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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
|
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26-1119726
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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4655 Great America Parkway
Santa Clara, California
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95054
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(Address of Principal executive offices)
|
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(Zip Code)
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Large accelerated filer
¨
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Accelerated filer
¨
|
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Non-accelerated filer
x
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Smaller Reporting Company
¨
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Emerging growth company
¨
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Item
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Description
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Page
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1.
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2.
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3.
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4.
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1.
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1A.
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2.
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3.
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4.
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5.
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6.
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Item 1.
|
Financial Statements.
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
|
Three months ended
December 31, 2018 |
|
Period from December 16, 2017
through December 31, 2017 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
||||||
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|
|||||||||
REVENUE
|
|
|
|
|
|
|
|
||||||
Products
|
|
$
|
324
|
|
|
$
|
71
|
|
|
|
$
|
253
|
|
Services
|
|
414
|
|
|
77
|
|
|
|
351
|
|
|||
|
|
738
|
|
|
148
|
|
|
|
604
|
|
|||
COSTS
|
|
|
|
|
|
|
|
||||||
Products:
|
|
|
|
|
|
|
|
||||||
Costs
|
|
115
|
|
|
33
|
|
|
|
84
|
|
|||
Amortization of technology intangible assets
|
|
43
|
|
|
7
|
|
|
|
3
|
|
|||
Services
|
|
173
|
|
|
30
|
|
|
|
155
|
|
|||
|
|
331
|
|
|
70
|
|
|
|
242
|
|
|||
GROSS PROFIT
|
|
407
|
|
|
78
|
|
|
|
362
|
|
|||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
||||||
Selling, general and administrative
|
|
257
|
|
|
50
|
|
|
|
264
|
|
|||
Research and development
|
|
53
|
|
|
9
|
|
|
|
38
|
|
|||
Amortization of intangible assets
|
|
40
|
|
|
7
|
|
|
|
10
|
|
|||
Restructuring charges, net
|
|
7
|
|
|
10
|
|
|
|
14
|
|
|||
|
|
357
|
|
|
76
|
|
|
|
326
|
|
|||
OPERATING INCOME
|
|
50
|
|
|
2
|
|
|
|
36
|
|
|||
Interest expense
|
|
(60
|
)
|
|
(9
|
)
|
|
|
(14
|
)
|
|||
Other income (expense), net
|
|
22
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|||
Reorganization items, net
|
|
—
|
|
|
—
|
|
|
|
3,416
|
|
|||
INCOME (LOSS) BEFORE INCOME TAXES
|
|
12
|
|
|
(9
|
)
|
|
|
3,436
|
|
|||
(Provision for) benefit from income taxes
|
|
(3
|
)
|
|
246
|
|
|
|
(459
|
)
|
|||
NET INCOME
|
|
$
|
9
|
|
|
$
|
237
|
|
|
|
$
|
2,977
|
|
NET INCOME PER SHARE
|
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
0.08
|
|
|
$
|
2.16
|
|
|
|
$
|
5.19
|
|
Diluted
|
|
$
|
0.08
|
|
|
$
|
2.15
|
|
|
|
$
|
5.19
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
||||||
Basic
|
|
110.3
|
|
|
109.8
|
|
|
|
497.3
|
|
|||
Diluted
|
|
111.2
|
|
|
110.3
|
|
|
|
497.3
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
Three months ended
December 31, 2018 |
|
Period from December 16, 2017
through December 31, 2017 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
||||||
|
|
|
|
|||||||||
Net income
|
$
|
9
|
|
|
$
|
237
|
|
|
|
$
|
2,977
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
||||||
Pension, post-retirement and postemployment benefit-related items, net of income taxes $(58) for the period from October 1, 2017 through December 15, 2017
|
—
|
|
|
—
|
|
|
|
655
|
|
|||
Cumulative translation adjustment
|
1
|
|
|
(13
|
)
|
|
|
3
|
|
|||
Change in interest rate swaps, net of income taxes of $7 for the three months ended December 31, 2018
|
(21
|
)
|
|
—
|
|
|
|
—
|
|
|||
Other comprehensive (loss) income
|
(20
|
)
|
|
(13
|
)
|
|
|
658
|
|
|||
Elimination of Predecessor Company accumulated other comprehensive loss
|
—
|
|
|
—
|
|
|
|
790
|
|
|||
Total comprehensive (loss) income
|
$
|
(11
|
)
|
|
$
|
224
|
|
|
|
$
|
4,425
|
|
|
December 31, 2018
|
|
September 30, 2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
743
|
|
|
$
|
700
|
|
Accounts receivable, net
|
327
|
|
|
377
|
|
||
Inventory
|
68
|
|
|
81
|
|
||
Contract assets
|
120
|
|
|
—
|
|
||
Contract costs
|
118
|
|
|
—
|
|
||
Other current assets
|
106
|
|
|
170
|
|
||
TOTAL CURRENT ASSETS
|
1,482
|
|
|
1,328
|
|
||
Property, plant and equipment, net
|
239
|
|
|
250
|
|
||
Deferred income taxes, net
|
28
|
|
|
29
|
|
||
Intangible assets, net
|
3,149
|
|
|
3,234
|
|
||
Goodwill
|
2,764
|
|
|
2,764
|
|
||
Other assets
|
97
|
|
|
74
|
|
||
TOTAL ASSETS
|
$
|
7,759
|
|
|
$
|
7,679
|
|
LIABILITIES
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Debt maturing within one year
|
$
|
29
|
|
|
$
|
29
|
|
Accounts payable
|
295
|
|
|
266
|
|
||
Payroll and benefit obligations
|
121
|
|
|
145
|
|
||
Contract liabilities
|
482
|
|
|
484
|
|
||
Business restructuring reserve
|
50
|
|
|
51
|
|
||
Other current liabilities
|
152
|
|
|
148
|
|
||
TOTAL CURRENT LIABILITIES
|
1,129
|
|
|
1,123
|
|
||
Non-current liabilities:
|
|
|
|
||||
Long-term debt, net of current portion
|
3,095
|
|
|
3,097
|
|
||
Pension obligations
|
652
|
|
|
671
|
|
||
Other post-retirement obligations
|
177
|
|
|
176
|
|
||
Deferred income taxes, net
|
161
|
|
|
140
|
|
||
Business restructuring reserve
|
43
|
|
|
47
|
|
||
Other liabilities
|
370
|
|
|
374
|
|
||
TOTAL NON-CURRENT LIABILITIES
|
4,498
|
|
|
4,505
|
|
||
TOTAL LIABILITIES
|
5,627
|
|
|
5,628
|
|
||
Commitments and contingencies (Note 19)
|
|
|
|
||||
STOCKHOLDERS' EQUITY
|
|
|
|
||||
Preferred stock, $0.01 par value; 55,000,000 shares authorized, no shares issued or outstanding at December 31, 2018 and September 30, 2018
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; 550,000,000 shares authorized; 110,708,203 shares issued and 110,695,523 shares outstanding at December 31, 2018; and 110,218,653 shares issued and 110,012,790 shares outstanding at September 30, 2018
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
1,745
|
|
|
1,745
|
|
||
Retained earnings
|
388
|
|
|
287
|
|
||
Accumulated other comprehensive (loss) income
|
(2
|
)
|
|
18
|
|
||
TOTAL STOCKHOLDERS' EQUITY
|
2,132
|
|
|
2,051
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
7,759
|
|
|
$
|
7,679
|
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
Shares
|
|
Par Value
|
|
Additional
Paid-In Capital |
|
Retained Earnings
|
|
Accumulated
Other Comprehensive Income (Loss) |
|
Total
Stockholders' Equity |
|||||||||||
Balance as of September 30, 2018 (Successor)
|
|
110.2
|
|
|
$
|
1
|
|
|
$
|
1,745
|
|
|
$
|
287
|
|
|
$
|
18
|
|
|
$
|
2,051
|
|
Issuance of common stock under the equity incentive plan
|
|
0.8
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||
Shares repurchased and retired for tax withholding on vesting of restricted stock units
|
|
(0.3
|
)
|
|
|
|
(6
|
)
|
|
|
|
|
|
(6
|
)
|
||||||||
Amortization of share-based compensation
|
|
|
|
|
|
6
|
|
|
|
|
|
|
6
|
|
|||||||||
Adjustment for adoption of new accounting standard (Note 2)
|
|
|
|
|
|
|
|
92
|
|
|
|
|
92
|
|
|||||||||
Net income
|
|
|
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
(20
|
)
|
|
(20
|
)
|
|||||||||
Balance as of December 31, 2018 (Successor)
|
|
110.7
|
|
|
$
|
1
|
|
|
$
|
1,745
|
|
|
$
|
388
|
|
|
$
|
(2
|
)
|
|
$
|
2,132
|
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
Shares
|
|
Par Value
|
|
Additional
Paid-In Capital |
|
(Accumulated
Deficit) Retained Earnings |
|
Accumulated
Other Comprehensive (Loss) Income |
|
Total
Stockholders' (Deficit) Equity |
|||||||||||
Balance as of September 30, 2017 (Predecessor)
|
|
494.8
|
|
|
$
|
—
|
|
|
$
|
2,389
|
|
|
$
|
(5,954
|
)
|
|
$
|
(1,448
|
)
|
|
$
|
(5,013
|
)
|
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)
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 15, 2017 (Predecessor)
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Issuance of Successor common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock issued for settlement of Predecessor debt
|
|
103.9
|
|
|
1
|
|
|
1,575
|
|
|
|
|
|
|
1,576
|
|
|||||||
Common stock issued 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
|
|
—
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||
Amortization of share-based compensation
|
|
|
|
|
|
1
|
|
|
|
|
|
|
1
|
|
|||||||||
Net income
|
|
|
|
|
|
|
|
237
|
|
|
|
|
237
|
|
|||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
(13
|
)
|
|
(13
|
)
|
|||||||||
Balance as of December 31, 2017 (Successor)
|
|
110.0
|
|
|
$
|
1
|
|
|
$
|
1,668
|
|
|
$
|
237
|
|
|
$
|
(13
|
)
|
|
$
|
1,893
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
|
Three months ended
December 31, 2018 |
|
Period from December 16, 2017
through December 31, 2017 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
||||||
|
|
|
|
|
|||||||||
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
9
|
|
|
$
|
237
|
|
|
|
$
|
2,977
|
|
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
117
|
|
|
22
|
|
|
|
31
|
|
|||
Share-based compensation
|
|
6
|
|
|
1
|
|
|
|
—
|
|
|||
Amortization of debt issuance costs
|
|
4
|
|
|
—
|
|
|
|
—
|
|
|||
Accretion of debt discount
|
|
1
|
|
|
—
|
|
|
|
—
|
|
|||
Deferred income taxes, net
|
|
(2
|
)
|
|
(245
|
)
|
|
|
455
|
|
|||
Change in fair value of emergence date warrants
|
|
(18
|
)
|
|
5
|
|
|
|
—
|
|
|||
Unrealized loss (gain) on foreign currency transactions
|
|
14
|
|
|
(4
|
)
|
|
|
—
|
|
|||
Other non-cash charges, net
|
|
—
|
|
|
1
|
|
|
|
—
|
|
|||
Reorganization items:
|
|
|
|
|
|
|
|
||||||
Net gain on settlement of Liabilities subject to compromise
|
|
—
|
|
|
—
|
|
|
|
(1,778
|
)
|
|||
Payment to Pension Benefit Guaranty Corporation
|
|
—
|
|
|
—
|
|
|
|
(340
|
)
|
|||
Payment to pension trust
|
|
—
|
|
|
—
|
|
|
|
(49
|
)
|
|||
Payment of unsecured claims
|
|
—
|
|
|
—
|
|
|
|
(58
|
)
|
|||
Fresh start adjustments, net
|
|
—
|
|
|
—
|
|
|
|
(1,697
|
)
|
|||
Non-cash and financing related reorganization items, net
|
|
—
|
|
|
—
|
|
|
|
26
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
49
|
|
|
(21
|
)
|
|
|
40
|
|
|||
Inventory
|
|
(11
|
)
|
|
2
|
|
|
|
—
|
|
|||
Contract assets
|
|
(43
|
)
|
|
—
|
|
|
|
—
|
|
|||
Contract costs
|
|
(7
|
)
|
|
—
|
|
|
|
—
|
|
|||
Accounts payable
|
|
26
|
|
|
27
|
|
|
|
(40
|
)
|
|||
Payroll and benefit obligations
|
|
(37
|
)
|
|
(22
|
)
|
|
|
16
|
|
|||
Business restructuring reserve
|
|
(4
|
)
|
|
(3
|
)
|
|
|
(7
|
)
|
|||
Contract liabilities
|
|
21
|
|
|
44
|
|
|
|
28
|
|
|||
Other assets and liabilities
|
|
(39
|
)
|
|
(4
|
)
|
|
|
(18
|
)
|
|||
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES
|
|
86
|
|
|
40
|
|
|
|
(414
|
)
|
|||
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
||||||
Capital expenditures
|
|
(21
|
)
|
|
(2
|
)
|
|
|
(13
|
)
|
|||
Other investing activities, net
|
|
(1
|
)
|
|
—
|
|
|
|
—
|
|
|||
NET CASH USED FOR INVESTING ACTIVITIES
|
|
(22
|
)
|
|
(2
|
)
|
|
|
(13
|
)
|
|||
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
||||||
Proceeds from Term Loan Credit Agreement
|
|
—
|
|
|
—
|
|
|
|
2,896
|
|
|||
Repayment of debtor-in-possession financing
|
|
—
|
|
|
—
|
|
|
|
(725
|
)
|
|||
Repayment of first lien debt
|
|
—
|
|
|
—
|
|
|
|
(2,061
|
)
|
|||
Repayment of long-term debt, including adequate protection payments
|
|
(7
|
)
|
|
—
|
|
|
|
(111
|
)
|
|||
Debt issuance costs
|
|
—
|
|
|
—
|
|
|
|
(97
|
)
|
|||
Payments related to sale-leaseback transactions
|
|
(4
|
)
|
|
—
|
|
|
|
(4
|
)
|
|||
Other financing activities, net
|
|
(7
|
)
|
|
—
|
|
|
|
—
|
|
|||
NET CASH USED FOR FINANCING ACTIVITIES
|
|
(18
|
)
|
|
—
|
|
|
|
(102
|
)
|
|||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
|
(3
|
)
|
|
3
|
|
|
|
(2
|
)
|
|||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
|
|
43
|
|
|
41
|
|
|
|
(531
|
)
|
|||
Cash, cash equivalents, and restricted cash at beginning of period
|
|
704
|
|
|
435
|
|
|
|
966
|
|
|||
Cash, cash equivalents, and restricted cash at end of period
|
|
$
|
747
|
|
|
$
|
476
|
|
|
|
$
|
435
|
|
|
|
September 30, 2018
|
|
|
|
October 1, 2018
|
||||||
(In millions)
|
|
As Reported
|
|
Adjustments
|
|
Upon Adoption of ASC 606
|
||||||
ASSETS
|
|
|
|
|
|
|
||||||
Accounts receivable, net
|
|
$
|
377
|
|
|
$
|
(1
|
)
|
|
$
|
376
|
|
Inventory
|
|
81
|
|
|
(24
|
)
|
|
57
|
|
|||
Contract assets
|
|
—
|
|
|
77
|
|
|
77
|
|
|||
Contract costs
|
|
—
|
|
|
109
|
|
|
109
|
|
|||
Other current assets
|
|
170
|
|
|
(66
|
)
|
|
104
|
|
|||
Property, plant and equipment, net
|
|
250
|
|
|
(1
|
)
|
|
249
|
|
|||
Deferred income taxes, net
|
|
29
|
|
|
(2
|
)
|
|
27
|
|
|||
Other assets
|
|
74
|
|
|
16
|
|
|
90
|
|
|||
|
|
|
|
|
|
|
||||||
LIABILITIES
|
|
|
|
|
|
|
||||||
Contract liabilities
|
|
484
|
|
|
(16
|
)
|
|
468
|
|
|||
Other current liabilities
|
|
148
|
|
|
4
|
|
|
152
|
|
|||
Deferred income taxes, net
|
|
140
|
|
|
28
|
|
|
168
|
|
|||
|
|
|
|
|
|
|
||||||
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
||||||
Retained earnings
|
|
287
|
|
|
92
|
|
|
379
|
|
|
|
December 31, 2018
|
||||||||||
(In millions)
|
|
As Reported
|
|
Adjustments
|
|
Without Adoption of ASC 606
|
||||||
ASSETS
|
|
|
|
|
|
|
||||||
Accounts receivable, net
|
|
$
|
327
|
|
|
$
|
2
|
|
|
$
|
329
|
|
Inventory
|
|
68
|
|
|
28
|
|
|
96
|
|
|||
Contract assets
|
|
120
|
|
|
(120
|
)
|
|
—
|
|
|||
Contract costs
|
|
118
|
|
|
(118
|
)
|
|
—
|
|
|||
Other current assets
|
|
106
|
|
|
83
|
|
|
189
|
|
|||
Property, plant and equipment, net
|
|
239
|
|
|
1
|
|
|
240
|
|
|||
Deferred income taxes, net
|
|
28
|
|
|
2
|
|
|
30
|
|
|||
Other assets
|
|
97
|
|
|
(15
|
)
|
|
82
|
|
|||
|
|
|
|
|
|
|
||||||
LIABILITIES
|
|
|
|
|
|
|
||||||
Contract liabilities
|
|
482
|
|
|
23
|
|
|
505
|
|
|||
Other current liabilities
|
|
152
|
|
|
(12
|
)
|
|
140
|
|
|||
Deferred income taxes, net
|
|
161
|
|
|
(28
|
)
|
|
133
|
|
|||
|
|
|
|
|
|
|
||||||
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
||||||
Retained earnings
|
|
388
|
|
|
(120
|
)
|
|
268
|
|
|
|
Three Months Ended December 31, 2018
|
||||||||||
(In millions)
|
|
As Reported
|
|
Adjustments
|
|
Without Adoption of ASC 606
|
||||||
REVENUE
|
|
|
|
|
|
|
||||||
Products
|
|
$
|
324
|
|
|
$
|
(30
|
)
|
|
$
|
294
|
|
Services
|
|
414
|
|
|
(20
|
)
|
|
394
|
|
|||
|
|
738
|
|
|
(50
|
)
|
|
688
|
|
|||
COSTS
|
|
|
|
|
|
|
||||||
Products:
|
|
|
|
|
|
|
||||||
Costs
|
|
115
|
|
|
(6
|
)
|
|
109
|
|
|||
Amortization of technology intangible assets
|
|
43
|
|
|
—
|
|
|
43
|
|
|||
Services
|
|
173
|
|
|
(6
|
)
|
|
167
|
|
|||
|
|
331
|
|
|
(12
|
)
|
|
319
|
|
|||
GROSS PROFIT
|
|
407
|
|
|
(38
|
)
|
|
369
|
|
|||
OPERATING EXPENSES
|
|
|
|
|
|
|
||||||
Selling, general and administrative
|
|
257
|
|
|
8
|
|
|
265
|
|
|||
Research and development
|
|
53
|
|
|
—
|
|
|
53
|
|
|||
Amortization of intangible assets
|
|
40
|
|
|
—
|
|
|
40
|
|
|||
Restructuring charges, net
|
|
7
|
|
|
—
|
|
|
7
|
|
|||
|
|
357
|
|
|
8
|
|
|
365
|
|
|||
OPERATING INCOME
|
|
50
|
|
|
(46
|
)
|
|
4
|
|
|||
Interest expense
|
|
(60
|
)
|
|
—
|
|
|
(60
|
)
|
|||
Other income, net
|
|
22
|
|
|
—
|
|
|
22
|
|
|||
INCOME (LOSS) BEFORE INCOME TAXES
|
|
12
|
|
|
(46
|
)
|
|
(34
|
)
|
|||
(Provision for) benefit from income taxes
|
|
(3
|
)
|
|
18
|
|
|
15
|
|
|||
NET INCOME (LOSS)
|
|
$
|
9
|
|
|
$
|
(28
|
)
|
|
$
|
(19
|
)
|
|
|
Three months ended December 31, 2018
|
||||||||||||||
(In millions)
|
|
Products & Solutions
|
|
Services
|
|
Unallocated
|
|
Total
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
U.S.
|
|
$
|
150
|
|
|
$
|
251
|
|
|
$
|
(7
|
)
|
|
$
|
394
|
|
International:
|
|
|
|
|
|
|
|
|
||||||||
Europe, Middle East and Africa
|
|
106
|
|
|
94
|
|
|
(1
|
)
|
|
199
|
|
||||
Asia Pacific
|
|
38
|
|
|
41
|
|
|
(1
|
)
|
|
78
|
|
||||
Americas International - Canada and Latin America
|
|
32
|
|
|
36
|
|
|
(1
|
)
|
|
67
|
|
||||
Total International
|
|
176
|
|
|
171
|
|
|
(3
|
)
|
|
344
|
|
||||
Total revenue
|
|
$
|
326
|
|
|
$
|
422
|
|
|
$
|
(10
|
)
|
|
$
|
738
|
|
(In millions)
|
Technology and Patents |
|
Customer
Relationships and Other Intangibles |
|
Trademarks
and Trade Names |
|
Total
|
||||||||
Balance as of December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||||
Cost
|
$
|
961
|
|
|
$
|
2,156
|
|
|
$
|
43
|
|
|
$
|
3,160
|
|
Accumulated amortization
|
(178
|
)
|
|
(163
|
)
|
|
(4
|
)
|
|
(345
|
)
|
||||
Finite-lived intangible assets, net
|
783
|
|
|
1,993
|
|
|
39
|
|
|
2,815
|
|
||||
Indefinite-lived intangible assets
|
2
|
|
|
—
|
|
|
332
|
|
|
334
|
|
||||
Intangible assets, net
|
$
|
785
|
|
|
$
|
1,993
|
|
|
$
|
371
|
|
|
$
|
3,149
|
|
Balance as of September 30, 2018
|
|
|
|
|
|
|
|
||||||||
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
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
(In millions)
|
|
Three months ended December 31, 2018
|
|
Period from December 16, 2017
through December 31, 2017 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
||||||
OTHER INCOME (EXPENSE), NET
|
|
|
|
|
|
|
|
||||||
Interest income
|
|
$
|
3
|
|
|
$
|
—
|
|
|
|
$
|
2
|
|
Foreign currency (losses) gains, net
|
|
(1
|
)
|
|
2
|
|
|
|
—
|
|
|||
Income from transition services agreement, net
|
|
—
|
|
|
—
|
|
|
|
3
|
|
|||
Other pension and post-retirement benefit credits (costs), net
|
|
2
|
|
|
1
|
|
|
|
(8
|
)
|
|||
Change in fair value of emergence date warrants
|
|
18
|
|
|
(5
|
)
|
|
|
—
|
|
|||
Other, net
|
|
—
|
|
|
—
|
|
|
|
1
|
|
|||
Total other income (expense), net
|
|
$
|
22
|
|
|
$
|
(2
|
)
|
|
|
$
|
(2
|
)
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
(In millions)
|
|
Three months ended December 31, 2018
|
|
Period from December 16, 2017
through December 31, 2017 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
||||||
REORGANIZATION ITEMS, NET
|
|
|
|
|
|
|
|
||||||
Net gain on settlement of Liabilities subject to compromise
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
1,778
|
|
Net gain on fresh start adjustments
|
|
—
|
|
|
—
|
|
|
|
1,697
|
|
|||
Bankruptcy-related professional fees
|
|
—
|
|
|
—
|
|
|
|
(56
|
)
|
|||
Other items, net
|
|
—
|
|
|
—
|
|
|
|
(3
|
)
|
|||
Reorganization items, net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
3,416
|
|
Cash payments for reorganization items
|
|
$
|
—
|
|
|
$
|
1
|
|
|
|
$
|
2,524
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
(In millions)
|
|
Three months ended December 31, 2018
|
|
Period from December 16, 2017
through December 31, 2017 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
||||||
OTHER PAYMENTS
|
|
|
|
|
|
|
|
||||||
Interest payments
|
|
$
|
48
|
|
|
$
|
—
|
|
|
|
$
|
15
|
|
Income tax payments
|
|
$
|
7
|
|
|
$
|
2
|
|
|
|
$
|
7
|
|
|
|
|
|
|
|
|
|
||||||
NON-CASH INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
||||||
Increase in Accounts payable for Capital expenditures
|
|
$
|
4
|
|
|
$
|
1
|
|
|
|
$
|
—
|
|
|
|
Successor
|
|
|
Predecessor
|
|||||||||||||||
(In millions)
|
|
December 31, 2018
|
|
September 30, 2018
|
|
December 31, 2017
|
|
|
December 15, 2017
|
|
September 30, 2017
|
|||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents
|
|
$
|
743
|
|
|
$
|
700
|
|
|
$
|
417
|
|
|
|
$
|
366
|
|
|
876
|
|
Restricted cash included in other current assets
|
|
—
|
|
|
—
|
|
|
55
|
|
|
|
65
|
|
|
85
|
|
||||
Restricted cash included in other assets
|
|
4
|
|
|
4
|
|
|
4
|
|
|
|
4
|
|
|
5
|
|
||||
Total cash, cash equivalents, and restricted cash
|
|
$
|
747
|
|
|
$
|
704
|
|
|
$
|
476
|
|
|
|
$
|
435
|
|
|
966
|
|
(In millions)
|
Employee Separation Costs
|
|
Lease Obligations
|
|
Total
|
||||||
Restructuring charges
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
Cash payments
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Balance as of December 31, 2018
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
6
|
|
(In millions)
|
Employee Separation Costs
|
|
Lease Obligations
|
|
Total
|
||||||
Balance as of September 30, 2018
|
$
|
54
|
|
|
$
|
—
|
|
|
$
|
54
|
|
Cash payments
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||
Impact of foreign currency fluctuations
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Balance as of December 31, 2018
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
48
|
|
(In millions)
|
Employee Separation Costs
|
|
Lease Obligations
|
|
Total
|
||||||
Balance as of September 30, 2018
|
$
|
38
|
|
|
$
|
6
|
|
|
$
|
44
|
|
Cash payments
|
(4
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|||
Balance as of December 31, 2018
|
$
|
34
|
|
|
$
|
5
|
|
|
$
|
39
|
|
|
December 31, 2018
|
|
September 30, 2018
|
||||||||||||
(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
|
$
|
2,896
|
|
|
$
|
2,864
|
|
|
$
|
2,903
|
|
|
$
|
2,870
|
|
Convertible 2.25% senior notes due June 15, 2023
|
350
|
|
|
260
|
|
|
350
|
|
|
256
|
|
||||
Total debt
|
$
|
3,246
|
|
|
3,124
|
|
|
$
|
3,253
|
|
|
3,126
|
|
||
Debt maturing within one year
|
|
|
(29
|
)
|
|
|
|
(29
|
)
|
||||||
Long-term debt, net of current portion
|
|
|
$
|
3,095
|
|
|
|
|
$
|
3,097
|
|
(In millions)
|
|
December 31, 2018
|
|
September 30, 2018
|
||||
Principal
|
|
$
|
350
|
|
|
$
|
350
|
|
Less:
|
|
|
|
|
||||
Unamortized debt discount
|
|
(84
|
)
|
|
(87
|
)
|
||
Unamortized issuance costs
|
|
(6
|
)
|
|
(7
|
)
|
||
Net carrying amount
|
|
$
|
260
|
|
|
$
|
256
|
|
|
December 31, 2018
|
|
September 30, 2018
|
||
Expected volatility
|
54.86
|
%
|
|
50.14
|
%
|
Risk-free interest rates
|
2.47
|
%
|
|
2.90
|
%
|
Expected remaining life (in years)
|
3.96
|
|
|
4.21
|
|
Price per share of common stock
|
$14.56
|
|
$22.14
|
|
|
|
|
December 31, 2018
|
|
September 30, 2018
|
||||||||||||
(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
|
|
|
—
|
|
|
7
|
|
||||
Interest rate contracts
|
|
Other liabilities
|
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
—
|
|
|
31
|
|
|
3
|
|
|
7
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Emergence Date Warrants
|
|
Other liabilities
|
|
—
|
|
|
16
|
|
|
—
|
|
|
34
|
|
||||
Total derivative fair value
|
|
|
|
$
|
—
|
|
|
$
|
47
|
|
|
$
|
3
|
|
|
$
|
41
|
|
|
|
Three months
ended December 31, 2018 |
||||||
(In millions)
|
|
Interest Expense
|
|
Other Comprehensive (Loss) Income
|
||||
Financial Statement Line Item in which Cash Flow Hedges are Recorded
|
|
$
|
(60
|
)
|
|
$
|
(20
|
)
|
|
|
|
|
|
||||
Impact of cash flow hedging relationships:
|
|
|
|
|
||||
Loss recognized in AOCI - on interest rate swaps
|
|
—
|
|
|
(31
|
)
|
||
Interest expense from AOCI reclassified
|
|
(3
|
)
|
|
3
|
|
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
|
|
|
Three months ended December 31, 2018
|
|
Period from December 16, 2017
through December 31, 2017 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
||||||
(In millions)
|
|
Location of Derivative Pre-tax Gain (Loss)
|
|
|
|
|
|||||||||
Emergence Date Warrants
|
|
Other income (expense), net
|
|
$
|
18
|
|
|
$
|
(5
|
)
|
|
|
$
|
—
|
|
|
|
December 31, 2018
|
|
September 30, 2018
|
||||||||||||
(In millions)
|
|
Asset
|
|
Liability
|
|
Asset
|
|
Liability
|
||||||||
Gross amounts recognized in the Condensed Consolidated Balance Sheet
|
|
$
|
—
|
|
|
$
|
47
|
|
|
$
|
3
|
|
|
$
|
41
|
|
Gross amount subject to offset in master netting arrangements not offset in the Condensed Consolidated Balance Sheet
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
||||
Net amounts
|
|
$
|
—
|
|
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
38
|
|
|
December 31, 2018
|
|
September 30, 2018
|
||||||||||||||||||||||||||||
|
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
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||||||
Total assets
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate contracts
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
Spoken acquisition Earn-outs
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||||||
Emergence Date Warrants
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
34
|
|
||||||||
Total liabilities
|
$
|
63
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
32
|
|
|
$
|
56
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
49
|
|
(In millions)
|
Emergence Date Warrants
|
|
Spoken Acquisition Earn-outs
|
|
Total
|
||||||
September 30, 2018
|
$
|
34
|
|
|
$
|
15
|
|
|
$
|
49
|
|
Change in fair value
(1)
|
(18
|
)
|
|
1
|
|
|
(17
|
)
|
|||
December 31, 2018
|
$
|
16
|
|
|
$
|
16
|
|
|
$
|
32
|
|
|
December 31, 2018
|
|
September 30, 2018
|
||||||||||||
(In millions)
|
Principal amount
|
|
Fair value
|
|
Principal amount
|
|
Fair value
|
||||||||
Term Loan Credit Agreement due December 15, 2024
|
2,896
|
|
|
2,800
|
|
|
$
|
2,903
|
|
|
$
|
2,932
|
|
||
Convertible 2.25% senior notes due June 15, 2023
|
350
|
|
|
300
|
|
|
350
|
|
|
357
|
|
||||
Total debt
|
$
|
3,246
|
|
|
$
|
3,100
|
|
|
$
|
3,253
|
|
|
$
|
3,289
|
|
|
|
Successor
|
|
|
Predecessor
(1)
|
||||||||
(In millions)
|
|
Three months
ended December 31, 2018 |
|
Period from December 16, 2017
through December 31, 2017 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
||||||
Pension Benefits - U.S.
|
|
|
|
|
|
|
|
||||||
Components of net periodic benefit (credit) cost
|
|
|
|
|
|
|
|
||||||
Service cost
|
|
$
|
1
|
|
|
$
|
—
|
|
|
|
$
|
1
|
|
Interest cost
|
|
10
|
|
|
1
|
|
|
|
22
|
|
|||
Expected return on plan assets
|
|
(15
|
)
|
|
(2
|
)
|
|
|
(38
|
)
|
|||
Amortization of actuarial loss
|
|
—
|
|
|
—
|
|
|
|
20
|
|
|||
Net periodic benefit (credit) cost
|
|
$
|
(4
|
)
|
|
$
|
(1
|
)
|
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
||||||
Pension Benefits - Non-U.S.
|
|
|
|
|
|
|
|
||||||
Components of net periodic benefit cost
|
|
|
|
|
|
|
|
||||||
Service cost
|
|
$
|
2
|
|
|
$
|
—
|
|
|
|
$
|
2
|
|
Interest cost
|
|
2
|
|
|
—
|
|
|
|
3
|
|
|||
Expected return on plan assets
|
|
—
|
|
|
—
|
|
|
|
(1
|
)
|
|||
Amortization of actuarial loss
|
|
—
|
|
|
—
|
|
|
|
2
|
|
|||
Net periodic benefit cost
|
|
$
|
4
|
|
|
$
|
—
|
|
|
|
$
|
6
|
|
|
|
|
|
|
|
|
|
||||||
Post-retirement Benefits - U.S.
|
|
|
|
|
|
|
|
||||||
Components of net periodic benefit cost
|
|
|
|
|
|
|
|
||||||
Interest cost
|
|
$
|
3
|
|
|
$
|
—
|
|
|
|
$
|
3
|
|
Expected return on plan assets
|
|
(2
|
)
|
|
—
|
|
|
|
(2
|
)
|
|||
Amortization of prior service cost
|
|
—
|
|
|
—
|
|
|
|
(3
|
)
|
|||
Amortization of actuarial loss
|
|
—
|
|
|
—
|
|
|
|
2
|
|
|||
Net periodic benefit cost
|
|
$
|
1
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
(In millions, except per share amounts)
|
|
Three months ended December 31, 2018
|
|
Period from December 16, 2017
through December 31, 2017 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
||||||
Net income per share:
|
|
|
|
|
|
|
|
||||||
Numerator
|
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
9
|
|
|
$
|
237
|
|
|
|
$
|
2,977
|
|
Dividends and accretion to preferred stockholders
|
|
—
|
|
|
—
|
|
|
|
(6
|
)
|
|||
Undistributed earnings
|
|
9
|
|
|
237
|
|
|
|
2,971
|
|
|||
Percentage allocated to common stockholders
(1)
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
86.9
|
%
|
|||
Numerator for basic and diluted earnings per common share
|
|
$
|
9
|
|
|
$
|
237
|
|
|
|
$
|
2,582
|
|
|
|
|
|
|
|
|
|
||||||
Denominator
|
|
|
|
|
|
|
|
||||||
Denominator for basic earnings per weighted average common shares
|
|
110.3
|
|
|
109.8
|
|
|
|
497.3
|
|
|||
Effect of dilutive securities
|
|
|
|
|
|
|
|
||||||
Restricted stock units
|
|
0.9
|
|
|
0.5
|
|
|
|
—
|
|
|||
Denominator for diluted earnings per weighted average common shares
|
|
111.2
|
|
|
110.3
|
|
|
|
497.3
|
|
|||
|
|
|
|
|
|
|
|
||||||
Net income per common share
|
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
0.08
|
|
|
$
|
2.16
|
|
|
|
$
|
5.19
|
|
Diluted
|
|
$
|
0.08
|
|
|
$
|
2.15
|
|
|
|
$
|
5.19
|
|
|
|
|
|
|
|
|
|
||||||
(1)
Basic weighted average common stock outstanding
|
|
110.3
|
|
|
109.8
|
|
|
|
497.3
|
|
|||
Basic weighted average common stock and common stock equivalents (preferred shares)
|
|
110.3
|
|
|
109.8
|
|
|
|
572.4
|
|
|||
Percentage allocated to common stock holders
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
86.9
|
%
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
(In millions)
|
|
Three months ended December 31, 2018
|
|
Period from December 16, 2017
through December 31, 2017 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
||||||
REVENUE
|
|
|
|
|
|
|
|
||||||
Products & Solutions
|
|
$
|
326
|
|
|
$
|
77
|
|
|
|
$
|
253
|
|
Services
|
|
422
|
|
|
94
|
|
|
|
351
|
|
|||
Unallocated Amounts
(1)
|
|
(10
|
)
|
|
(23
|
)
|
|
|
—
|
|
|||
|
|
$
|
738
|
|
|
$
|
148
|
|
|
|
$
|
604
|
|
GROSS PROFIT
|
|
|
|
|
|
|
|
||||||
Products & Solutions
|
|
$
|
214
|
|
|
$
|
49
|
|
|
|
$
|
169
|
|
Services
|
|
255
|
|
|
70
|
|
|
|
196
|
|
|||
Unallocated Amounts
(2)
|
|
(62
|
)
|
|
(41
|
)
|
|
|
(3
|
)
|
|||
|
|
407
|
|
|
78
|
|
|
|
362
|
|
|||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
||||||
Selling, general and administrative
|
|
257
|
|
|
50
|
|
|
|
264
|
|
|||
Research and development
|
|
53
|
|
|
9
|
|
|
|
38
|
|
|||
Amortization of intangible assets
|
|
40
|
|
|
7
|
|
|
|
10
|
|
|||
Restructuring charges, net
|
|
7
|
|
|
10
|
|
|
|
14
|
|
|||
|
|
357
|
|
|
76
|
|
|
|
326
|
|
|||
OPERATING INCOME
|
|
50
|
|
|
2
|
|
|
|
36
|
|
|||
INTEREST EXPENSE, OTHER INCOME (EXPENSE), NET AND REORGANIZATION ITEMS, NET
|
|
(38
|
)
|
|
(11
|
)
|
|
|
3,400
|
|
|||
INCOME (LOSS) BEFORE INCOME TAXES
|
|
$
|
12
|
|
|
$
|
(9
|
)
|
|
|
$
|
3,436
|
|
(1)
|
Unallocated amounts in Revenue represent the fair value adjustment to deferred revenue recognized upon emergence from bankruptcy and excluded from segment revenue.
|
(2)
|
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.
|
17.
|
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 Income (Loss)
|
||||||||||
Balance as of September 30, 2018
|
$
|
51
|
|
|
$
|
(31
|
)
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
18
|
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
1
|
|
|
(31
|
)
|
|
—
|
|
|
(30
|
)
|
|||||
Amounts reclassified to earnings
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||
Benefit from income taxes
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|||||
Balance as of December 31, 2018 (Successor)
|
$
|
51
|
|
|
$
|
(30
|
)
|
|
$
|
(23
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
(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 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 loss before reclassifications
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|||||
Balance as of December 31, 2017 (Successor)
|
$
|
—
|
|
|
$
|
(13
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(13
|
)
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Global Support Services
features 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.
|
|
|
Successor
|
|
|
Predecessor
|
|
Non-GAAP Combined
|
||||||||||
(In millions)
|
|
Three months ended December 31, 2018
|
|
Period from December 16, 2017
through December 31, 2017 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Three months ended December 31, 2017
|
||||||||
REVENUE
|
|
|
|
|
|
|
|
|
|
||||||||
Products
|
|
$
|
324
|
|
|
$
|
71
|
|
|
|
$
|
253
|
|
|
$
|
324
|
|
Services
|
|
414
|
|
|
77
|
|
|
|
351
|
|
|
428
|
|
||||
|
|
738
|
|
|
148
|
|
|
|
604
|
|
|
752
|
|
||||
COSTS
|
|
|
|
|
|
|
|
|
|
||||||||
Products:
|
|
|
|
|
|
|
|
|
|
||||||||
Costs
|
|
115
|
|
|
33
|
|
|
|
84
|
|
|
117
|
|
||||
Amortization of technology intangible assets
|
|
43
|
|
|
7
|
|
|
|
3
|
|
|
10
|
|
||||
Services
|
|
173
|
|
|
30
|
|
|
|
155
|
|
|
185
|
|
||||
|
|
331
|
|
|
70
|
|
|
|
242
|
|
|
312
|
|
||||
GROSS PROFIT
|
|
407
|
|
|
78
|
|
|
|
362
|
|
|
440
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
|
257
|
|
|
50
|
|
|
|
264
|
|
|
314
|
|
||||
Research and development
|
|
53
|
|
|
9
|
|
|
|
38
|
|
|
47
|
|
||||
Amortization of intangible assets
|
|
40
|
|
|
7
|
|
|
|
10
|
|
|
17
|
|
||||
Restructuring charges, net
|
|
7
|
|
|
10
|
|
|
|
14
|
|
|
24
|
|
||||
|
|
357
|
|
|
76
|
|
|
|
326
|
|
|
402
|
|
||||
OPERATING INCOME
|
|
50
|
|
|
2
|
|
|
|
36
|
|
|
38
|
|
||||
Interest expense
|
|
(60
|
)
|
|
(9
|
)
|
|
|
(14
|
)
|
|
(23
|
)
|
||||
Other income (expense), net
|
|
22
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
(4
|
)
|
||||
Reorganization items, net
|
|
—
|
|
|
—
|
|
|
|
3,416
|
|
|
3,416
|
|
||||
INCOME (LOSS) BEFORE INCOME TAXES
|
|
12
|
|
|
(9
|
)
|
|
|
3,436
|
|
|
3,427
|
|
||||
(Provision for) benefit from income taxes
|
|
(3
|
)
|
|
246
|
|
|
|
(459
|
)
|
|
(213
|
)
|
||||
NET INCOME
|
|
$
|
9
|
|
|
$
|
237
|
|
|
|
$
|
2,977
|
|
|
$
|
3,214
|
|
(In millions)
|
Three months ended December 31, 2018
|
|
Period from December 16, 2017
through December 31, 2017 |
||||
REVENUE
|
|
|
|
||||
Products
|
$
|
(2
|
)
|
|
$
|
(6
|
)
|
Services
|
(8
|
)
|
|
(17
|
)
|
||
|
(10
|
)
|
|
(23
|
)
|
||
COSTS
|
|
|
|
||||
Products
|
3
|
|
|
5
|
|
||
Services
|
6
|
|
|
7
|
|
||
|
9
|
|
|
12
|
|
||
GROSS PROFIT
|
(19
|
)
|
|
(35
|
)
|
||
OPERATING EXPENSES
|
|
|
|
||||
Selling, general and administrative
|
—
|
|
|
(2
|
)
|
||
Research and development
|
1
|
|
|
—
|
|
||
|
1
|
|
|
(2
|
)
|
||
OPERATING INCOME
|
$
|
(20
|
)
|
|
$
|
(33
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of Total Revenue
|
|
|
|
|
||||||||||||||
|
|
Successor
|
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Successor
|
|
Non-GAAP Combined
|
|
|
|
Yr. to Yr. Percentage Change, net of Foreign Currency Impact
|
||||||||||||||
(In millions)
|
|
Three months ended December 31, 2018
|
|
Period from December 16, 2017
through December 31, 2017 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Three months ended December 31, 2017
|
|
Three months ended December 31, 2018
|
|
Three months ended December 31, 2017
|
|
Yr. to Yr. Percentage Change
|
|
|||||||||||||
Products & Solutions
|
|
$
|
326
|
|
|
$
|
77
|
|
|
|
$
|
253
|
|
|
$
|
330
|
|
|
44
|
%
|
|
44
|
%
|
|
(1
|
)%
|
|
(1
|
)%
|
Services
|
|
422
|
|
|
94
|
|
|
|
351
|
|
|
445
|
|
|
57
|
%
|
|
59
|
%
|
|
(5
|
)%
|
|
(4
|
)%
|
||||
Unallocated amounts
|
|
(10
|
)
|
|
(23
|
)
|
|
|
—
|
|
|
(23
|
)
|
|
(1
|
)%
|
|
(3
|
)%
|
|
(1)
|
|
|
(1)
|
|
||||
Total revenue
|
|
$
|
738
|
|
|
$
|
148
|
|
|
|
$
|
604
|
|
|
$
|
752
|
|
|
100
|
%
|
|
100
|
%
|
|
(2
|
)%
|
|
(1
|
)%
|
(1)
|
Not meaningful
|
|
|
|
|
|
|
|
|
|
|
Percentage of Total Revenue
|
|
|
|
|
||||||||||||||
|
Successor
|
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Successor
|
|
Non-GAAP Combined
|
|
|
|
Yr. to Yr. Percentage Change, net of Foreign Currency Impact
|
||||||||||||||
(In millions)
|
Three months ended December 31, 2018
|
|
Period from December 16, 2017
through December 31, 2017 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Three months ended December 31, 2017
|
|
Three months ended December 31, 2018
|
|
Three months ended December 31, 2017
|
|
Yr. to Yr. Percentage Change
|
|
|||||||||||||
U.S.
|
$
|
394
|
|
|
$
|
81
|
|
|
|
$
|
331
|
|
|
$
|
412
|
|
|
53
|
%
|
|
55
|
%
|
|
(4
|
)%
|
|
(4
|
)%
|
International:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Europe, Middle East and Africa
|
199
|
|
|
35
|
|
|
|
166
|
|
|
201
|
|
|
27
|
%
|
|
27
|
%
|
|
(1
|
)%
|
|
—
|
%
|
||||
Asia Pacific
|
78
|
|
|
17
|
|
|
|
57
|
|
|
74
|
|
|
11
|
%
|
|
10
|
%
|
|
5
|
%
|
|
8
|
%
|
||||
Americas International - Canada and Latin America
|
67
|
|
|
15
|
|
|
|
50
|
|
|
65
|
|
|
9
|
%
|
|
8
|
%
|
|
3
|
%
|
|
7
|
%
|
||||
Total International
|
344
|
|
|
67
|
|
|
|
273
|
|
|
340
|
|
|
47
|
%
|
|
45
|
%
|
|
1
|
%
|
|
3
|
%
|
||||
Total revenue
|
$
|
738
|
|
|
$
|
148
|
|
|
|
$
|
604
|
|
|
$
|
752
|
|
|
100
|
%
|
|
100
|
%
|
|
(2
|
)%
|
|
(1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of Total
Products & Solutions Revenue |
|
|
|
|
||||||||||||||
|
|
Successor
|
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Successor
|
|
Non-GAAP Combined
|
|
|
|
Yr. to Yr. Percentage Change, net of Foreign Currency Impact
|
||||||||||||||
(In millions)
|
|
Three months ended December 31, 2018
|
|
Period from December 16, 2017
through December 31, 2017 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Three months ended December 31, 2017
|
|
Three months ended December 31, 2018
|
|
Three months ended December 31, 2017
|
|
Yr. to Yr. Percentage Change
|
|
|||||||||||||
Direct
|
|
$
|
100
|
|
|
$
|
23
|
|
|
|
$
|
80
|
|
|
$
|
103
|
|
|
31
|
%
|
|
31
|
%
|
|
(3
|
)%
|
|
(2
|
)%
|
Indirect
|
|
226
|
|
|
54
|
|
|
|
173
|
|
|
227
|
|
|
69
|
%
|
|
69
|
%
|
|
—
|
%
|
|
—
|
%
|
||||
Total Products & Solutions revenue
|
|
$
|
326
|
|
|
$
|
77
|
|
|
|
$
|
253
|
|
|
$
|
330
|
|
|
100
|
%
|
|
100
|
%
|
|
(1
|
)%
|
|
(1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
|
|
|
|
|
|||||||||||||||
|
|
Successor
|
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Successor
|
|
Non-GAAP Combined
|
|
Change
|
|||||||||||||||||
(In millions)
|
|
Three months ended December 31, 2018
|
|
Period from December 16, 2017
through December 31, 2017 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Three months ended December 31, 2017
|
|
Three months ended December 31, 2018
|
|
Three months ended December 31, 2017
|
|
Amount
|
|
Percent
|
|||||||||||||
Products & Solutions
|
|
$
|
214
|
|
|
$
|
49
|
|
|
|
$
|
169
|
|
|
$
|
218
|
|
|
65.6
|
%
|
|
66.1
|
%
|
|
$
|
(4
|
)
|
|
(2
|
)%
|
Services
|
|
255
|
|
|
70
|
|
|
|
196
|
|
|
266
|
|
|
60.4
|
%
|
|
59.8
|
%
|
|
(11
|
)
|
|
(4
|
)%
|
|||||
Unallocated amounts
|
|
(62
|
)
|
|
(41
|
)
|
|
|
(3
|
)
|
|
(44
|
)
|
|
(1
|
)
|
|
(1)
|
|
|
(18
|
)
|
|
(1)
|
|
|||||
Total
|
|
$
|
407
|
|
|
$
|
78
|
|
|
|
$
|
362
|
|
|
$
|
440
|
|
|
55.1
|
%
|
|
58.5
|
%
|
|
$
|
(33
|
)
|
|
(8
|
)%
|
(1)
|
Not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of Total Revenue
|
|
|
|
|
|||||||||||||||
|
|
Successor
|
|
|
Predecessor
|
|
Non-GAAP Combined
|
|
Successor
|
|
Non-GAAP Combined
|
|
Change
|
|||||||||||||||||
(In millions)
|
|
Three months ended December 31, 2018
|
|
Period from December 16, 2017
through December 31, 2017 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Three months ended December 31, 2017
|
|
Three months ended December 31, 2018
|
|
Three months ended December 31, 2017
|
|
Amount
|
|
Percent
|
|||||||||||||
Selling, general and administrative
|
|
$
|
257
|
|
|
$
|
50
|
|
|
|
$
|
264
|
|
|
$
|
314
|
|
|
34.8
|
%
|
|
41.7
|
%
|
|
$
|
(57
|
)
|
|
(18
|
)%
|
Research and development
|
|
53
|
|
|
9
|
|
|
|
38
|
|
|
47
|
|
|
7.2
|
%
|
|
6.3
|
%
|
|
6
|
|
|
13
|
%
|
|||||
Amortization of intangible assets
|
|
40
|
|
|
7
|
|
|
|
10
|
|
|
17
|
|
|
5.4
|
%
|
|
2.3
|
%
|
|
23
|
|
|
135
|
%
|
|||||
Restructuring charges, net
|
|
7
|
|
|
10
|
|
|
|
14
|
|
|
24
|
|
|
0.9
|
%
|
|
3.2
|
%
|
|
(17
|
)
|
|
(71
|
)%
|
|||||
Total operating expenses
|
|
$
|
357
|
|
|
$
|
76
|
|
|
|
$
|
326
|
|
|
$
|
402
|
|
|
48.3
|
%
|
|
53.5
|
%
|
|
$
|
(45
|
)
|
|
(11
|
)%
|
•
|
lower revenue and gross profit for the
three months ended December 31, 2018
, as described above;
|
•
|
costs incurred in connection with certain legal matters of
$37 million
for the
three months ended December 31, 2017
;
|
•
|
lower restructuring charges for the
three months ended December 31, 2018
;
|
•
|
lower advisory fees incurred to assist in the assessment of strategic and financial alternatives to improve the Company’s capital structure during the
three months ended December 31, 2018
of
$10 million
;
|
•
|
operating results from the Spoken acquisition completed in March 2018;
|
•
|
higher amortization of intangible assets due to the application of fresh start accounting upon emergence from bankruptcy; and
|
•
|
the favorable impact of adopting ASC 606 on
October 1, 2018
.
|
|
|
Successor
|
|
|
Predecessor
|
|
Non-GAAP Combined
|
||||||||||
|
|
Three months ended December 31, 2018
|
|
Period from December 16, 2017
through December 31, 2017 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
|
Three months ended December 31, 2017
|
||||||||
(In millions)
|
|
|
|
|
|
||||||||||||
Net cash provided by (used for):
|
|
|
|
|
|
|
|
|
|
||||||||
Operating activities
|
|
$
|
86
|
|
|
$
|
40
|
|
|
|
$
|
(414
|
)
|
|
$
|
(374
|
)
|
Investing activities
|
|
(22
|
)
|
|
(2
|
)
|
|
|
(13
|
)
|
|
(15
|
)
|
||||
Financing activities
|
|
(18
|
)
|
|
—
|
|
|
|
(102
|
)
|
|
(102
|
)
|
||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
|
(3
|
)
|
|
3
|
|
|
|
(2
|
)
|
|
1
|
|
||||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
|
43
|
|
|
41
|
|
|
|
(531
|
)
|
|
(490
|
)
|
||||
Cash, cash equivalents, and restricted cash at beginning of period
|
|
704
|
|
|
435
|
|
|
|
966
|
|
|
966
|
|
||||
Cash, cash equivalents, and restricted cash at end of period
|
|
$
|
747
|
|
|
$
|
476
|
|
|
|
$
|
435
|
|
|
$
|
476
|
|
•
|
scheduled debt repayments under the Term Loan Credit Agreement of
$7 million
;
|
•
|
repayments in connection with financing the use of equipment for the performance of services under our agreement with HP Enterprise Services, LLC ("HP") of
$4 million
; and
|
•
|
other financing activities, net of
$7 million
.
|
•
|
repayments to the Predecessor Company first lien debt holders of
$2,061 million
;
|
•
|
repayment of the Predecessor Company debtor-in-possession credit agreement of
$725 million
;
|
•
|
adequate protection payments related to the bankruptcy of
$111 million
;
|
•
|
payment of debt issuance costs of
$97 million
; and
|
•
|
repayments in connection with financing the use of equipment for the performance of services under our agreement with HP of
$4 million
, partially offset by:
|
•
|
proceeds of
$2,896 million
from the Term Loan Credit Agreement entered into on the Emergence Date.
|
•
|
Debt service
—We expect to make payments of approximately
$187 million
during the remainder of 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
$30 million
to
$35 million
during the remainder of fiscal
2019
for employee separation costs and lease termination obligations associated with restructuring actions we have taken through
December 31, 2018
. The Company continues to evaluate opportunities to streamline its operations and identify additional cost savings globally.
|
•
|
Capital expenditures
—We expect to spend approximately
$55 million
to
$65 million
for capital expenditures and capitalized software development costs during the remainder of fiscal
2019
.
|
•
|
Benefit obligations—
We estimate we will make payments under our pension and post-retirement benefit obligations totaling
$49 million
during the remainder of fiscal
2019
. These payments include:
$17 million
to satisfy the minimum statutory funding requirements of our U.S. qualified pension plans;
$21 million
for our non-U.S. benefit plans, which are predominantly not pre-funded; and
$11 million
for represented retiree post-retirement benefits. See discussion in Note 12, “Benefit Obligations,” to our unaudited interim Condensed Consolidated Financial Statements for further details.
|
•
|
Moody’s Investors Service issued a corporate family rating of "B2" with a stable outlook and a rating of the 7-year
$2,925 million
Term Loan Credit Agreement of "B2";
|
•
|
Standard and Poor's issued a definitive corporate credit rating of "B" with a stable outlook and a rating of the Term Loan Credit Agreement of "B"; and
|
•
|
Fitch Ratings Inc. issued a Long-Term Issuer Default Rating of "B" with a stable outlook and a rating of the Term Loan Credit Agreement of "BB-".
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
(In millions)
|
|
Three months ended
December 31, 2018 |
|
Period from December 16, 2017
through December 31, 2017 |
|
|
Period from
October 1, 2017 through December 15, 2017 |
||||||
Net income
|
|
$
|
9
|
|
|
$
|
237
|
|
|
|
$
|
2,977
|
|
Interest expense
|
(a)
|
60
|
|
|
9
|
|
|
|
14
|
|
|||
Interest income
|
|
(3
|
)
|
|
—
|
|
|
|
(2
|
)
|
|||
Provision for (benefit from) income taxes
|
|
3
|
|
|
(246
|
)
|
|
|
459
|
|
|||
Depreciation and amortization
|
|
117
|
|
|
22
|
|
|
|
31
|
|
|||
EBITDA
|
|
186
|
|
|
22
|
|
|
|
3,479
|
|
|||
Impact of fresh start accounting adjustments
|
(b)
|
3
|
|
|
27
|
|
|
|
—
|
|
|||
Restructuring charges, net
|
|
7
|
|
|
10
|
|
|
|
14
|
|
|||
Advisory fees
|
(c)
|
1
|
|
|
8
|
|
|
|
3
|
|
|||
Acquisition-related costs
|
|
3
|
|
|
—
|
|
|
|
—
|
|
|||
Reorganization items, net
|
|
—
|
|
|
—
|
|
|
|
(3,416
|
)
|
|||
Non-cash share-based compensation
|
|
6
|
|
|
1
|
|
|
|
—
|
|
|||
Loss on sale/disposal of long-lived assets, net
|
|
—
|
|
|
—
|
|
|
|
1
|
|
|||
Resolution of certain legal matters
|
(d)
|
—
|
|
|
—
|
|
|
|
37
|
|
|||
Change in fair value of Emergence Date Warrants
|
|
(18
|
)
|
|
5
|
|
|
|
—
|
|
|||
Loss (gain) on foreign currency transactions
|
|
1
|
|
|
(2
|
)
|
|
|
—
|
|
|||
Pension/OPEB/nonretirement postemployment benefits and long-term disability costs
|
(e)
|
—
|
|
|
—
|
|
|
|
17
|
|
|||
Adjusted EBITDA
|
|
$
|
189
|
|
|
$
|
71
|
|
|
|
$
|
135
|
|
(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
period from October 1, 2017 through December 15, 2017
, contractual interest expense related to debt subject to compromise of
$94 million
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.
|
(d)
|
Costs in connection with the resolution of certain legal matters include reserves and settlements, as well as associated legal costs.
|
(e)
|
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 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
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
|
•
|
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.
|
•
|
Implemented changes to posting rights and responsibilities to eliminate segregation of duties conflicts. We also provided additional training so that appropriate segregation of duties related to recording journal entries is achieved and performed on a timely basis as designed.
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
|
Issuer Purchases of Equity Securities
|
||||||||||||
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
||||||
Period
|
|
Total Number of Shares (or Units) Purchased
(1)
|
|
Average Price Paid per Share (or Unit)
|
|
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Yet Be Purchased Under Plans or Programs
(2)
|
||||||
October 1 - 31, 2018
|
|
3,706
|
|
|
$
|
18.8000
|
|
|
—
|
|
|
$
|
—
|
|
November 1 - 30, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
15,000,000
|
|
|
December 1 - 31, 2018
|
|
334,176
|
|
|
$
|
17.5800
|
|
|
—
|
|
|
15,000,000
|
|
|
Total
|
|
337,882
|
|
|
$
|
17.5934
|
|
|
—
|
|
|
$
|
15,000,000
|
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
Exhibit Number
|
|
Exhibit Description
|
10.1
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
|
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
|
|
AVAYA HOLDINGS CORP.
|
|
|
|
|
|
By:
|
/s/ L. D
AVID
D
ELL
'O
SSO
|
|
Name:
|
L. David Dell'Osso
|
|
Title:
|
Vice President, Controller & Chief Accounting Officer
|
Performance Year
|
Level of Achievement
|
Percentage of PRSUs Eligible to be Earned
(as a percentage of 1/3 of the Target PRSUs)
|
Fiscal 2019:
October 1, 2018 -September 30, 2019
|
Below Threshold
|
0%
|
Threshold
|
75%
|
|
Target
|
100%
|
|
Maximum
|
150%
|
|
Fiscal 2020:
October 1, 2019-September 30, 2020
|
Below Threshold
|
0%
|
Threshold
|
75%
|
|
Target
|
100%
|
|
Maximum
|
150%
|
|
Fiscal 2021:
October 1, 2020-September 30, 2021
|
Below Threshold
|
0%
|
Threshold
|
75%
|
|
Target
|
100%
|
|
Maximum
|
150%
|
Performance Year
|
Threshold
|
Target
|
Maximum
|
Fiscal 2019:
October 1, 2018 -September 30, 2019
|
|
|
|
Fiscal 2020:
October 1, 2019-September 30, 2020
|
|
|
|
Fiscal 2021:
October 1, 2020-September 30, 2021
|
|
|
|
|
|
|
|
2
|
|
|
3
|
|
|
4
|
|
|
5
|
|
|
6
|
|
|
7
|
|
|
|
|
/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)
|
|