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ý
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ANNUAL 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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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, Par Value $.01
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New York Stock Exchange
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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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Item
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Description
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Page
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PART I
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1.
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1A.
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1B.
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2.
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3.
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4.
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PART II
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5.
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6.
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7.
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7A.
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8.
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9.
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9A.
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9B.
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PART III
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10.
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11.
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12.
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13.
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14.
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PART IV
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15.
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16.
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•
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Gartner Forecast: PCs, Ultramobiles and Mobile Phones, Worldwide, 2016-2022, 3Q18 Update, Ranjit Atwal, et al., 27 September 2018.
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•
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Gartner Magic Quadrant for Unified Communications, Steve Blood, et al., 25 July 2018.
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•
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Gartner Magic Quadrant for Contact Center Infrastructure, Worldwide, Drew Kraus, et al., 17 May 2018.
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Item 1.
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Business
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•
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Unified Communications ("UC"):
Avaya unifies communications, helping companies increase employee productivity, improve customer service and reduce costs. Avaya embeds communications directly into the applications, browsers and devices employees use every day to create a single, powerful gateway for voice, video, messaging, conferencing and collaboration. We give people a more natural, efficient, and flexible way to connect, engage, respond, and share - where and how they want - for better business results.
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•
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Contact Center ("CC"):
Avaya’s industry-leading omnichannel contact center solutions enable customers to build a customized portfolio of applications, driving stronger customer engagement and higher customer lifetime value. Our reliable, secure and scalable communications solutions include voice, email, chat, social media, video, performance management and ease of third-party integration that can improve customer service and help companies compete more effectively.
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•
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Global Support Services
feature offerings that address the risk of system outages and help businesses protect technology investments. We help our customers maintain their competitiveness through proactive problem prevention, rapid resolution and continual solution optimization. The majority of our revenue in this business is recurring in nature.
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•
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Enterprise Cloud and Managed Services
(formerly named Avaya private cloud services) enables customers to take advantage of our technology via the cloud, on-premises, or a hybrid of both, depending on the solution and the needs of the customer. The majority of our revenue in this business is recurring in nature and based on multi-year services contracts.
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•
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Professional Services
enable businesses worldwide to take full advantage of their solution investments to drive measurable business results. Our expert consultants and experienced engineers work with clients as a strategic partner along each step of the solution lifecycle to deliver services that drive business transformation and expand ongoing value. The majority of our revenue in this business is one-time in nature.
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•
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Convergence with UC/collaboration and CC becoming less distinct technologies, and more similar with integrated services and capabilities across devices and channels. Avaya already has more than 12,000 customers on a converged UC and CC platform, and we are in a position of strength to lead in bringing customers the power of this convergence.
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•
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Increasing remote workers and workforce mobility, with greater use of mobile devices by consumers and employees. This is happening as business leaders also shift priorities to digitally transform their companies, taking advantage of disruptive technologies like big data, IoT, cybersecurity, and Artificial Intelligence.
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•
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Increased preference for cloud delivery of applications, and management of multiple and varied devices, all of which must be handled with the security their business demands.
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•
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Omnichannel communication customer service will continue to rise, as consumers embrace new technologies and devices in creative ways and at an accelerating pace.
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•
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Disrupt - the more an innovation invalidates the status quo, the better;
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•
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Reduce adoption friction - make the innovation straightforward to select and deploy, embrace the multi-vendor marketplace; and
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•
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Partner intelligently - leverage provocative partner intellectual property and thought leadership to speed market introduction, presenting Avaya as the industry platform.
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1)
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We have invested in R&D and new technologies to develop and provide more comprehensive contact center and unified communications products and services, continuing our focus on enterprise customers while expanding the value we can provide to midmarket customers.
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2)
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We have evolved our product design philosophy, anticipating demand for applications that are cloud- and mobile-enabled. We design our products to be flexible, extensible, secure and reliable. This approach allows our customers to transition from traditional communications and collaboration technology to newer solutions that are more mobile, manageable and cost-effective.
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3)
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We have increased our focus on delivering integrated solutions including:
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Successor
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Predecessor
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Non-GAAP Combined
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Predecessor
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||||||||||||
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Period from December 16, 2017
through September 30, 2018 |
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Period from
October 1, 2017 through December 15, 2017 |
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Fiscal year ended September 30,
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||||||||||||||
(In millions)
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2018
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2017
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2016
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||||||||||||
Products:
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||||||||||
Unified Communications
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$
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718
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$
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180
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$
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898
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$
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936
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$
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1,129
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Contact Center
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271
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73
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344
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361
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422
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|||||
Networking
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—
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—
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—
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140
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204
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|||||
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989
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253
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1,242
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1,437
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1,755
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|||||
Services:
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||||||||||
Global Support Services
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786
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244
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1,030
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1,267
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1,345
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|||||
Enterprise Cloud and Managed Services
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245
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57
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302
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296
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309
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|||||
Professional Services
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227
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50
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277
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272
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293
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|||||
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1,258
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351
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1,609
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1,835
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1,947
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|||||
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$
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2,247
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|
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$
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604
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$
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2,851
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|
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$
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3,272
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$
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3,702
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1)
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Manage the reliable and secure integration of an increasing number and variety of devices and endpoints
: Today, business users not only use desk-based devices, but also laptops, smartphones and tablets. Gartner reports from a September 2018 forecast that these devices are growing at a compound annual growth rate of 2.9% for smartphones (basic and premium), and 2.1% for tablets (traditional) worldwide from 2018 through 2022
(1)
.
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2)
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Leverage existing technology infrastructure while positioning for the future
: The speed at which new enterprise technology enters the market is challenging companies to rapidly adopt and install new technology. We believe this pressure creates strong demand for systems that do not require enterprise-wide overhauls of existing technology. Instead, it favors incremental, flexible, extensible technologies that are easy to adopt and compatible with existing infrastructures.
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3)
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Shift to cloud-based applications
: Companies today seek technology that helps them lower Total Cost of Ownership ("TCO") and increase deployment speed and application agility, including a variety of public, private and hybrid cloud solutions. They also seek to shift away from a complex, proprietary capital-intensive model to one that is more open and efficient.
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1)
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Innovate in our core business solutions
. As a leader in unified communications and the contact center, our extensive experience and expertise are critical factors in customers' decision-making processes. We will continue to invest in enhancing our core solution areas, delivering secure, scalable and reliable solutions that focus on simplifying and integrating the user experience.
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2)
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Bring emerging technologies to market
. By innovating in disruptive areas such as AI and mobility, and building an ecosystem with technology partners like Afiniti and others, we will drive new opportunities for our customers.
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3)
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Deliver breadth and depth of cloud.
Customers need a partner who can help them unlock the benefits of cloud, in a way that works for their specific needs, whether private, public, or hybrid cloud. Avaya is investing and building a cloud ecosystem, and delivering across all fronts with a cloud-first approach that builds on the power, reliability, and security that customers have come to expect from Avaya.
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4)
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Deliver high-value services.
We provide world-class global services that help customers maximize the value of their investments and drive business value. We will expand offerings and capabilities in managed and professional services to meet the changing needs of our customers.
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1)
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Enablement Services
: Provide access to expertise and resources for planning, defining and deploying Avaya products to maximize technology potential, simplify business processes, improve security and minimize risk. Avaya integrates and tests equipment, trains employees and deploys a plan to help ensure success.
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2)
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Optimization Services:
Help drive increased value and improved business results by leveraging customers’ existing technology. Avaya advanced solution architects analyze a communications environment in the context of customer business priorities, recommend enhancements and implement proven best practices.
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3)
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Innovation Services:
Help identify improved methods for using communications and collaboration to increase business productivity, employee efficiency and customer service levels. Our consultative approach, deep industry experience and custom application services-from business planning through to execution and product integration-create alignment with a customer’s specific business objectives.
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1)
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Customer Journey Transformation: We are engaging with our key clients in a highly consultative way to help them better leverage their communications investment. This model has led to an increase in large, complex projects for our top enterprise clients. Our extensive knowledge of our customers' journeys, leveraging reference architectures is a cornerstone of Avaya’s growth strategy going forward.
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2)
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Agile Development Business: The increase in large projects has also led to increases in our agile development business. We help clients develop customized, leading-edge applications that fully integrate into their environment to solve key business problems and take advantage of opportunities.
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3)
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Professional Services: We have a fully integrated, global professional services team that has grown to more than 1,200 professionals today. This team provides the same high level of technical talent and tool support in all regions of the world. We are in the process of implementing a new professional services automation tool that is expected to enable us to be more efficient in operating and managing as a seamless global business.
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•
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A comprehensive suite of support options both directly and through partners to proactively resolve issues and improve uptime. Global Support Services offers capabilities that include 24/7 remote support, proactive remote monitoring, sophisticated diagnostic tools, parts replacement and on-site response.
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•
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Our Avaya Support website quickly connects customers to advanced Avaya technicians via live chat, voice or video. The website also provides access to “Ava,” an interactive virtual chat agent based on Avaya Automated Chat that quickly searches our knowledge base and a wide range of “how-to” videos to answer customer support questions. Ava
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•
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Enhanced automation to enable our clients to get to the right technical expert in a quicker and more effective way, improving overall customer satisfaction.
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•
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Implemented a new Support Services Customer Success team, which we believe has helped enable us to understand our clients' UC and CC strategies, issues, and opportunities. We expect this investment to help our clients further view us as a trusted consultative provider that will result in increased adoption, accelerated momentum and transition to our full-service stack, including the cloud.
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•
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Real-time automated evaluation of global clients' solution performance across 30 criteria enabling proactive deep-dives with clients.
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1)
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A standard set of “Ready Now” reference architectures that enable quick and effective POC’s and trials, prior to implementing production environments for clients. The cloud platform will be based on Avaya’s industry-leading UC and CC technology that will meet the majority of enterprise client requirements, with the ability to customize.
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2)
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A new set of automation platforms to effectively build and deploy solutions for clients that will enable Avaya to replicate a client’s sophisticated premise-based implementations to our cloud solution in an unprecedented level of speed, accuracy, and effectiveness.
|
3)
|
A new Enterprise Communications Cloud Architect team, consisting of some of the best enterprise communications cloud technical talent in the industry, works with clients in the architecture, design, operations and implementation of their secure virtualized private cloud environment. In addition, the Avaya team will stay with the client as their top technical advisor as they move to full production in their new private cloud environment, helping them fully realize the benefit of the solution and driving adoption, growth and retention.
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4)
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A set of managed services offers to effectively operate the private cloud environment at a high level of availability, performance and Quality of Service ("QOS") Service Level Agreements ("SLAs"). These offerings will include full multi-vendor support of their current communications technology environment as they begin their migration to cloud.
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5)
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A global network of data centers running the same virtualized private cloud architectures, all run with the same industry-leading set of automation, workflow and team.
|
1)
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Global Service Provider
alliances are partnering arrangements with leading telecommunications service providers, such as AT&T, for enterprise communications and collaboration. We pursue sell-to and sell-through opportunities for Avaya products and services. These alliances are integral in selling and implementing our cloud-based services. We also see them as a principal route to market for our UCaaS and CCaaS solutions.
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2)
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Global Systems Integrator
alliances are identical in nature to our Global Service Provider alliances, except that these are forged with systems integrator partners, such as IBM.
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3)
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Ecosystem
alliances are partnering arrangements by Avaya with IT and telecommunications industry leaders, such as ConvergeOne, to bring to our joint customers solutions that leverage our combined range of products and services.
|
•
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Enterprise UC:
Cisco, Microsoft, NEC Corporation, Unify GmbH & Co. Kg, Alcatel-Lucent Enterprise and Huawei.
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•
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Midmarket UC:
Mitel and ShoreTel (acquired by Mitel), Cisco, Microsoft, and NEC.
|
•
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Cloud Products and Services:
Cisco, Broadsoft (now a division of Cisco), Fuze, Twilio, Microsoft, 8x8, RingCentral, Mitel and ShoreTel (acquired by Mitel).
|
•
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Video Products and Solutions:
Cisco, Polycom (now a division of Plantronics), Huawei, Zoom, ZTE, BlueJeans, and LifeSize (now a division of Logitech International S.A.).
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•
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Enterprise Contact Center Products and Services:
Genesys Telecommunications Laboratories (Genesys), Cisco, Huawei, Enghouse Interactive, Mitel and NICE.
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•
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Midmarket Contact Center Products and Services:
Amazon, Cisco, Genesys, Five9, NICE and Vonage.
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•
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certain provisions of environmental laws governing the cleanup of soil and groundwater contamination;
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•
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various local, federal and international laws and regulations regarding the material content and electrical design of our products that require us to be financially responsible for the collection, treatment, recycling and disposal of those products; and
|
•
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various employee safety and health regulations that are imposed in various countries within which we operate.
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Item 1A.
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Risk Factors
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•
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Enterprise UC:
Cisco, Microsoft, NEC Corporation, Unify GmbH & Co. Kg, Alcatel-Lucent Enterprise and Huawei.
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•
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Midmarket UC:
Mitel and ShoreTel (acquired by Mitel), Cisco, Microsoft, and NEC.
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•
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Cloud Products and Services:
Cisco, Broadsoft (now a division of Cisco), Fuze, Twilio, Microsoft, 8x8, RingCentral, Mitel and ShoreTel (acquired by Mitel).
|
•
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Video Products and Solutions:
Cisco, Polycom (now a division of Plantronics), Huawei, Zoom, ZTE, BlueJeans, and LifeSize (now a division of Logitech International S.A.).
|
•
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Enterprise Contact Center Products and Services:
Genesys Telecommunications Laboratories (Genesys), Cisco, Huawei, Enghouse Interactive, Mitel and NICE.
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•
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Midmarket Contact Center Products and Services:
Amazon, Cisco, Genesys, Five9, NICE and Vonage.
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•
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economic conditions and geopolitical developments, including trade sanctions, changes to significant trading relationships such as the United Kingdom’s ongoing process of withdrawal from the EU, and the negotiation of
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•
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political or social unrest, or economic instability or corruption, in a specific country or region;
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•
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legal and regulatory constraints, such as international and local laws and regulations related to trade compliance, anti-corruption, information security, data privacy and protection, labor and other requirements;
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•
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protectionist and local security legislation;
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•
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difficulty in enforcing intellectual property rights, such as protecting against the counterfeiting of our products;
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•
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relationships with employees and works councils,
as well as difficulties in finding qualified employees, including skilled design and technical employees, as companies expand their operations offshore;
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•
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unfavorable tax and currency regulations;
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•
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military conflict, terrorist activities and health pandemics or similar issues;
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•
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future government shutdowns or uncertainties which could affect the portion of our revenues which comes from the U.S. federal government sector;
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•
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natural disasters, such as earthquakes, hurricanes or floods, anywhere we and/or our channel partners and distributors have business operations; and
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•
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other matters in any of the countries or regions in which we and our contract manufacturers and business partners currently operate or intend to operate, including in the U.S.
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•
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we could fail to meet our financial reporting obligations;
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•
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our reputation may be adversely affected and our business and operating results could be harmed;
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•
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the market price of our stock could decline; and
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•
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we could be subject to litigation and/or investigations or sanctions by the Securities and Exchange Commission (the "SEC"), the New York Stock Exchange or other regulatory authorities.
|
•
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making it more difficult for us to make payments on our indebtedness;
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•
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increasing our vulnerability to general economic and industry conditions;
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•
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requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, thereby reducing our ability to use our cash flow to fund our operations, capital expenditures, research and development and future business opportunities;
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•
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exposing us to the risk of increased interest rates under Avaya Inc.’s credit facilities to the extent such facilities have variable rates of interest;
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•
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limiting our ability to make strategic acquisitions and investments;
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•
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limiting our ability to refinance our indebtedness as it becomes due; and
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•
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limiting our ability to adjust quickly or at all to changing market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged.
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•
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incur or guarantee additional debt and issue or sell certain preferred stock;
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•
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pay dividends on, redeem or repurchase our capital stock;
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•
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make certain acquisitions or investments;
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•
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incur or assume certain liens;
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•
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enter into transactions with affiliates; and
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•
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sell assets to, or merge or consolidate with, another company.
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•
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general economic conditions;
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•
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fluctuations in our operating results;
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•
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variance in our financial performance from the expectations of equity and/or debt research analysts;
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•
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conditions and trends in the markets we serve;
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•
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announcements of significant new services or products by us or our competitors;
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•
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additions of or changes to key employees;
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•
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changes in market valuations or earnings of our competitors;
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•
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trading volumes of our common stock and/or Convertible Notes;
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•
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future sales of our equity securities and/or future issuances of indebtedness;
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•
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changes in the estimation of the future sizes and growth rates of our markets;
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•
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legislation or regulatory policies, practices or actions;
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•
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hedging or arbitrage trading activity by third parties, including by the counterparties to the note hedge and warrant transactions that we entered into in connection with the issuance of the Convertible Notes; and
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•
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dilution that may occur upon any conversion of the Convertible Notes or the exercise of the warrants we issued in connection with the issuance of the Convertible Notes.
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•
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authorize our board of directors to create and issue, without stockholder approval, up to
55,000,000
shares of undesignated preferred stock, which could be used to dilute the ownership of a hostile acquirer;
|
•
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grant the board of directors the exclusive right to fill a vacancy on the board of directors, whether such vacancy is due to an increase in the number of directors or death, resignation or removal of a director, which prevents stockholders from being able to fill such vacancies on the board of directors; and
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•
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require stockholders to follow certain advance notice procedures to bring a proposal before an annual meeting, including proposing nominees for election as directors, which may discourage a potential acquirer from soliciting proxies to elect the acquirer’s own director or slate of directors.
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Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
|
Issuer Purchases of Equity Securities
|
|||||||||
|
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(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 Plans or Programs
|
|||
July 1 - 31, 2018
|
|
—
|
|
|
$
|
—
|
|
|
N/A
|
|
N/A
|
August 1 - 31, 2018
|
|
—
|
|
|
$
|
—
|
|
|
N/A
|
|
N/A
|
September 1 - 30, 2018
|
|
40,716
|
|
|
$
|
22.0600
|
|
|
N/A
|
|
N/A
|
Total
|
|
40,716
|
|
|
|
|
N/A
|
|
N/A
|
|
12/19/17
|
|
12/29/17
|
|
01/31/18
|
|
02/28/18
|
|
03/29/18
|
|
04/30/18
|
|
05/31/18
|
|
06/29/18
|
|
07/31/18
|
|
08/31/18
|
|
09/28/18
|
|
|||||||||||
Avaya Holdings Corp.
|
$
|
100.00
|
|
$
|
106.69
|
|
$
|
126.93
|
|
$
|
127.60
|
|
$
|
136.17
|
|
$
|
139.15
|
|
$
|
134.16
|
|
$
|
122.07
|
|
$
|
125.11
|
|
$
|
142.01
|
|
$
|
134.59
|
|
Russell 2000 Index
|
$
|
100.00
|
|
$
|
99.92
|
|
$
|
102.49
|
|
$
|
98.42
|
|
$
|
99.52
|
|
$
|
100.33
|
|
$
|
106.30
|
|
$
|
106.92
|
|
$
|
108.72
|
|
$
|
113.27
|
|
$
|
110.40
|
|
NASDAQ Computer Index
|
$
|
100.00
|
|
$
|
98.21
|
|
$
|
104.97
|
|
$
|
104.72
|
|
$
|
100.68
|
|
$
|
100.31
|
|
$
|
108.84
|
|
$
|
107.76
|
|
$
|
110.25
|
|
$
|
117.54
|
|
$
|
116.13
|
|
Item 6.
|
Selected Financial Data
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||||||||||
Statement of Operations Data:
|
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal years ended September 30,
|
||||||||||||||||||
(In millions, except per share amounts)
|
|
|
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||
Revenue
|
|
$
|
2,247
|
|
|
|
$
|
604
|
|
|
$
|
3,272
|
|
|
$
|
3,702
|
|
|
$
|
4,081
|
|
|
$
|
4,371
|
|
Income (loss) from continuing operations, net of income taxes
|
|
287
|
|
|
|
2,977
|
|
|
(182
|
)
|
|
(730
|
)
|
|
(168
|
)
|
|
(315
|
)
|
||||||
Income from discontinued operations, net of income taxes
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62
|
|
||||||
Net income (loss)
|
|
287
|
|
|
|
2,977
|
|
|
(182
|
)
|
|
(730
|
)
|
|
(168
|
)
|
|
(253
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Per share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) from continuing operations - basic
|
|
$
|
2.61
|
|
|
|
$
|
5.19
|
|
|
$
|
(0.43
|
)
|
|
$
|
(1.54
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
(0.73
|
)
|
Income from discontinued operations - basic
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.13
|
|
||||||
Net income (loss) - basic
|
|
$
|
2.61
|
|
|
|
$
|
5.19
|
|
|
$
|
(0.43
|
)
|
|
$
|
(1.54
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
(0.60
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) from continuing operations - diluted
|
|
$
|
2.58
|
|
|
|
$
|
5.19
|
|
|
$
|
(0.43
|
)
|
|
$
|
(1.54
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
(0.73
|
)
|
Income from discontinued operations - diluted
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.13
|
|
||||||
Net income (loss) - diluted
|
|
$
|
2.58
|
|
|
|
$
|
5.19
|
|
|
$
|
(0.43
|
)
|
|
$
|
(1.54
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
(0.60
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Successor
|
|
|
Predecessor
|
|
|
||||||||||||||||||
Balance Sheet Data:
|
|
As of September 30, 2018
|
|
|
As of September 30,
|
|
|
||||||||||||||||||
(In millions)
|
|
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
|
|||||||||||||
Cash and cash equivalents
|
|
$
|
700
|
|
|
|
$
|
876
|
|
|
$
|
336
|
|
|
$
|
323
|
|
|
$
|
322
|
|
|
|
||
Total assets
|
|
7,679
|
|
|
|
5,898
|
|
|
5,821
|
|
|
6,836
|
|
|
7,179
|
|
|
|
|||||||
Total debt (including current and long-term portion)
|
|
3,126
|
|
|
|
725
|
|
|
6,018
|
|
|
5,967
|
|
|
5,968
|
|
|
|
|||||||
Liabilities subject to compromise
|
|
—
|
|
|
|
7,705
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|||||||
Capital leases
|
|
31
|
|
|
|
26
|
|
|
56
|
|
|
61
|
|
|
59
|
|
|
|
|||||||
Total stockholders' equity (deficit)
|
|
2,051
|
|
|
|
(5,013
|
)
|
|
(5,023
|
)
|
|
(4,001
|
)
|
|
(3,621
|
)
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Successor
|
|
|
Predecessor
|
||||||||||||||||||||
Other Financial Data:
|
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal years ended September 30,
|
||||||||||||||||||
(In millions)
|
|
|
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||
Cash provided by (used for) by operating activities
|
|
$
|
202
|
|
|
|
$
|
(414
|
)
|
|
$
|
291
|
|
|
$
|
113
|
|
|
$
|
215
|
|
|
$
|
35
|
|
EBITDA
|
|
289
|
|
|
|
3,479
|
|
|
370
|
|
|
125
|
|
|
724
|
|
|
627
|
|
||||||
Adjusted EBITDA
(a)
|
|
611
|
|
|
|
135
|
|
|
866
|
|
|
940
|
|
|
900
|
|
|
898
|
|
•
|
On
December 15, 2017
, the Company emerged from bankruptcy and applied fresh start accounting, which required the allocation of its reorganization value to its individual assets based on their estimated fair values. As a result of the application of fresh start accounting and the effects of the implementation of the Plan of Reorganization, the Consolidated Financial Statements after
December 15, 2017
are not comparable with the Consolidated Financial Statements as of or prior to that date. See Note 5, "Fresh Start Accounting," to our Consolidated Financial Statements included in Part II, Item 8 and Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations-Emergence from Bankruptcy" to this Annual Report on Form 10-K for a more detailed discussion.
|
•
|
During the
period from October 1, 2017 through December 15, 2017
(Predecessor) and fiscal
2017
(Predecessor), the Company recorded pre-tax reorganization, net credits (costs) of
$3,416 million
and
$(98) million
, respectively. The
period from October 1, 2017 through December 15, 2017
(Predecessor) primarily consists of the net gain from the consummation of the Plan of Reorganization and the related settlement of liabilities. The
period from October 1, 2017 through December 15, 2017
(Predecessor) and fiscal
2017
(Predecessor) also include amounts incurred subsequent to the Bankruptcy Filing as a direct result of the Bankruptcy Filing and are comprised of professional service fees and contract rejection fees.
|
•
|
The Company acquired Spoken on March 9, 2018. Spoken has been included in the Company's results of operations starting on the acquisition date. See Note 6, "Business Combinations," to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for a more detailed discussion.
|
•
|
The Company sold its Networking business on July 14, 2017, and its Technology Business Unit and IT Professional Services businesses in fiscal
2014
(Predecessor). These sales resulted in pre-tax gains of
$2 million
and
$66 million
in fiscal
2017
and
2014
(Predecessor), respectively. See Note 4, "Emergence from Voluntary Reorganization under Chapter 11 Proceedings," to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information on the sale of the Networking business.
|
•
|
In fiscal
2017
(Predecessor) and
2016
(Predecessor), the Company recorded pre-tax impairment charges of
$117 million
and
$542 million
, respectively, related to goodwill and indefinite-lived intangible assets. See Note 7, "Goodwill," and Note 8, "Intangible Assets," to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.
|
•
|
On December 22, 2017, the Tax Cuts and Jobs Act was signed into law, which lowered the U.S. federal corporate tax rate from
35%
to
21%
effective January 1, 2018. During the
period from December 16, 2017 through September 30, 2018
(Successor), the Company recorded an income tax benefit of
$245 million
to adjust deferred tax balances to reflect the new rates. See Note 14, "Income Taxes," to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.
|
•
|
Restructuring and impairment charges were
$81 million
,
$14 million
,
$30 million
,
$105 million
,
$62 million
and
$165 million
on a pre-tax basis for the
period from December 16, 2017 through September 30, 2018
(Successor), the
period from October 1, 2017 through December 15, 2017
(Predecessor), and fiscal
2017
,
2016
,
2015
and
2014
(Predecessor), respectively. See Note 10, "Business Restructuring Reserves and Programs," to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.
|
•
|
In fiscal
2017
(Predecessor), the Company recorded non-cash interest expense of
$61 million
related to the accelerated amortization of debt issuance costs and accretion of debt discount related to the Company’s Bankruptcy Filing. In addition, effective January 19, 2017, the Company ceased recording interest expense on outstanding pre-petition debt classified as Liabilities subject to compromise. Contractual interest expense represented amounts due under the contractual terms of outstanding debt, including debt subject to compromise. For the
period from October 1, 2017 through December 15, 2017
(Predecessor) and the period from January 19, 2017 through September 30, 2017 (Predecessor), contractual interest expense of $94 million and
$316 million
was not recorded as interest expense, as it was not an allowed claim under the Bankruptcy Filing.
|
•
|
As of
September 30, 2017
(Predecessor), Liabilities subject to compromise included
$5,832 million
of Predecessor debt and
$12 million
of Predecessor capital lease obligations.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Global Support Services
feature offerings that address the risk of system outages and also help businesses protect their technology investments. We help our customers maintain their competitiveness through proactive problem prevention, rapid resolution and continual solution optimization. The majority of our revenue in this business is recurring in nature.
|
•
|
Enterprise Cloud and Managed Services enables customers to take advantage of our technology via the cloud, on-premises, or a hybrid of both, depending on the solution and the needs of the customer. The majority of our revenue in this business is recurring in nature and based on multi-year services contracts.
|
•
|
Professional Services enable businesses worldwide to take full advantage of their solution investments to drive measurable business results. Our expert consultants and experienced engineers work with clients as a strategic partner along each step of the solution lifecycle to deliver services that drive business transformation and expand ongoing value. The majority of our revenue in this business is one-time in nature.
|
•
|
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 canceled, 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
|
|
Non-GAAP Combined
|
|
Predecessor
|
||||||||||||
|
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal years ended September 30,
|
||||||||||||||
(In millions)
|
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
|
$
|
989
|
|
|
|
$
|
253
|
|
|
$
|
1,242
|
|
|
$
|
1,437
|
|
|
$
|
1,755
|
|
Services
|
|
1,258
|
|
|
|
351
|
|
|
1,609
|
|
|
1,835
|
|
|
1,947
|
|
|||||
|
|
2,247
|
|
|
|
604
|
|
|
2,851
|
|
|
3,272
|
|
|
3,702
|
|
|||||
COSTS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Costs
|
|
372
|
|
|
|
84
|
|
|
456
|
|
|
499
|
|
|
629
|
|
|||||
Amortization of technology intangible assets
|
|
135
|
|
|
|
3
|
|
|
138
|
|
|
20
|
|
|
30
|
|
|||||
Services
|
|
597
|
|
|
|
155
|
|
|
752
|
|
|
745
|
|
|
785
|
|
|||||
|
|
1,104
|
|
|
|
242
|
|
|
1,346
|
|
|
1,264
|
|
|
1,444
|
|
|||||
GROSS PROFIT
|
|
1,143
|
|
|
|
362
|
|
|
1,505
|
|
|
2,008
|
|
|
2,258
|
|
|||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
|
888
|
|
|
|
264
|
|
|
1,152
|
|
|
1,261
|
|
|
1,401
|
|
|||||
Research and development
|
|
172
|
|
|
|
38
|
|
|
210
|
|
|
225
|
|
|
273
|
|
|||||
Amortization of intangible assets
|
|
127
|
|
|
|
10
|
|
|
137
|
|
|
204
|
|
|
226
|
|
|||||
Impairment of indefinite-lived intangible assets
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
65
|
|
|
100
|
|
|||||
Goodwill impairment
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
442
|
|
|||||
Restructuring charges, net
|
|
81
|
|
|
|
14
|
|
|
95
|
|
|
30
|
|
|
105
|
|
|||||
|
|
1,268
|
|
|
|
326
|
|
|
1,594
|
|
|
1,837
|
|
|
2,547
|
|
|||||
OPERATING (LOSS) INCOME
|
|
(125
|
)
|
|
|
36
|
|
|
(89
|
)
|
|
171
|
|
|
(289
|
)
|
|||||
Interest expense
|
|
(169
|
)
|
|
|
(14
|
)
|
|
(183
|
)
|
|
(246
|
)
|
|
(471
|
)
|
|||||
Other income (expense), net
|
|
35
|
|
|
|
(2
|
)
|
|
33
|
|
|
(25
|
)
|
|
41
|
|
|||||
Reorganization items, net
|
|
—
|
|
|
|
3,416
|
|
|
3,416
|
|
|
(98
|
)
|
|
—
|
|
|||||
(LOSS) INCOME BEFORE INCOME TAXES
|
|
(259
|
)
|
|
|
3,436
|
|
|
3,177
|
|
|
(198
|
)
|
|
(719
|
)
|
|||||
Benefit from (provision for) income taxes
|
|
546
|
|
|
|
(459
|
)
|
|
87
|
|
|
16
|
|
|
(11
|
)
|
|||||
NET INCOME (LOSS)
|
|
$
|
287
|
|
|
|
$
|
2,977
|
|
|
$
|
3,264
|
|
|
$
|
(182
|
)
|
|
$
|
(730
|
)
|
(In millions)
|
Period from December 16, 2017
through September 30, 2018 |
||
REVENUE
|
|
||
Products
|
$
|
(63
|
)
|
Services
|
(143
|
)
|
|
|
(206
|
)
|
|
COSTS
|
|
||
Products
|
21
|
|
|
Services
|
37
|
|
|
|
58
|
|
|
GROSS PROFIT
|
(264
|
)
|
|
OPERATING EXPENSES
|
|
||
Selling, general and administrative
|
16
|
|
|
Research and development
|
(11
|
)
|
|
|
5
|
|
|
OPERATING LOSS
|
$
|
(259
|
)
|
|
|
|
|
|
|
|
|
|
|
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 September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal year ended September 30, 2018
|
|
Fiscal year ended September 30, 2017
|
|
Fiscal year ended September 30, 2018
|
|
Fiscal year ended September 30, 2017
|
|
Yr. to Yr. Percentage Change
|
|
|||||||||||||
Products & Solutions
|
$
|
1,052
|
|
|
|
$
|
253
|
|
|
$
|
1,305
|
|
|
$
|
1,297
|
|
|
46
|
%
|
|
40
|
%
|
|
1
|
%
|
|
0
|
%
|
Networking
|
—
|
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|
0
|
%
|
|
4
|
%
|
|
(100
|
)%
|
|
(100
|
)%
|
||||
Services
|
1,401
|
|
|
|
351
|
|
|
1,752
|
|
|
1,835
|
|
|
61
|
%
|
|
56
|
%
|
|
(5
|
)%
|
|
(5
|
)%
|
||||
Unallocated amounts
|
(206
|
)
|
|
|
—
|
|
|
(206
|
)
|
|
—
|
|
|
(7
|
)%
|
|
0
|
%
|
|
(1)
|
|
|
(1)
|
|
||||
Total revenue
|
$
|
2,247
|
|
|
|
$
|
604
|
|
|
$
|
2,851
|
|
|
$
|
3,272
|
|
|
100
|
%
|
|
100
|
%
|
|
(13
|
)%
|
|
(14
|
)%
|
(1)
|
Not meaningful
|
|
|
|
|
|
|
|
|
|
|
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 September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal year ended September 30, 2018
|
|
Fiscal year ended September 30, 2017
|
|
Fiscal year ended September 30, 2018
|
|
Fiscal year ended September 30, 2017
|
|
Yr. to Yr. Percentage Change
|
|
|||||||||||||
U.S.
|
$
|
1,184
|
|
|
|
$
|
331
|
|
|
$
|
1,515
|
|
|
$
|
1,798
|
|
|
53
|
%
|
|
55
|
%
|
|
(16
|
)%
|
|
(16
|
)%
|
International:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Europe, Middle East and Africa
|
603
|
|
|
|
166
|
|
|
769
|
|
|
834
|
|
|
27
|
%
|
|
26
|
%
|
|
(8
|
)%
|
|
(11
|
)%
|
||||
Asia Pacific
|
256
|
|
|
|
57
|
|
|
313
|
|
|
334
|
|
|
11
|
%
|
|
10
|
%
|
|
(6
|
)%
|
|
(7
|
)%
|
||||
Americas International - Canada and Latin America
|
204
|
|
|
|
50
|
|
|
254
|
|
|
306
|
|
|
9
|
%
|
|
9
|
%
|
|
(17
|
)%
|
|
(16
|
)%
|
||||
Total International
|
1,063
|
|
|
|
273
|
|
|
1,336
|
|
|
1,474
|
|
|
47
|
%
|
|
45
|
%
|
|
(9
|
)%
|
|
(11
|
)%
|
||||
Total revenue
|
$
|
2,247
|
|
|
|
$
|
604
|
|
|
$
|
2,851
|
|
|
$
|
3,272
|
|
|
100
|
%
|
|
100
|
%
|
|
(13
|
)%
|
|
(14
|
)%
|
|
|
|
|
|
|
|
|
|
|
Percentage of Total Products & Solutions and Networking 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 September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal year ended September 30, 2018
|
|
Fiscal year ended September 30, 2017
|
|
Fiscal year ended September 30, 2018
|
|
Fiscal year ended September 30, 2017
|
|
Yr. to Yr. Percentage Change
|
|
|||||||||||||
Direct
|
$
|
300
|
|
|
|
$
|
80
|
|
|
$
|
380
|
|
|
$
|
382
|
|
|
29
|
%
|
|
27
|
%
|
|
(1
|
)%
|
|
(2
|
)%
|
Indirect
|
752
|
|
|
|
173
|
|
|
925
|
|
|
1,055
|
|
|
71
|
%
|
|
73
|
%
|
|
(12
|
)%
|
|
(13
|
)%
|
||||
Total Products & Solutions and Networking revenue
|
$
|
1,052
|
|
|
|
$
|
253
|
|
|
$
|
1,305
|
|
|
$
|
1,437
|
|
|
100
|
%
|
|
100
|
%
|
|
(9
|
)%
|
|
(10
|
)%
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
|
|
|
|
|
|||||||||||||||
|
Successor
|
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Predecessor
|
|
Change
|
|||||||||||||||
(In millions)
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal year ended September 30, 2018
|
|
Fiscal year ended September 30, 2017
|
|
Fiscal year ended September 30, 2018
|
|
Fiscal year ended September 30, 2017
|
|
Amount
|
|
Percent
|
|||||||||||||
Products & Solutions
|
$
|
696
|
|
|
|
$
|
169
|
|
|
$
|
865
|
|
|
$
|
890
|
|
|
66.3
|
%
|
|
68.6
|
%
|
|
$
|
(25
|
)
|
|
(2.8
|
)%
|
Networking
|
—
|
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|
—
|
%
|
|
34.3
|
%
|
|
(48
|
)
|
|
(100
|
)%
|
|||||
Services
|
843
|
|
|
|
196
|
|
|
1,039
|
|
|
1,091
|
|
|
59.3
|
%
|
|
59.5
|
%
|
|
(52
|
)
|
|
(4.8
|
)%
|
|||||
Unallocated amounts
|
(396
|
)
|
|
|
(3
|
)
|
|
(399
|
)
|
|
(21
|
)
|
|
(1
|
)
|
|
(1)
|
|
|
(378
|
)
|
|
(1)
|
|
|||||
Total
|
$
|
1,143
|
|
|
|
$
|
362
|
|
|
$
|
1,505
|
|
|
$
|
2,008
|
|
|
52.8
|
%
|
|
61.4
|
%
|
|
$
|
(503
|
)
|
|
(25
|
)%
|
(1)
|
Not meaningful
|
|
|
|
|
|
|
|
|
|
|
Percentage of Total Revenue
|
|
|
|
|
|||||||||||||||
|
Successor
|
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Predecessor
|
|
Change
|
|||||||||||||||
(In millions)
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal year ended September 30, 2018
|
|
Fiscal year ended September 30, 2017
|
|
Fiscal year ended September 30, 2018
|
|
Fiscal year ended September 30, 2017
|
|
Amount
|
|
Percent
|
|||||||||||||
Selling, general and administrative
|
$
|
888
|
|
|
|
$
|
264
|
|
|
$
|
1,152
|
|
|
$
|
1,261
|
|
|
40.4
|
%
|
|
38.5
|
%
|
|
$
|
(109
|
)
|
|
(9
|
)%
|
Research and development
|
172
|
|
|
|
38
|
|
|
210
|
|
|
225
|
|
|
7.4
|
%
|
|
6.9
|
%
|
|
(15
|
)
|
|
(7
|
)%
|
|||||
Amortization of intangible assets
|
127
|
|
|
|
10
|
|
|
137
|
|
|
204
|
|
|
4.8
|
%
|
|
6.2
|
%
|
|
(67
|
)
|
|
(33
|
)%
|
|||||
Impairment of indefinite-lived intangible assets
|
—
|
|
|
|
—
|
|
|
—
|
|
|
65
|
|
|
—
|
%
|
|
2.0
|
%
|
|
(65
|
)
|
|
(100
|
)%
|
|||||
Goodwill impairment
|
—
|
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
—
|
%
|
|
1.6
|
%
|
|
(52
|
)
|
|
(100
|
)%
|
|||||
Restructuring charges, net
|
81
|
|
|
|
14
|
|
|
95
|
|
|
30
|
|
|
3.3
|
%
|
|
0.9
|
%
|
|
65
|
|
|
217
|
%
|
|||||
Total operating expenses
|
$
|
1,268
|
|
|
|
$
|
326
|
|
|
$
|
1,594
|
|
|
$
|
1,837
|
|
|
55.9
|
%
|
|
56.1
|
%
|
|
$
|
(243
|
)
|
|
(13
|
)%
|
•
|
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 fiscal
2017
;
|
•
|
higher restructuring charges for fiscal
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 fiscal
2018
of
$62 million
;
|
•
|
costs incurred in connection with certain legal matters of
$37 million
for fiscal
2018
;
|
•
|
operating results from the Networking business for fiscal
2017
; and
|
•
|
operating results from the Spoken acquisition completed in March 2018.
|
|
|
|
|
|
|
Percentage of
Total Revenue
|
|
Yr. to Yr.
Percent
Change
|
|
Yr. to Yr. Percent
Change, net of Foreign
Currency Impact
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
||||||||||
Products & Solutions
|
|
$
|
1,297
|
|
|
$
|
1,536
|
|
|
40
|
%
|
|
41
|
%
|
|
(16
|
)%
|
|
(15
|
)%
|
Networking
(1)
|
|
140
|
|
|
219
|
|
|
4
|
%
|
|
6
|
%
|
|
(36
|
)%
|
|
(36
|
)%
|
||
Services
|
|
1,835
|
|
|
1,947
|
|
|
56
|
%
|
|
53
|
%
|
|
(6
|
)%
|
|
(6
|
)%
|
||
Total revenue
|
|
$
|
3,272
|
|
|
$
|
3,702
|
|
|
100
|
%
|
|
100
|
%
|
|
(12
|
)%
|
|
(11
|
)%
|
|
|
|
|
|
|
Percentage of
Total Revenue
|
|
Yr. to Yr.
Percent
Change
|
|
Yr. to Yr. Percent
Change, net of Foreign
Currency Impact
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
||||||||||
U.S.
|
|
$
|
1,798
|
|
|
$
|
2,072
|
|
|
55
|
%
|
|
56
|
%
|
|
(13
|
)%
|
|
(13
|
)%
|
International:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
EMEA
|
|
834
|
|
|
880
|
|
|
26
|
%
|
|
24
|
%
|
|
(5
|
)%
|
|
(4
|
)%
|
||
APAC-Asia Pacific
|
|
334
|
|
|
416
|
|
|
10
|
%
|
|
11
|
%
|
|
(20
|
)%
|
|
(20
|
)%
|
||
Americas International-Canada and Latin America
|
|
306
|
|
|
334
|
|
|
9
|
%
|
|
9
|
%
|
|
(8
|
)%
|
|
(9
|
)%
|
||
Total International
|
|
1,474
|
|
|
1,630
|
|
|
45
|
%
|
|
44
|
%
|
|
(10
|
)%
|
|
(9
|
)%
|
||
Total revenue
|
|
$
|
3,272
|
|
|
$
|
3,702
|
|
|
100
|
%
|
|
100
|
%
|
|
(12
|
)%
|
|
(11
|
)%
|
|
|
|
|
|
|
Percentage of Total Products & Solutions and Networking Revenue
|
|
Yr. to Yr.
Percent
Change
|
|
Yr. to Yr. Percent
Change, net of Foreign
Currency Impact
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
||||||||||
Direct
|
|
$
|
382
|
|
|
$
|
453
|
|
|
27
|
%
|
|
26
|
%
|
|
(16
|
)%
|
|
(15
|
)%
|
Indirect
|
|
1,055
|
|
|
1,302
|
|
|
73
|
%
|
|
74
|
%
|
|
(19
|
)%
|
|
(19
|
)%
|
||
Total Products & Solutions and Networking revenue
|
|
$
|
1,437
|
|
|
$
|
1,755
|
|
|
100
|
%
|
|
100
|
%
|
|
(18
|
)%
|
|
(18
|
)%
|
|
|
Gross Profit
|
|
Gross Margin
|
|
Change
|
|||||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Amount
|
|
Percentage
|
|||||||||
Products & Solutions
|
|
$
|
890
|
|
|
$
|
1,047
|
|
|
68.6
|
%
|
|
68.2
|
%
|
|
$
|
(157
|
)
|
|
(15
|
)%
|
Networking
|
|
48
|
|
|
80
|
|
|
34.3
|
%
|
|
36.5
|
%
|
|
(32
|
)
|
|
(40
|
)%
|
|||
Services
|
|
1,091
|
|
|
1,160
|
|
|
59.5
|
%
|
|
59.6
|
%
|
|
(69
|
)
|
|
(6
|
)%
|
|||
Unallocated amounts
|
|
(21
|
)
|
|
(29
|
)
|
|
(1)
|
|
|
(1)
|
|
|
8
|
|
|
(1)
|
|
|||
Total
|
|
$
|
2,008
|
|
|
$
|
2,258
|
|
|
61.4
|
%
|
|
61.0
|
%
|
|
$
|
(250
|
)
|
|
(11
|
)%
|
(1)
|
Not meaningful
|
|
|
|
|
|
Percentage of Total Revenue
|
|
Change
|
|||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Amount
|
|
Percent
|
|||||||||
Selling, general and administrative
|
$
|
1,261
|
|
|
$
|
1,401
|
|
|
38.5
|
%
|
|
37.9
|
%
|
|
$
|
(140
|
)
|
|
(10
|
)%
|
Research and development
|
225
|
|
|
273
|
|
|
6.9
|
%
|
|
7.4
|
%
|
|
(48
|
)
|
|
(18
|
)%
|
|||
Amortization of intangible assets
|
204
|
|
|
226
|
|
|
6.2
|
%
|
|
6.1
|
%
|
|
(22
|
)
|
|
(10
|
)%
|
|||
Impairment of indefinite-lived intangible assets
|
65
|
|
|
100
|
|
|
2.0
|
%
|
|
2.7
|
%
|
|
(35
|
)
|
|
(35
|
)%
|
|||
Goodwill impairment
|
52
|
|
|
442
|
|
|
1.6
|
%
|
|
11.9
|
%
|
|
(390
|
)
|
|
(88
|
)%
|
|||
Restructuring charges, net
|
30
|
|
|
105
|
|
|
0.9
|
%
|
|
2.8
|
%
|
|
(75
|
)
|
|
(71
|
)%
|
|||
Total operating expenses
|
$
|
1,837
|
|
|
$
|
2,547
|
|
|
56.1
|
%
|
|
68.8
|
%
|
|
$
|
(710
|
)
|
|
(28
|
)%
|
|
|
Successor
|
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Predecessor
|
||||||||||||
|
|
|
|
|
Revised
|
|
|
|
|
||||||||||||
|
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal year ended September 30, 2018
|
|
Fiscal years ended September 30,
|
||||||||||||
(In millions)
|
|
|
|
|
|
2017
|
|
2016
|
|||||||||||||
Net cash provided by (used for):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
|
$
|
202
|
|
|
|
$
|
(414
|
)
|
|
$
|
(212
|
)
|
|
$
|
291
|
|
|
$
|
113
|
|
Investing activities
|
|
(134
|
)
|
|
|
8
|
|
|
(126
|
)
|
|
(70
|
)
|
|
(100
|
)
|
|||||
Financing activities
|
|
273
|
|
|
|
(102
|
)
|
|
171
|
|
|
314
|
|
|
9
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
|
(7
|
)
|
|
|
(2
|
)
|
|
(9
|
)
|
|
5
|
|
|
(9
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
|
334
|
|
|
|
(510
|
)
|
|
(176
|
)
|
|
540
|
|
|
13
|
|
|||||
Cash and cash equivalents at beginning of period
|
|
366
|
|
|
|
876
|
|
|
876
|
|
|
336
|
|
|
323
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
700
|
|
|
|
$
|
366
|
|
|
$
|
700
|
|
|
$
|
876
|
|
|
$
|
336
|
|
•
|
proceeds of
$2,896 million
from the Term Loan Credit Agreement entered into on the 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
$22 million
; and
|
•
|
repayments in connection with financing the use of equipment for the performance of services under our agreement with HP of
$13 million
.
|
•
|
proceeds from the Predecessor Company DIP Credit Agreement of
$712 million
, partially offset by:
|
•
|
scheduled debt repayments of
$223 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
$19 million
.
|
•
|
borrowings in excess of repayments under the Predecessor Company revolving credit facilities of $57 million, partially offset by:
|
•
|
scheduled debt repayments of
$25 million
; and
|
•
|
repayments under our agreement with HP of
$19 million
.
|
|
|
Payments due by period
|
||||||||||||||||||
(In millions)
|
|
Total
|
|
Less than
1 year |
|
1-3
years |
|
3-5
years |
|
More than
5 years |
||||||||||
Total debt
(1)
|
|
$
|
3,253
|
|
|
$
|
29
|
|
|
$
|
58
|
|
|
$
|
408
|
|
|
$
|
2,758
|
|
Interest payments due on debt
(2)
|
|
1,356
|
|
|
216
|
|
|
440
|
|
|
438
|
|
|
262
|
|
|||||
Purchase obligations with contract manufacturers and suppliers
(3)
|
|
138
|
|
|
138
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other purchase obligations
(4)
|
|
625
|
|
|
411
|
|
|
166
|
|
|
47
|
|
|
1
|
|
|||||
Operating lease obligations
(5)
|
|
194
|
|
|
48
|
|
|
68
|
|
|
39
|
|
|
39
|
|
|||||
Capital lease obligations
(6)
|
|
29
|
|
|
14
|
|
|
14
|
|
|
1
|
|
|
—
|
|
|||||
Pension benefit obligations
(7)
|
|
537
|
|
|
65
|
|
|
108
|
|
|
136
|
|
|
228
|
|
|||||
Total
|
|
$
|
6,132
|
|
|
$
|
921
|
|
|
$
|
854
|
|
|
$
|
1,069
|
|
|
$
|
3,288
|
|
(1)
|
The contractual obligations for debt represent principal payments only.
|
(2)
|
The interest payments due on debt include the impact of the Company's interest rate swap agreements. The interest payments for the unhedged portion of the Company's Term Loan Credit Agreement were calculated by applying an applicable margin to a projected LIBOR rate. The interest payments for the Company's Convertible 2.25% senior notes were based on the contractual 2.25% coupon rate. An estimated unused facility fee was calculated for the ABL Credit Agreement using the contract rate.
|
(3)
|
During the normal course of business, in order to manage manufacturing lead times and to help assure adequate component supply, the Company enters into agreements with contract manufacturers and suppliers that allow them to produce and procure inventory based upon forecasted requirements. If the Company does not meet the specified minimum purchase commitments under these agreements, it could be required to purchase the inventory.
|
(4)
|
Other purchase obligations represent an estimate of contractual obligations in the ordinary course of business, other than commitments with contract manufacturers and suppliers, for which the Company had not received the goods or services as of
September 30, 2018
. Although contractual obligations are considered enforceable and legally binding, the terms generally allow the Company the option to cancel, reschedule and adjust its requirements based on the Company's business needs prior to the delivery of goods or performance of services.
|
(5)
|
Contractual obligations for operating leases include future minimum lease payments, net of remaining sublease income of
$10 million
.
|
(6)
|
The payments due for capital lease obligations do not include $2 million in future payments for interest.
|
(7)
|
The Company sponsors non-contributory defined pension and post-retirement plans covering certain employees and retirees. The Company's general funding policy with respect to qualified pension plans is to contribute amounts at least sufficient to satisfy the minimum amount required by applicable law and regulations, or to directly pay benefits where appropriate. Most post-retirement medical benefits are not pre-funded. Consequently, the Company makes payments as these retiree medical benefits are disbursed. Upon emergence, the APPSE was transferred to the PBGC and the Avaya Supplemental Pension Plan was terminated. The amounts presented represent estimated minimum funding requirements through fiscal 2028.
|
•
|
Debt service
—We expect to make payments of approximately
$245 million
during fiscal
2019
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
$45 million
to
$50 million
during fiscal
2019
for employee separation costs and lease termination obligations associated with restructuring actions we have taken through
September 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
$75 million
to
$85 million
for capital expenditures and capitalized software development costs during fiscal
2019
.
|
•
|
Benefit obligations—
We estimate we will make payments under our pension and post-retirement benefit obligations totaling
$65 million
during fiscal
2019
. These payments include:
$26 million
to satisfy the minimum statutory funding requirements of our U.S. qualified pension plans;
$25 million
for our non-U.S. benefit plans, which are predominantly not pre-funded; and
$14 million
for represented retiree post-retirement benefits. See discussion in Note 15, “Benefit Obligations,” to our Consolidated Financial Statements for further details.
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal years ended September 30,
|
||||||||||
(In millions)
|
|
|
|
2017
|
|
2016
|
||||||||||
Net income (loss)
|
$
|
287
|
|
|
|
$
|
2,977
|
|
|
$
|
(182
|
)
|
|
$
|
(730
|
)
|
Interest expense
(a)
|
169
|
|
|
|
14
|
|
|
246
|
|
|
471
|
|
||||
Interest income
|
(5
|
)
|
|
|
(2
|
)
|
|
(4
|
)
|
|
(1
|
)
|
||||
(Benefit from) provision for income taxes
|
(546
|
)
|
|
|
459
|
|
|
(16
|
)
|
|
11
|
|
||||
Depreciation and amortization
|
384
|
|
|
|
31
|
|
|
326
|
|
|
374
|
|
||||
EBITDA
|
289
|
|
|
|
3,479
|
|
|
370
|
|
|
125
|
|
||||
Impact of fresh start accounting adjustments
(b)
|
196
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Restructuring charges, net
|
81
|
|
|
|
14
|
|
|
30
|
|
|
105
|
|
||||
Advisory fees
(c)
|
18
|
|
|
|
3
|
|
|
85
|
|
|
43
|
|
||||
Acquisition-related costs
(d)
|
15
|
|
|
|
—
|
|
|
1
|
|
|
2
|
|
||||
Reorganization items, net
|
—
|
|
|
|
(3,416
|
)
|
|
98
|
|
|
—
|
|
||||
Third-party sales transformation costs
(e)
|
—
|
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Non-cash share-based compensation
|
19
|
|
|
|
—
|
|
|
11
|
|
|
19
|
|
||||
Impairment of indefinite-lived intangible assets
|
—
|
|
|
|
—
|
|
|
65
|
|
|
100
|
|
||||
Goodwill impairment
|
—
|
|
|
|
—
|
|
|
52
|
|
|
442
|
|
||||
Impairment of long-lived assets
|
—
|
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Loss on sale/disposal of long-lived assets, net
|
4
|
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Gain on sale of Networking business
|
—
|
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Loss on equity investment
|
—
|
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||
Resolution of certain legal matters
(f)
|
—
|
|
|
|
37
|
|
|
64
|
|
|
106
|
|
||||
Change in fair value of Preferred Series B embedded derivative
(g)
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(73
|
)
|
||||
Change in fair value of Emergence Date Warrants
|
17
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Securities registration fees
(h)
|
—
|
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Gain on foreign currency transactions
|
(28
|
)
|
|
|
—
|
|
|
(2
|
)
|
|
(10
|
)
|
||||
Pension/OPEB/nonretirement postemployment retirement benefits and long-term disability costs
(i)
|
—
|
|
|
|
17
|
|
|
90
|
|
|
63
|
|
||||
Other
|
—
|
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Adjusted EBITDA
|
$
|
611
|
|
|
|
$
|
135
|
|
|
$
|
866
|
|
|
$
|
940
|
|
(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 September 30, 2017, contractual interest expense related to debt subject to compromise of $94 million and
$316 million
, respectively, had not been recorded as interest expense, as it was not 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 periods were sponsors’ fees, which represented 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 ceased being an affiliate of the Sponsors and the management services agreement and related monitoring fees no longer exist.
|
(d)
|
In fiscal
2018
, 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)
|
Third-party sales transformation costs are consulting fees incurred in support of the Company’s sales initiatives and the realignment of its sales organization.
|
(f)
|
Costs in connection with the resolution of certain legal matters include reserves and settlements, as well as associated legal costs.
|
(g)
|
Represents the gain on changes in the fair value of certain embedded derivative features of the Predecessor Company’s Series B preferred stock. Under GAAP, these embedded features must be recognized at fair value at each balance sheet date with the changes in the fair value recognized in operations. The Predecessor Company's Series B preferred stock was canceled upon the Company's emergence from bankruptcy.
|
(h)
|
Represents third-party fees incurred in connection with the Company’s registration statement filed with the SEC on Form S-1, Amendment No. 8, which was subsequently withdrawn on January 23, 2017.
|
(i)
|
Represents that portion of our pension and post-retirement benefit costs which represent the amortization of prior service costs and net actuarial gain (loss) associated with these benefits.
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Statements of Operations
|
|
Consolidated Statements of Comprehensive Income (Loss)
|
|
Consolidated Balance Sheets
|
|
Consolidated Statements of Changes in Stockholders' Equity (Deficit)
|
|
Consolidated Statements of Cash Flows
|
|
Notes to Consolidated Financial Statements
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal years ended September 30,
|
||||||||||
|
|
|
|
|
2017
|
|
2016
|
||||||||||
REVENUE
|
|
|
|
|
|
|
|
|
|
||||||||
Products
|
|
$
|
989
|
|
|
|
$
|
253
|
|
|
$
|
1,437
|
|
|
$
|
1,755
|
|
Services
|
|
1,258
|
|
|
|
351
|
|
|
1,835
|
|
|
1,947
|
|
||||
|
|
2,247
|
|
|
|
604
|
|
|
3,272
|
|
|
3,702
|
|
||||
COSTS
|
|
|
|
|
|
|
|
|
|
||||||||
Products:
|
|
|
|
|
|
|
|
|
|
||||||||
Costs
|
|
372
|
|
|
|
84
|
|
|
499
|
|
|
629
|
|
||||
Amortization of technology intangible assets
|
|
135
|
|
|
|
3
|
|
|
20
|
|
|
30
|
|
||||
Services
|
|
597
|
|
|
|
155
|
|
|
745
|
|
|
785
|
|
||||
|
|
1,104
|
|
|
|
242
|
|
|
1,264
|
|
|
1,444
|
|
||||
GROSS PROFIT
|
|
1,143
|
|
|
|
362
|
|
|
2,008
|
|
|
2,258
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
|
888
|
|
|
|
264
|
|
|
1,261
|
|
|
1,401
|
|
||||
Research and development
|
|
172
|
|
|
|
38
|
|
|
225
|
|
|
273
|
|
||||
Amortization of intangible assets
|
|
127
|
|
|
|
10
|
|
|
204
|
|
|
226
|
|
||||
Impairment of indefinite-lived intangible assets
|
|
—
|
|
|
|
—
|
|
|
65
|
|
|
100
|
|
||||
Goodwill impairment
|
|
—
|
|
|
|
—
|
|
|
52
|
|
|
442
|
|
||||
Restructuring charges, net
|
|
81
|
|
|
|
14
|
|
|
30
|
|
|
105
|
|
||||
|
|
1,268
|
|
|
|
326
|
|
|
1,837
|
|
|
2,547
|
|
||||
OPERATING (LOSS) INCOME
|
|
(125
|
)
|
|
|
36
|
|
|
171
|
|
|
(289
|
)
|
||||
Interest expense
|
|
(169
|
)
|
|
|
(14
|
)
|
|
(246
|
)
|
|
(471
|
)
|
||||
Other income (expense), net
|
|
35
|
|
|
|
(2
|
)
|
|
(25
|
)
|
|
41
|
|
||||
Reorganization items, net
|
|
—
|
|
|
|
3,416
|
|
|
(98
|
)
|
|
—
|
|
||||
(LOSS) INCOME BEFORE INCOME TAXES
|
|
(259
|
)
|
|
|
3,436
|
|
|
(198
|
)
|
|
(719
|
)
|
||||
Benefit from (provision for) income taxes
|
|
546
|
|
|
|
(459
|
)
|
|
16
|
|
|
(11
|
)
|
||||
NET INCOME (LOSS)
|
|
$
|
287
|
|
|
|
$
|
2,977
|
|
|
$
|
(182
|
)
|
|
$
|
(730
|
)
|
NET INCOME (LOSS) PER SHARE
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
2.61
|
|
|
|
$
|
5.19
|
|
|
$
|
(0.43
|
)
|
|
$
|
(1.54
|
)
|
Diluted
|
|
$
|
2.58
|
|
|
|
$
|
5.19
|
|
|
$
|
(0.43
|
)
|
|
$
|
(1.54
|
)
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
109.9
|
|
|
|
497.3
|
|
|
497.1
|
|
|
500.7
|
|
||||
Diluted
|
|
111.1
|
|
|
|
497.3
|
|
|
497.1
|
|
|
500.7
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal years ended September 30,
|
||||||||||
|
|
|
|
2017
|
|
2016
|
||||||||||
Net income (loss)
|
$
|
287
|
|
|
|
$
|
2,977
|
|
|
$
|
(182
|
)
|
|
$
|
(730
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Pension, post-retirement and postemployment benefit-related items, net of income taxes of $(19) for the period from December 15, 2017 through September 30, 2018; $(58) for the period from October 1, 2017 through December 15, 2017; and $(19) for fiscal 2017
|
51
|
|
|
|
655
|
|
|
252
|
|
|
(259
|
)
|
||||
Cumulative translation adjustment
|
(31
|
)
|
|
|
3
|
|
|
(39
|
)
|
|
(18
|
)
|
||||
Change in interest rate swaps, net of income taxes of $1 for the period from December 16, 2017 through September 30, 2018
|
(2
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other comprehensive income (loss)
|
18
|
|
|
|
658
|
|
|
213
|
|
|
(277
|
)
|
||||
Elimination of Predecessor Company accumulated other comprehensive loss
|
—
|
|
|
|
790
|
|
|
—
|
|
|
—
|
|
||||
Total comprehensive income (loss)
|
$
|
305
|
|
|
|
$
|
4,425
|
|
|
$
|
31
|
|
|
$
|
(1,007
|
)
|
|
Successor
|
|
|
Predecessor
|
||||
|
September 30, 2018
|
|
|
September 30, 2017
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
700
|
|
|
|
$
|
876
|
|
Accounts receivable, net
|
377
|
|
|
|
536
|
|
||
Inventory
|
81
|
|
|
|
90
|
|
||
Other current assets
|
170
|
|
|
|
275
|
|
||
TOTAL CURRENT ASSETS
|
1,328
|
|
|
|
1,777
|
|
||
Property, plant and equipment, net
|
250
|
|
|
|
200
|
|
||
Deferred income taxes, net
|
29
|
|
|
|
—
|
|
||
Intangible assets, net
|
3,234
|
|
|
|
311
|
|
||
Goodwill
|
2,764
|
|
|
|
3,542
|
|
||
Other assets
|
74
|
|
|
|
68
|
|
||
TOTAL ASSETS
|
$
|
7,679
|
|
|
|
$
|
5,898
|
|
LIABILITIES
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Debt maturing within one year
|
$
|
29
|
|
|
|
$
|
725
|
|
Accounts payable
|
266
|
|
|
|
282
|
|
||
Payroll and benefit obligations
|
145
|
|
|
|
127
|
|
||
Deferred revenue
|
484
|
|
|
|
614
|
|
||
Business restructuring reserve
|
51
|
|
|
|
35
|
|
||
Other current liabilities
|
148
|
|
|
|
90
|
|
||
TOTAL CURRENT LIABILITIES
|
1,123
|
|
|
|
1,873
|
|
||
Non-current liabilities:
|
|
|
|
|
||||
Long-term debt, net of current portion
|
3,097
|
|
|
|
—
|
|
||
Pension obligations
|
671
|
|
|
|
513
|
|
||
Other post-retirement obligations
|
176
|
|
|
|
—
|
|
||
Deferred income taxes, net
|
140
|
|
|
|
32
|
|
||
Business restructuring reserve
|
47
|
|
|
|
34
|
|
||
Other liabilities
|
374
|
|
|
|
170
|
|
||
TOTAL NON-CURRENT LIABILITIES
|
4,505
|
|
|
|
749
|
|
||
LIABILITIES SUBJECT TO COMPROMISE
|
—
|
|
|
|
7,705
|
|
||
TOTAL LIABILTIES
|
5,628
|
|
|
|
10,327
|
|
||
Commitments and contingencies (Note 22)
|
|
|
|
|
||||
Predecessor equity awards on redeemable shares
|
—
|
|
|
|
7
|
|
||
Predecessor preferred stock, $0.001 par value, 250,000 shares authorized at September 30, 2017
|
|
|
|
|
||||
Convertible Series B preferred stock; 48,922 shares issued and outstanding at September 30, 2017
|
—
|
|
|
|
393
|
|
||
Series A preferred stock; 125,000 shares issued and outstanding at September 30, 2017
|
—
|
|
|
|
184
|
|
||
STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
||||
Successor preferred stock, $0.01 par value; 55,000,000 shares authorized, no shares issued or outstanding at September 30, 2018
|
—
|
|
|
|
—
|
|
||
Predecessor common stock, $0.001 par value; 750,000,000 shares authorized, 494,768,243 shares issued and outstanding at September 30, 2017
|
—
|
|
|
|
—
|
|
||
Successor common stock, $0.01 par value; 550,000,000 shares authorized, 110,218,653 shares issued and 110,012,790 shares outstanding at September 30, 2018
|
1
|
|
|
|
—
|
|
||
Additional paid-in capital
|
1,745
|
|
|
|
2,389
|
|
||
Retained earnings (accumulated deficit)
|
287
|
|
|
|
(5,954
|
)
|
||
Accumulated other comprehensive income (loss)
|
18
|
|
|
|
(1,448
|
)
|
||
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)
|
2,051
|
|
|
|
(5,013
|
)
|
||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
$
|
7,679
|
|
|
|
$
|
5,898
|
|
|
|
Common Stock
|
|
Additional
Paid-In Capital |
|
Accumulated
Deficit |
|
Accumulated
Other Comprehensive Loss |
|
Total
Stockholders' Deficit |
|||||||||||||
|
|
Shares
|
|
Par Value
|
|
|
|
|
|||||||||||||||
Balance as of September 30, 2015 (Predecessor)
|
|
491.8
|
|
|
$
|
—
|
|
|
$
|
2,425
|
|
|
$
|
(5,042
|
)
|
|
$
|
(1,384
|
)
|
|
$
|
(4,001
|
)
|
Issuance of common stock, net of shares redeemed and canceled, under employee stock option plan
|
|
2.8
|
|
|
|
|
(3
|
)
|
|
|
|
|
|
(3
|
)
|
||||||||
Amortization of share-based compensation
|
|
|
|
|
|
16
|
|
|
|
|
|
|
16
|
|
|||||||||
Accrued dividends on Series A preferred stock
|
|
|
|
|
|
(8
|
)
|
|
|
|
|
|
(8
|
)
|
|||||||||
Accrued dividends on Series B preferred stock
|
|
|
|
|
|
(20
|
)
|
|
|
|
|
|
(20
|
)
|
|||||||||
Accretion on Series B preferred stock
|
|
|
|
|
|
(13
|
)
|
|
|
|
|
|
(13
|
)
|
|||||||||
Reclassifications to equity awards on redeemable shares
|
|
|
|
|
|
13
|
|
|
|
|
|
|
13
|
|
|||||||||
Net loss
|
|
|
|
|
|
|
|
(730
|
)
|
|
|
|
(730
|
)
|
|||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
(277
|
)
|
|
(277
|
)
|
|||||||||
Balance as of September 30, 2016 (Predecessor)
|
|
494.6
|
|
|
$
|
—
|
|
|
$
|
2,410
|
|
|
$
|
(5,772
|
)
|
|
$
|
(1,661
|
)
|
|
$
|
(5,023
|
)
|
Issuance of common stock, net of shares redeemed and canceled, under employee stock option plan
|
|
0.2
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
||||||||
Amortization of share-based compensation
|
|
|
|
|
|
11
|
|
|
|
|
|
|
11
|
|
|||||||||
Accrued dividends on Series A preferred stock
|
|
|
|
|
|
(9
|
)
|
|
|
|
|
|
(9
|
)
|
|||||||||
Accrued dividends on Series B preferred stock
|
|
|
|
|
|
(22
|
)
|
|
|
|
|
|
(22
|
)
|
|||||||||
Reclassifications to equity awards on redeemable shares
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
(1
|
)
|
|||||||||
Net loss
|
|
|
|
|
|
|
|
(182
|
)
|
|
|
|
(182
|
)
|
|||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
213
|
|
|
213
|
|
|||||||||
Balance as of September 30, 2017 (Predecessor)
|
|
494.8
|
|
|
$
|
—
|
|
|
$
|
2,389
|
|
|
$
|
(5,954
|
)
|
|
$
|
(1,448
|
)
|
|
$
|
(5,013
|
)
|
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
|
|
Additional
Paid-In Capital |
|
Retained Earnings
|
|
Accumulated
Other Comprehensive Income |
|
Total
Stockholders' Equity |
|||||||||||||
|
|
Shares
|
|
Par Value
|
|
|
|
|
|||||||||||||||
Balance as of December 15, 2017 (Predecessor)
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Issuance of Successor common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock issued for Predecessor debt
|
|
103.9
|
|
|
1
|
|
|
1,575
|
|
|
|
|
|
|
1,576
|
|
|||||||
Common stock issued for 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
|
|
|
|
|
|
19
|
|
|
|
|
|
|
19
|
|
|||||||||
Net income
|
|
|
|
|
|
|
|
287
|
|
|
|
|
287
|
|
|||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
18
|
|
|
18
|
|
|||||||||
Balance as of September 30, 2018 (Successor)
|
|
110.2
|
|
|
$
|
1
|
|
|
$
|
1,745
|
|
|
$
|
287
|
|
|
$
|
18
|
|
|
$
|
2,051
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal years ended September 30,
|
||||||||||
|
|
|
|
2017
|
|
2016
|
||||||||||
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
287
|
|
|
|
$
|
2,977
|
|
|
$
|
(182
|
)
|
|
$
|
(730
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
|
|
|
|
|
|
|
|
|||||||||
Depreciation and amortization
|
384
|
|
|
|
31
|
|
|
326
|
|
|
374
|
|
||||
Share-based compensation
|
19
|
|
|
|
—
|
|
|
11
|
|
|
16
|
|
||||
Amortization of debt issuance costs
|
4
|
|
|
|
—
|
|
|
36
|
|
|
12
|
|
||||
Accretion of debt discount
|
4
|
|
|
|
—
|
|
|
25
|
|
|
8
|
|
||||
Change in fair value of Preferred Series B derivative
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(73
|
)
|
||||
Deferred income taxes, net
|
(588
|
)
|
|
|
455
|
|
|
(39
|
)
|
|
(53
|
)
|
||||
Gain on sale of Networking business
|
—
|
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Impairment of indefinite-lived intangible assets
|
—
|
|
|
|
—
|
|
|
65
|
|
|
100
|
|
||||
Goodwill impairment
|
—
|
|
|
|
—
|
|
|
52
|
|
|
442
|
|
||||
Loss on investment
|
—
|
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||
Post-retirement and pension curtailments
|
—
|
|
|
|
—
|
|
|
(8
|
)
|
|
1
|
|
||||
Change in fair value of emergence date warrants
|
17
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Unrealized gain on foreign currency transactions
|
(36
|
)
|
|
|
—
|
|
|
(4
|
)
|
|
(12
|
)
|
||||
Other non-cash charges, net
|
3
|
|
|
|
—
|
|
|
4
|
|
|
3
|
|
||||
Reorganization items:
|
|
|
|
|
|
|
|
|
||||||||
Net gain on settlement of Liabilities subject to compromise
|
—
|
|
|
|
(1,778
|
)
|
|
—
|
|
|
—
|
|
||||
Payment to PBGC
|
—
|
|
|
|
(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
|
|
|
52
|
|
|
—
|
|
||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Accounts receivable
|
13
|
|
|
|
40
|
|
|
24
|
|
|
94
|
|
||||
Inventory
|
36
|
|
|
|
—
|
|
|
24
|
|
|
17
|
|
||||
Accounts payable
|
(16
|
)
|
|
|
(40
|
)
|
|
(27
|
)
|
|
(37
|
)
|
||||
Payroll and benefit obligations
|
(71
|
)
|
|
|
16
|
|
|
(34
|
)
|
|
(188
|
)
|
||||
Business restructuring reserve
|
29
|
|
|
|
(7
|
)
|
|
(51
|
)
|
|
(19
|
)
|
||||
Deferred revenue
|
160
|
|
|
|
28
|
|
|
(44
|
)
|
|
28
|
|
||||
Other assets and liabilities
|
(43
|
)
|
|
|
(18
|
)
|
|
63
|
|
|
119
|
|
||||
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES
|
202
|
|
|
|
(414
|
)
|
|
291
|
|
|
113
|
|
||||
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures
|
(61
|
)
|
|
|
(13
|
)
|
|
(57
|
)
|
|
(94
|
)
|
||||
Capitalized software development costs
|
—
|
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
||||
Acquisition of businesses, net of cash acquired
|
(157
|
)
|
|
|
—
|
|
|
(4
|
)
|
|
(20
|
)
|
||||
Proceeds from sale of Networking business
|
—
|
|
|
|
—
|
|
|
70
|
|
|
—
|
|
||||
Proceeds from sale-leaseback transactions
|
17
|
|
|
|
—
|
|
|
—
|
|
|
14
|
|
||||
Restricted cash
|
65
|
|
|
|
21
|
|
|
(80
|
)
|
|
—
|
|
||||
Other investing activities, net
|
2
|
|
|
|
—
|
|
|
3
|
|
|
2
|
|
||||
NET CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES
|
(134
|
)
|
|
|
8
|
|
|
(70
|
)
|
|
(100
|
)
|
||||
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
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Proceeds from foreign asset-based revolving credit facility
|
—
|
|
|
|
—
|
|
|
—
|
|
|
53
|
|
||||
Repayment of foreign asset-based revolving credit facility
|
—
|
|
|
|
—
|
|
|
(55
|
)
|
|
(18
|
)
|
||||
Proceeds from domestic asset-based revolving credit facility
|
—
|
|
|
|
—
|
|
|
—
|
|
|
260
|
|
||||
Repayment of domestic asset-based revolving credit facility
|
—
|
|
|
|
—
|
|
|
(77
|
)
|
|
(238
|
)
|
||||
Repayment of long-term debt, including adequate protection payments
|
(22
|
)
|
|
|
(111
|
)
|
|
(223
|
)
|
|
(25
|
)
|
||||
Debt issuance costs
|
(10
|
)
|
|
|
(97
|
)
|
|
(1
|
)
|
|
—
|
|
||||
Proceeds from borrowings on revolving loans under the senior secured credit agreement
|
—
|
|
|
|
—
|
|
|
—
|
|
|
35
|
|
||||
Repayments of borrowings on revolving loans under the senior secured credit agreement
|
—
|
|
|
|
—
|
|
|
(18
|
)
|
|
(35
|
)
|
||||
Payments related to sale-leaseback transactions
|
(9
|
)
|
|
|
(4
|
)
|
|
(19
|
)
|
|
(19
|
)
|
||||
Other financing activities, net
|
(3
|
)
|
|
|
—
|
|
|
(5
|
)
|
|
(4
|
)
|
||||
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES
|
273
|
|
|
|
(102
|
)
|
|
314
|
|
|
9
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(7
|
)
|
|
|
(2
|
)
|
|
5
|
|
|
(9
|
)
|
||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
334
|
|
|
|
(510
|
)
|
|
540
|
|
|
13
|
|
||||
Cash and cash equivalents at beginning of period
|
366
|
|
|
|
876
|
|
|
336
|
|
|
323
|
|
||||
Cash and cash equivalents at end of period
|
$
|
700
|
|
|
|
$
|
366
|
|
|
$
|
876
|
|
|
$
|
336
|
|
|
December 16, 2017 (Successor)
|
||||||||||
(In millions, except per share amounts)
|
As Previously Reported
|
|
Adjustments
|
|
Revised
|
||||||
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
|
||||||
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 canceled, 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 of 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 canceled, 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 canceled, 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
|
•
|
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 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
|
90
|
|
|
—
|
|
|
|
|
29
|
|
|
(22)
|
|
119
|
|
||||
Other current assets
|
374
|
|
|
(58
|
)
|
|
(2)
|
|
(66
|
)
|
|
(23)
|
|
250
|
|
||||
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 post-retirement 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
|
90
|
|
|
—
|
|
|
|
|
29
|
|
|
(22)
|
|
119
|
|
||||
Other current assets
|
374
|
|
|
(58
|
)
|
|
(2)
|
|
(66
|
)
|
|
(23)
|
|
250
|
|
||||
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 and 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
of 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 canceled 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 a 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 the 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 15, 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
|
|
(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 Company 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
|
|
(In millions)
|
Products & Solutions
|
|
Services
|
|
Total
|
||||||
Cost
|
$
|
2,668
|
|
|
$
|
2,537
|
|
|
$
|
5,205
|
|
Accumulated impairment losses
|
(1,576
|
)
|
|
—
|
|
|
(1,576
|
)
|
|||
Balance as of September 30, 2016 (Predecessor)
|
1,092
|
|
|
2,537
|
|
|
3,629
|
|
|||
Sale of Networking business
|
—
|
|
|
(36
|
)
|
|
(36
|
)
|
|||
Impairment loss
|
—
|
|
|
(52
|
)
|
|
(52
|
)
|
|||
Adjustments
|
1
|
|
|
—
|
|
|
1
|
|
|||
Balance as of September 30, 2017 (Predecessor)
|
$
|
1,093
|
|
|
$
|
2,449
|
|
|
$
|
3,542
|
|
|
As Previously Reported
|
||||||||||
(In millions)
|
Products & Solutions
|
|
Services
|
|
Total
|
||||||
Cost
|
$
|
2,669
|
|
|
$
|
2,501
|
|
|
$
|
5,170
|
|
Accumulated impairment losses
|
(1,576
|
)
|
|
(52
|
)
|
|
(1,628
|
)
|
|||
Balance as of September 30, 2017 (Predecessor)
|
1,093
|
|
|
2,449
|
|
|
3,542
|
|
|||
Adjustments
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Impact of fresh start accounting
|
68
|
|
|
(977
|
)
|
|
(909
|
)
|
|||
Balance as of December 15, 2017 (Predecessor)
|
$
|
1,160
|
|
|
$
|
1,472
|
|
|
$
|
2,632
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Balance as of December 16, 2017 (Successor)
|
$
|
1,160
|
|
|
$
|
1,472
|
|
|
$
|
2,632
|
|
|
Adjustments
|
||||||||||
(In millions)
|
Products & Solutions
|
|
Services
|
|
Total
|
||||||
Cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accumulated impairment losses
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance as of September 30, 2017 (Predecessor)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Impact of fresh start accounting
|
11
|
|
|
15
|
|
|
26
|
|
|||
Balance as of December 15, 2017 (Predecessor)
|
$
|
11
|
|
|
$
|
15
|
|
|
$
|
26
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Balance as of December 16, 2017 (Successor)
|
$
|
11
|
|
|
$
|
15
|
|
|
$
|
26
|
|
|
Revised
|
||||||||||
(In millions)
|
Products & Solutions
|
|
Services
|
|
Total
|
||||||
Cost
|
$
|
2,669
|
|
|
$
|
2,501
|
|
|
$
|
5,170
|
|
Accumulated impairment losses
|
(1,576
|
)
|
|
(52
|
)
|
|
(1,628
|
)
|
|||
Balance as of September 30, 2017 (Predecessor)
|
1,093
|
|
|
2,449
|
|
|
3,542
|
|
|||
Adjustments
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Impact of fresh start accounting
|
79
|
|
|
(962
|
)
|
|
(883
|
)
|
|||
Balance as of December 15, 2017 (Predecessor)
|
$
|
1,171
|
|
|
$
|
1,487
|
|
|
$
|
2,658
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Balance as of December 16, 2017 (Successor)
|
$
|
1,171
|
|
|
$
|
1,487
|
|
|
$
|
2,658
|
|
Spoken acquisition
|
116
|
|
|
—
|
|
|
116
|
|
|||
Foreign currency fluctuations
|
(4
|
)
|
|
(6
|
)
|
|
(10
|
)
|
|||
Balance as of September 30, 2018 (Successor)
|
$
|
1,283
|
|
|
$
|
1,481
|
|
|
$
|
2,764
|
|
(In millions)
|
Technology and Patents |
|
Customer
Relationships and Other Intangibles |
|
Trademarks
and Trade Names |
|
Total
|
||||||||
Balance as of September 30, 2018 (Successor)
|
|
|
|
|
|
|
|
||||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||||
Cost
|
$
|
959
|
|
|
$
|
2,157
|
|
|
$
|
43
|
|
|
$
|
3,159
|
|
Accumulated amortization
|
(135
|
)
|
|
(124
|
)
|
|
(3
|
)
|
|
(262
|
)
|
||||
Finite-lived intangible assets, net
|
824
|
|
|
2,033
|
|
|
40
|
|
|
2,897
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Indefinite-lived intangible assets
|
5
|
|
|
—
|
|
|
332
|
|
|
337
|
|
||||
Intangible assets, net
|
$
|
829
|
|
|
$
|
2,033
|
|
|
$
|
372
|
|
|
$
|
3,234
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Balance as of September 30, 2017 (Predecessor)
|
|
|
|
|
|
|
|
||||||||
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
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal years ended September 30,
|
||||||||||
(In millions)
|
|
|
|
|
2017
|
|
2016
|
||||||||||
DEPRECIATION AND AMORTIZATION
|
|
|
|
|
|
|
|
|
|
||||||||
Amortization of software development costs (included in Costs)
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Amortization of intangible assets (included in Costs and Operating expenses)
|
|
262
|
|
|
|
13
|
|
|
224
|
|
|
256
|
|
||||
Depreciation and amortization of property, plant and equipment and internal use software (included in Costs and Operating expenses)
|
|
122
|
|
|
|
18
|
|
|
101
|
|
|
117
|
|
||||
Total depreciation and amortization
|
|
$
|
384
|
|
|
|
$
|
31
|
|
|
$
|
326
|
|
|
$
|
374
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
OTHER INCOME (EXPENSE), NET
|
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
|
$
|
5
|
|
|
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
1
|
|
Foreign currency gains, net
|
|
28
|
|
|
|
—
|
|
|
2
|
|
|
10
|
|
||||
Income from TSA, net
|
|
5
|
|
|
|
3
|
|
|
3
|
|
|
—
|
|
||||
Gain on sale of Networking business
|
|
—
|
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Loss on investment
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
||||
Change in fair value of Preferred B embedded derivative
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
73
|
|
||||
Other pension and post-retirement benefit credits (costs), net
|
|
13
|
|
|
|
(8
|
)
|
|
(34
|
)
|
|
(27
|
)
|
||||
Change in fair value of Emergence Date Warrants
|
|
(17
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Gain on sale of long-lived assets
|
|
1
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other, net
|
|
—
|
|
|
|
1
|
|
|
(2
|
)
|
|
(5
|
)
|
||||
Total other income (expense), net
|
|
$
|
35
|
|
|
|
$
|
(2
|
)
|
|
$
|
(25
|
)
|
|
$
|
41
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||||||||||
|
|
Period from December 16, 2017
through September 30, 2018 |
|
|
As Previously Reported
|
|
Adjustments
|
|
Revised
|
|
|
||||||||||||||
|
|
|
|
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 |
|
Fiscal years ended September 30,
|
|||||||||||||||
(In millions)
|
|
|
|
|
|
|
2017
|
|
2016
|
||||||||||||||||
REORGANIZATION ITEMS, NET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
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
|
|
|
—
|
|
|
—
|
|
||||||
Bankruptcy-related professional fees
|
|
—
|
|
|
|
(56
|
)
|
|
—
|
|
|
(56
|
)
|
|
(66
|
)
|
|
—
|
|
||||||
Contract rejection fees / lease terminations
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
||||||
DIP Credit Agreement financing costs
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
||||||
Other items, net
|
|
—
|
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
||||||
Reorganization items, net
|
|
$
|
—
|
|
|
|
$
|
3,416
|
|
|
$
|
—
|
|
|
$
|
3,416
|
|
|
$
|
(98
|
)
|
|
$
|
—
|
|
Cash payments for reorganization items
|
|
$
|
1
|
|
|
|
$
|
2,524
|
|
|
$
|
—
|
|
|
$
|
2,524
|
|
|
$
|
47
|
|
|
$
|
—
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal years ended September 30,
|
||||||||||
(In millions)
|
|
|
|
|
2017
|
|
2016
|
||||||||||
VALUATION AND QUALIFYING ACCOUNTS
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for Doubtful Accounts Receivable:
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
$
|
—
|
|
|
|
$
|
13
|
|
|
$
|
16
|
|
|
$
|
15
|
|
Increase (decrease) in expense
|
|
2
|
|
|
|
1
|
|
|
(3
|
)
|
|
1
|
|
||||
Reductions
|
|
—
|
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Impact of fresh start accounting
|
|
—
|
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
||||
Balance at end of period
|
|
$
|
2
|
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
16
|
|
Deferred Tax Asset Valuation Allowance:
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
$
|
836
|
|
|
|
$
|
2,152
|
|
|
$
|
2,256
|
|
|
$
|
1,976
|
|
Increase (decrease) in expense
|
|
105
|
|
|
|
(452
|
)
|
|
(65
|
)
|
|
203
|
|
||||
(Reductions) additions
|
|
(22
|
)
|
|
|
(393
|
)
|
|
(39
|
)
|
|
77
|
|
||||
Impact of fresh start accounting
|
|
—
|
|
|
|
(471
|
)
|
|
—
|
|
|
—
|
|
||||
Balance at end of period
|
|
$
|
919
|
|
|
|
$
|
836
|
|
|
$
|
2,152
|
|
|
$
|
2,256
|
|
|
|
Successor
|
|
|
Predecessor
|
||||
(In millions)
|
|
As of September 30, 2018
|
|
|
As of September 30, 2017
|
||||
PROPERTY, PLANT AND EQUIPMENT, NET
|
|
|
|
|
|
||||
Leasehold improvements
|
|
$
|
105
|
|
|
|
$
|
142
|
|
Machinery and equipment
|
|
65
|
|
|
|
173
|
|
||
Rental equipment
|
|
125
|
|
|
|
241
|
|
||
Assets under construction
|
|
14
|
|
|
|
13
|
|
||
Internal use software
|
|
112
|
|
|
|
240
|
|
||
Total property, plant and equipment
|
|
421
|
|
|
|
809
|
|
||
Less: Accumulated depreciation and amortization
|
|
(171
|
)
|
|
|
(609
|
)
|
||
Property, plant and equipment, net
|
|
$
|
250
|
|
|
|
$
|
200
|
|
|
|
Successor
|
|
|
Predecessor
|
||||
(In millions)
|
|
As of September 30, 2018
|
|
|
As of September 30, 2017
|
||||
LIABILITIES SUBJECT TO COMPROMISE
|
|
|
|
|
|
||||
Accounts payable
|
|
$
|
—
|
|
|
|
$
|
40
|
|
Debt subject to compromise including accrued interest
(1)
|
|
—
|
|
|
|
5,832
|
|
||
Pension obligations
|
|
—
|
|
|
|
1,012
|
|
||
Payroll and benefit obligations
|
|
—
|
|
|
|
45
|
|
||
Other post-retirement obligations
|
|
—
|
|
|
|
211
|
|
||
Deferred revenue
|
|
—
|
|
|
|
95
|
|
||
Deferred income taxes
|
|
—
|
|
|
|
113
|
|
||
Other liabilities
|
|
—
|
|
|
|
357
|
|
||
Consolidated Liabilities subject to compromise
|
|
—
|
|
|
|
7,705
|
|
||
Payables to non-debtor subsidiaries
|
|
—
|
|
|
|
100
|
|
||
Debtors’ Liabilities subject to compromise
|
|
$
|
—
|
|
|
|
$
|
7,805
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal years ended September 30,
|
||||||||||
(In millions)
|
|
|
|
|
2017
|
|
2016
|
||||||||||
OTHER PAYMENTS
|
|
|
|
|
|
|
|
|
|
||||||||
Interest payments
|
|
$
|
149
|
|
|
|
$
|
15
|
|
|
$
|
138
|
|
|
$
|
425
|
|
Income tax payments
|
|
$
|
22
|
|
|
|
$
|
7
|
|
|
$
|
33
|
|
|
$
|
51
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
NON-CASH INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||
Acquisition of equipment under capital lease
|
|
$
|
2
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
Increase (decrease) in Accounts payable for Capital expenditures
|
|
$
|
1
|
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(4
|
)
|
(In millions)
|
Employee Separation Costs
|
|
Lease Obligations
|
|
Total
|
||||||
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
|
|
Restructuring charges
|
70
|
|
|
10
|
|
|
80
|
|
|||
Cash payments
|
(23
|
)
|
|
(10
|
)
|
|
(33
|
)
|
|||
Impact of foreign currency fluctuations
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Balance as of September 30, 2018 (Successor)
|
$
|
54
|
|
|
$
|
—
|
|
|
$
|
54
|
|
(In millions)
|
Employee Separation Costs
|
|
Lease Obligations
|
|
Total
|
||||||
Restructuring charges
|
$
|
18
|
|
|
$
|
1
|
|
|
$
|
19
|
|
Cash payments
|
(14
|
)
|
|
—
|
|
|
(14
|
)
|
|||
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
|
)
|
|||
Impact of foreign currency fluctuations
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Balance as of September 30, 2018 (Successor)
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
(In millions)
|
Employee Separation Costs
|
|
Lease Obligations
|
|
Total
|
||||||
Restructuring charges
|
$
|
98
|
|
|
$
|
—
|
|
|
$
|
98
|
|
Cash payments
|
(47
|
)
|
|
—
|
|
|
(47
|
)
|
|||
Balance as of September 30, 2016 (Predecessor)
|
51
|
|
|
—
|
|
|
51
|
|
|||
Cash payments
|
(25
|
)
|
|
—
|
|
|
(25
|
)
|
|||
Adjustments
(1)
|
2
|
|
|
—
|
|
|
2
|
|
|||
Impact of foreign currency fluctuations
|
2
|
|
|
—
|
|
|
2
|
|
|||
Balance as of September 30, 2017 (Predecessor)
|
30
|
|
|
—
|
|
|
30
|
|
|||
Restructuring charges
|
1
|
|
|
—
|
|
|
1
|
|
|||
Cash payments
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Adjustments - fresh start items
|
4
|
|
|
—
|
|
|
4
|
|
|||
Balance as of December 15, 2017 (Predecessor)
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
33
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Balance as of December 16, 2017 (Successor)
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
33
|
|
Cash payments
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|||
Balance as of September 30, 2018 (Successor)
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
25
|
|
(1)
|
Includes changes in estimates for increases and decreases in costs related to the fiscal
2016
restructuring program, which are recorded in Restructuring charges, net in the Consolidated Statements of Operations in the period of the adjustment.
|
(In millions)
|
Employee Separation Costs
|
|
Lease Obligations
|
|
Total
|
||||||
Balance as of September 30, 2015 (Predecessor)
|
$
|
95
|
|
|
$
|
62
|
|
|
$
|
157
|
|
Cash payments
|
(55
|
)
|
|
(20
|
)
|
|
(75
|
)
|
|||
Adjustments
(1)
|
3
|
|
|
2
|
|
|
5
|
|
|||
Impact of foreign currency fluctuations
|
(1
|
)
|
|
(3
|
)
|
|
(4
|
)
|
|||
Balance as of September 30, 2016 (Predecessor)
|
42
|
|
|
41
|
|
|
83
|
|
|||
Cash payments
|
(22
|
)
|
|
(16
|
)
|
|
(38
|
)
|
|||
Adjustments
(1)(2)
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||
Balance as of September 30, 2017 (Predecessor)
|
21
|
|
|
24
|
|
|
45
|
|
|||
Restructuring charges
|
—
|
|
|
1
|
|
|
1
|
|
|||
Cash payments
|
(1
|
)
|
|
(17
|
)
|
|
(18
|
)
|
|||
Adjustments - reorganization items
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Balance as of December 15, 2017 (Predecessor)
|
$
|
20
|
|
|
$
|
7
|
|
|
$
|
27
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Balance as of December 16, 2017 (Successor)
|
$
|
20
|
|
|
$
|
7
|
|
|
$
|
27
|
|
Restructuring charges
|
—
|
|
|
1
|
|
|
1
|
|
|||
Cash payments
|
(8
|
)
|
|
(2
|
)
|
|
(10
|
)
|
|||
Balance as of September 30, 2018 (Successor)
|
$
|
12
|
|
|
$
|
6
|
|
|
$
|
18
|
|
(1)
|
Includes changes in estimates for increases and decreases in costs related to fiscal 2009 through
2015
restructuring programs, which are recorded in Restructuring charges, net in the Consolidated Statements of Operations in the period of the adjustment. Also, includes changes in estimates whereby all increases in costs related to the fiscal 2008 (Predecessor)
|
(2)
|
Includes a transfer of reserve of
$6 million
associated with the sale of the Networking business in July 2017 related to lease obligations.
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
September 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 due December 15, 2024
|
$
|
2,903
|
|
|
$
|
2,870
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Convertible 2.25% senior notes due June 15, 2023
|
350
|
|
|
256
|
|
|
|
—
|
|
|
—
|
|
||||
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
|
$
|
3,253
|
|
|
3,126
|
|
|
|
$
|
6,557
|
|
|
6,557
|
|
||
Debt maturing within one year
|
|
|
(29
|
)
|
|
|
|
|
(725
|
)
|
||||||
Long-term debt, net of current portion
(1)
|
|
|
$
|
3,097
|
|
|
|
|
|
$
|
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 canceled
$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 canceled
$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 days
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)
|
|
September 30, 2018
|
||
Principal
|
|
$
|
350
|
|
Less:
|
|
|
||
Unamortized debt discount
|
|
(87
|
)
|
|
Unamortized issuance costs
|
|
(7
|
)
|
|
Net carrying amount
|
|
$
|
256
|
|
(In millions)
|
|
September 30, 2018
|
||
Debt discount for conversion option
|
|
$
|
92
|
|
Less:
|
|
|
||
Issuance costs
|
|
(3
|
)
|
|
Net carrying amount
|
|
$
|
89
|
|
•
|
Senior Secured Term Loans - The term B-3 loans, term B-4 loans, term B-6 loans and term B-7 loans each bore interest at a rate per annum equal to either a base rate (subject to a floor of
2.25%
in the case of the term B-4 loans and
2.00%
in the case of the term B-6 loans and term B-7 loans) or a LIBOR rate (subject to a floor of
1.25%
in the case of the term B-4 loans and
1.00%
in the case of the term B-6 loans and term B-7 loans), in each case plus an applicable margin. Subject to the floor described in the immediately preceding sentence, the base rate was determined by reference to the higher of (1) the prime rate of Citibank, N.A. and (2) the federal funds effective rate plus 1/2 of 1%. The applicable margin for borrowings of term B-3 loans, term B-4 loans, term B-6 loans and term B-7 loans was
3.50%
,
5.25%
,
4.50%
and
4.25%
per annum, respectively, with respect to base rate borrowings and
4.50%
,
6.25%
,
5.50%
and
5.25%
, per annum, respectively, with respect to LIBOR borrowings. The applicable margin on the term B-4 loans, term B-6 loans and term B-7 loans was subject to increase pursuant to the Company's senior secured credit agreement in connection with the making of certain refinancing, extended or replacement term loans under the senior secured credit agreement with an effective yield (as defined in the senior secured credit agreement) greater than the applicable effective yield payable in respect of the applicable loans at such time plus
50
basis points.
|
•
|
7%
Senior Secured Notes - The
7%
senior secured notes bore interest at a rate of
7%
per annum and were scheduled to mature on April 1, 2019. The
7%
senior secured notes were redeemable at
101.75%
of the principal amount redeemed, which decreased to
100%
on or after April 1, 2017. Upon the occurrence of specific kinds of changes of control, the Company would have been required to make an offer to purchase the
7%
senior secured notes at
101%
of their principal amount. If the Company or any of its restricted subsidiaries engaged in certain asset sales, under certain circumstances the Company would have been required to use the net proceeds to make an offer to purchase the
7%
senior secured notes at
100%
of their principal amount.
|
•
|
9%
Senior Secured Notes - The
9%
senior secured notes bore interest at a rate of
9%
per annum and were scheduled to mature on April 1, 2019. The
9%
senior secured notes were redeemable at
102.25%
of the principal amount redeemed, which decreased to
100%
on or after April 1, 2017. Upon the occurrence of specific kinds of changes of control, the Company would have been required to make an offer to purchase the
9%
senior secured notes at
101%
of their principal amount. If the Company or any of its restricted subsidiaries engaged in certain asset sales, under certain circumstances the Company would have been required to use the net proceeds to make an offer to purchase the
9%
senior secured notes at
100%
of their principal amount.
|
•
|
10.50%
Senior Secured Notes - The
10.50%
senior secured notes bore interest at a rate of
10.50%
per annum and were scheduled to mature on March 1, 2021. The
10.50%
senior secured notes were redeemable at
107.875%
of the principal amount redeemed commencing March 1, 2017, which decreased to
105.250%
on March 1, 2018, to
102.625%
on March 1, 2019 and to
100%
on or after March 1, 2020. The Company could have redeemed all or part of the notes at any time prior to March 1, 2017 at
100%
of the principal amount redeemed plus a “make-whole” premium. Upon the occurrence of specific kinds of changes of control, the Company would have been required to make an offer to purchase the
10.50%
senior secured notes at
101%
of their principal amount. If the Company or any of its restricted subsidiaries engaged in certain asset sales, under certain circumstances the Company would have been required to use the net proceeds to make an offer to purchase the
10.50%
senior secured notes at
100%
of their principal amount.
|
|
|
|
As Previously Reported
|
|
Revised
|
|||
|
September 30, 2018
|
|
December 15, 2017
|
|
December 15, 2017
|
|||
Expected volatility
|
50.14
|
%
|
|
54.57
|
%
|
|
54.38
|
%
|
Risk-free interest rates
|
2.90
|
%
|
|
2.20
|
%
|
|
2.20
|
%
|
Expected remaining life (in years)
|
4.21
|
|
|
5.00
|
|
|
5.00
|
|
Price per share of common stock
|
$22.14
|
|
$14.93
|
|
$15.16
|
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
|
|
|
September 30, 2018
|
|
|
September 30, 2017
|
||||||||||||
(In millions)
|
|
Balance Sheet Caption
|
|
Asset
|
|
Liability
|
|
|
Asset
|
|
Liability
|
||||||||
Derivatives Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
|
Other assets
|
|
$
|
3
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate contracts
|
|
Other current liabilities
|
|
—
|
|
|
7
|
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
3
|
|
|
7
|
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Emergence Date Warrants
|
|
Other liabilities
|
|
—
|
|
|
34
|
|
|
|
—
|
|
|
—
|
|
||||
Total derivative fair value
|
|
|
|
$
|
3
|
|
|
$
|
41
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
|
Period from
December 16, 2017 through September 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)
|
||||||||
Financial Statement Line Item in which Cash Flow Hedges are Recorded
|
|
$
|
(169
|
)
|
|
$
|
—
|
|
|
|
$
|
(14
|
)
|
|
$
|
658
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Impact of cash flow hedging relationships:
|
|
|
|
|
|
|
|
|
|
||||||||
Loss recognized in AOCI - on interest rate swaps
|
|
—
|
|
|
(9
|
)
|
|
|
—
|
|
|
—
|
|
||||
Interest expense reclassified from AOCI
|
|
(6
|
)
|
|
6
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
|
|
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal year ended September 30,
|
||||||||||
(In millions)
|
|
Location of Derivative Pre-tax Gain (Loss)
|
|
|
|
|
2017
|
|
2016
|
||||||||||
Emergence Date Warrants
|
|
Other income (expense), net
|
|
$
|
(17
|
)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Preferred Series B embedded derivative
|
|
Other income (expense), net
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
73
|
|
||||
Foreign currency forward contracts
|
|
Other income (expense), net
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
|
September 30, 2018
|
|
|
September 30, 2017
|
||||||||||||
(In millions)
|
|
Asset
|
|
Liability
|
|
|
Asset
|
|
Liability
|
||||||||
Gross amounts recognized in the consolidated balance sheet
|
|
$
|
3
|
|
|
$
|
41
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Gross amount subject to offset in master netting arrangements not offset in the Consolidated Balance Sheet
|
|
(3
|
)
|
|
(3
|
)
|
|
|
—
|
|
|
—
|
|
||||
Net amounts
|
|
$
|
—
|
|
|
$
|
38
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||||||||||||||||||
|
September 30, 2018
|
|
|
September 30, 2017
|
||||||||||||||||||||||||||||
|
Fair Value Measurements Using
|
|
|
Fair Value Measurements Using
|
||||||||||||||||||||||||||||
(In millions)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
Total
|
|
Level 1 |
|
Level 2
|
|
Level 3
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Investments
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate contracts
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total assets
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate contracts
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Spoken acquisition Earn-outs
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Emergence Date Warrants
|
34
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total liabilities
|
$
|
56
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
49
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(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
|
|
|||
Accretion of interest
(1)
|
—
|
|
|
1
|
|
|
1
|
|
|||
Change in fair value
(1)
|
17
|
|
|
—
|
|
|
17
|
|
|||
September 30, 2018 (Successor)
|
$
|
34
|
|
|
$
|
15
|
|
|
$
|
49
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
September 30, 2018
|
|
|
September 30, 2017
|
||||||||||||
(In millions)
|
Principal amount
|
|
Fair value
|
|
|
Principal amount
|
|
Fair value
|
||||||||
Term Loan Credit Agreement due December 15, 2024
|
2,903
|
|
|
2,932
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
||
Convertible 2.25% senior notes due June 15, 2023
|
350
|
|
|
357
|
|
|
|
—
|
|
|
—
|
|
||||
DIP Credit Agreement due January 19, 2018
|
—
|
|
|
—
|
|
|
|
725
|
|
|
732
|
|
||||
First lien debt:
|
|
|
|
|
|
|
|
|
||||||||
Senior secured term B-3 loans
|
—
|
|
|
—
|
|
|
|
594
|
|
|
503
|
|
||||
Senior secured term B-4 loans
|
—
|
|
|
—
|
|
|
|
1
|
|
|
1
|
|
||||
Senior secured term B-6 loans
|
—
|
|
|
—
|
|
|
|
519
|
|
|
440
|
|
||||
Senior secured term B-7 loans
|
—
|
|
|
—
|
|
|
|
2,012
|
|
|
1,709
|
|
||||
7% senior secured notes
|
—
|
|
|
—
|
|
|
|
982
|
|
|
832
|
|
||||
9% senior secured notes
|
—
|
|
|
—
|
|
|
|
284
|
|
|
241
|
|
||||
Second lien debt:
|
|
|
|
|
|
|
|
|
||||||||
10.50% senior secured notes
|
—
|
|
|
—
|
|
|
|
1,440
|
|
|
67
|
|
||||
Total debt
|
$
|
3,253
|
|
|
$
|
3,289
|
|
|
|
$
|
6,557
|
|
|
$
|
4,525
|
|
|
Successor
|
|
|
Predecessor
|
||||
(In millions)
|
As of September 30, 2018
|
|
|
As of September 30, 2017
|
||||
DEFERRED INCOME TAX ASSETS:
|
|
|
|
|
||||
Benefit obligations
|
$
|
205
|
|
|
|
$
|
624
|
|
Net operating losses/credit carryforwards
|
951
|
|
|
|
1,452
|
|
||
Property, plant and equipment
|
21
|
|
|
|
43
|
|
||
Other
|
—
|
|
|
|
35
|
|
||
Valuation allowance
|
(919
|
)
|
|
|
(2,152
|
)
|
||
Gross deferred income tax assets
|
258
|
|
|
|
2
|
|
||
DEFERRED INCOME TAX LIABILITIES:
|
|
|
|
|
||||
Goodwill and intangible assets
|
(290
|
)
|
|
|
(29
|
)
|
||
Other/accrued liabilities
|
(79
|
)
|
|
|
(118
|
)
|
||
Gross deferred income tax liabilities
|
(369
|
)
|
|
|
(147
|
)
|
||
Net deferred income tax liabilities
|
$
|
(111
|
)
|
|
|
$
|
(145
|
)
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal years ended September 30,
|
||||||||||
(In millions)
|
|
|
|
2017
|
|
2016
|
||||||||||
Income tax benefit (provision) computed at the U.S. Federal statutory rate
|
$
|
64
|
|
|
|
$
|
(1,203
|
)
|
|
$
|
69
|
|
|
$
|
252
|
|
State and local income taxes, net of federal income tax effect
|
(12
|
)
|
|
|
10
|
|
|
6
|
|
|
8
|
|
||||
Tax differentials on foreign earnings
|
(12
|
)
|
|
|
182
|
|
|
12
|
|
|
(15
|
)
|
||||
Loss on foreign subsidiaries
|
43
|
|
|
|
—
|
|
|
7
|
|
|
24
|
|
||||
Taxes on unremitted foreign earnings and profits
|
4
|
|
|
|
7
|
|
|
7
|
|
|
12
|
|
||||
Non-deductible portion of goodwill
|
—
|
|
|
|
—
|
|
|
(17
|
)
|
|
(100
|
)
|
||||
Non-deductible loss on sale of Networking business
|
—
|
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
||||
Non-deductible reorganization items
|
—
|
|
|
|
(11
|
)
|
|
(18
|
)
|
|
—
|
|
||||
Adjustment to deferred taxes
|
4
|
|
|
|
(1
|
)
|
|
5
|
|
|
39
|
|
||||
Audit settlements and accruals
|
(48
|
)
|
|
|
(6
|
)
|
|
(5
|
)
|
|
(7
|
)
|
||||
Credits and other taxes
|
(5
|
)
|
|
|
(1
|
)
|
|
(11
|
)
|
|
(24
|
)
|
||||
Impact of Tax Cuts and Jobs Act
|
245
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
NOL recognition / intellectual property
|
366
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Warrants
|
(4
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Debt refinancing
|
(8
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Non-deductible impact of fresh start accounting
|
—
|
|
|
|
(555
|
)
|
|
—
|
|
|
—
|
|
||||
Non-taxable cancellation of debt income
|
—
|
|
|
|
313
|
|
|
—
|
|
|
—
|
|
||||
Attribute reduction
|
—
|
|
|
|
(452
|
)
|
|
—
|
|
|
—
|
|
||||
Rate changes
|
(3
|
)
|
|
|
—
|
|
|
(68
|
)
|
|
(2
|
)
|
||||
U.S. tax on foreign source income
|
(10
|
)
|
|
|
(2
|
)
|
|
(2
|
)
|
|
(34
|
)
|
||||
Non-taxable income (non-deductible expense) on derivative
|
—
|
|
|
|
—
|
|
|
—
|
|
|
26
|
|
||||
Valuation allowance
|
(85
|
)
|
|
|
1,199
|
|
|
45
|
|
|
(187
|
)
|
||||
Other differences—net
|
7
|
|
|
|
61
|
|
|
(2
|
)
|
|
(3
|
)
|
||||
Benefit from (provision for) income taxes
|
$
|
546
|
|
|
|
$
|
(459
|
)
|
|
$
|
16
|
|
|
$
|
(11
|
)
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
(In millions)
|
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal year ended September 30, 2017
|
||||||
Pension Benefits - U.S.
|
|
|
|
|
|
|
|
||||||
Change in benefit obligation
|
|
|
|
|
|
|
|
||||||
Projected benefit obligation at beginning of period
|
|
$
|
1,136
|
|
|
|
$
|
3,415
|
|
|
$
|
3,558
|
|
Service cost
|
|
3
|
|
|
|
1
|
|
|
4
|
|
|||
Interest cost
|
|
28
|
|
|
|
22
|
|
|
98
|
|
|||
Actuarial (gain) loss
|
|
(56
|
)
|
|
|
19
|
|
|
(18
|
)
|
|||
Benefits paid
|
|
(61
|
)
|
|
|
(39
|
)
|
|
(227
|
)
|
|||
Reorganization adjustments
|
|
—
|
|
|
|
(2,282
|
)
|
|
—
|
|
|||
Projected benefit obligation at end of period
|
|
$
|
1,050
|
|
|
|
$
|
1,136
|
|
|
$
|
3,415
|
|
|
|
|
|
|
|
|
|
||||||
Change in plan assets
|
|
|
|
|
|
|
|
||||||
Fair value of plan assets at beginning of period
|
|
$
|
889
|
|
|
|
$
|
2,395
|
|
|
$
|
2,370
|
|
Actual return on plan assets
|
|
10
|
|
|
|
57
|
|
|
229
|
|
|||
Employer contributions
|
|
43
|
|
|
|
49
|
|
|
23
|
|
|||
Benefits paid
|
|
(61
|
)
|
|
|
(39
|
)
|
|
(227
|
)
|
|||
Reorganization adjustments
|
|
—
|
|
|
|
(1,573
|
)
|
|
—
|
|
|||
Fair value of plan assets at end of period
|
|
$
|
881
|
|
|
|
$
|
889
|
|
|
$
|
2,395
|
|
Underfunded status at end of period
|
|
$
|
(169
|
)
|
|
|
$
|
(247
|
)
|
|
$
|
(1,020
|
)
|
|
|
|
|
|
|
|
|
||||||
Amount recognized in the Consolidated Balance Sheets consists of:
|
|
|
|
|
|
|
|
||||||
Accrued benefit liability, current
|
|
$
|
—
|
|
|
|
$
|
(9
|
)
|
|
$
|
(10
|
)
|
Accrued benefit liability, noncurrent
|
|
(169
|
)
|
|
|
(238
|
)
|
|
(1,010
|
)
|
|||
Net amount recognized
|
|
$
|
(169
|
)
|
|
|
$
|
(247
|
)
|
|
$
|
(1,020
|
)
|
|
|
|
|
|
|
|
|
||||||
Amount recognized in Accumulated other comprehensive loss (pre-tax) consists of:
|
|
|
|
|
|
|
|
||||||
Net prior service cost
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Net actuarial (gain) loss
|
|
(15
|
)
|
|
|
—
|
|
|
1,166
|
|
|||
Net amount recognized
|
|
$
|
(15
|
)
|
|
|
$
|
—
|
|
|
$
|
1,167
|
|
|
|
|
|
|
|
|
|
||||||
Weighted average assumptions used to determine benefit obligations
|
|
|
|
|
|
|
|
||||||
Discount rate
|
|
4.22
|
%
|
|
|
3.70
|
%
|
|
3.73
|
%
|
|||
Rate of compensation increase
|
|
4.00
|
%
|
|
|
4.00
|
%
|
|
4.00
|
%
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
(In millions)
|
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal year ended September 30, 2017
|
||||||
Pension Benefits - Non-U.S.
|
|
|
|
|
|
|
|
||||||
Change in benefit obligation
|
|
|
|
|
|
|
|
||||||
Projected benefit obligation at beginning of period
|
|
$
|
575
|
|
|
|
$
|
551
|
|
|
$
|
651
|
|
Service cost
|
|
5
|
|
|
|
2
|
|
|
7
|
|
|||
Interest cost
|
|
7
|
|
|
|
3
|
|
|
8
|
|
|||
Actuarial gain
|
|
(19
|
)
|
|
|
(2
|
)
|
|
(67
|
)
|
|||
Benefits paid
|
|
(22
|
)
|
|
|
(3
|
)
|
|
(23
|
)
|
|||
Foreign currency exchange rate changes
|
|
(10
|
)
|
|
|
—
|
|
|
28
|
|
|||
Curtailments, settlements and other
|
|
—
|
|
|
|
—
|
|
|
(53
|
)
|
|||
Reorganization adjustments
|
|
—
|
|
|
|
24
|
|
|
—
|
|
|||
Projected benefit obligation at end of period
|
|
$
|
536
|
|
|
|
$
|
575
|
|
|
$
|
551
|
|
|
|
|
|
|
|
|
|
||||||
Change in plan assets
|
|
|
|
|
|
|
|
||||||
Fair value of plan assets at beginning of period
|
|
$
|
15
|
|
|
|
$
|
15
|
|
|
$
|
67
|
|
Employer contributions
|
|
22
|
|
|
|
3
|
|
|
25
|
|
|||
Benefits paid
|
|
(22
|
)
|
|
|
(3
|
)
|
|
(23
|
)
|
|||
Curtailments, settlements and other
|
|
—
|
|
|
|
—
|
|
|
(54
|
)
|
|||
Fair value of plan assets at end of period
|
|
$
|
15
|
|
|
|
$
|
15
|
|
|
$
|
15
|
|
Underfunded status at end of period
|
|
$
|
(521
|
)
|
|
|
$
|
(560
|
)
|
|
$
|
(536
|
)
|
|
|
|
|
|
|
|
|
||||||
Amount recognized in the Consolidated Balance Sheets consists of:
|
|
|
|
|
|
|
|
||||||
Noncurrent assets
|
|
$
|
1
|
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Accrued benefit liability, current
|
|
(20
|
)
|
|
|
(23
|
)
|
|
(22
|
)
|
|||
Accrued benefit liability, noncurrent
|
|
(502
|
)
|
|
|
(538
|
)
|
|
(515
|
)
|
|||
Net amount recognized
|
|
$
|
(521
|
)
|
|
|
$
|
(560
|
)
|
|
$
|
(536
|
)
|
|
|
|
|
|
|
|
|
||||||
Amount recognized in Accumulated other comprehensive loss (pre-tax) consists of:
|
|
|
|
|
|
|
|
||||||
Net actuarial (gain) loss
|
|
$
|
(19
|
)
|
|
|
$
|
—
|
|
|
$
|
143
|
|
Net amount recognized
|
|
$
|
(19
|
)
|
|
|
$
|
—
|
|
|
$
|
143
|
|
|
|
|
|
|
|
|
|
||||||
Weighted average assumptions used to determine benefit obligations
|
|
|
|
|
|
|
|
||||||
Discount rate
|
|
1.92
|
%
|
|
|
1.92
|
%
|
|
1.92
|
%
|
|||
Rate of compensation increase
|
|
4.46
|
%
|
|
|
3.66
|
%
|
|
3.66
|
%
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
(In millions)
|
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal year ended September 30, 2017
|
||||||
Post-retirement Benefits - U.S.
|
|
|
|
|
|
|
|
||||||
Change in benefit obligation
|
|
|
|
|
|
|
|
||||||
Benefit obligation at beginning of period
|
|
$
|
407
|
|
|
|
$
|
404
|
|
|
$
|
436
|
|
Service cost
|
|
1
|
|
|
|
—
|
|
|
2
|
|
|||
Interest cost
|
|
11
|
|
|
|
3
|
|
|
13
|
|
|||
Employee contributions
|
|
—
|
|
|
|
—
|
|
|
7
|
|
|||
Actuarial (gain) loss
|
|
(40
|
)
|
|
|
4
|
|
|
(26
|
)
|
|||
Benefits paid
|
|
(11
|
)
|
|
|
(3
|
)
|
|
(28
|
)
|
|||
Reorganization adjustments
|
|
—
|
|
|
|
(1
|
)
|
|
—
|
|
|||
Projected benefit obligation at end of period
|
|
$
|
368
|
|
|
|
$
|
407
|
|
|
$
|
404
|
|
|
|
|
|
|
|
|
|
||||||
Change in plan assets
|
|
|
|
|
|
|
|
||||||
Fair value of plan assets at beginning of period
|
|
$
|
180
|
|
|
|
$
|
178
|
|
|
$
|
172
|
|
Actual return on plan assets
|
|
2
|
|
|
|
3
|
|
|
12
|
|
|||
Employer contributions
|
|
7
|
|
|
|
2
|
|
|
15
|
|
|||
Employee contributions
|
|
—
|
|
|
|
—
|
|
|
7
|
|
|||
Benefits paid
|
|
(11
|
)
|
|
|
(3
|
)
|
|
(28
|
)
|
|||
Fair value of plan assets at end of period
|
|
$
|
178
|
|
|
|
$
|
180
|
|
|
$
|
178
|
|
Underfunded status at end of period
|
|
$
|
(190
|
)
|
|
|
$
|
(227
|
)
|
|
$
|
(226
|
)
|
|
|
|
|
|
|
|
|
||||||
Amount recognized in the Consolidated Balance Sheets consists of:
|
|
|
|
|
|
|
|
||||||
Accrued benefit liability, current
|
|
$
|
(14
|
)
|
|
|
$
|
(12
|
)
|
|
$
|
(15
|
)
|
Accrued benefit liability, noncurrent
|
|
(176
|
)
|
|
|
(215
|
)
|
|
(211
|
)
|
|||
Net amount recognized
|
|
$
|
(190
|
)
|
|
|
$
|
(227
|
)
|
|
$
|
(226
|
)
|
|
|
|
|
|
|
|
|
||||||
Amount recognized in Accumulated other comprehensive loss (pre-tax) consists of:
|
|
|
|
|
|
|
|
||||||
Net prior service credit
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
(58
|
)
|
Net actuarial (gain) loss
|
|
(34
|
)
|
|
|
—
|
|
|
97
|
|
|||
Net amount recognized
|
|
$
|
(34
|
)
|
|
|
$
|
—
|
|
|
$
|
39
|
|
|
|
|
|
|
|
|
|
||||||
Weighted average assumptions used to determine benefit obligations
|
|
|
|
|
|
|
|
||||||
Discount rate
|
|
4.26
|
%
|
|
|
3.77
|
%
|
|
3.83
|
%
|
|||
Rate of compensation increase
|
|
4.00
|
%
|
|
|
4.00
|
%
|
|
4.00
|
%
|
|
|
Pension Benefits - U.S.
|
|
Pension Benefits - Non-U.S.
|
||||||||||||||
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||||||
(In millions)
|
|
September 30, 2018
|
|
|
September 30, 2017
|
|
September 30, 2018
|
|
|
September 30, 2017
|
||||||||
Accumulated benefit obligation for all plans
|
|
$
|
1,050
|
|
|
|
$
|
3,415
|
|
|
$
|
521
|
|
|
|
$
|
536
|
|
Plans with accumulated benefit obligation in excess of plan assets
|
|
|
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligation
|
|
$
|
1,050
|
|
|
|
$
|
3,415
|
|
|
$
|
531
|
|
|
|
$
|
546
|
|
Accumulated benefit obligation
|
|
$
|
1,050
|
|
|
|
$
|
3,415
|
|
|
$
|
516
|
|
|
|
$
|
531
|
|
Fair value of plan assets
|
|
$
|
881
|
|
|
|
$
|
2,395
|
|
|
$
|
9
|
|
|
|
$
|
9
|
|
|
|
Pension Benefits
|
|
Post-retirement
Benefits
|
||||||||
(In millions)
|
|
U.S.
|
|
Non-U.S.
|
|
|||||||
2019
|
|
$
|
74
|
|
|
$
|
24
|
|
|
$
|
20
|
|
2020
|
|
73
|
|
|
23
|
|
|
21
|
|
|||
2021
|
|
73
|
|
|
24
|
|
|
21
|
|
|||
2022
|
|
73
|
|
|
26
|
|
|
21
|
|
|||
2023
|
|
72
|
|
|
25
|
|
|
21
|
|
|||
2024 - 2028
|
|
351
|
|
|
139
|
|
|
109
|
|
|||
Total
|
|
$
|
716
|
|
|
$
|
261
|
|
|
$
|
213
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
(In millions)
|
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal year ended September 30, 2017
|
|
Fiscal year ended September 30, 2016
|
||||||||
Pension Benefits - U.S.
|
|
|
|
|
|
|
|
|
|
||||||||
Components of net periodic benefit (credit) cost
|
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
3
|
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
4
|
|
Interest cost
|
|
28
|
|
|
|
22
|
|
|
98
|
|
|
110
|
|
||||
Expected return on plan assets
|
|
(51
|
)
|
|
|
(38
|
)
|
|
(179
|
)
|
|
(183
|
)
|
||||
Amortization of prior service cost
|
|
—
|
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Amortization of actuarial loss
|
|
—
|
|
|
|
20
|
|
|
102
|
|
|
91
|
|
||||
Curtailment, settlement loss
(1)
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Net periodic benefit (credit) cost
|
|
$
|
(20
|
)
|
|
|
$
|
5
|
|
|
$
|
26
|
|
|
$
|
26
|
|
Weighted average assumptions used to determine net periodic benefit cost
|
|
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
|
3.29
|
%
|
|
|
3.19
|
%
|
|
2.86
|
%
|
|
4.23
|
%
|
||||
Expected return on plan assets
|
|
7.65
|
%
|
|
|
7.75
|
%
|
|
7.75
|
%
|
|
8.00
|
%
|
||||
Rate of compensation increase
|
|
4.00
|
%
|
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Pension Benefits - Non-U.S.
|
|
|
|
|
|
|
|
|
|
||||||||
Components of net periodic benefit cost (credit)
|
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
5
|
|
|
|
$
|
2
|
|
|
$
|
7
|
|
|
$
|
6
|
|
Interest cost
|
|
7
|
|
|
|
3
|
|
|
8
|
|
|
14
|
|
||||
Expected return on plan assets
|
|
—
|
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
||||
Amortization of actuarial loss
|
|
—
|
|
|
|
2
|
|
|
16
|
|
|
7
|
|
||||
Curtailment, settlement gain
|
|
—
|
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
||||
Net periodic benefit cost
|
|
$
|
12
|
|
|
|
$
|
6
|
|
|
$
|
26
|
|
|
$
|
25
|
|
Weighted average assumptions used to determine net periodic benefit cost
|
|
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
|
1.92
|
%
|
|
|
1.22
|
%
|
|
1.22
|
%
|
|
2.53
|
%
|
||||
Expected return on plan assets
|
|
3.68
|
%
|
|
|
1.82
|
%
|
|
1.82
|
%
|
|
3.09
|
%
|
||||
Rate of compensation increase
|
|
3.62
|
%
|
|
|
3.45
|
%
|
|
3.45
|
%
|
|
3.11
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Post-retirement Benefits - U.S.
|
|
|
|
|
|
|
|
|
|
||||||||
Components of net periodic benefit cost (credit)
|
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
1
|
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Interest cost
|
|
11
|
|
|
|
3
|
|
|
13
|
|
|
13
|
|
||||
Expected return on plan assets
|
|
(8
|
)
|
|
|
(2
|
)
|
|
(10
|
)
|
|
(10
|
)
|
||||
Amortization of prior service cost
|
|
—
|
|
|
|
(3
|
)
|
|
(18
|
)
|
|
(19
|
)
|
||||
Amortization of actuarial loss
|
|
—
|
|
|
|
2
|
|
|
12
|
|
|
4
|
|
||||
Curtailment, settlement gain
(1)
|
|
—
|
|
|
|
—
|
|
|
(4
|
)
|
|
(2
|
)
|
||||
Net periodic benefit cost (credit)
|
|
$
|
4
|
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
(12
|
)
|
Weighted average assumptions used to determine net periodic benefit cost
|
|
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
|
3.39
|
%
|
|
|
3.37
|
%
|
|
3.11
|
%
|
|
4.35
|
%
|
||||
Expected return on plan assets
|
|
5.50
|
%
|
|
|
5.90
|
%
|
|
5.90
|
%
|
|
5.90
|
%
|
||||
Rate of compensation increase
|
|
4.00
|
%
|
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
(In millions)
|
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal year ended September 30, 2017
|
|
Fiscal year ended September 30, 2016
|
||||||||
Pension Benefits - U.S.
|
|
|
|
|
|
|
|
|
|
||||||||
Net (gain) loss
|
|
$
|
(15
|
)
|
|
|
$
|
—
|
|
|
$
|
(68
|
)
|
|
$
|
124
|
|
Amortization of prior service cost
|
|
—
|
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Amortization of actuarial loss
|
|
—
|
|
|
|
(20
|
)
|
|
(102
|
)
|
|
(91
|
)
|
||||
Reorganization adjustments
|
|
—
|
|
|
|
(1,147
|
)
|
|
—
|
|
|
—
|
|
||||
Total recognized in Other comprehensive income (loss)
|
|
$
|
(15
|
)
|
|
|
$
|
(1,167
|
)
|
|
$
|
(171
|
)
|
|
$
|
32
|
|
Total recognized in net periodic benefit cost and Other comprehensive income (loss)
(1)
|
|
$
|
(35
|
)
|
|
|
$
|
(722
|
)
|
|
$
|
(145
|
)
|
|
$
|
58
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pension Benefits - Non-U.S.
|
|
|
|
|
|
|
|
|
|
||||||||
Net (gain) loss
|
|
$
|
(19
|
)
|
|
|
$
|
22
|
|
|
$
|
(68
|
)
|
|
$
|
95
|
|
Amortization of actuarial loss
|
|
—
|
|
|
|
(2
|
)
|
|
(16
|
)
|
|
(7
|
)
|
||||
Net gain recognition due to settlement
|
|
—
|
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Reorganization adjustments
|
|
—
|
|
|
|
(163
|
)
|
|
—
|
|
|
—
|
|
||||
Total recognized in Other comprehensive income (loss)
|
|
$
|
(19
|
)
|
|
|
$
|
(143
|
)
|
|
$
|
(80
|
)
|
|
$
|
88
|
|
Total recognized in net periodic benefit cost and Other comprehensive income (loss)
(1)
|
|
$
|
(7
|
)
|
|
|
$
|
(137
|
)
|
|
$
|
(54
|
)
|
|
$
|
113
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Post-retirement Benefits - U.S.
|
|
|
|
|
|
|
|
|
|
||||||||
Net (gain) loss
|
|
$
|
(34
|
)
|
|
|
$
|
—
|
|
|
$
|
(28
|
)
|
|
$
|
71
|
|
Amortization of prior service credit
|
|
—
|
|
|
|
3
|
|
|
18
|
|
|
19
|
|
||||
Amortization of actuarial loss
|
|
—
|
|
|
|
(2
|
)
|
|
(12
|
)
|
|
(4
|
)
|
||||
Prior service cost (credit) and net gain (loss) recognition due to curtailment
|
|
—
|
|
|
|
—
|
|
|
4
|
|
|
2
|
|
||||
Reorganization adjustments
|
|
—
|
|
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
||||
Total recognized in Other comprehensive income (loss)
|
|
$
|
(34
|
)
|
|
|
$
|
(39
|
)
|
|
$
|
(18
|
)
|
|
$
|
88
|
|
Total recognized in net periodic benefit cost and Other comprehensive income (loss)
(1)
|
|
$
|
(30
|
)
|
|
|
$
|
2
|
|
|
$
|
(23
|
)
|
|
$
|
76
|
|
|
|
Successor
|
|
|
Predecessor
|
|
Long-term Target
|
|||
Asset Category
|
|
September 30, 2018
|
|
|
September 30, 2017
|
|
|
|||
Pension Benefits - U.S.
|
|
|
|
|
|
|
|
|||
Equity Securities
|
|
37
|
%
|
|
|
44
|
%
|
|
39
|
%
|
Debt Securities
|
|
39
|
%
|
|
|
37
|
%
|
|
45
|
%
|
Hedge Funds
|
|
8
|
%
|
|
|
8
|
%
|
|
7
|
%
|
Private Equity
|
|
1
|
%
|
|
|
1
|
%
|
|
—
|
%
|
Real Estate
|
|
6
|
%
|
|
|
5
|
%
|
|
7
|
%
|
Commodities
|
|
2
|
%
|
|
|
2
|
%
|
|
2
|
%
|
Other
(1)
|
|
7
|
%
|
|
|
3
|
%
|
|
—
|
%
|
Total
|
|
100
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|||
Pension Benefits - Non-U.S.
|
|
|
|
|
|
|
|
|||
Debt Securities
|
|
27
|
%
|
|
|
27
|
%
|
|
|
|
Asset Allocation Fund
|
|
13
|
%
|
|
|
13
|
%
|
|
|
|
Insurance Contracts
|
|
60
|
%
|
|
|
60
|
%
|
|
|
|
Total
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|||
Post-retirement Benefits - U.S.
|
|
|
|
|
|
|
|
|||
Equity Securities
|
|
40
|
%
|
|
|
40
|
%
|
|
40
|
%
|
Debt Securities
|
|
60
|
%
|
|
|
60
|
%
|
|
60
|
%
|
Total
|
|
100
|
%
|
|
|
100
|
%
|
|
100
|
%
|
(1)
|
Other includes cash/cash equivalents, derivative financial instruments, and payables/receivables for pending transactions.
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||||||||||||||||||
|
|
As of September 30, 2018
|
|
|
As of September 30, 2017
|
||||||||||||||||||||||||||||
(In millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
U.S. Government debt securities
(a)
|
|
$
|
—
|
|
|
$
|
93
|
|
|
$
|
—
|
|
|
$
|
93
|
|
|
|
$
|
—
|
|
|
$
|
159
|
|
|
$
|
—
|
|
|
$
|
159
|
|
Derivative instruments
(b)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||||||
Total assets in the fair value hierarchy
|
|
(2
|
)
|
|
93
|
|
|
—
|
|
|
91
|
|
|
|
(4
|
)
|
|
159
|
|
|
—
|
|
|
155
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Investments measured at net asset value:
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Real estate
(d)
|
|
|
|
|
|
|
|
49
|
|
|
|
|
|
|
|
|
|
112
|
|
||||||||||||||
Private equity
(e)
|
|
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
23
|
|
||||||||||||||
Multi-strategy hedge funds
(f)
|
|
|
|
|
|
|
|
73
|
|
|
|
|
|
|
|
|
|
190
|
|
||||||||||||||
Investment funds:
(g)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents
|
|
|
|
|
|
|
|
62
|
|
|
|
|
|
|
|
|
|
63
|
|
||||||||||||||
Long duration fixed income
|
|
|
|
|
|
|
|
231
|
|
|
|
|
|
|
|
|
|
636
|
|
||||||||||||||
High-yield debt
|
|
|
|
|
|
|
|
26
|
|
|
|
|
|
|
|
|
|
97
|
|
||||||||||||||
U.S. equity
|
|
|
|
|
|
|
|
179
|
|
|
|
|
|
|
|
|
|
541
|
|
||||||||||||||
Non-U.S. equity
|
|
|
|
|
|
|
|
112
|
|
|
|
|
|
|
|
|
|
395
|
|
||||||||||||||
Emerging market equity
|
|
|
|
|
|
|
|
35
|
|
|
|
|
|
|
|
|
|
127
|
|
||||||||||||||
Commodities
|
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
41
|
|
||||||||||||||
Total investment measured at net asset value
|
|
|
|
|
|
|
|
789
|
|
|
|
|
|
|
|
|
|
2,225
|
|
||||||||||||||
Other plan assets, net
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
15
|
|
||||||||||||||
Total plan assets at fair value
|
|
$
|
(2
|
)
|
|
$
|
93
|
|
|
$
|
—
|
|
|
$
|
881
|
|
|
|
$
|
(4
|
)
|
|
$
|
159
|
|
|
$
|
—
|
|
|
$
|
2,395
|
|
(a)
|
Includes U.S. Treasury STRIPS, which are generally valued using institutional bid evaluations from various contracted pricing vendors. Institutional bid evaluations are estimated prices that represent the price a dealer would pay for a security. Pricing inputs to the institutional bid evaluation vary by security and include benchmark yields, reported trades, unadjusted broker/dealer quotes, issuer spreads, bids, offers or other observable market data.
|
(b)
|
Includes future contracts that are generally valued using the last trade price at which a specific contract/security was last traded on the primary exchange, which is provided by a contracted vendor. If pricing is not available from the contracted vendor, then pricing is obtained from other sources such as Bloomberg, broker bid, ask/offer quotes or the investment manager.
|
(c)
|
Certain investments that are measured at fair value using the net asset value per share or its equivalent (“NAV”) have not been classified in the fair value hierarchy.
|
(d)
|
Includes open ended real estate commingled funds, close ended real estate limited partnerships, and insurance company separate accounts that invest primarily in U.S. office, lodging, retail and residential real estate. The insurance company separate accounts and the commingled funds account for their portfolio of assets at fair value and calculate the NAV on either a monthly or quarterly basis. Shares can be redeemed at the NAV on a quarterly basis, provided a written redemption request is received in advance (generally 45-91 days) of the redemption date. Therefore, the undiscounted NAV is used as the fair value measurement. For limited partnerships, the fair value of the underlying assets and the capital account for each investor is determined by the General Partner (“GP”). The valuation techniques used by the GP generally consist of unobservable inputs such as discounted cash flow analysis, analysis of recent comparable sales transactions, actual sale negotiations and bona fide purchase offers received from third parties. The partnerships are typically funded over time as capital is needed to fund asset purchases, and distributions from the partnerships are received as the partnerships liquidate their underlying asset holdings. Therefore, the life cycle for a typical investment in a real estate limited partnership is expected to be approximately 10 years from initial funding.
|
(e)
|
Includes limited partner interests in various limited partnerships (“LPs”) that invest primarily in U.S. and non-U.S. investments either directly, or through other partnerships or funds with a focus on venture capital, buyouts, expansion capital, or companies undergoing financial distress or significant restructuring. The NAV of the LPs and of the capital
|
(f)
|
Includes hedge funds and funds of funds that pursue multiple strategies to diversify risks and reduce volatility. The funds account for their portfolio of assets at fair value and calculate the NAV of their fund on a monthly basis. The funds limit the frequency of redemptions to manage liquidity and protect the interests of the funds and its shareholders.
|
(g)
|
Includes open-end funds and unit investment trusts that invest in various asset classes including: U.S. and non-U.S. corporate debt, U.S. government debt, municipal bonds, U.S. equity, non-U.S. developed and emerging markets equity, and commodities. The funds account for their portfolio of assets at fair value and calculate the NAV of the funds on a daily basis, and shares can be redeemed at the NAV. Therefore, the undiscounted NAV as reported by the funds is used as the fair value measurement.
|
|
|
Successor
|
|
|
Predecessor
|
||||
(In millions)
|
|
September 30, 2018
|
|
|
September 30, 2017
|
|
|||
Investments measured at net asset value:
(a)
|
|
|
|
|
|
||||
Investment funds:
(b)
|
|
|
|
|
|
||||
Debt securities
|
|
$
|
4
|
|
|
|
$
|
4
|
|
Asset allocation
|
|
2
|
|
|
|
2
|
|
||
Insurance contracts
(c)
|
|
9
|
|
|
|
9
|
|
||
Total plan assets at fair value
|
|
$
|
15
|
|
|
|
$
|
15
|
|
(a)
|
Certain investments that are measured at fair value using the NAV have not been classified in the fair value hierarchy.
|
(b)
|
Includes collective investment funds that invest in various asset classes including U.S. and non-U.S. corporate debt and equity, and derivatives. The funds account for their portfolio of assets at fair value and calculate the NAV of the funds on a daily basis, and shares can be redeemed at the NAV. Therefore, the undiscounted NAV as reported by the funds is used as the fair value measurement.
|
(c)
|
Most non-U.S. pension plans are funded through insurance contracts, which provide for a guaranteed interest credit and a profit-sharing adjustment based on the actual performance of the underlying investment assets of the insurer. The fair value of the contract is determined by the insurer based on the premiums paid by the Company plus interest credits plus the profit-sharing adjustment less benefit payments. The underlying assets of the insurer are invested in compliance with local rules or law, which tend to require a high allocation to fixed income securities.
|
|
|
Successor
|
|
|
Predecessor
|
||||
(In millions)
|
|
September 30, 2018
|
|
|
September 30, 2017
|
|
|||
Investments measured at net asset value:
(a)
|
|
|
|
|
|
||||
Group life insurance contract measured at net asset value
(b)
|
|
$
|
178
|
|
|
|
$
|
178
|
|
Total plan assets at fair value
|
|
$
|
178
|
|
|
|
$
|
178
|
|
(a)
|
Certain investments that are measured at fair value using the NAV have not been classified in the fair value hierarchy.
|
(b)
|
The group life insurance contracts are held in a reserve of an insurance company that provides for investment of pre-funding amounts in a family of pooled separate accounts. The fair value of each group life insurance contract is primarily determined by the value of the units it owns in the pooled separate accounts that back the policy. Each of the pooled separate accounts provides a unit NAV on a daily basis, which is based on the fair value of the underlying assets owned by the account. The post-retirement benefit plans can transact daily at the unit NAV without restriction. As of
September 30, 2018
(Successor), the asset allocation of the pooled separate accounts in which the contracts invest was approximately
60%
fixed income securities,
22%
U.S. equity securities and
18%
non-U.S. equity securities.
|
|
Period from December 16, 2017
through September 30, 2018 |
|
Emergence Date Grants
|
||||
Exercise price
|
$
|
21.66
|
|
|
$
|
19.46
|
|
Expected volatility
(1)
|
49.67
|
%
|
|
56.59
|
%
|
||
Expected life (in years)
(2)
|
5.86
|
|
|
6.65
|
|
||
Risk-free interest rate
(3)
|
2.72
|
%
|
|
2.35
|
%
|
||
Dividend yield
(4)
|
—
|
%
|
|
—
|
%
|
|
|
Options (In thousands)
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Term (in years)
|
|
Aggregate Intrinsic Value (In thousands)
|
|||||
Granted
|
|
1,255
|
|
|
$
|
19.65
|
|
|
|
|
|
||
Exercised
|
|
(3
|
)
|
|
$
|
19.46
|
|
|
|
|
|
||
Forfeited or expired
|
|
(134
|
)
|
|
$
|
19.71
|
|
|
|
|
|
||
Outstanding at September 30, 2018 (Successor)
|
|
1,118
|
|
|
$
|
19.64
|
|
|
8.9
|
|
$
|
2,794
|
|
|
|
|
|
|
|
|
|
|
|||||
Exercisable at September 30, 2018 (Successor)
|
|
106
|
|
|
$
|
19.69
|
|
|
5.6
|
|
$
|
260
|
|
|
|
Restricted Stock Units (In thousands)
|
|
Granted
|
|
4,048
|
|
Vested
|
|
(379
|
)
|
Forfeited
|
|
(427
|
)
|
Non-vested at September 30, 2018 (Successor)
|
|
3,243
|
|
|
|
Fiscal year ended September 30, 2016 (Predecessor)
|
||
Exercise price
|
|
$
|
1.83
|
|
Expected volatility
(1)
|
|
83.09
|
%
|
|
Expected life (in years)
(2)
|
|
5.00
|
|
|
Risk-free interest rate
(3)
|
|
1.53
|
%
|
|
Dividend yield
(4)
|
|
—
|
%
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal year ended September 30,
|
||||||||||
(In millions, except per share amounts)
|
|
|
|
2017
|
|
2016
|
||||||||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Numerator
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
287
|
|
|
|
$
|
2,977
|
|
|
$
|
(182
|
)
|
|
$
|
(730
|
)
|
Dividends and accretion to preferred stockholders
|
—
|
|
|
|
(6
|
)
|
|
(31
|
)
|
|
(41
|
)
|
||||
Undistributed earnings
|
287
|
|
|
|
2,971
|
|
|
(213
|
)
|
|
(771
|
)
|
||||
Percentage allocated to common stockholders
(1)
|
100.0
|
%
|
|
|
86.9
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
||||
Numerator for basic and diluted earnings (loss) per common share
|
$
|
287
|
|
|
|
$
|
2,582
|
|
|
$
|
(213
|
)
|
|
$
|
(771
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator
|
|
|
|
|
|
|
|
|
||||||||
Denominator for basic earnings (loss) per weighted average common shares
|
109.9
|
|
|
|
497.3
|
|
|
497.1
|
|
|
500.7
|
|
||||
Effect of dilutive securities
|
|
|
|
|
|
|
|
|
||||||||
Restricted stock units
|
1.2
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Stock options
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Convertible Notes
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Call Spread Warrants
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Emergence Date Warrants
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Denominator for diluted earnings (loss) per weighted average common shares
|
111.1
|
|
|
|
497.3
|
|
|
497.1
|
|
|
500.7
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per common share
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
2.61
|
|
|
|
$
|
5.19
|
|
|
$
|
(0.43
|
)
|
|
$
|
(1.54
|
)
|
Diluted
|
$
|
2.58
|
|
|
|
$
|
5.19
|
|
|
$
|
(0.43
|
)
|
|
$
|
(1.54
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
(1)
Basic weighted average common stock outstanding
|
109.9
|
|
|
|
497.3
|
|
|
497.1
|
|
|
500.7
|
|
||||
Basic weighted average common stock and common stock equivalents (preferred shares)
|
109.9
|
|
|
|
572.4
|
|
|
497.1
|
|
|
500.7
|
|
||||
Percentage allocated to common stock holders
|
100.0
|
%
|
|
|
86.9
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
(1)
|
The Networking business was sold on July 14, 2017.
|
(2)
|
Unallocated amounts in Revenue represent the fair value adjustment to deferred revenue recognized upon emergence from bankruptcy and excluded from segment revenue.
|
(3)
|
Unallocated amounts in Gross Profit include the fair value adjustments recognized upon emergence from bankruptcy and excluded from segment gross profit; the effect of the amortization of technology intangibles; and costs that are not core to the measurement of segment management’s performance, but rather are controlled at the corporate level.
|
|
Successor
|
|
|
Predecessor
|
||||
(In millions)
|
September 30, 2018
|
|
|
September 30, 2017
|
||||
ASSETS:
|
|
|
|
|
||||
Products & Solutions
|
$
|
1,336
|
|
|
|
$
|
1,133
|
|
Services
|
1,509
|
|
|
|
2,499
|
|
||
Unallocated Assets
(1)
|
4,834
|
|
|
|
2,266
|
|
||
Total
|
$
|
7,679
|
|
|
|
$
|
5,898
|
|
(1)
|
Unallocated Assets consist of cash and cash equivalents, accounts receivable, deferred income tax assets, property, plant and equipment, acquired intangible assets and other assets. Unallocated Assets are managed at the corporate level and are not identified with a specific segment.
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal years ended September 30,
|
||||||||||
(In millions)
|
|
|
|
|
2017
|
|
2016
|
||||||||||
REVENUE
(1)
:
|
|
|
|
|
|
|
|
|
|
||||||||
U.S.
|
|
$
|
1,184
|
|
|
|
$
|
331
|
|
|
$
|
1,798
|
|
|
$
|
2,072
|
|
International:
|
|
|
|
|
|
|
|
|
|
||||||||
EMEA
|
|
603
|
|
|
|
166
|
|
|
834
|
|
|
880
|
|
||||
APAC—Asia Pacific
|
|
256
|
|
|
|
57
|
|
|
334
|
|
|
416
|
|
||||
Americas International—Canada and Latin America
|
|
204
|
|
|
|
50
|
|
|
306
|
|
|
334
|
|
||||
Total International
|
|
1,063
|
|
|
|
273
|
|
|
1,474
|
|
|
1,630
|
|
||||
Total
|
|
$
|
2,247
|
|
|
|
$
|
604
|
|
|
$
|
3,272
|
|
|
$
|
3,702
|
|
|
Successor
|
|
|
Predecessor
|
||||
(In millions)
|
September 30, 2018
|
|
|
September 30, 2017
|
||||
LONG-LIVED ASSETS
(2)
|
|
|
|
|
||||
U.S.
|
$
|
169
|
|
|
|
$
|
132
|
|
International:
|
|
|
|
|
||||
EMEA
|
61
|
|
|
|
50
|
|
||
APAC—Asia Pacific
|
12
|
|
|
|
11
|
|
||
Americas International—Canada and Latin America
|
8
|
|
|
|
7
|
|
||
Total International
|
81
|
|
|
|
68
|
|
||
Total
|
$
|
250
|
|
|
|
$
|
200
|
|
(1)
|
Revenue is attributed to geographic areas based on the location of customers.
|
(2)
|
Represents property, plant and equipment, net.
|
20.
|
Accumulated Other Comprehensive (Loss) Income
|
(In millions)
|
Change in Unamortized Pension, Post-retirement and Postemployment Benefit-related Items
|
|
Foreign Currency Translation
|
|
Unrealized Loss on Term Loan Interest Rate Swap
|
|
Other
|
|
Accumulated Other Comprehensive (Loss) Income
|
||||||||||
Balance as of October 1, 2015 (Predecessor)
|
$
|
(1,368
|
)
|
|
$
|
(15
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(1,384
|
)
|
Other comprehensive loss before reclassifications
|
(319
|
)
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(337
|
)
|
|||||
Amounts reclassified to earnings
|
60
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|||||
Balance as of September 30, 2016 (Predecessor)
|
(1,627
|
)
|
|
(33
|
)
|
|
—
|
|
|
(1
|
)
|
|
(1,661
|
)
|
|||||
Other comprehensive income (loss) before reclassifications
|
181
|
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
142
|
|
|||||
Amounts reclassified to earnings
|
90
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90
|
|
|||||
Provision for income taxes
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|||||
Balance as of 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 as of December 15, 2017 (Predecessor)
|
(720
|
)
|
|
(69
|
)
|
|
—
|
|
|
(1
|
)
|
|
(790
|
)
|
|||||
Elimination of Predecessor Company Accumulated other comprehensive loss
|
720
|
|
|
69
|
|
|
—
|
|
|
1
|
|
|
790
|
|
|||||
Balance as of December 15, 2017 (Predecessor)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance as of December 16, 2017 (Successor)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other comprehensive income (loss) before reclassifications
|
70
|
|
|
(31
|
)
|
|
(3
|
)
|
|
—
|
|
|
36
|
|
|||||
(Provision for) benefit from income taxes
|
(19
|
)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(18
|
)
|
|||||
Balance as of September 30, 2018 (Successor)
|
$
|
51
|
|
|
$
|
(31
|
)
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
18
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||||||
(In millions, except per share amounts)
|
|
Fourth
Quarter |
|
Third
Quarter |
|
Second
Quarter |
|
Period from December 16, 2017 through December 31, 2017
|
|
|
Period from October 1, 2017 through December 15, 2017
|
||||||||||
Fiscal Year Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
735
|
|
|
$
|
692
|
|
|
$
|
672
|
|
|
$
|
148
|
|
|
|
$
|
604
|
|
Gross profit
|
|
390
|
|
|
352
|
|
|
323
|
|
|
78
|
|
|
|
362
|
|
|||||
Operating income (loss)
|
|
11
|
|
|
(49
|
)
|
|
(89
|
)
|
|
2
|
|
|
|
36
|
|
|||||
Benefit from (provision for) income taxes
|
|
311
|
|
|
(20
|
)
|
|
9
|
|
|
246
|
|
|
|
(459
|
)
|
|||||
Net income (loss)
|
|
268
|
|
|
(88
|
)
|
|
(130
|
)
|
|
237
|
|
|
|
2,977
|
|
|||||
Net income (loss) attributable to common stockholders
|
|
268
|
|
|
(88
|
)
|
|
(130
|
)
|
|
237
|
|
|
|
2,582
|
|
|||||
Net income (loss) per common share - basic
|
|
$
|
2.44
|
|
|
$
|
(0.80
|
)
|
|
$
|
(1.18
|
)
|
|
$
|
2.16
|
|
|
|
$
|
5.19
|
|
Net income (loss) per common share - diluted
|
|
$
|
2.41
|
|
|
$
|
(0.80
|
)
|
|
$
|
(1.18
|
)
|
|
$
|
2.15
|
|
|
|
$
|
5.19
|
|
|
|
Predecessor
|
||||||||||||||
(In millions, except per share amounts)
|
|
Fourth
Quarter |
|
Third
Quarter |
|
Second
Quarter |
|
First
Quarter |
||||||||
Fiscal Year Ended September 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
$
|
790
|
|
|
$
|
803
|
|
|
$
|
804
|
|
|
$
|
875
|
|
Gross profit
|
|
496
|
|
|
493
|
|
|
484
|
|
|
535
|
|
||||
Operating income (loss)
|
|
69
|
|
|
(43
|
)
|
|
75
|
|
|
70
|
|
||||
(Provision for) benefit from income taxes
|
|
(6
|
)
|
|
6
|
|
|
19
|
|
|
(3
|
)
|
||||
Net income (loss)
|
|
27
|
|
|
(98
|
)
|
|
(8
|
)
|
|
(103
|
)
|
||||
Net income (loss) attributable to common stockholders
|
|
19
|
|
|
(106
|
)
|
|
(15
|
)
|
|
(111
|
)
|
||||
Net income (loss) per common share - basic
|
|
$
|
0.04
|
|
|
$
|
(0.22
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.22
|
)
|
Net income (loss) per common share - diluted
|
|
$
|
0.04
|
|
|
$
|
(0.22
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.22
|
)
|
(1)
|
the Successor Company, Parent Company only, statements of financial position as of
September 30, 2018
, the statements of operations, comprehensive income (loss) and cash flows for the
period from December 16, 2017 through September 30, 2018
, and;
|
(2)
|
the Predecessor Company, Parent Company only, statements of financial position as of
September 30, 2017
, the statements of operations, comprehensive income (loss) and cash flows for the
period from October 1, 2017 through December 15, 2017
and for
fiscal years ended September 30,
2017
and
2016
.
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal year ended September 30, 2017
|
|
Fiscal year ended September 30, 2016
|
||||||||
Net income (loss)
|
$
|
287
|
|
|
|
$
|
2,977
|
|
|
$
|
(182
|
)
|
|
$
|
(730
|
)
|
Equity in other comprehensive income (loss) of Avaya Inc.
|
18
|
|
|
|
658
|
|
|
213
|
|
|
(277
|
)
|
||||
Elimination of Predecessor Company accumulated other comprehensive loss
|
—
|
|
|
|
790
|
|
|
—
|
|
|
—
|
|
||||
Comprehensive income (loss)
|
$
|
305
|
|
|
|
$
|
4,425
|
|
|
$
|
31
|
|
|
$
|
(1,007
|
)
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Period from December 16, 2017
through September 30, 2018 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Fiscal year ended September 30, 2017
|
|
Fiscal year ended September 30, 2016
|
||||||||
Net income (loss)
|
$
|
287
|
|
|
|
$
|
2,977
|
|
|
$
|
(182
|
)
|
|
$
|
(730
|
)
|
Adjustments to reconcile net income (loss) to net cash used for operating activities:
|
|
|
|
|
|
|
|
|
||||||||
Equity in net (income) loss of Avaya Inc.
|
(311
|
)
|
|
|
(2,977
|
)
|
|
182
|
|
|
801
|
|
||||
Change in fair value of Preferred Series B derivative
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(73
|
)
|
||||
Changes in operating assets and liabilities
|
24
|
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Net cash used for operating activities
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net cash used for investing activities
|
(314
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net cash provided by financing activities
|
314
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Cash and cash equivalents at beginning of period
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Cash and cash equivalents at end of period
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
•
|
The appropriate complement of resources in our 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.
|
•
|
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.
|
•
|
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.
|
•
|
Provided additional training for employees involved in the cash and accounts receivable reconciliation processes, as well as certain other reconciliation processes, and supplemented existing reviewers with higher skilled resources.
|
•
|
Provided additional training to ensure that the control designed to ensure that appropriate segregation of duties related to recording journal entries is achieved and performed on a timely basis as designed.
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accountant Fees and Services
|
Item 15.
|
Exhibits, Financial Statement Schedules
|
(a) (1)
|
Financial Statements - The information required by this item is included in Part II Item 8. of this Annual Report on Form 10-K.
|
(2)
|
Financial Statement Schedules - The information required by this item is included in Note 9, "Supplementary Financial Information," to our Consolidated Financial Statements included in Part II Item 8 of this Annual Report on Form 10-K.
|
(3)
|
Exhibits - See Index to Exhibits, which is incorporated by reference in this Item. The Exhibits listed in the accompanying Index to Exhibits are filed herewith or incorporated by reference as part of this Annual Report on Form 10-K.
|
Exhibit Number
|
|
Exhibit Description
|
2.1
|
|
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
4.4
|
|
|
4.5
|
|
|
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
|
|
|
10.18
|
|
|
10.19
|
|
|
10.20
|
|
|
10.21
|
|
|
10.22
|
|
|
10.23
|
|
|
10.24
|
|
10.25
|
|
|
10.26
|
|
|
10.27
|
|
|
10.28*
|
|
|
10.29*
|
|
|
10.30*
|
|
|
21.1
|
|
|
23.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
32.2
|
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
Item 16.
|
Form 10-K Summary
|
|
AVAYA HOLDINGS CORP.
|
|
|
|
|
|
By:
|
/s/ L. D
AVID
D
ELL
'O
SSO
|
|
Name:
|
L. David Dell'Osso
|
|
Title:
|
Vice President, Controller & Chief Accounting Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ J
AMES
M. C
HIRICO,
J
R.
|
|
Director, President and Chief Executive Officer
(Principal Executive Officer) |
|
December 21, 2018
|
James M. Chirico, Jr.
|
|
|
|
|
/s/ P
ATRICK
J
.
O'M
ALLEY,
III
|
|
Senior Vice President, Chief Financial Officer
(Principal Financial Officer)
|
|
December 21, 2018
|
Patrick J. O'Malley, III
|
|
|
|
|
/s/ L. D
AVID
D
ELL
'O
SSO
|
|
Vice President, Controller and Chief Accounting Officer
|
|
December 21, 2018
|
L. David Dell'Osso
|
|
|
|
|
/s/ W
ILLIAM
D
.
W
ATKINS
|
|
Chairman of the Board of
Directors
|
|
December 21, 2018
|
William D. Watkins
|
|
|
|
|
/s/ S
TEPHAN
S
CHOLL
|
|
Director
|
|
December 21, 2018
|
Stephan Scholl
|
|
|
|
|
/s/ S
USAN
L
.
S
PRADLEY
|
|
Director
|
|
December 21, 2018
|
Susan L. Spradley
|
|
|
|
|
/s/ S
TANLEY
J
.
S
UTULA,
III
|
|
Director
|
|
December 21, 2018
|
Stanley J. Sutula, III
|
|
|
|
|
/s/ S
COTT
D. V
OGEL
|
|
Director
|
|
December 21, 2018
|
Scott D. Vogel
|
|
|
|
Subsidiaries of Avaya Holdings Corp.
|
||
Company Name
|
|
State or Other Jurisdiction of Incorporation or Organization
|
3102455 Nova Scotia Company
|
|
Nova Scotia
|
Aurix Limited
|
|
United Kingdom
|
Avaya (China) Communication Co. Ltd.
|
|
China
|
Avaya (Dalian) Intelligent Communications Co., Ltd.
|
|
China
|
Avaya (Gibraltar) Investments Limited
|
|
Gibraltar
|
Avaya (Malaysia) Sdn. Bhd.
|
|
Malaysia
|
Avaya (Shanghai) Enterprise Management Co., Ltd.
|
|
China
|
Avaya Argentina S.R.L.
|
|
Argentina
|
Avaya Australia Pty Ltd
|
|
Australia
|
Avaya Austria GmbH
|
|
Austria
|
Avaya Belgium SPRL
|
|
Belgium
|
Avaya Beteiligungs GmbH
|
|
Germany
|
Avaya Brasil LTDA.
|
|
Brazil
|
Avaya CALA Inc.
|
|
Delaware
|
Avaya Canada Corp.
|
|
Nova Scotia
|
Avaya Capital Ireland
|
|
England & Wales
|
Avaya Capital Ireland Unlimited Company
|
|
Ireland
|
Avaya Chile Limitada
|
|
Chile
|
Avaya CIS LLC
|
|
Russian Federation
|
Avaya Cloud Inc.
|
|
Delaware
|
Avaya Cloud Limited
|
|
Ireland
|
Avaya Communication de Colombia S.A.
|
|
Colombia
|
Avaya Communication de Mexico, S.A. de C.V.
|
|
Mexico
|
Avaya Communication Israel Ltd.
|
|
Israel
|
Avaya Comunicación España S.L.U.
|
|
Spain
|
Avaya Cyprus Investments Limited
|
|
Cyprus
|
Avaya Czech Republic s.r.o.
|
|
Czech Republic
|
Avaya d.o.o.
|
|
Croatia
|
Avaya Denmark ApS
|
|
Denmark
|
Avaya Deutschland GmbH
|
|
Germany
|
Avaya Dutch Holdco B.V.
|
|
Netherlands
|
Avaya ECS Limited
|
|
England & Wales
|
Avaya Egypt LLC
|
|
Egypt
|
Avaya EMEA Ltd.
|
|
Delaware
|
Avaya Enterprises S.R.L.
|
|
Romania
|
Avaya Federal Solutions, Inc.
|
|
Delaware
|
Avaya Finland Oy
|
|
Finland
|
Avaya France SAS
|
|
France
|
Avaya GCM Sales Limited
|
|
Ireland
|
Avaya German Holdco GmbH
|
|
Germany
|
Avaya Germany GmbH
|
|
Germany
|
Avaya GmbH & Co. KG
|
|
Germany
|
Avaya Holding EMEA BV
|
|
Netherlands
|
Avaya Holdings Limited
|
|
Ireland
|
Avaya Holdings LLC
|
|
Delaware
|
Avaya Holdings Two, LLC
|
|
Delaware
|
Avaya Hong Kong Company Limited
|
|
Hong Kong
|
Avaya Hungary Ltd./Avaya Hungary Communication Limited Liability Company
|
|
Hungary
|
Avaya Iletisim Sistemleri Ticaret Anonim Sirketi (Turkey JSC)
|
|
Turkey
|
Avaya Inc.
|
|
Delaware
|
Avaya India (SEZ) Pvt Ltd
|
|
India
|
Avaya India Private Limited
|
|
India
|
Avaya Integrated Cabinet Solutions LLC
|
|
Delaware
|
Avaya International Enterprises Ltd.
|
|
Ireland
|
Avaya International Holdings Limited
|
|
England & Wales
|
Avaya International Sales Limited
|
|
Ireland
|
Avaya Ireland Limited
|
|
Ireland
|
Avaya Italia S.p.A.
|
|
Italy
|
Avaya Japan Ltd.
|
|
Japan
|
Avaya Korea Ltd.
|
|
Korea, Republic Of
|
Avaya Limited
|
|
England & Wales
|
Avaya Luxembourg Investments S.a.r.l.
|
|
Luxembourg
|
Avaya Luxembourg Sarl
|
|
Luxembourg
|
Avaya Macau Limitada
|
|
China
|
Avaya Management L.P.
|
|
Delaware
|
Avaya Management Services Inc.
|
|
Delaware
|
Avaya Mauritius Ltd
|
|
Mauritius
|
Avaya Nederland B.V.
|
|
Netherlands
|
Avaya New Zealand Limited
|
|
New Zealand
|
Avaya Nigeria Limited
|
|
Nigeria
|
Avaya Norway AS
|
|
Norway
|
Avaya Panama Ltda.
|
|
Panama
|
Avaya Peru S.R.L.
|
|
Peru
|
Avaya Philippines, Inc.
|
|
Philippines
|
Avaya Poland Sp. z.o.o.
|
|
Poland
|
Avaya Puerto Rico, Inc.
|
|
Puerto Rico
|
Avaya Services Inc.
|
|
New York
|
Avaya Singapore Pte Ltd
|
|
Singapore
|
Avaya Sweden AB
|
|
Sweden
|
Avaya Switzerland GmbH
|
|
Switzerland
|
Avaya Training and Service Centre FZE
|
|
United Arab Emirates
|
Avaya UK
|
|
England & Wales
|
Avaya UK Holdings Limited
|
|
England & Wales
|
Avaya Venezuela S.R.L.
|
|
Venezuela
|
Avaya Verwaltungs GmbH
|
|
Germany
|
Avaya World Services Inc.
|
|
Delaware
|
CAAS Technologies, LLC
|
|
Nevada
|
Esna Technologies Inc.
|
|
Ontario
|
Esna Technologies Ltd
|
|
United Kingdom
|
Global Horizon Holdings Ltd
|
|
Israel
|
Harmatis Ltd.
|
|
Israel
|
Hyper Quality (India) Private Limited
|
|
India
|
HyperQuality II, LLC
|
|
Washington
|
HyperQuality, Inc.
|
|
Delaware
|
Intellisist, Inc.
|
|
Washington
|
KnoahSoft Technologies Private Limited
|
|
India
|
KnoahSoft, Inc.
|
|
Delaware
|
Konftel AB
|
|
Sweden
|
Nimcat Networks General Partnership
|
|
Canada
|
Octel Communications LLC
|
|
Delaware
|
Persony, Inc.
|
|
Delaware
|
PT Sierra Communication Indonesia
|
|
Indonesia
|
Radvision Communication Development Beijing Co. Ltd. (RCD)
|
|
Bejing
|
Radvision Government Services, Inc.
|
|
Delaware
|
Sierra Asia Pacific Inc.
|
|
Delaware
|
Sierra Communication International LLC
|
|
Delaware
|
Sipera Systems Private Limited
|
|
India
|
Spectel Limited
|
|
Ireland
|
Spectel Operations Limited
|
|
Ireland
|
Spectel Research Limited
|
|
Ireland
|
Spoken Communications Japan K.K.
|
|
Japan
|
Technology Corporation of America, Inc.
|
|
Delaware
|
Tenovis Direct GmbH
|
|
Germany
|
Tenovis Telecom Frankfurt GmbH & Co. KG
|
|
Germany
|
Ubiquity Software Corporation
|
|
Delaware
|
Ubiquity Software Corporation Limited
|
|
England & Wales
|
VPNet Technologies, Inc.
|
|
Delaware
|
Windward Corp.
|
|
Cayman Islands
|
|
|
|
/s/ J
AMES
M. C
HIRICO
, J
R
.
|
|
James M. Chirico, Jr.
Director, President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
/s/ P
ATRICK
J. O'M
ALLEY
, III
|
|
Patrick J. O'Malley, III
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
|
/s/ J
AMES
M. C
HIRICO
, J
R
.
|
|
James M. Chirico, Jr.
Director, President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
/s/ P
ATRICK
J. O'M
ALLEY
, III
|
|
Patrick J. O'Malley, III
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|