
|
(231
|
)
|
||||||
(Provision for) benefit from income taxes
|
(20
|
)
|
|
|
6
|
|
|
235
|
|
|
|
(459
|
)
|
|
(224
|
)
|
|
22
|
|
||||||
NET (LOSS) INCOME
|
$
|
(88
|
)
|
|
|
$
|
(98
|
)
|
|
$
|
19
|
|
|
|
$
|
2,977
|
|
|
$
|
2,996
|
|
|
$
|
(209
|
)
|
(In millions)
|
Three months ended
June 30, 2018 |
|
|
Period from December 16, 2017
through June 30, 2018 |
||||
REVENUE
|
|
|
|
|
||||
Products
|
$
|
(22
|
)
|
|
|
$
|
(52
|
)
|
Services
|
(41
|
)
|
|
|
(119
|
)
|
||
|
(63
|
)
|
|
|
(171
|
)
|
||
COSTS
|
|
|
|
|
||||
Products
|
2
|
|
|
|
16
|
|
||
Services
|
4
|
|
|
|
23
|
|
||
|
6
|
|
|
|
39
|
|
||
GROSS PROFIT
|
(69
|
)
|
|
|
(210
|
)
|
||
OPERATING EXPENSES
|
|
|
|
|
||||
Selling, general and administrative
|
2
|
|
|
|
1
|
|
||
OPERATING LOSS
|
$
|
(71
|
)
|
|
|
$
|
(211
|
)
|
|
Successor
|
|
|
Predecessor
|
|
Percentage of Total Revenue
|
|
|
|
|
||||||||||
(In millions)
|
Three months ended
June 30, 2018 |
|
|
Three months ended
June 30, 2017 |
|
Three months ended
June 30, 2018 |
|
Three months ended
June 30, 2017 |
|
Yr. to Yr. Percentage Change
|
|
Yr. to Yr. Percentage Change, net of Foreign Currency Impact
|
||||||||
GCS
|
$
|
322
|
|
|
|
$
|
302
|
|
|
46
|
%
|
|
38
|
%
|
|
7
|
%
|
|
5
|
%
|
Networking
|
—
|
|
|
|
43
|
|
|
0
|
%
|
|
5
|
%
|
|
(100
|
)%
|
|
(100
|
)%
|
||
Total ECS product revenue
|
322
|
|
|
|
345
|
|
|
46
|
%
|
|
43
|
%
|
|
(7
|
)%
|
|
(8
|
)%
|
||
AGS
|
433
|
|
|
|
458
|
|
|
63
|
%
|
|
57
|
%
|
|
(5
|
)%
|
|
(6
|
)%
|
||
Unallocated amounts
|
(63
|
)
|
|
|
—
|
|
|
(9
|
)%
|
|
0
|
%
|
|
(1)
|
|
|
(1)
|
|
||
Total revenue
|
$
|
692
|
|
|
|
$
|
803
|
|
|
100
|
%
|
|
100
|
%
|
|
(14
|
)%
|
|
(15
|
)%
|
|
Successor
|
|
|
Predecessor
|
|
Percentage of Total Revenue
|
|
|
|
|
||||||||||
(In millions)
|
Three months ended
June 30, 2018 |
|
|
Three months ended
June 30, 2017 |
|
Three months ended
June 30, 2018 |
|
Three months ended
June 30, 2017 |
|
Yr. to Yr. Percentage Change
|
|
Yr. to Yr. Percentage Change, net of Foreign Currency Impact
|
||||||||
U.S.
|
$
|
356
|
|
|
|
$
|
435
|
|
|
51
|
%
|
|
54
|
%
|
|
(18
|
)%
|
|
(18
|
)%
|
International:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
EMEA
|
193
|
|
|
|
204
|
|
|
28
|
%
|
|
25
|
%
|
|
(5
|
)%
|
|
(9
|
)%
|
||
APAC - Asia Pacific
|
81
|
|
|
|
88
|
|
|
12
|
%
|
|
11
|
%
|
|
(8
|
)%
|
|
(9
|
)%
|
||
Americas International - Canada and Latin America
|
62
|
|
|
|
76
|
|
|
9
|
%
|
|
10
|
%
|
|
(18
|
)%
|
|
(20
|
)%
|
||
Total International
|
336
|
|
|
|
368
|
|
|
49
|
%
|
|
46
|
%
|
|
(9
|
)%
|
|
(11
|
)%
|
||
Total revenue
|
$
|
692
|
|
|
|
$
|
803
|
|
|
100
|
%
|
|
100
|
%
|
|
(14
|
)%
|
|
(15
|
)%
|
|
Successor
|
|
|
Predecessor
|
|
Percentage of Total ECS Revenue
|
|
|
|
Yr. to Yr. Percentage Change, net of Foreign Currency Impact
|
||||||||||
(In millions)
|
Three months ended
June 30, 2018 |
|
|
Three months ended
June 30, 2017 |
|
Three months ended
June 30, 2018 |
|
Three months ended
June 30, 2017 |
|
Yr. to Yr. Percentage Change
|
|
|||||||||
Direct
|
$
|
88
|
|
|
|
$
|
98
|
|
|
27
|
%
|
|
28
|
%
|
|
(10
|
)%
|
|
(12
|
)%
|
Indirect
|
234
|
|
|
|
247
|
|
|
73
|
%
|
|
72
|
%
|
|
(5
|
)%
|
|
(6
|
)%
|
||
Total ECS product revenue
|
$
|
322
|
|
|
|
$
|
345
|
|
|
100
|
%
|
|
100
|
%
|
|
(7
|
)%
|
|
(8
|
)%
|
|
Successor
|
|
|
Predecessor
|
|
Gross Margin
|
|
Change
|
|||||||||||||
(In millions)
|
Three months ended
June 30, 2018 |
|
|
Three months ended
June 30, 2017 |
|
Three months ended
June 30, 2018 |
|
Three months ended
June 30, 2017 |
|
Amount
|
|
Percent
|
|||||||||
GCS
|
$
|
210
|
|
|
|
$
|
210
|
|
|
65.4
|
%
|
|
69.5
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Networking
|
—
|
|
|
|
14
|
|
|
—
|
|
|
32.6
|
%
|
|
(14
|
)
|
|
(100
|
)%
|
|||
ECS
|
210
|
|
|
|
224
|
|
|
65.4
|
%
|
|
64.9
|
%
|
|
(14
|
)
|
|
(6
|
)%
|
|||
AGS
|
257
|
|
|
|
274
|
|
|
59.2
|
%
|
|
59.8
|
%
|
|
(17
|
)
|
|
(6
|
)%
|
|||
Unallocated amounts
|
(115
|
)
|
|
|
(5
|
)
|
|
(1)
|
|
|
(1)
|
|
|
(110
|
)
|
|
(1)
|
|
|||
Total
|
$
|
352
|
|
|
|
$
|
493
|
|
|
50.9
|
%
|
|
61.4
|
%
|
|
$
|
(141
|
)
|
|
(29
|
)%
|
|
Successor
|
|
|
Predecessor
|
|
Percentage of Total Revenue
|
|
Change
|
|||||||||||||
(In millions)
|
Three months ended
June 30, 2018 |
|
|
Three months ended
June 30, 2017 |
|
Three months ended
June 30, 2018 |
|
Three months ended
June 30, 2017 |
|
Amount
|
|
Percent
|
|||||||||
Selling, general and administrative
|
$
|
281
|
|
|
|
$
|
295
|
|
|
40.6
|
%
|
|
36.7
|
%
|
|
$
|
(14
|
)
|
|
(5
|
)%
|
Research and development
|
51
|
|
|
|
59
|
|
|
7.4
|
%
|
|
7.3
|
%
|
|
(8
|
)
|
|
(14
|
)%
|
|||
Amortization of intangible assets
|
39
|
|
|
|
57
|
|
|
5.6
|
%
|
|
7.1
|
%
|
|
(18
|
)
|
|
(32
|
)%
|
|||
Impairment of indefinite-lived intangible assets
|
—
|
|
|
|
65
|
|
|
0.0
|
%
|
|
8.1
|
%
|
|
(65
|
)
|
|
(100
|
)%
|
|||
Goodwill impairment
|
—
|
|
|
|
52
|
|
|
0.0
|
%
|
|
6.5
|
%
|
|
(52
|
)
|
|
(100
|
)%
|
|||
Restructuring charges, net
|
30
|
|
|
|
8
|
|
|
4.3
|
%
|
|
1.0
|
%
|
|
22
|
|
|
275
|
%
|
|||
Total operating expenses
|
$
|
401
|
|
|
|
$
|
536
|
|
|
57.9
|
%
|
|
66.7
|
%
|
|
$
|
(135
|
)
|
|
(25
|
)%
|
•
|
the impact of applying fresh start accounting upon emergence from bankruptcy on
December 15, 2017
;
|
•
|
impairment charges for indefinite-lived intangible assets and goodwill recognized during the
three months ended June 30, 2017
;
|
•
|
higher restructuring charges for the
three months ended June 30, 2018
, primarily related to employee separation charges in Europe and the U.S.;
|
•
|
operating results from the Networking business for the
three months ended June 30, 2017
; and
|
•
|
operating results from the Spoken acquisition completed in March 2018.
|
|
|
|
|
|
|
|
|
|
|
Percentage of Total Revenue
|
|
|
|
|
||||||||||||||
|
Successor
|
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Predecessor
|
|
|
|
Yr. to Yr. Percentage Change, net of Foreign Currency Impact
|
||||||||||||
(In millions)
|
Period from December 16, 2017
through June 30, 2018 |
|
|
Period from October 1, 2017 through December 15, 2017
|
|
Nine months ended
June 30, 2018 |
|
Nine months ended
June 30, 2017 |
|
Nine months ended
June 30, 2018 |
|
Nine months ended
June 30, 2017 |
|
Yr. to Yr. Percentage Change
|
|
|||||||||||||
GCS
|
$
|
716
|
|
|
|
$
|
253
|
|
|
$
|
969
|
|
|
$
|
957
|
|
|
46
|
%
|
|
39
|
%
|
|
1
|
%
|
|
0
|
%
|
Networking
|
—
|
|
|
|
—
|
|
|
—
|
|
|
137
|
|
|
0
|
%
|
|
5
|
%
|
|
(100
|
)%
|
|
(100
|
)%
|
||||
Total ECS product revenue
|
716
|
|
|
|
253
|
|
|
969
|
|
|
1,094
|
|
|
46
|
%
|
|
44
|
%
|
|
(11
|
)%
|
|
(13
|
)%
|
||||
AGS
|
967
|
|
|
|
351
|
|
|
1,318
|
|
|
1,388
|
|
|
62
|
%
|
|
56
|
%
|
|
(5
|
)%
|
|
(7
|
)%
|
||||
Unallocated amounts
|
(171
|
)
|
|
|
—
|
|
|
(171
|
)
|
|
—
|
|
|
(8
|
)%
|
|
0
|
%
|
|
(1)
|
|
|
(1)
|
|
||||
Total revenue
|
$
|
1,512
|
|
|
|
$
|
604
|
|
|
$
|
2,116
|
|
|
$
|
2,482
|
|
|
100
|
%
|
|
100
|
%
|
|
(15
|
)%
|
|
(16
|
)%
|
|
|
|
|
|
|
|
|
|
|
Percentage of Total Revenue
|
|
|
|
|
||||||||||||||
|
Successor
|
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Predecessor
|
|
|
|
|
||||||||||||
(In millions)
|
Period from December 16, 2017
through June 30, 2018 |
|
|
Period from October 1, 2017 through December 15, 2017
|
|
Nine months ended
June 30, 2018 |
|
Nine months ended
June 30, 2017 |
|
Nine months ended
June 30, 2018 |
|
Nine months ended
June 30, 2017 |
|
Yr. to Yr. Percentage Change
|
|
Yr. to Yr. Percentage Change, net of Foreign Currency Impact
|
||||||||||||
U.S.
|
$
|
791
|
|
|
|
$
|
331
|
|
|
$
|
1,122
|
|
|
$
|
1,351
|
|
|
53
|
%
|
|
54
|
%
|
|
(17
|
)%
|
|
(17
|
)%
|
International:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
EMEA
|
407
|
|
|
|
166
|
|
|
573
|
|
|
640
|
|
|
27
|
%
|
|
26
|
%
|
|
(10
|
)%
|
|
(15
|
)%
|
||||
APAC - Asia Pacific
|
178
|
|
|
|
57
|
|
|
235
|
|
|
255
|
|
|
11
|
%
|
|
10
|
%
|
|
(8
|
)%
|
|
(9
|
)%
|
||||
Americas International - Canada and Latin America
|
136
|
|
|
|
50
|
|
|
186
|
|
|
236
|
|
|
9
|
%
|
|
10
|
%
|
|
(21
|
)%
|
|
(23
|
)%
|
||||
Total International
|
721
|
|
|
|
273
|
|
|
994
|
|
|
1,131
|
|
|
47
|
%
|
|
46
|
%
|
|
(12
|
)%
|
|
(15
|
)%
|
||||
Total revenue
|
$
|
1,512
|
|
|
|
$
|
604
|
|
|
$
|
2,116
|
|
|
$
|
2,482
|
|
|
100
|
%
|
|
100
|
%
|
|
(15
|
)%
|
|
(16
|
)%
|
|
|
|
|
|
|
|
|
|
|
Percentage of Total ECS Revenue
|
|
|
|
|
||||||||||||||
|
Successor
|
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Predecessor
|
|
|
|
Yr. to Yr. Percentage Change, net of Foreign Currency Impact
|
||||||||||||
(In millions)
|
Period from December 16, 2017
through June 30, 2018 |
|
|
Period from October 1, 2017 through December 15, 2017
|
|
Nine months ended
June 30, 2018 |
|
Nine months ended
June 30, 2017 |
|
Nine months ended
June 30, 2018 |
|
Nine months ended
June 30, 2017 |
|
Yr. to Yr. Percentage Change
|
|
|||||||||||||
Direct
|
$
|
204
|
|
|
|
$
|
80
|
|
|
$
|
284
|
|
|
$
|
294
|
|
|
29
|
%
|
|
27
|
%
|
|
(3
|
)%
|
|
(6
|
)%
|
Indirect
|
512
|
|
|
|
173
|
|
|
685
|
|
|
800
|
|
|
71
|
%
|
|
73
|
%
|
|
(14
|
)%
|
|
(15
|
)%
|
||||
Total ECS product revenue
|
$
|
716
|
|
|
|
$
|
253
|
|
|
$
|
969
|
|
|
$
|
1,094
|
|
|
100
|
%
|
|
100
|
%
|
|
(11
|
)%
|
|
(13
|
)%
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
|
|
|
|
|
|||||||||||||||
|
Successor
|
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Predecessor
|
|
Change
|
|||||||||||||||
(In millions)
|
Period from December 16, 2017
through June 30, 2018 |
|
|
Period from October 1, 2017 through December 15, 2017
|
|
Nine months ended
June 30, 2018 |
|
Nine months ended
June 30, 2017 |
|
Nine months ended
June 30, 2018 |
|
Nine months ended
June 30, 2017 |
|
Amount
|
|
Percent
|
|||||||||||||
GCS
|
$
|
473
|
|
|
|
$
|
169
|
|
|
$
|
642
|
|
|
$
|
653
|
|
|
66.3
|
%
|
|
68.2
|
%
|
|
$
|
(11
|
)
|
|
(2
|
)%
|
Networking
|
—
|
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
—
|
|
|
34.3
|
%
|
|
(47
|
)
|
|
(100
|
)%
|
|||||
ECS
|
473
|
|
|
|
169
|
|
|
642
|
|
|
700
|
|
|
66.3
|
%
|
|
64.0
|
%
|
|
(58
|
)
|
|
(8
|
)%
|
|||||
AGS
|
582
|
|
|
|
196
|
|
|
778
|
|
|
828
|
|
|
59.0
|
%
|
|
59.7
|
%
|
|
(50
|
)
|
|
(6
|
)%
|
|||||
Unallocated amounts
|
(302
|
)
|
|
|
(3
|
)
|
|
(305
|
)
|
|
(16
|
)
|
|
(1)
|
|
|
(1)
|
|
|
(289
|
)
|
|
(1)
|
|
|||||
Total
|
$
|
753
|
|
|
|
$
|
362
|
|
|
$
|
1,115
|
|
|
$
|
1,512
|
|
|
52.7
|
%
|
|
60.9
|
%
|
|
$
|
(397
|
)
|
|
(26
|
)%
|
|
|
|
|
|
|
|
|
|
|
Percentage of Total Revenue
|
|
|
|
|
|||||||||||||||
|
Successor
|
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Predecessor
|
|
Change
|
|||||||||||||||
(In millions)
|
Period from December 16, 2017
through June 30, 2018 |
|
|
Period from October 1, 2017 through December 15, 2017
|
|
Nine months ended
June 30, 2018 |
|
Nine months ended
June 30, 2017 |
|
Nine months ended
June 30, 2018 |
|
Nine months ended
June 30, 2017 |
|
Amount
|
|
Percent
|
|||||||||||||
Selling, general and administrative
|
$
|
613
|
|
|
|
$
|
264
|
|
|
$
|
877
|
|
|
$
|
923
|
|
|
41.4
|
%
|
|
37.2
|
%
|
|
$
|
(46
|
)
|
|
(5
|
)%
|
Research and development
|
110
|
|
|
|
38
|
|
|
148
|
|
|
178
|
|
|
7.0
|
%
|
|
7.2
|
%
|
|
(30
|
)
|
|
(17
|
)%
|
|||||
Amortization of intangible assets
|
86
|
|
|
|
10
|
|
|
96
|
|
|
170
|
|
|
4.5
|
%
|
|
6.8
|
%
|
|
(74
|
)
|
|
(44
|
)%
|
|||||
Impairment of indefinite-lived intangible assets
|
—
|
|
|
|
—
|
|
|
—
|
|
|
65
|
|
|
0.0
|
%
|
|
2.6
|
%
|
|
(65
|
)
|
|
(100
|
)%
|
|||||
Goodwill impairment
|
—
|
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
0.0
|
%
|
|
2.1
|
%
|
|
(52
|
)
|
|
(100
|
)%
|
|||||
Restructuring charges, net
|
80
|
|
|
|
14
|
|
|
94
|
|
|
22
|
|
|
4.5
|
%
|
|
0.9
|
%
|
|
72
|
|
|
327
|
%
|
|||||
Total operating expenses
|
$
|
889
|
|
|
|
$
|
326
|
|
|
$
|
1,215
|
|
|
$
|
1,410
|
|
|
57.4
|
%
|
|
56.8
|
%
|
|
$
|
(195
|
)
|
|
(14
|
)%
|
•
|
the impact of applying fresh start accounting upon emergence from bankruptcy on
December 15, 2017
;
|
•
|
impairment charges for indefinite-lived intangible assets and goodwill recognized during the
nine months ended June 30, 2017
;
|
•
|
higher restructuring charges for the
nine months ended June 30, 2018
, primarily related to employee separation charges and lease termination agreements associated with vacated facilities particularly in Europe and the U.S.;
|
•
|
lower advisory fees incurred to assist in the assessment of strategic and financial alternatives to improve the Company’s capital structure during the
nine months ended June 30, 2018
of
$62 million
;
|
•
|
costs incurred in connection with certain legal matters of
$37 million
for the
nine months ended June 30, 2018
;
|
•
|
operating results from the Networking business for the
nine months ended June 30, 2017
; and
|
•
|
operating results from the Spoken acquisition completed in March 2018.
|
|
|
Successor
|
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Predecessor
|
||||||||
|
|
|
|
|
Revised
|
|
|
|
|
||||||||
(In millions)
|
|
Period from December 16, 2017
through June 30, 2018 |
|
|
Period from October 1, 2017 through December 15, 2017
|
|
Nine months ended
June 30, 2018 |
|
Nine months ended
June 30, 2017 |
||||||||
Net cash provided by (used for):
|
|
|
|
|
|
|
|
|
|
||||||||
Operating activities
|
|
$
|
177
|
|
|
|
$
|
(414
|
)
|
|
$
|
(237
|
)
|
|
$
|
125
|
|
Investing activities
|
|
(137
|
)
|
|
|
8
|
|
|
(129
|
)
|
|
(120
|
)
|
||||
Financing activities
|
|
284
|
|
|
|
(102
|
)
|
|
182
|
|
|
387
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
|
(5
|
)
|
|
|
(2
|
)
|
|
(7
|
)
|
|
1
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
|
319
|
|
|
|
(510
|
)
|
|
(191
|
)
|
|
393
|
|
||||
Cash and cash equivalents at beginning of period
|
|
366
|
|
|
|
876
|
|
|
876
|
|
|
336
|
|
||||
Cash and cash equivalents at end of period
|
|
$
|
685
|
|
|
|
$
|
366
|
|
|
$
|
685
|
|
|
$
|
729
|
|
•
|
proceeds of
$2,896 million
from the Term Loan Credit Agreement entered into on the Company's Emergence Date;
|
•
|
proceeds of
$350 million
from the issuance of
2.25%
Convertible Notes; and
|
•
|
proceeds from the issuance of call spread warrants (the "Call Spread Warrants") of
$58 million
; partially offset by
|
•
|
repayment of the Company's Term Loan Credit Agreement of
$2,918 million
as part of the refinancing discussed below, net of proceeds received under the refinancing of
$2,911 million
;
|
•
|
repayments to the Predecessor Company first lien debt holders of
$2,061 million
;
|
•
|
repayment of the Predecessor Company DIP Credit Agreement of
$725 million
;
|
•
|
adequate protection payments related to the bankruptcy of
$111 million
;
|
•
|
payment of debt issuance costs of
$107 million
;
|
•
|
the purchase of a bond hedge of
$84 million
;
|
•
|
scheduled debt repayments under the Term Loan Credit Agreement of
$15 million
; and
|
•
|
repayments in connection with financing the use of equipment for the performance of services under our agreement with HP Enterprise Services, LLC ("HP") of
$11 million
.
|
•
|
proceeds from the Predecessor Company DIP Credit Agreement of
$712 million
, partially offset by
|
•
|
scheduled debt repayments of
$155 million
, inclusive of adequate protection payments;
|
•
|
repayments in excess of borrowings under the Predecessor Company revolving credit facilities of
$150 million
; and
|
•
|
repayments under our agreement with HP of
$15 million
.
|
•
|
Debt service
—We expect to make payments of
$57 million
during the remainder of fiscal
2018
in principal and interest associated with the Term Loan Credit Agreement and interest and fees associated with our ABL Credit Agreement and
2.25%
Convertible Notes due 2023. In the ordinary course of business, we may from time to time borrow and repay amounts under our ABL Credit Agreement.
|
•
|
Restructuring payments
—We expect to make payments of approximately
$18 million
to
$20 million
during the remainder of fiscal
2018
for employee separation costs and lease termination obligations associated with restructuring actions we have taken through
June 30, 2018
. The Company continues to evaluate opportunities to streamline its operations and identify additional cost savings globally.
|
•
|
Capital expenditures
—We expect to spend approximately
$25 million
to
$35 million
for capital expenditures and capitalized software development costs during the remainder of fiscal
2018
.
|
•
|
Benefit obligations
—We estimate we will make payments in respect of our pension and post-retirement benefit obligations totaling
$29 million
during the remainder of fiscal
2018
. These payments include
$20 million
for the Avaya Pension Plan for represented employees;
$6 million
for our non-U.S. benefit plans, which are predominately not pre-funded; and
$3 million
for represented retiree post-retirement health trusts. See discussion in Note 13, “Benefit Obligations” to our unaudited interim Condensed Consolidated Financial Statements for further details of our benefit obligations.
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
(In millions)
|
Three months ended
June 30, 2018 |
|
|
Three months ended
June 30, 2017 |
|
Period from December 16, 2017
through June 30, 2018 |
|
|
Period from October 1, 2017 through December 15, 2017
|
|
Nine months ended
June 30, 2017 |
||||||||||
Net (loss) income
|
$
|
(88
|
)
|
|
|
$
|
(98
|
)
|
|
$
|
19
|
|
|
|
$
|
2,977
|
|
|
$
|
(209
|
)
|
Interest expense
(a)
|
56
|
|
|
|
17
|
|
|
112
|
|
|
|
14
|
|
|
229
|
|
|||||
Interest income
|
(1
|
)
|
|
|
(1
|
)
|
|
(2
|
)
|
|
|
(2
|
)
|
|
(2
|
)
|
|||||
(Benefit from) provision for income taxes
|
20
|
|
|
|
(6
|
)
|
|
(235
|
)
|
|
|
459
|
|
|
(22
|
)
|
|||||
Depreciation and amortization
|
119
|
|
|
|
85
|
|
|
264
|
|
|
|
31
|
|
|
263
|
|
|||||
EBITDA
|
106
|
|
|
|
(3
|
)
|
|
158
|
|
|
|
3,479
|
|
|
259
|
|
|||||
Impact of fresh start accounting adjustments
(b)
|
54
|
|
|
|
—
|
|
|
167
|
|
|
|
—
|
|
|
—
|
|
|||||
Restructuring charges, net
|
30
|
|
|
|
8
|
|
|
80
|
|
|
|
14
|
|
|
22
|
|
|||||
Advisory fees
(c)
|
3
|
|
|
|
17
|
|
|
15
|
|
|
|
3
|
|
|
82
|
|
|||||
Acquisition-related costs
(d)
|
4
|
|
|
|
1
|
|
|
11
|
|
|
|
—
|
|
|
1
|
|
|||||
Reorganization items, net
|
—
|
|
|
|
35
|
|
|
—
|
|
|
|
(3,416
|
)
|
|
77
|
|
|||||
Non-cash share-based compensation
|
7
|
|
|
|
4
|
|
|
13
|
|
|
|
—
|
|
|
10
|
|
|||||
Impairment of indefinite-lived intangible assets
|
—
|
|
|
|
65
|
|
|
—
|
|
|
|
—
|
|
|
65
|
|
|||||
Goodwill impairment
|
—
|
|
|
|
52
|
|
|
—
|
|
|
|
—
|
|
|
52
|
|
|||||
Impairment of long-lived assets
|
—
|
|
|
|
3
|
|
|
—
|
|
|
|
—
|
|
|
3
|
|
|||||
Loss on disposal of long-lived assets, net
|
2
|
|
|
|
—
|
|
|
4
|
|
|
|
1
|
|
|
—
|
|
|||||
Resolution of certain legal matters
(e)
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
37
|
|
|
—
|
|
|||||
Change in fair value of Emergence Date Warrants
|
(6
|
)
|
|
|
—
|
|
|
9
|
|
|
|
—
|
|
|
—
|
|
|||||
Gain on foreign currency transactions
|
(25
|
)
|
|
|
(2
|
)
|
|
(24
|
)
|
|
|
—
|
|
|
(1
|
)
|
|||||
Pension/OPEB/nonretirement postemployment benefits and long-term disability costs
(f)
|
—
|
|
|
|
24
|
|
|
—
|
|
|
|
17
|
|
|
70
|
|
|||||
Other
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
1
|
|
|||||
Adjusted EBITDA
|
$
|
175
|
|
|
|
$
|
204
|
|
|
$
|
433
|
|
|
|
$
|
135
|
|
|
$
|
641
|
|
(a)
|
Effective January 19, 2017, the Company ceased recording interest expense on outstanding pre-petition debt classified as liabilities subject to compromise. Contractual interest expense represents amounts due under the contractual terms of outstanding debt, including debt subject to compromise. For the periods from
October 1, 2017 through December 15, 2017
and
January 19, 2017 through June 30, 2017
, contractual interest expense related to debt subject to compromise of
$94 million
and
$201 million
, respectively, had not been recorded as interest expense, as it was not expected to be an allowed claim under the Bankruptcy Filing.
|
(b)
|
The impact of fresh start accounting adjustments in connection with the Company's emergence from bankruptcy.
|
(c)
|
Advisory fees represent costs incurred to assist in the assessment of strategic and financial alternatives to improve the Company's capital structure. Also included in advisory fees for the prior year period are sponsors’ fees which represent monitoring fees payable to affiliates of two private equity firms, Silver Lake Partners (“Silver Lake”) and TPG Capital (“TPG”, together with Silver Lake, the “Sponsors”) that each had an ownership interest in the Predecessor Company and their designees pursuant to a management services agreement. Effective as of emergence from bankruptcy, the Company no longer has affiliations with the Sponsors.
|
(d)
|
Acquisition-related costs include investment banking, legal and other costs related to the acquisition of Spoken, including the accelerated vesting of certain Spoken stock options in connection with the acquisition.
|
(e)
|
Costs in connection with certain legal matters include reserves and settlements, as well as associated legal costs.
|
(f)
|
Represents that portion of our pension and post-employment benefit costs which represent the amortization of prior service costs and net actuarial gain (loss) associated with these benefits.
|
•
|
we face formidable competition from providers of unified communications and contact center products and related services;
|
•
|
market opportunity for business communications products and services may not develop in the ways that we anticipate;
|
•
|
our ability to rely on our indirect sales channel;
|
•
|
our products and services may fail to keep pace with rapidly changing technology and evolving industry standards;
|
•
|
we rely on third-party contract manufacturers and component suppliers, some of which are sole source and limited source suppliers, as well as warehousing and distribution logistics providers;
|
•
|
recently completed bankruptcy proceedings may adversely affect our operations in the future;
|
•
|
our actual financial results may vary significantly from the financial projections filed with the Bankruptcy Court;
|
•
|
our historical financial information may not be indicative of our future financial performance;
|
•
|
our quarterly and annual revenues and operating results have historically fluctuated and the results of one period may not provide a reliable indicator of our future performance;
|
•
|
operational and logistical challenges as well as changes in economic or political conditions, in a specific country or region;
|
•
|
our revenues are dependent on general economic conditions and the willingness of enterprises to invest in technology;
|
•
|
the potential that we may not be able to protect our proprietary rights or that those rights may be invalidated or circumvented;
|
•
|
certain software we use is from open source code sources, which, under certain circumstances, may lead to unintended consequences;
|
•
|
changes in our tax rates, the adoption of new U.S. or international tax legislation or exposure to additional tax liabilities;
|
•
|
cancellation of indebtedness income is expected to result in material reductions in, or elimination of, tax attributes;
|
•
|
tax examinations and audits;
|
•
|
fluctuations in foreign currency exchange rates;
|
•
|
business communications products are complex, and design defects, errors, failures or “bugs” may be difficult to detect and correct;
|
•
|
if we are unable to integrate acquired businesses effectively;
|
•
|
failure to realize the benefits we expect from our cost-reduction initiatives;
|
•
|
liabilities incurred as a result of our obligation to indemnify, and to share certain liabilities with, Lucent Technologies, Inc. ("Lucent") (now Nokia Corporation) in connection with our spin-off from Lucent in September 2000;
|
•
|
transfers or issuances of our equity may impair or reduce our ability to utilize our net operating loss carryforwards and certain other tax attributes in the future;
|
•
|
our ability to retain and attract key personnel;
|
•
|
our ability to establish and maintain proper and effective internal control over financial reporting;
|
•
|
if we do not adequately remediate our material weaknesses, or if we experience additional material weaknesses in the future;
|
•
|
potential litigation in connection with our emergence from bankruptcy;
|
•
|
breach of the security of our information systems, products or services or of the information systems of our third-party providers;
|
•
|
business interruptions, whether due to catastrophic disasters or other events;
|
•
|
claims that were not discharged in the Plan of Reorganization could have a material adverse effect on our results of operations and profitability;
|
•
|
potential litigation and infringement claims, which could cause us to incur significant expenses or prevent us from selling our products or services;
|
•
|
the composition of our board of directors has changed significantly;
|
•
|
we have entered into many related party transactions with a significant number of our foreign subsidiaries, which could adversely affect us in the event of their bankruptcy or similar insolvency proceeding; and
|
•
|
environmental, health and safety, laws, regulations, costs and other liabilities.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures.
|
•
|
The appropriate complement of resources in its tax department commensurate with the volume and complexity of accounting for income taxes subsequent to the Company’s Bankruptcy Filing were not maintained, which contributed to the following control deficiencies, each of which are individually considered to be material weaknesses, relating to the completeness and accuracy of the Company’s accounting for income taxes, including the related tax assets and liabilities:
|
◦
|
Control activities over the completeness and accuracy of interim forecasts by tax jurisdiction used in accounting for the Company’s interim income tax provision were not performed at the appropriate level of precision. This control deficiency resulted in an adjustment to the Company’s income tax provision for the quarter ended June 30, 2017.
|
◦
|
Control activities over the completeness and accuracy of the allocation of the tax provision calculations (the “intraperiod allocation”) were insufficient to ensure that the intraperiod allocation balances were accurately determined. This control deficiency resulted in an adjustment to the Company’s income tax provision for the quarter ended June 30, 2017.
|
•
|
Implemented specific additional review procedures over the income tax provision calculations for interim quarters to ensure that the results of such calculations are not inconsistent with the actual results and trends being observed in the business. The deficiency, and the related remediation, applies only to interim quarters in which the income tax provision is based on forecast results for the year. The controls and processes related to the income tax provision for our fiscal year-end are not affected as they are based on actual results for the year.
|
•
|
Hired additional personnel, including a Vice President of Tax, with the appropriate experience and technical expertise in income taxes.
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
Issuer Purchases of Equity Securities
|
|||||||||||||
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|||||
Period
|
|
Total number of shares (or units) purchased
(1)
|
|
Average price paid per share (or unit)
|
|
Total number of shares (or units) purchased as part of publicly announced plans or programs
|
|
Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
|
|||||
April 1 - 30, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
May 1 - 31, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
June 1 - 30, 2018
|
|
74,118
|
|
|
$
|
21.0487
|
|
|
—
|
|
|
—
|
|
Total
|
|
74,118
|
|
|
$
|
21.0487
|
|
|
—
|
|
|
—
|
|
Item 3.
|
Defaults Upon Senior Securities.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Other Information.
|
Item 6.
|
Exhibits.
|
Exhibit Number
|
|
|
4.1
|
|
|
10.1
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6
|
|
|
10.7
|
|
|
10.8
|
|
|
10.9
|
|
|
10.10
|
|
|
10.11
|
|
|
10.12
|
|
|
10.13
|
|
|
10.14
|
|
|
10.15
|
|
|
10.16
|
|
|
10.17
|
|
|
31.1
|
|
31.2
|
|
|
32.1
|
|
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32.2
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase
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101.LAB
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XBRL Taxonomy Extension Labels Linkbase
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase
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A
VAYA
H
OLDINGS
C
ORP.
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By:
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/s/ L. D
AVID
D
ELL'
Osso
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L. David Dell'Osso
Vice President, Corporate Controller & Chief Accounting Officer
(Principal Accounting Officer)
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Vesting Dates
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Percentage of RSUs
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On the date listed below which is closest to the one year anniversary of the grant date (whether before or after such anniversary date):
o
February 15
o
May 15
o
August 15
o
November 15
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33.34%
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Quarterly thereafter on each February 15, May 15, August 15 and November 15
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8.33%
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Vesting Dates
|
Percentage of Option
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On the date listed below which is closest to the one year anniversary of the grant date (whether before or after such anniversary date):
•
February 15
•
May 15
•
August 15
•
November 15
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33.34%
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Quarterly thereafter on each February 15, May 15, August 15 and November 15
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8.33%
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/s/ J
AMES
M. C
HIRICO
, J
R
.
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James M. Chirico, Jr.
Director, President and Chief Executive Officer
(Principal Executive Officer)
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/s/ P
ATRICK
J. O'M
ALLEY
, III
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Patrick J. O'Malley, III
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
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/s/ J
AMES
M. C
HIRICO
, J
R
.
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James M. Chirico, Jr.
Director, President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
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/s/ P
ATRICK
J. O'M
ALLEY
, III
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Patrick J. O'Malley, III
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|
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