Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Jun. 30, 2018 | Jul. 31, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Avaya Holdings Corp. | |
Entity Central Index Key | 1,418,100 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 109,954,972 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | |
Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
REVENUE | |||||
Products | $ 300,000,000 | $ 664,000,000 | |||
Services | 392,000,000 | 848,000,000 | |||
TOTAL REVENUES | 692,000,000 | 1,512,000,000 | |||
Products: | |||||
Costs | 114,000,000 | 257,000,000 | |||
Amortization of technology intangible assets | 44,000,000 | 92,000,000 | |||
Services | 182,000,000 | 410,000,000 | |||
TOTAL COST OF REVENUE | 340,000,000 | 759,000,000 | |||
GROSS PROFIT | 352,000,000 | 753,000,000 | |||
OPERATING EXPENSES | |||||
Selling, general and administrative | 281,000,000 | 613,000,000 | |||
Research and development | 51,000,000 | 110,000,000 | |||
Amortization of intangible assets | 39,000,000 | 86,000,000 | |||
Intangible asset impairment | 0 | 0 | |||
Goodwill impairment | 0 | 0 | |||
Restructuring charges, net | 30,000,000 | 80,000,000 | |||
TOTAL OPERATING EXPENSES | 401,000,000 | 889,000,000 | |||
OPERATING (LOSS) INCOME | (49,000,000) | (136,000,000) | |||
Interest expense | (56,000,000) | (112,000,000) | |||
Other income (expense), net | 37,000,000 | 32,000,000 | |||
Reorganization items, net | $ 0 | 0 | 0 | ||
(LOSS) INCOME BEFORE INCOME TAXES | (68,000,000) | (216,000,000) | |||
(Provision for) benefit from income taxes | (20,000,000) | 235,000,000 | |||
NET (LOSS) INCOME | $ (88,000,000) | $ 19,000,000 | |||
Net (loss) income per share: | |||||
Basic (USD per share) | $ (0.80) | $ 0.17 | |||
Diluted (USD per share) | $ (0.80) | $ 0.17 | |||
Weighted average shares outstanding: | |||||
Basic (shares) | 109.8 | 109.8 | |||
Diluted (shares) | 109.8 | 111 | |||
Predecessor | |||||
REVENUE | |||||
Products | 253,000,000 | $ 345,000,000 | $ 1,094,000,000 | ||
Services | 351,000,000 | 458,000,000 | 1,388,000,000 | ||
TOTAL REVENUES | 604,000,000 | 803,000,000 | 2,482,000,000 | ||
Products: | |||||
Costs | 84,000,000 | 121,000,000 | 394,000,000 | ||
Amortization of technology intangible assets | 3,000,000 | 5,000,000 | 16,000,000 | ||
Services | 155,000,000 | 184,000,000 | 560,000,000 | ||
TOTAL COST OF REVENUE | 242,000,000 | 310,000,000 | 970,000,000 | ||
GROSS PROFIT | 362,000,000 | 493,000,000 | 1,512,000,000 | ||
OPERATING EXPENSES | |||||
Selling, general and administrative | 264,000,000 | 295,000,000 | 923,000,000 | ||
Research and development | 38,000,000 | 59,000,000 | 178,000,000 | ||
Amortization of intangible assets | 10,000,000 | 57,000,000 | 170,000,000 | ||
Intangible asset impairment | 0 | 65,000,000 | 65,000,000 | ||
Goodwill impairment | 0 | 52,000,000 | 52,000,000 | ||
Restructuring charges, net | 14,000,000 | 8,000,000 | 22,000,000 | ||
TOTAL OPERATING EXPENSES | 326,000,000 | 536,000,000 | 1,410,000,000 | ||
OPERATING (LOSS) INCOME | 36,000,000 | (43,000,000) | 102,000,000 | ||
Interest expense | (14,000,000) | (17,000,000) | (229,000,000) | ||
Other income (expense), net | (2,000,000) | (9,000,000) | (27,000,000) | ||
Reorganization items, net | 3,416,000,000 | (35,000,000) | (77,000,000) | ||
(LOSS) INCOME BEFORE INCOME TAXES | 3,436,000,000 | (104,000,000) | (231,000,000) | ||
(Provision for) benefit from income taxes | (459,000,000) | 6,000,000 | 22,000,000 | ||
NET (LOSS) INCOME | $ 2,977,000,000 | $ (98,000,000) | $ (209,000,000) | ||
Net (loss) income per share: | |||||
Basic (USD per share) | $ 5.19 | $ (0.22) | $ (0.47) | ||
Diluted (USD per share) | $ 5.19 | $ (0.22) | $ (0.47) | ||
Weighted average shares outstanding: | |||||
Basic (shares) | 497.3 | 497.2 | 497 | ||
Diluted (shares) | 497.3 | 497.2 | 497 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | |
Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Net income (loss) | $ (88) | $ 19 | |||
Other comprehensive (loss) income: | |||||
Pension, post-retirement and postemployment benefit-related items, net of income taxes of $58 for the period from October 1, 2017 through December 15, 2017 and $1 and $16 for the three and nine months ended June 30, 2017, respectively | 0 | 0 | |||
Cumulative translation adjustment, net of income taxes of $2 and $1 for the three and nine months ended June 30, 2017, respectively | (4) | (29) | |||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | $ 0 | (12) | $ 0 | (12) | $ 0 |
Other comprehensive (loss) income | (16) | (41) | |||
Cancellation of Predecessor equity | 0 | 0 | |||
Total comprehensive (loss) income | $ (104) | $ (22) | |||
Predecessor | |||||
Net income (loss) | 2,977 | (98) | (209) | ||
Other comprehensive (loss) income: | |||||
Pension, post-retirement and postemployment benefit-related items, net of income taxes of $58 for the period from October 1, 2017 through December 15, 2017 and $1 and $16 for the three and nine months ended June 30, 2017, respectively | 655 | 25 | 54 | ||
Cumulative translation adjustment, net of income taxes of $2 and $1 for the three and nine months ended June 30, 2017, respectively | 3 | (44) | (18) | ||
Other comprehensive (loss) income | 658 | (19) | 36 | ||
Cancellation of Predecessor equity | (790) | 0 | 0 | ||
Total comprehensive (loss) income | $ 4,425 | $ (117) | $ (173) |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | |
Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | $ (3) | $ (3) | |||
Predecessor | |||||
Pension, post-retirement and postemployment benefit-related items, net of income taxes | $ 58 | $ 1 | $ 16 | ||
Cumulative translation adjustment, net of income taxes | $ 2 | $ 1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2018 | Sep. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 685 | |
Accounts receivable, net | 367 | |
Inventory | 102 | |
Other current assets | 238 | |
TOTAL CURRENT ASSETS | 1,392 | |
Property, plant and equipment, net | 260 | |
Deferred income taxes, net | 21 | |
Intangible assets, net | 3,318 | |
Goodwill | 2,771 | |
Other assets | 64 | |
TOTAL ASSETS | 7,826 | |
Current liabilities: | ||
Debt maturing within one year | 0 | |
Long-term debt, current portion | 29 | |
Accounts payable | 326 | |
Payroll and benefit obligations | 119 | |
Deferred revenue | 479 | |
Business restructuring reserve | 57 | |
Other current liabilities | 129 | |
TOTAL CURRENT LIABILITIES | 1,139 | |
Non-current liabilities: | ||
Long-term debt, net of current portion | 3,099 | |
Pension obligations | 731 | |
Other post-retirement obligations | 213 | |
Deferred income taxes, net | 486 | |
Business restructuring reserve | 52 | |
Other liabilities | 388 | |
TOTAL NON-CURRENT LIABILITIES | 4,969 | |
LIABILITIES SUBJECT TO COMPROMISE | 0 | |
TOTAL LIABILITIES | 6,108 | |
Commitments and contingencies (Note 20) | ||
Preferred stock | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Common stock | 1 | |
Additional paid-in capital | 1,739 | |
Retained earnings (accumulated deficit) | 19 | |
Accumulated other comprehensive loss | (41) | |
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | 1,718 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 7,826 | |
Predecessor | ||
Current assets: | ||
Cash and cash equivalents | $ 876 | |
Accounts receivable, net | 536 | |
Inventory | 96 | |
Other current assets | 269 | |
TOTAL CURRENT ASSETS | 1,777 | |
Property, plant and equipment, net | 200 | |
Deferred income taxes, net | 0 | |
Intangible assets, net | 311 | |
Goodwill | 3,542 | |
Other assets | 68 | |
TOTAL ASSETS | 5,898 | |
Current liabilities: | ||
Debt maturing within one year | 725 | |
Long-term debt, current portion | 0 | |
Accounts payable | 282 | |
Payroll and benefit obligations | 127 | |
Deferred revenue | 614 | |
Business restructuring reserve | 35 | |
Other current liabilities | 90 | |
TOTAL CURRENT LIABILITIES | 1,873 | |
Non-current liabilities: | ||
Long-term debt, net of current portion | 0 | |
Pension obligations | 513 | |
Other post-retirement obligations | 0 | |
Deferred income taxes, net | 32 | |
Business restructuring reserve | 34 | |
Other liabilities | 170 | |
TOTAL NON-CURRENT LIABILITIES | 749 | |
LIABILITIES SUBJECT TO COMPROMISE | 7,705 | |
TOTAL LIABILITIES | 10,327 | |
Commitments and contingencies (Note 20) | ||
Predecessor equity awards on redeemable shares | 7 | |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Common stock | 0 | |
Additional paid-in capital | 2,389 | |
Retained earnings (accumulated deficit) | (5,954) | |
Accumulated other comprehensive loss | (1,448) | |
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | (5,013) | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | 5,898 | |
Predecessor | Convertible Series B preferred stock | ||
Non-current liabilities: | ||
Preferred stock | 393 | |
Predecessor | Series A preferred stock | ||
Non-current liabilities: | ||
Preferred stock | $ 184 |
Condensed Consolidated Balance6
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2018 | Sep. 30, 2017 |
Preferred stock, par value (in usd per share) | $ 0.01 | |
Preferred stock, shares authorized | 55,000,000 | |
Convertible preferred stock, shares issued | 0 | |
Convertible preferred stock, shares outstanding | 0 | |
Common stock, par value (in usd per share) | $ 0.01 | |
Common stock, shares authorized | 550,000,000 | |
Common stock, shares issued | 110,160,835 | |
Common stock, share outstanding | 109,954,972 | |
Predecessor | ||
Preferred stock, par value (in usd per share) | $ 0.001 | |
Preferred stock, shares authorized | 250,000 | |
Common stock, par value (in usd per share) | $ 0.01 | |
Common stock, shares authorized | 750,000,000 | |
Common stock, shares issued | 494,768,243 | |
Common stock, share outstanding | 494,768,243 | |
Convertible Series B preferred stock | Predecessor | ||
Convertible preferred stock, shares issued | 48,922 | |
Convertible preferred stock, shares outstanding | 48,922 | |
Series A preferred stock | Predecessor | ||
Convertible preferred stock, shares issued | 125,000 | |
Convertible preferred stock, shares outstanding | 125,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Series A preferred stock | Series B preferred stock | Common Stock | Additional Paid-in Capital | Additional Paid-in CapitalSeries A preferred stock | Additional Paid-in CapitalSeries B preferred stock | (Accumulated Deficit) Retained Earnings | Accumulated Other Comprehensive (Loss) Income |
Beginning balance (Predecessor) at Sep. 30, 2016 | $ (1,661) | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income (loss) | Predecessor | (209) | ||||||||
Other comprehensive (loss) income | Predecessor | 36 | ||||||||
Cancellation of Predecessor equity | Predecessor | 0 | ||||||||
Ending balance (Predecessor) at Jun. 30, 2017 | (1,625) | ||||||||
Beginning balance (Predecessor) at Mar. 31, 2017 | (1,606) | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income (loss) | Predecessor | (98) | ||||||||
Other comprehensive (loss) income | Predecessor | (19) | ||||||||
Cancellation of Predecessor equity | Predecessor | 0 | ||||||||
Ending balance (Predecessor) at Jun. 30, 2017 | (1,625) | ||||||||
Beginning balance (in shares) (Predecessor) at Sep. 30, 2017 | 494.8 | ||||||||
Beginning balance (Predecessor) at Sep. 30, 2017 | (5,013) | $ 0 | $ 2,389 | $ (5,954) | $ (1,448) | ||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Amortization of share-based compensation | Predecessor | 3 | 3 | |||||||
Accrued dividends | Predecessor | $ (2) | $ (4) | $ (2) | $ (4) | |||||
Reclassifications to equity awards on redeemable shares | Predecessor | 1 | 1 | |||||||
Net income (loss) | Predecessor | 2,977 | 2,977 | |||||||
Other comprehensive (loss) income | Predecessor | 658 | 658 | |||||||
Cancellation of Predecessor equity | Predecessor | 790 | ||||||||
Ending balance (in shares) (Predecessor) at Dec. 15, 2017 | 110 | ||||||||
Ending balance (in shares) at Dec. 15, 2017 | 110 | ||||||||
Ending balance (Predecessor) at Dec. 15, 2017 | 1,668 | $ 1 | 1,667 | 0 | 0 | ||||
Ending balance at Dec. 15, 2017 | 1,668 | $ 1 | 1,667 | 0 | 0 | ||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Common stock issued for debt (in shares) | Predecessor | 103.9 | ||||||||
Common stock issued for settlement of Predecessor debt | Predecessor | 1,576 | $ 1 | 1,575 | ||||||
Common stock issued for PBGC (in shares) | Predecessor | 6.1 | ||||||||
Common stock issued to Pension Benefit Guaranty Corporation | Predecessor | 92 | 92 | |||||||
Balance as of December 15, 2017 (Predecessor) (in shares) | Predecessor | 494.8 | ||||||||
Balance as of December 15, 2017 (Predecessor) | Predecessor | (1,380) | 2,387 | (2,977) | (790) | |||||
Balance as of December 15, 2017 (Predecessor) | 0 | ||||||||
Issuance of common stock under the equity incentive plan (in shares) | 0.2 | ||||||||
Issuance of common stock under the equity incentive plan | 0 | ||||||||
Amortization of share-based compensation | 13 | 13 | |||||||
Net income (loss) | 19 | ||||||||
Other comprehensive (loss) income | (41) | (41) | |||||||
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 | |||||||
Cancellation of Predecessor equity | 0 | ||||||||
Ending balance (in shares) at Jun. 30, 2018 | 110.2 | ||||||||
Ending balance at Jun. 30, 2018 | 1,718 | $ 1 | 1,739 | 19 | (41) | ||||
Beginning balance at Mar. 31, 2018 | (25) | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income (loss) | (88) | ||||||||
Other comprehensive (loss) income | (16) | ||||||||
Cancellation of Predecessor equity | 0 | ||||||||
Ending balance (in shares) at Jun. 30, 2018 | 110.2 | ||||||||
Ending balance at Jun. 30, 2018 | $ 1,718 | $ 1 | $ 1,739 | $ 19 | $ (41) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 2 Months Ended | 7 Months Ended | 9 Months Ended |
Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
OPERATING ACTIVITIES: | |||
Net income (loss) | $ 19 | ||
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | |||
Depreciation and amortization | 264 | ||
Share-based compensation | 13 | ||
Amortization of debt issuance costs | 1 | ||
Accretion of debt discount | 2 | ||
Impairment of long-lived asset | 0 | ||
Impairment of indefinite-lived intangible assets | 0 | ||
Goodwill impairment | 0 | ||
Provision for uncollectible receivables | 0 | ||
Deferred income taxes, net | (207) | ||
Post-retirement curtailment | 0 | ||
Loss on disposal/sale of long-lived assets, net | 3 | ||
Change in fair value of emergence date warrants | 9 | ||
Unrealized (gain) loss on foreign currency transactions | (33) | ||
Reorganization items: | |||
Net gain on settlement of liabilities subject to compromise | $ 26 | 0 | |
Payment to Pension Benefit Guaranty Corporation | 0 | ||
Payment to pension trust | 0 | ||
Payment of unsecured claims | 0 | ||
Fresh start adjustments, net | (26) | 0 | |
Non-cash and financing related reorganization items, net | 0 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | 23 | ||
Inventory | 24 | ||
Accounts payable | 42 | ||
Payroll and benefit obligations | (73) | ||
Business restructuring reserve | 39 | ||
Deferred revenue | 149 | ||
Other assets and liabilities | (98) | ||
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | 177 | ||
INVESTING ACTIVITIES: | |||
Capital expenditures | (36) | ||
Capitalized software development costs | 0 | ||
Acquisition of businesses, net of cash acquired | (157) | ||
Proceeds from sale of long-lived assets | 1 | ||
Restricted cash | 55 | ||
Other investing activities, net | 0 | ||
NET CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES | (137) | ||
FINANCING ACTIVITIES: | |||
Repayment of debtor-in-possession financing | 0 | ||
Proceeds from debtor-in-possession financing | 0 | ||
Proceeds from issuance of call spread warrants | 58 | ||
Debt issuance costs | (10) | ||
Repayments of borrowings under sale-leaseback transaction | (7) | ||
Other financing activities, net | (1) | ||
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES | 284 | ||
Effect of exchange rate changes on cash and cash equivalents | (5) | ||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | 319 | ||
Cash and cash equivalents at beginning of period | 366 | ||
Cash and cash equivalents at end of period | 366 | 685 | |
Term Loan Credit Agreement due December 15, 2024 | |||
FINANCING ACTIVITIES: | |||
Proceeds from long term debt | 0 | ||
First lien debt | |||
FINANCING ACTIVITIES: | |||
Repayment of long-term debt | 0 | ||
Term Loan Credit Agreement, Due To Refinancing | |||
FINANCING ACTIVITIES: | |||
Proceeds from long term debt | 2,911 | ||
Repayment of long-term debt | (2,918) | ||
Convertible Notes | |||
FINANCING ACTIVITIES: | |||
Proceeds from long term debt | 350 | ||
Purchase of convertible note bond hedge | (84) | ||
Foreign ABL | |||
FINANCING ACTIVITIES: | |||
Repayments of lines of credit | 0 | ||
Domestic ABL | |||
FINANCING ACTIVITIES: | |||
Repayments of lines of credit | 0 | ||
Long-term debt, including adequate protection payments | |||
FINANCING ACTIVITIES: | |||
Repayment of long-term debt | (15) | ||
Senior Secured Credit Agreement | |||
FINANCING ACTIVITIES: | |||
Repayments of lines of credit | 0 | ||
Predecessor | |||
OPERATING ACTIVITIES: | |||
Net income (loss) | 2,977 | $ (209) | |
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | |||
Depreciation and amortization | 31 | 263 | |
Share-based compensation | 0 | 10 | |
Amortization of debt issuance costs | 0 | 36 | |
Accretion of debt discount | 0 | 25 | |
Impairment of long-lived asset | 0 | 3 | |
Impairment of indefinite-lived intangible assets | 0 | 65 | |
Goodwill impairment | 0 | 52 | |
Provision for uncollectible receivables | (1) | 1 | |
Deferred income taxes, net | 455 | (38) | |
Post-retirement curtailment | 0 | (4) | |
Loss on disposal/sale of long-lived assets, net | 1 | 0 | |
Change in fair value of emergence date warrants | 0 | 0 | |
Unrealized (gain) loss on foreign currency transactions | 0 | 4 | |
Reorganization items: | |||
Net gain on settlement of liabilities subject to compromise | (1,778) | 0 | |
Payment to Pension Benefit Guaranty Corporation | (340) | 0 | |
Payment to pension trust | (49) | 0 | |
Payment of unsecured claims | (58) | 0 | |
Fresh start adjustments, net | (1,697) | 0 | |
Non-cash and financing related reorganization items, net | 26 | 39 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 40 | 85 | |
Inventory | (2) | 20 | |
Accounts payable | (40) | (62) | |
Payroll and benefit obligations | 16 | (50) | |
Business restructuring reserve | (7) | (40) | |
Deferred revenue | 28 | (59) | |
Other assets and liabilities | (16) | (16) | |
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | (414) | 125 | |
INVESTING ACTIVITIES: | |||
Capital expenditures | (13) | (40) | |
Capitalized software development costs | 0 | (2) | |
Acquisition of businesses, net of cash acquired | 0 | (4) | |
Proceeds from sale of long-lived assets | 0 | 0 | |
Restricted cash | 21 | (77) | |
Other investing activities, net | 0 | 3 | |
NET CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES | 8 | (120) | |
FINANCING ACTIVITIES: | |||
Repayment of debtor-in-possession financing | (725) | 0 | |
Proceeds from debtor-in-possession financing | 0 | 712 | |
Proceeds from issuance of call spread warrants | 0 | 0 | |
Debt issuance costs | (97) | (1) | |
Repayments of borrowings under sale-leaseback transaction | (4) | (15) | |
Other financing activities, net | 0 | (4) | |
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES | (102) | 387 | |
Effect of exchange rate changes on cash and cash equivalents | (2) | 1 | |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (510) | 393 | |
Cash and cash equivalents at beginning of period | 876 | $ 366 | 336 |
Cash and cash equivalents at end of period | 366 | 729 | |
Predecessor | Term Loan Credit Agreement due December 15, 2024 | |||
FINANCING ACTIVITIES: | |||
Proceeds from long term debt | 2,896 | 0 | |
Predecessor | First lien debt | |||
FINANCING ACTIVITIES: | |||
Repayment of long-term debt | (2,061) | 0 | |
Predecessor | Term Loan Credit Agreement, Due To Refinancing | |||
FINANCING ACTIVITIES: | |||
Proceeds from long term debt | 0 | 0 | |
Repayment of long-term debt | 0 | 0 | |
Predecessor | Convertible Notes | |||
FINANCING ACTIVITIES: | |||
Proceeds from long term debt | 0 | 0 | |
Purchase of convertible note bond hedge | 0 | 0 | |
Predecessor | Foreign ABL | |||
FINANCING ACTIVITIES: | |||
Repayments of lines of credit | 0 | (55) | |
Predecessor | Domestic ABL | |||
FINANCING ACTIVITIES: | |||
Repayments of lines of credit | 0 | (77) | |
Predecessor | Long-term debt, including adequate protection payments | |||
FINANCING ACTIVITIES: | |||
Repayment of long-term debt | (111) | (155) | |
Predecessor | Senior Secured Credit Agreement | |||
FINANCING ACTIVITIES: | |||
Repayments of lines of credit | $ 0 | $ (18) |
Background and Basis of Present
Background and Basis of Presentation | 9 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis Of Presentation | Background and Basis of Presentation Background Avaya Holdings Corp. (the "Parent" or "Avaya Holdings"), together with its consolidated subsidiaries (collectively, the “Company” or “Avaya”), is a leading global provider of software and associated hardware and services for contact center and unified communications, offered on-premises, in the cloud, or as a hybrid solution. Avaya provides the mission-critical, real-time communication applications for small businesses to large multinational enterprises and government organizations. Currently, the Company manages its business operations in two segments, Global Communication Solutions ("GCS"), representing the Company's products portfolio, and Avaya Global Services ("AGS"), representing the Company's services portfolio. The Company sells directly through its worldwide sales force and indirectly through its global network of channel partners, including distributors, service providers, dealers, value-added resellers, system integrators and business partners that provide sales and services support. Basis of Presentation Avaya Holdings has no material assets or standalone operations other than its ownership of Avaya Inc. and its subsidiaries. The accompanying unaudited interim Condensed Consolidated Financial Statements as of June 30, 2018 and for the period from December 16, 2017 through June 30, 2018 , the period from October 1, 2017 through December 15, 2017 and the nine months ended June 30, 2017 , reflect the operating results of Avaya Holdings and its consolidated subsidiaries, and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial statements, and should be read in conjunction with the Consolidated Financial Statements and other financial information for the fiscal year ended September 30, 2017 , included in Amendment No. 3 to the Company’s Form 10 filed with the SEC on January 10, 2018. In management’s opinion, these unaudited interim Condensed Consolidated Financial Statements reflect all adjustments, consisting of normal and recurring adjustments, necessary to state fairly the results of operations, financial position and cash flows for the periods indicated. The condensed consolidated results of operations for the interim periods reported are not necessarily indicative of the results for the entire fiscal year. Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenue and expenses during the periods reported. These estimates include assessing the collectability of accounts receivable, sales returns and allowances, the use and recoverability of inventory, the realization of deferred tax assets, business restructuring reserves, pension and post-retirement benefit costs, the fair value of equity compensation, the fair value of assets and liabilities in connection with fresh start accounting as well as those acquired in business combinations, the recoverability of long-lived assets, useful lives and impairment of tangible and intangible assets including goodwill, the amount of exposure from potential loss contingencies, and fair value measurements, among others. The markets for the Company’s products are characterized by intense competition, rapid technological development and frequent new product introductions, all of which could affect the future recoverability of the Company’s assets. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Actual results could differ from these estimates. On January 19, 2017 (the “Petition Date”), Avaya Holdings, together with certain of its affiliates, namely Avaya CALA Inc., Avaya EMEA Ltd., Avaya Federal Solutions, Inc., Avaya Holdings LLC, Avaya Holdings Two, LLC, Avaya Inc., Avaya Integrated Cabinet Solutions Inc., Avaya Management Services Inc., Avaya Services Inc., Avaya World Services Inc., Octel Communications LLC, Sierra Asia Pacific Inc., Sierra Communication International LLC, Technology Corporation of America, Inc., Ubiquity Software Corporation, VPNet Technologies, Inc., and Zang, Inc. (the “Debtors”), filed voluntary petitions for relief (the “Bankruptcy Filing”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court"). The cases were jointly administered as Case No. 17-10089 (SMB). The Debtors operated their businesses as "debtors-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of Chapter 11 of the Bankruptcy Code and the orders of the Bankruptcy Court until their emergence from bankruptcy on December 15, 2017. During Chapter 11 proceedings, all expenses, gains and losses directly associated with the reorganization proceedings were reported as Reorganization items, net in the accompanying Condensed Consolidated Statements of Operations. In addition, Liabilities subject to compromise during Chapter 11 proceedings were distinguished from liabilities of the non-debtors and from post-petition liabilities in the accompanying Condensed Consolidated Balance Sheets. The Company's other subsidiaries that were not part of the Bankruptcy Filing ("non-debtors") continued to operate in the ordinary course of business. Upon emergence from bankruptcy on December 15, 2017 (the "Emergence Date"), the Company applied fresh start accounting, which resulted in a new basis of accounting and the Company becoming a new entity for financial reporting purposes. As a result of the application of fresh start accounting and the effects of the implementation of the Second Amended Joint Plan of Reorganization filed by the Debtors on October 24, 2017 and approved by the Bankruptcy Court on November 28, 2017 (the "Plan of Reorganization"), the consolidated financial statements after the Emergence Date, are not comparable with the consolidated financial statements on or before that date. Upon emergence, income and expense on non-U.S. dollar functional currency subsidiaries are translated into U.S. dollars using an average rate for the period rather than the applicable spot rate. Refer to Note 4, "Fresh Start Accounting," for additional information. The accompanying Condensed Consolidated Financial Statements of the Company have been prepared on a basis that assumes that the Company will continue as a going concern and contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. During the Chapter 11 proceedings, the Company's ability to continue as a going concern was contingent upon its ability to comply with the financial and other covenants contained in its debtor-in-possession credit agreement, the Bankruptcy Court's approval of the Company's Plan of Reorganization and the Company's ability to successfully implement the Plan of Reorganization, among other factors. As a result of the execution of the Plan of Reorganization, there is no longer substantial doubt about the Company's ability to continue as a going concern. References to "Successor" or "Successor Company" relate to the financial position and results of operations of the reorganized Avaya Holdings after the Emergence Date. References to "Predecessor" or "Predecessor Company" refer to the financial position and results of operations of Avaya Holdings on or before the Emergence Date. Revision of Prior Period Amounts Subsequent to filing the first quarter fiscal 2018 Form 10-Q, the Company identified certain amounts that should have been recorded in the Predecessor Company's consolidated financial statements as of December 15, 2017 , the Emergence Date. Such errors resulted in a $26 million understatement of cash and cash equivalents and cash flows from operating activities with a corresponding overstatement of accounts receivable. Because of the application of fresh start accounting as of December 15, 2017 , Stockholders’ Equity and Goodwill were also each understated by the same amount at December 15, 2017 and December 31, 2017 . These errors had no effect on the reported consolidated net income (loss) for the Predecessor and Successor periods. The Company assessed the materiality of the above errors individually and in the aggregate on the December 31, 2017 interim Condensed Consolidated Financial Statements in accordance with SEC Staff Accounting Bulletin No. 99 and, based on an analysis of quantitative and qualitative factors, determined that the errors were not material to the Company's Predecessor and Successor periods in the interim Condensed Consolidated Financial Statements for the quarter ended December 31, 2017 . The Condensed Consolidated Balance Sheet as of December 16, 2017 , the Condensed Consolidated Statement of Cash Flows for the Predecessor period from October 1, 2017 through December 15, 2017 , and the notes thereto have been revised to include the effects of these errors and the cash flow reclassification as follows: December 16, 2017 (Successor) (In millions, except per share amounts) As Previously Reported Adjustments Revised Condensed Consolidated Balance Sheet: Cash $ 340 $ 26 $ 366 Accounts receivable 417 (26 ) 391 Goodwill 2,632 26 2,658 Total Assets 7,583 26 7,609 Additional paid-in capital (Successor) 1,641 26 1,667 Total Stockholders' Equity 1,642 26 1,668 Total Liabilities and Stockholders' Equity 7,583 26 7,609 Successor common stock value per share $ 14.93 $ 0.23 $ 15.16 Period from October 1, 2017 through December 15, 2017 (Predecessor) (In millions) As Previously Reported Adjustments Revised Condensed Consolidated Statement of Cash Flows: Change in Accounts receivable $ 14 $ 26 $ 40 Net gain on settlement of Liabilities subject to compromise (1,804 ) 26 (1,778 ) Fresh start adjustments (1,671 ) (26 ) (1,697 ) Net Cash Used from Operating Activities (440 ) 26 (414 ) Net decrease in cash and cash equivalents (536 ) 26 (510 ) For additional information refer to Notes: 4. “Fresh Start Accounting”; 6. “Goodwill and Intangible Assets”; 7. “Supplementary Financial Information”; and 10. “Derivative Instruments and Hedging Activities”. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In August 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” This standard sets forth targeted improvements to accounting for hedging activities and will make more financial and non-financial hedging strategies eligible for hedge accounting. It also modifies the presentation and disclosure requirements for hedging activities and changes how companies assess hedge effectiveness. The Company elected to early adopt this standard as of April 1, 2018, applying the updated provisions retrospectively to the beginning of the current fiscal year. As the Company did not maintain any hedging instruments prior to April 1, 2018, there was no retrospective impact due to this interim adoption. The new guidance will be applied to all hedging transactions entered into on or after April 1, 2018. In March 2017, the FASB issued ASU No. 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost." This standard changes how employers that sponsor defined benefit pension and other post-retirement benefit plans present net periodic benefit cost in the income statement. This amendment requires that the service cost component be disaggregated from the other components of pension and post-retirement benefit costs on the income statement. The service cost component is reported in the same line items as other compensation costs and the other components of pension and post-retirement benefit costs (including interest cost, expected return on plan assets, amortization and curtailments and settlements) are reported in Other income (expense), net in the Company's Condensed Consolidated Financial Statements. The Company early adopted this accounting standard as of October 1, 2017. Changes to the Condensed Consolidated Financial Statements have been applied retrospectively. As a result, the Company reclassified $12 million and $29 million of other pension and post-retirement benefit costs to Other income (expense), net for the three and nine months ended June 30, 2017 (Predecessor) , respectively. For the three months ended June 30, 2018 (Successor), the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor), the Company recorded $4 million , $9 million and $(8) million , respectively, of other pension and post-retirement benefit credits (costs) in Other income (expense), net. In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." This standard simplifies the accounting for share-based payments and their presentation in the statements of cash flows as well as the income tax effects of share-based payments. The Company adopted this standard as of October 1, 2017 on a prospective basis. The adoption of this standard did not have a material impact on the Company's Condensed Consolidated Financial Statements. Recent Standards Not Yet Effective In February 2018, the FASB issued ASU No. 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." This new standard allows companies to reclassify from accumulated other comprehensive income to retained earnings any stranded tax benefits resulting from the enactment of the Tax Cuts and Jobs Act. This standard is effective for the Company beginning in the first quarter of fiscal 2020. The Company is currently evaluating the impact that the adoption of this standard may have on its Condensed Consolidated Financial Statements. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." The standard requires the recognition of assets and liabilities for all leases with lease terms of more than 12 months. Subsequently, the FASB issued other standards that clarified certain aspects of the standard. This standard is effective for the Company in the first quarter of fiscal 2020 with early adoption permitted. The Company is currently evaluating the method of adoption and the effect that the adoption of the standard may have on its Condensed Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” This standard supersedes most of the current revenue recognition guidance under GAAP and is intended to improve and converge with international standards the financial reporting requirements for revenue recognition. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. Subsequently, the FASB issued several standards that clarified certain aspects of the standard but did not change the original standard. This new guidance is effective for the Company beginning in the first quarter of fiscal 2019. The ASU may be applied retrospectively (a) to each reporting period presented or (b) with the cumulative effect in retained earnings at the beginning of the adoption period. The Company will adopt the new standard effective October 1, 2018 using the modified retrospective method whereby the cumulative effect is recorded to retained earnings at the beginning of the adoption period. Adoption of the standard is dependent on completion of a detailed accounting assessment, the success of the design and implementation phase for changes to the Company's processes, internal controls and system functionality and the completion of the analysis of information necessary to assess the overall impact of adoption of this guidance on its Condensed Consolidated Financial Statements. The Company continues to make progress on its accounting assessment phase and the design and implementation phases to implement the required business process and system changes to comply with the new accounting policies and disclosures in the consolidated financial statements. The Company will continue to monitor and assess the impact of changes to the standard and interpretations as they become available. The Company expects revenue recognition related to stand-alone product shipments and maintenance services to remain substantially unchanged. However, the Company continues to evaluate its preliminary conclusion and assess the impact on other sources of revenue recognition. |
Emergence from Voluntary Reorga
Emergence from Voluntary Reorganization under Chapter 11 Proceedings | 9 Months Ended |
Jun. 30, 2018 | |
Reorganizations [Abstract] | |
Emergence From Voluntary Reorganization Under Chapter 11 Proceedings | Emergence from Voluntary Reorganization under Chapter 11 Proceedings Plan of Reorganization On November 28, 2017 , the Bankruptcy Court entered an order confirming the Plan of Reorganization. On the Emergence Date, the Plan of Reorganization became effective and the Debtors emerged from bankruptcy. On or following the Emergence Date and pursuant to the terms of the Plan of Reorganization, the following occurred: • Debtor-in-Possession Credit Agreement. The Company paid in full the debtor-in-possession credit agreement (the "DIP Credit Agreement") in the amount of $725 million ; • Predecessor Equity and Indebtedness. The Debtors' obligations under stock certificates, equity interests, and / or any other instrument or document directly or indirectly evidencing or creating any indebtedness or obligation of, or ownership interest in, the Debtors or giving rise to any claim or equity interest were cancelled, except as provided under the Plan of Reorganization; • Successor Equity. The Company's certificate of incorporation was amended and restated to authorize the issuance of 605.0 million shares of Successor Company stock, consisting of 55.0 million shares of preferred stock, par value $0.01 per share, and 550.0 million shares of common stock, par value $0.01 per share, of which 110.0 million shares of common stock were issued (as discussed below); • Exit Financing. The Successor Company entered into (1) a term loan credit agreement (the "Term Loan Credit Agreement") for a principal amount of $2,925 million maturing on December 15, 2024 , and (2) a $300 million asset-based revolving credit facility (the "ABL Credit Agreement") maturing on December 15, 2022 ; • First Lien Debt Claims. All the Predecessor Company's outstanding obligations under the variable rate term B-3, B-4, B-6, and B-7 loans and the 7% and 9% senior secured notes (collectively, the "Predecessor first lien obligations") were cancelled, and the holders of claims under the Predecessor first lien obligations received 99.3 million shares of Successor Company common stock. In addition, the holders of the Predecessor first lien obligations received cash in the amount of $2,061 million ; • Second Lien Debt Claims. All the Predecessor Company's outstanding obligations under the 10.50% senior secured notes (the "Predecessor second lien obligations") were cancelled, and the holders of claims under the Predecessor second lien obligations received 4.4 million shares of Successor Company common stock. In addition, holders of the Predecessor second lien obligations received warrants to purchase 5.6 million shares of Successor Company common stock at an exercise price of $25.55 per warrant (the "Emergence Date Warrants"); • Claims of Pension Benefit Guaranty Corporation ("PBGC"). The Predecessor Company's outstanding obligations under the Avaya Inc. Pension Plan for Salaried Employees ("APPSE") were terminated and transferred to the PBGC. The PBGC received 6.1 million shares of Successor Company common stock and $340 million in cash; and • General Unsecured Claims. Holders of the Predecessor Company's general unsecured claims will receive their pro rata share of the general unsecured recovery pool. A liquidating trust was established in the amount of $58 million for the benefit of the general unsecured claims. Included in the 110.0 million Successor Company common stock issued are 0.2 million additional shares of common stock that have been issued (but are not outstanding) for the benefit of the general unsecured creditors. The general unsecured creditors will receive a total of $58 million in cash and common stock. Any excess cash and / or common stock not distributed to the general unsecured creditors will be distributed to the holders of the Predecessor first lien obligations. Section 363 Asset Sale In July 2017, the Company sold its networking business ("Networking" or the "Networking business") to Extreme Networks, Inc. ("Extreme"). The Networking business was comprised primarily of certain assets of the Company's Networking segment (which prior to the sale was a separate operating segment), along with the maintenance and professional services of the Networking business, which were part of the AGS segment. Under a Transition Services Agreement ("TSA"), the Company provides administrative services to Extreme for process support, maintenance services and product logistics on a fee basis. Substantially all activities required to be provided under the TSA have been completed as of June 30, 2018 . Fresh Start Accounting In connection with the Company's emergence from bankruptcy and in accordance with FASB Accounting Standards Codification ("ASC") 852, "Reorganizations" ("ASC 852"), the Company applied the provisions of fresh start accounting to its Condensed Consolidated Financial Statements on the Emergence Date. The Company was required to use fresh start accounting since (i) the holders of existing voting shares of the Predecessor Company received less than 50% of the voting shares of the emerging entity and (ii) the reorganization value of the Company's assets immediately prior to confirmation of the Plan of Reorganization was less than the post-petition liabilities and allowed claims. ASC 852 prescribes that with the application of fresh start accounting, the Company allocated its reorganization value to its individual assets based on their estimated fair values in conformity with ASC 805, "Business Combinations". The reorganization value represents the fair value of the Successor Company's assets before considering liabilities. The excess reorganization value over the fair value of identified tangible and intangible assets is reported as goodwill. 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. As discussed in Note 1, "Revision of Prior Period Amounts", prior period amounts as reported have been revised, where applicable. Reorganization Value As set forth in the Plan of Reorganization, the agreed upon enterprise value of the Company was $5,721 million . This value is within the initial range calculated by the Company of approximately $5,100 million to approximately $7,100 million using an income approach. The $5,721 million enterprise value was selected as it was the transaction price agreed to in the global settlement agreement with the Company’s creditor constituencies, including the PBGC. The reorganization value was then determined by adding liabilities other than interest bearing debt, pension obligations, and the deferred tax impact of the reorganization and fresh start adjustments. The following table reconciles the enterprise value to the estimated fair value of the Successor stockholders' equity as of the Emergence Date: (In millions, except per share amount) As Previously Reported Adjustments Revised Enterprise value $ 5,721 $ — $ 5,721 Plus: Cash and cash equivalents 340 26 366 Less: Minimum cash required for operations (120 ) — (120 ) Fair value of Term Loan Credit Agreement (1) (2,896 ) — (2,896 ) Fair value of capitalized leases (20 ) — (20 ) Fair value of pension and other post-retirement obligations, net of tax (2) (856 ) — (856 ) Change in net deferred tax liabilities from reorganization (510 ) — (510 ) Fair value of Successor Emergence Date Warrants (3) (17 ) — (17 ) Fair value of Successor common stock $ 1,642 $ 26 $ 1,668 Shares issued at December 15, 2017 upon emergence 110.0 — 110.0 Successor common stock value per share $ 14.93 $ 0.23 $ 15.16 (1) The fair value of the Term Loan Credit Agreement was determined based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices and was estimated to be 99% of par value. (2) The following assumptions were used when measuring the fair value of the U.S. pension, non-U.S. pension, and post-retirement benefit plans: weighted-average return on assets of 7.75% , 3.80% and 5.90% , and weighted-average discount rate to measure plan obligations of 3.70% , 1.52% and 3.77% , respectively. (3) The fair value of the Emergence Date Warrants was estimated using the Black-Scholes-Merton ("Black-Scholes") pricing model. The following table reconciles the enterprise value to the estimated reorganization value as of the Emergence Date: (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 Consolidated Balance Sheet The reorganization and fresh start adjustments set forth in the following consolidated balance sheet as of December 16, 2017 reflect the effect of the consummation of the transactions contemplated by the Plan of Reorganization (reflected in the column "Reorganization Adjustments") as well as fair value adjustments as a result of applying fresh start accounting (reflected in the column "Fresh Start Adjustments"). The explanatory notes highlight methods used to determine fair values or other amounts of the assets and liabilities, as well as significant assumptions or inputs. As Previously Reported (In millions) Predecessor Company December 15, Reorganization Adjustments Fresh Start Adjustments Successor Company December 16, ASSETS Current assets: Cash and cash equivalents $ 744 $ (404 ) (1) $ — $ 340 Accounts receivable, net 523 — (106 ) (21) 417 Inventory 98 — 29 (22) 127 Other current assets 366 (58 ) (2) (66 ) (23) 242 TOTAL CURRENT ASSETS 1,731 (462 ) (143 ) 1,126 Property, plant and equipment, net 194 — 116 (24) 310 Deferred income taxes, net — 48 (3) (17 ) (25) 31 Intangible assets, net 298 — 3,137 (26) 3,435 Goodwill 3,541 — (909 ) (27) 2,632 Other assets 70 6 (4) (27 ) (28) 49 TOTAL ASSETS $ 5,834 $ (408 ) $ 2,157 $ 7,583 LIABILITIES Current liabilities: Debt maturing within one year $ 725 $ (696 ) (5) $ — $ 29 Accounts payable 325 (49 ) (6) — 276 Payroll and benefit obligations 123 23 (7) — 146 Deferred revenue 627 50 (8) (341 ) (29) 336 Business restructuring reserve 35 3 (9) — 38 Other current liabilities 97 65 (6,10) (3 ) (30) 159 TOTAL CURRENT LIABILITIES 1,932 (604 ) (344 ) 984 Non-current liabilities: Long-term debt, net of current portion — 2,771 (11) 96 (31) 2,867 Pension obligations 539 246 (12) — 785 Other post-retirement obligations — 212 (13) — 212 Deferred income taxes, net 28 113 (14) 548 (32) 689 Business restructuring reserve 26 4 (9) 4 (33) 34 Other liabilities 180 233 (8,15) (43 ) (29,34) 370 TOTAL NON-CURRENT LIABILITIES 773 3,579 605 4,957 LIABILITIES SUBJECT TO COMPROMISE 7,585 (7,585 ) (16) — — TOTAL LIABILITIES 10,290 (4,610 ) 261 5,941 Commitments and contingencies Equity awards on redeemable shares 6 (6 ) (17) — — Preferred stock: Series B 397 (397 ) (17) — — Series A 186 (186 ) (17) — — STOCKHOLDERS' (DEFICIT) EQUITY Common stock (Successor) — 1 (18) — 1 Additional paid-in capital (Successor) — 1,641 (18) — 1,641 Common stock (Predecessor) — — — — Additional paid-in capital (Predecessor) 2,387 (2,387 ) (17) — — (Accumulated deficit) retained earnings (5,978 ) 4,872 (19) 1,106 (36) — Accumulated other comprehensive (loss) income (1,454 ) 664 (20) 790 (35) — TOTAL STOCKHOLDERS' (DEFICIT) EQUITY (5,045 ) 4,791 1,896 1,642 TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY $ 5,834 $ (408 ) $ 2,157 $ 7,583 Adjustments (In millions) Predecessor Company December 15, Reorganization Adjustments Fresh Start Adjustments Successor Company December 16, ASSETS Current assets: Cash and cash equivalents $ 26 $ — $ — $ 26 Accounts receivable, net (26 ) — — (26 ) Inventory — — — — Other current assets — — — — TOTAL CURRENT ASSETS — — — — Property, plant and equipment, net — — — — Deferred income taxes, net — — — — Intangible assets, net — — — — Goodwill — — 26 (27) 26 Other assets — — — — TOTAL ASSETS $ — $ — $ 26 $ 26 LIABILITIES Current liabilities: Debt maturing within one year $ — $ — $ — $ — Accounts payable — — — — Payroll and benefit obligations — — — — Deferred revenue — — — — Business restructuring reserve — — — — Other current liabilities — — — — TOTAL CURRENT LIABILITIES — — — — Non-current liabilities: Long-term debt — — — — Pension obligations — — — — Other postretirement obligations — — — — Deferred income taxes, net — — — — Business restructuring reserve — — — — Other liabilities — — — — TOTAL NON-CURRENT LIABILITIES — — — — LIABILITIES SUBJECT TO COMPROMISE — — — — TOTAL LIABILITIES — — — — Commitments and contingencies Equity awards on redeemable shares — — — — Preferred stock: Series B — — — — Series A — — — — STOCKHOLDERS' (DEFICIT) EQUITY Common stock (Successor) — — — — Additional paid-in capital (Successor) — 26 (18) — 26 Common stock (Predecessor) — — — — Additional paid-in capital (Predecessor) — — — — (Accumulated deficit) retained earnings — (26 ) (19) 26 (36) — Accumulated other comprehensive (loss) income — — — — TOTAL STOCKHOLDERS' (DEFICIT) EQUITY — — 26 26 TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY $ — $ — $ 26 $ 26 Revised (In millions) Predecessor Company December 15, 2017 Reorganization Adjustments Fresh Start Adjustments Successor Company December 16, 2017 ASSETS Current assets: Cash and cash equivalents $ 770 $ (404 ) (1) $ — $ 366 Accounts receivable, net 497 — (106 ) (21) 391 Inventory 98 — 29 (22) 127 Other current assets 366 (58 ) (2) (66 ) (23) 242 TOTAL CURRENT ASSETS 1,731 (462 ) (143 ) 1,126 Property, plant and equipment, net 194 — 116 (24) 310 Deferred income taxes, net — 48 (3) (17 ) (25) 31 Intangible assets, net 298 — 3,137 (26) 3,435 Goodwill 3,541 — (883 ) (27) 2,658 Other assets 70 6 (4) (27 ) (28) 49 TOTAL ASSETS $ 5,834 $ (408 ) $ 2,183 $ 7,609 LIABILITIES Current liabilities: Debt maturing within one year $ 725 $ (696 ) (5) $ — $ 29 Accounts payable 325 (49 ) (6) — 276 Payroll and benefit obligations 123 23 (7) — 146 Deferred revenue 627 50 (8) (341 ) (29) 336 Business restructuring reserve 35 3 (9) — 38 Other current liabilities 97 65 (6,10) (3 ) (30) 159 TOTAL CURRENT LIABILITIES 1,932 (604 ) (344 ) 984 Non-current liabilities: Long-term debt, net of current portion — 2,771 (11) 96 (31) 2,867 Pension obligations 539 246 (12) — 785 Other post-retirement obligations — 212 (13) — 212 Deferred income taxes, net 28 113 (14) 548 (32) 689 Business restructuring reserve 26 4 (9) 4 (33) 34 Other liabilities 180 233 (8,15) (43 ) (29,34) 370 TOTAL NON-CURRENT LIABILITIES 773 3,579 605 4,957 LIABILITIES SUBJECT TO COMPROMISE 7,585 (7,585 ) (16) — — TOTAL LIABILITIES 10,290 (4,610 ) 261 5,941 Commitments and contingencies Equity awards on redeemable shares 6 (6 ) (17) — — Preferred stock: Series B 397 (397 ) (17) — — Series A 186 (186 ) (17) — — STOCKHOLDERS' (DEFICIT) EQUITY Common stock (Successor) — 1 (18) — 1 Additional paid-in capital (Successor) — 1,667 (18) — 1,667 Common stock (Predecessor) — — — — Additional paid-in capital (Predecessor) 2,387 (2,387 ) (17) — — (Accumulated deficit) retained earnings (5,978 ) 4,846 (19) 1,132 (36) — Accumulated other comprehensive (loss) income (1,454 ) 664 (20) 790 (35) — TOTAL STOCKHOLDERS' (DEFICIT) EQUITY (5,045 ) 4,791 1,922 1,668 TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY $ 5,834 $ (408 ) $ 2,183 $ 7,609 Reorganization Adjustments In accordance with the Plan of Reorganization, the following adjustments were made: 1. Sources and Uses of Cash. The following reflects the net cash payments recorded as of the Emergence Date as a result of implementing the Plan of Reorganization: (In millions) Sources: Proceeds from Term Loan Credit Agreement, net of original issue discount $ 2,896 Release of restricted cash 76 Total sources of cash 2,972 Uses: Repayment of DIP Credit Agreement (725 ) Payment of DIP Credit Agreement accrued interest (1 ) Cash paid to Predecessor first lien debt-holders (2,061 ) Cash paid to PBGC (340 ) Payment for professional fees escrow account (56 ) Funding payment for Avaya represented employee pension plan (49 ) Payment of accrued professional & administrative fees (27 ) Costs incurred for Term Loan Credit Agreement and ABL Credit Agreement (59 ) Payment for general unsecured claims (58 ) Total uses of cash (3,376 ) Net uses of cash $ (404 ) 2. Other Current Assets. (In millions) Release of restricted cash $ (76 ) Reclassification of prepaid debt issuance costs related to the Term Loan Credit Agreement (42 ) Payment of fees related to the ABL Credit Agreement 5 Restricted cash for bankruptcy related professional fees 55 Total other current assets $ (58 ) 3. Deferred Income Taxes. The adjustment represents the release of the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of the bankruptcy reorganization. 4. Other Assets. The adjustment represents the re-establishment of foreign prepaid taxes. 5. Debt Maturing Within One Year. The adjustment represents the net effect of the Company’s repayment of $725 million for the DIP Credit Agreement and Term Loan Credit Agreement principal payments of $29 million due over the next year. 6. Accounts Payable . The net decrease of $49 million includes $50 million for professional fees that were reclassified to Other current liabilities for accrued bankruptcy related professional fees that will be paid from an escrow account and a payment of $3 million for bankruptcy related professional fees, partially offset by reinstatement of $4 million contract cure costs from liabilities subject to compromise. 7. Payroll and Benefi t Obligations. The Company reinstated $23 million of liabilities subject to compromise related to the post-employment and post-retirement benefit obligations. 8. Deferred Revenue. The reinstatement of liabilities subject to compromise was $79 million of which $50 million is included in deferred revenue and $29 million in other liabilities. 9. Business Restructuring Reserve. The reinstatement of liabilities subject to compromise was $7 million , of which $3 million is current and $4 million is non-current. 10. Other Current Liabilities. (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 11. Exit Financing. In accordance with the Plan of Reorganization, the Company entered into the Term Loan Credit Agreement with a principal amount of $2,925 million maturing seven years from the date of issuance, and the ABL Credit Agreement, which allows borrowings up to an aggregate principal amount of $300 million , subject to borrowing base availability, maturing five years from the date of issuance. (In millions) Term Loan Credit Agreement $ 2,925 Less: Discount (29 ) Upfront and underwriting fees (54 ) Cash received upon emergence from bankruptcy 2,842 Reclassification of debt issuance cost incurred prior to emergence from bankruptcy (42 ) Current portion of Long-term debt (29 ) Long-term debt, net of current portion $ 2,771 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. 16. Liabilities Subject to Compromise. Liabilities subject to compromise were reinstated or settled as follows in accordance with the Plan of Reorganization: (In millions) Liabilities subject to compromise $ 7,585 Less amounts settled per the Plan of Reorganization Pre-petition first lien debt (4,281 ) Pre-petition second lien debt (1,440 ) Avaya Pension Plan for Salaried Employees (620 ) Amounts reinstated: Accounts payable (4 ) Payroll and benefit obligations (23 ) Deferred revenue (50 ) Business restructuring reserves (7 ) Other current liabilities (16 ) Pension obligations (295 ) Other post-retirement obligations (212 ) Deferred income taxes, net (118 ) Other liabilities (216 ) Total liabilities reinstated at emergence (941 ) General unsecured credit claims (1) (303 ) Liabilities subject to compromise $ — (1) In settlement of allowed general unsecured claims, each claimant will receive a pro-rata distribution of $58 million of the general unsecured claims account. The following table displays the detail on the gain on settlement of liabilities subject to compromise: (In millions) As Previously Reported Adjustments Revised Pre-petition first lien debt $ 734 $ (23 ) $ 711 Pre-petition second lien debt 1,357 (1 ) 1,356 Avaya pension plan for salaried employees (514 ) (2 ) (516 ) General unsecured creditors' claims 227 — 227 Net gain on settlement of Liabilities subject to compromise $ 1,804 $ (26 ) $ 1,778 17. Cancellation of Predecessor Preferred and Common Stock. All common stock, Series A and B preferred stock and all other equity awards of the Predecessor Company were cancelled on the Emergence Date without any recovery on account thereof. 18. Issuance of Successor Common Stock and Emergence Date Warrants. In settlement of the Company's $5,721 million Predecessor first lien obligations and Predecessor second lien obligations, the holders of the Predecessor first lien obligations received a total of 99.3 million shares of common stock (fair value of $1,509 million ) and $2,061 million in cash and the holders of the Predecessor second lien obligations received a total of 4.4 million shares of common stock (fair value of $67 million ) and 5.6 million Emergence Date Warrants to purchase a like amount of common shares (fair value of $17 million ). In addition, as part of the Plan of Reorganization, the Company completed a distressed termination of the APPSE in accordance with the Stipulation Settlement with the PBGC, the PBGC received $340 million in cash and 6.1 million shares of common stock (fair value of $92 million ). 19. Accumulated Deficit. (In millions) As Previously Reported Adjustments Revised Accumulated deficit: Net gain on settlement of liabilities subject to compromise $ 1,804 $ (26 ) $ 1,778 Expense for certain professional fees (26 ) — (26 ) Benefit from income taxes 118 — 118 Cancellation of Predecessor equity awards 6 — 6 Cancellation of Predecessor Preferred stock Series B 397 — 397 Cancellation of Predecessor Preferred stock Series A 186 — 186 Cancellation of Predecessor Common stock 2,387 — 2,387 Total $ 4,872 $ (26 ) $ 4,846 20. Accumulated Comprehensive Loss. The changes to Accumulated comprehensive loss relate to the settlement of the APPSE and the Avaya Supplemental Pension Plan ("ASPP") and associated taxes. Fresh Start Adjustments At the Emergence Date, the Company met the requirements under ASC 852 for the adoption of fresh start accounting. These adjustments reflect actual amounts recorded as of the Emergence Date. 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. The following table reflects the components of property, plant and equipment, net as of December 15, 2017 : (In millions) Buildings and improvements $ 82 Machinery and equipment 38 Rental equipment 85 Assets under construction 13 Internal use software 92 Total property, plant and equipment 310 Less: accumulated depreciation and amortization — Property, plant and equipment, net $ 310 25. Deferred Income Tax. T he adjustment represents the release of the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of future taxable income from the reversal of deferred tax liabilities that were established as part of fresh start accounting. 26. Intangible Assets. The Company recorded an adjustment to intangible assets for $3,137 million as follows: Successor Predecessor (In millions) December 16, 2017 Post-emergence December 15, 2017 Pre-emergence Difference Customer relationships and other intangible assets $ 2,155 $ 96 $ 2,059 Technology and patents 905 12 893 Trademarks and trade names 375 190 185 Total $ 3,435 $ 298 $ 3,137 The fair value of customer relationships was determined using the excess earnings method, a derivation of the income approach that calculates residual profit attributable to an asset after proper returns are paid to complementary or contributory assets. The fair value of technology and patents and trademarks and trade names determined using the royalty savings method, a derivation of the income approach that estimates the royalties saved through ownership of the assets. 27. Goodwill. Predecessor goodwill of $3,541 million was eliminated and Successor goodwill of $2,658 million was established based on the calculated reorganization value. (In millions) As Previously Reported Adjustments Revised Reorganization value of Successor Company $ 7,583 $ 26 $ 7,609 Less: Fair value of Successor Company assets (4,951 ) — (4,951 ) Reorganization value of Successor Company assets in excess of fair value - goodwill $ 2,632 $ 26 $ 2,658 28. Other Assets. The $27 million decrease to other assets is related to prepaid commissions that do not meet the definition of an asset upon emergence as there is no future benefit to the Successor Company. 29. Deferred Revenue. The fair value of deferred revenue, which principally relates to payments on annual maintenance contracts, was determined by deducting selling costs and associated profit from the Predecessor deferred revenue balance to arrive at the costs and profit associated with fulfilling the liability. Additionally, the decrease includes the impact of an accounting policy change whereby the Successor Company no longer recognizes deferred revenue relating to sales transactions that have been billed, but for which the related account receivable has not yet been collected. 30. Other Current Liabilities. The decrease of $3 million to other current liabilities is related to the fair value of real estate leases determined to be above or below market using the income approach based on the difference between the contractual rental rate and the estimated market rental rate, discounted utilizing a risk-related discount rate. 31. Long-term Debt . The fair value of the Term Loan Credit Agreement was determined based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices. 32. Deferred Income Taxes. The adjustment represents the establishment of deferred tax liabilities related to book/tax differences created by fresh start accounting adjustments. The amount is net of the release of the valuation allowance on deferred tax assets, which management believes more likely than not will be realized as a result of future taxable income from the reversal of such deferred tax liabilities. 33. Business Restructuring Reserve. The Company recorded an increase to its non-current business restructuring reserves based on estimated future cash flows applied to a current discount rate at emergence. 34. Other Liabilities. A decrease in other liabilities of $43 million relates to deferred revenue and real estate leases as previously discussed. 35. Accumulated Other Comprehensive Loss. The remaining balance in Accumulated comprehensive loss was reversed to Reorganization expenses, net. 36. Fresh Start Adjustments. The following table reflects the cumulative impact of the fresh start adjustments as discussed above, the elimination of the Predecessor Company's accumulated other comprehensive loss and the adjustments required to eliminate accumulated deficit: (In millions) As Previously Reported Adjustments Revised Eliminate Predecessor Intangible assets $ (298 ) $ — $ (298 ) Eliminate Predecessor Goodwill (3,541 ) — (3,541 ) Establish Successor Intangible assets 3,435 — 3,435 Establish Successor Goodwill 2,632 26 2,658 Fair value adjustment to Inventory 29 — 29 Fair value adjustment to Other current assets (66 ) — (66 ) Fair value adjustment to Property, plant and equipment 116 — 116 Fair value adjustment to Other assets (27 ) — (27 ) Fair value adjustment to Deferred revenue 235 — 235 Fair value adjustment to Business restructuring reserves (4 ) — (4 ) Fair value adjustment to Other current liabilities 3 — 3 Fair value adjustment to Long-term debt (96 ) (96 ) Fair value adjustment to Other liabilities 43 — 43 Release Predecessor Accumulated comprehensive loss (790 ) — (790 ) Fresh start adjustments included in Reorganization items, net 1,671 26 1,697 Tax impact of fresh start adjustments (565 ) — (565 ) Gain on fresh start accounting, net $ 1,106 $ 26 $ 1,132 |
Fresh Start Accounting
Fresh Start Accounting | 9 Months Ended |
Jun. 30, 2018 | |
Reorganizations [Abstract] | |
Fresh Start Accounting | Emergence from Voluntary Reorganization under Chapter 11 Proceedings Plan of Reorganization On November 28, 2017 , the Bankruptcy Court entered an order confirming the Plan of Reorganization. On the Emergence Date, the Plan of Reorganization became effective and the Debtors emerged from bankruptcy. On or following the Emergence Date and pursuant to the terms of the Plan of Reorganization, the following occurred: • Debtor-in-Possession Credit Agreement. The Company paid in full the debtor-in-possession credit agreement (the "DIP Credit Agreement") in the amount of $725 million ; • Predecessor Equity and Indebtedness. The Debtors' obligations under stock certificates, equity interests, and / or any other instrument or document directly or indirectly evidencing or creating any indebtedness or obligation of, or ownership interest in, the Debtors or giving rise to any claim or equity interest were cancelled, except as provided under the Plan of Reorganization; • Successor Equity. The Company's certificate of incorporation was amended and restated to authorize the issuance of 605.0 million shares of Successor Company stock, consisting of 55.0 million shares of preferred stock, par value $0.01 per share, and 550.0 million shares of common stock, par value $0.01 per share, of which 110.0 million shares of common stock were issued (as discussed below); • Exit Financing. The Successor Company entered into (1) a term loan credit agreement (the "Term Loan Credit Agreement") for a principal amount of $2,925 million maturing on December 15, 2024 , and (2) a $300 million asset-based revolving credit facility (the "ABL Credit Agreement") maturing on December 15, 2022 ; • First Lien Debt Claims. All the Predecessor Company's outstanding obligations under the variable rate term B-3, B-4, B-6, and B-7 loans and the 7% and 9% senior secured notes (collectively, the "Predecessor first lien obligations") were cancelled, and the holders of claims under the Predecessor first lien obligations received 99.3 million shares of Successor Company common stock. In addition, the holders of the Predecessor first lien obligations received cash in the amount of $2,061 million ; • Second Lien Debt Claims. All the Predecessor Company's outstanding obligations under the 10.50% senior secured notes (the "Predecessor second lien obligations") were cancelled, and the holders of claims under the Predecessor second lien obligations received 4.4 million shares of Successor Company common stock. In addition, holders of the Predecessor second lien obligations received warrants to purchase 5.6 million shares of Successor Company common stock at an exercise price of $25.55 per warrant (the "Emergence Date Warrants"); • Claims of Pension Benefit Guaranty Corporation ("PBGC"). The Predecessor Company's outstanding obligations under the Avaya Inc. Pension Plan for Salaried Employees ("APPSE") were terminated and transferred to the PBGC. The PBGC received 6.1 million shares of Successor Company common stock and $340 million in cash; and • General Unsecured Claims. Holders of the Predecessor Company's general unsecured claims will receive their pro rata share of the general unsecured recovery pool. A liquidating trust was established in the amount of $58 million for the benefit of the general unsecured claims. Included in the 110.0 million Successor Company common stock issued are 0.2 million additional shares of common stock that have been issued (but are not outstanding) for the benefit of the general unsecured creditors. The general unsecured creditors will receive a total of $58 million in cash and common stock. Any excess cash and / or common stock not distributed to the general unsecured creditors will be distributed to the holders of the Predecessor first lien obligations. Section 363 Asset Sale In July 2017, the Company sold its networking business ("Networking" or the "Networking business") to Extreme Networks, Inc. ("Extreme"). The Networking business was comprised primarily of certain assets of the Company's Networking segment (which prior to the sale was a separate operating segment), along with the maintenance and professional services of the Networking business, which were part of the AGS segment. Under a Transition Services Agreement ("TSA"), the Company provides administrative services to Extreme for process support, maintenance services and product logistics on a fee basis. Substantially all activities required to be provided under the TSA have been completed as of June 30, 2018 . Fresh Start Accounting In connection with the Company's emergence from bankruptcy and in accordance with FASB Accounting Standards Codification ("ASC") 852, "Reorganizations" ("ASC 852"), the Company applied the provisions of fresh start accounting to its Condensed Consolidated Financial Statements on the Emergence Date. The Company was required to use fresh start accounting since (i) the holders of existing voting shares of the Predecessor Company received less than 50% of the voting shares of the emerging entity and (ii) the reorganization value of the Company's assets immediately prior to confirmation of the Plan of Reorganization was less than the post-petition liabilities and allowed claims. ASC 852 prescribes that with the application of fresh start accounting, the Company allocated its reorganization value to its individual assets based on their estimated fair values in conformity with ASC 805, "Business Combinations". The reorganization value represents the fair value of the Successor Company's assets before considering liabilities. The excess reorganization value over the fair value of identified tangible and intangible assets is reported as goodwill. 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. As discussed in Note 1, "Revision of Prior Period Amounts", prior period amounts as reported have been revised, where applicable. Reorganization Value As set forth in the Plan of Reorganization, the agreed upon enterprise value of the Company was $5,721 million . This value is within the initial range calculated by the Company of approximately $5,100 million to approximately $7,100 million using an income approach. The $5,721 million enterprise value was selected as it was the transaction price agreed to in the global settlement agreement with the Company’s creditor constituencies, including the PBGC. The reorganization value was then determined by adding liabilities other than interest bearing debt, pension obligations, and the deferred tax impact of the reorganization and fresh start adjustments. The following table reconciles the enterprise value to the estimated fair value of the Successor stockholders' equity as of the Emergence Date: (In millions, except per share amount) As Previously Reported Adjustments Revised Enterprise value $ 5,721 $ — $ 5,721 Plus: Cash and cash equivalents 340 26 366 Less: Minimum cash required for operations (120 ) — (120 ) Fair value of Term Loan Credit Agreement (1) (2,896 ) — (2,896 ) Fair value of capitalized leases (20 ) — (20 ) Fair value of pension and other post-retirement obligations, net of tax (2) (856 ) — (856 ) Change in net deferred tax liabilities from reorganization (510 ) — (510 ) Fair value of Successor Emergence Date Warrants (3) (17 ) — (17 ) Fair value of Successor common stock $ 1,642 $ 26 $ 1,668 Shares issued at December 15, 2017 upon emergence 110.0 — 110.0 Successor common stock value per share $ 14.93 $ 0.23 $ 15.16 (1) The fair value of the Term Loan Credit Agreement was determined based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices and was estimated to be 99% of par value. (2) The following assumptions were used when measuring the fair value of the U.S. pension, non-U.S. pension, and post-retirement benefit plans: weighted-average return on assets of 7.75% , 3.80% and 5.90% , and weighted-average discount rate to measure plan obligations of 3.70% , 1.52% and 3.77% , respectively. (3) The fair value of the Emergence Date Warrants was estimated using the Black-Scholes-Merton ("Black-Scholes") pricing model. The following table reconciles the enterprise value to the estimated reorganization value as of the Emergence Date: (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 Consolidated Balance Sheet The reorganization and fresh start adjustments set forth in the following consolidated balance sheet as of December 16, 2017 reflect the effect of the consummation of the transactions contemplated by the Plan of Reorganization (reflected in the column "Reorganization Adjustments") as well as fair value adjustments as a result of applying fresh start accounting (reflected in the column "Fresh Start Adjustments"). The explanatory notes highlight methods used to determine fair values or other amounts of the assets and liabilities, as well as significant assumptions or inputs. As Previously Reported (In millions) Predecessor Company December 15, Reorganization Adjustments Fresh Start Adjustments Successor Company December 16, ASSETS Current assets: Cash and cash equivalents $ 744 $ (404 ) (1) $ — $ 340 Accounts receivable, net 523 — (106 ) (21) 417 Inventory 98 — 29 (22) 127 Other current assets 366 (58 ) (2) (66 ) (23) 242 TOTAL CURRENT ASSETS 1,731 (462 ) (143 ) 1,126 Property, plant and equipment, net 194 — 116 (24) 310 Deferred income taxes, net — 48 (3) (17 ) (25) 31 Intangible assets, net 298 — 3,137 (26) 3,435 Goodwill 3,541 — (909 ) (27) 2,632 Other assets 70 6 (4) (27 ) (28) 49 TOTAL ASSETS $ 5,834 $ (408 ) $ 2,157 $ 7,583 LIABILITIES Current liabilities: Debt maturing within one year $ 725 $ (696 ) (5) $ — $ 29 Accounts payable 325 (49 ) (6) — 276 Payroll and benefit obligations 123 23 (7) — 146 Deferred revenue 627 50 (8) (341 ) (29) 336 Business restructuring reserve 35 3 (9) — 38 Other current liabilities 97 65 (6,10) (3 ) (30) 159 TOTAL CURRENT LIABILITIES 1,932 (604 ) (344 ) 984 Non-current liabilities: Long-term debt, net of current portion — 2,771 (11) 96 (31) 2,867 Pension obligations 539 246 (12) — 785 Other post-retirement obligations — 212 (13) — 212 Deferred income taxes, net 28 113 (14) 548 (32) 689 Business restructuring reserve 26 4 (9) 4 (33) 34 Other liabilities 180 233 (8,15) (43 ) (29,34) 370 TOTAL NON-CURRENT LIABILITIES 773 3,579 605 4,957 LIABILITIES SUBJECT TO COMPROMISE 7,585 (7,585 ) (16) — — TOTAL LIABILITIES 10,290 (4,610 ) 261 5,941 Commitments and contingencies Equity awards on redeemable shares 6 (6 ) (17) — — Preferred stock: Series B 397 (397 ) (17) — — Series A 186 (186 ) (17) — — STOCKHOLDERS' (DEFICIT) EQUITY Common stock (Successor) — 1 (18) — 1 Additional paid-in capital (Successor) — 1,641 (18) — 1,641 Common stock (Predecessor) — — — — Additional paid-in capital (Predecessor) 2,387 (2,387 ) (17) — — (Accumulated deficit) retained earnings (5,978 ) 4,872 (19) 1,106 (36) — Accumulated other comprehensive (loss) income (1,454 ) 664 (20) 790 (35) — TOTAL STOCKHOLDERS' (DEFICIT) EQUITY (5,045 ) 4,791 1,896 1,642 TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY $ 5,834 $ (408 ) $ 2,157 $ 7,583 Adjustments (In millions) Predecessor Company December 15, Reorganization Adjustments Fresh Start Adjustments Successor Company December 16, ASSETS Current assets: Cash and cash equivalents $ 26 $ — $ — $ 26 Accounts receivable, net (26 ) — — (26 ) Inventory — — — — Other current assets — — — — TOTAL CURRENT ASSETS — — — — Property, plant and equipment, net — — — — Deferred income taxes, net — — — — Intangible assets, net — — — — Goodwill — — 26 (27) 26 Other assets — — — — TOTAL ASSETS $ — $ — $ 26 $ 26 LIABILITIES Current liabilities: Debt maturing within one year $ — $ — $ — $ — Accounts payable — — — — Payroll and benefit obligations — — — — Deferred revenue — — — — Business restructuring reserve — — — — Other current liabilities — — — — TOTAL CURRENT LIABILITIES — — — — Non-current liabilities: Long-term debt — — — — Pension obligations — — — — Other postretirement obligations — — — — Deferred income taxes, net — — — — Business restructuring reserve — — — — Other liabilities — — — — TOTAL NON-CURRENT LIABILITIES — — — — LIABILITIES SUBJECT TO COMPROMISE — — — — TOTAL LIABILITIES — — — — Commitments and contingencies Equity awards on redeemable shares — — — — Preferred stock: Series B — — — — Series A — — — — STOCKHOLDERS' (DEFICIT) EQUITY Common stock (Successor) — — — — Additional paid-in capital (Successor) — 26 (18) — 26 Common stock (Predecessor) — — — — Additional paid-in capital (Predecessor) — — — — (Accumulated deficit) retained earnings — (26 ) (19) 26 (36) — Accumulated other comprehensive (loss) income — — — — TOTAL STOCKHOLDERS' (DEFICIT) EQUITY — — 26 26 TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY $ — $ — $ 26 $ 26 Revised (In millions) Predecessor Company December 15, 2017 Reorganization Adjustments Fresh Start Adjustments Successor Company December 16, 2017 ASSETS Current assets: Cash and cash equivalents $ 770 $ (404 ) (1) $ — $ 366 Accounts receivable, net 497 — (106 ) (21) 391 Inventory 98 — 29 (22) 127 Other current assets 366 (58 ) (2) (66 ) (23) 242 TOTAL CURRENT ASSETS 1,731 (462 ) (143 ) 1,126 Property, plant and equipment, net 194 — 116 (24) 310 Deferred income taxes, net — 48 (3) (17 ) (25) 31 Intangible assets, net 298 — 3,137 (26) 3,435 Goodwill 3,541 — (883 ) (27) 2,658 Other assets 70 6 (4) (27 ) (28) 49 TOTAL ASSETS $ 5,834 $ (408 ) $ 2,183 $ 7,609 LIABILITIES Current liabilities: Debt maturing within one year $ 725 $ (696 ) (5) $ — $ 29 Accounts payable 325 (49 ) (6) — 276 Payroll and benefit obligations 123 23 (7) — 146 Deferred revenue 627 50 (8) (341 ) (29) 336 Business restructuring reserve 35 3 (9) — 38 Other current liabilities 97 65 (6,10) (3 ) (30) 159 TOTAL CURRENT LIABILITIES 1,932 (604 ) (344 ) 984 Non-current liabilities: Long-term debt, net of current portion — 2,771 (11) 96 (31) 2,867 Pension obligations 539 246 (12) — 785 Other post-retirement obligations — 212 (13) — 212 Deferred income taxes, net 28 113 (14) 548 (32) 689 Business restructuring reserve 26 4 (9) 4 (33) 34 Other liabilities 180 233 (8,15) (43 ) (29,34) 370 TOTAL NON-CURRENT LIABILITIES 773 3,579 605 4,957 LIABILITIES SUBJECT TO COMPROMISE 7,585 (7,585 ) (16) — — TOTAL LIABILITIES 10,290 (4,610 ) 261 5,941 Commitments and contingencies Equity awards on redeemable shares 6 (6 ) (17) — — Preferred stock: Series B 397 (397 ) (17) — — Series A 186 (186 ) (17) — — STOCKHOLDERS' (DEFICIT) EQUITY Common stock (Successor) — 1 (18) — 1 Additional paid-in capital (Successor) — 1,667 (18) — 1,667 Common stock (Predecessor) — — — — Additional paid-in capital (Predecessor) 2,387 (2,387 ) (17) — — (Accumulated deficit) retained earnings (5,978 ) 4,846 (19) 1,132 (36) — Accumulated other comprehensive (loss) income (1,454 ) 664 (20) 790 (35) — TOTAL STOCKHOLDERS' (DEFICIT) EQUITY (5,045 ) 4,791 1,922 1,668 TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY $ 5,834 $ (408 ) $ 2,183 $ 7,609 Reorganization Adjustments In accordance with the Plan of Reorganization, the following adjustments were made: 1. Sources and Uses of Cash. The following reflects the net cash payments recorded as of the Emergence Date as a result of implementing the Plan of Reorganization: (In millions) Sources: Proceeds from Term Loan Credit Agreement, net of original issue discount $ 2,896 Release of restricted cash 76 Total sources of cash 2,972 Uses: Repayment of DIP Credit Agreement (725 ) Payment of DIP Credit Agreement accrued interest (1 ) Cash paid to Predecessor first lien debt-holders (2,061 ) Cash paid to PBGC (340 ) Payment for professional fees escrow account (56 ) Funding payment for Avaya represented employee pension plan (49 ) Payment of accrued professional & administrative fees (27 ) Costs incurred for Term Loan Credit Agreement and ABL Credit Agreement (59 ) Payment for general unsecured claims (58 ) Total uses of cash (3,376 ) Net uses of cash $ (404 ) 2. Other Current Assets. (In millions) Release of restricted cash $ (76 ) Reclassification of prepaid debt issuance costs related to the Term Loan Credit Agreement (42 ) Payment of fees related to the ABL Credit Agreement 5 Restricted cash for bankruptcy related professional fees 55 Total other current assets $ (58 ) 3. Deferred Income Taxes. The adjustment represents the release of the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of the bankruptcy reorganization. 4. Other Assets. The adjustment represents the re-establishment of foreign prepaid taxes. 5. Debt Maturing Within One Year. The adjustment represents the net effect of the Company’s repayment of $725 million for the DIP Credit Agreement and Term Loan Credit Agreement principal payments of $29 million due over the next year. 6. Accounts Payable . The net decrease of $49 million includes $50 million for professional fees that were reclassified to Other current liabilities for accrued bankruptcy related professional fees that will be paid from an escrow account and a payment of $3 million for bankruptcy related professional fees, partially offset by reinstatement of $4 million contract cure costs from liabilities subject to compromise. 7. Payroll and Benefi t Obligations. The Company reinstated $23 million of liabilities subject to compromise related to the post-employment and post-retirement benefit obligations. 8. Deferred Revenue. The reinstatement of liabilities subject to compromise was $79 million of which $50 million is included in deferred revenue and $29 million in other liabilities. 9. Business Restructuring Reserve. The reinstatement of liabilities subject to compromise was $7 million , of which $3 million is current and $4 million is non-current. 10. Other Current Liabilities. (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 11. Exit Financing. In accordance with the Plan of Reorganization, the Company entered into the Term Loan Credit Agreement with a principal amount of $2,925 million maturing seven years from the date of issuance, and the ABL Credit Agreement, which allows borrowings up to an aggregate principal amount of $300 million , subject to borrowing base availability, maturing five years from the date of issuance. (In millions) Term Loan Credit Agreement $ 2,925 Less: Discount (29 ) Upfront and underwriting fees (54 ) Cash received upon emergence from bankruptcy 2,842 Reclassification of debt issuance cost incurred prior to emergence from bankruptcy (42 ) Current portion of Long-term debt (29 ) Long-term debt, net of current portion $ 2,771 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. 16. Liabilities Subject to Compromise. Liabilities subject to compromise were reinstated or settled as follows in accordance with the Plan of Reorganization: (In millions) Liabilities subject to compromise $ 7,585 Less amounts settled per the Plan of Reorganization Pre-petition first lien debt (4,281 ) Pre-petition second lien debt (1,440 ) Avaya Pension Plan for Salaried Employees (620 ) Amounts reinstated: Accounts payable (4 ) Payroll and benefit obligations (23 ) Deferred revenue (50 ) Business restructuring reserves (7 ) Other current liabilities (16 ) Pension obligations (295 ) Other post-retirement obligations (212 ) Deferred income taxes, net (118 ) Other liabilities (216 ) Total liabilities reinstated at emergence (941 ) General unsecured credit claims (1) (303 ) Liabilities subject to compromise $ — (1) In settlement of allowed general unsecured claims, each claimant will receive a pro-rata distribution of $58 million of the general unsecured claims account. The following table displays the detail on the gain on settlement of liabilities subject to compromise: (In millions) As Previously Reported Adjustments Revised Pre-petition first lien debt $ 734 $ (23 ) $ 711 Pre-petition second lien debt 1,357 (1 ) 1,356 Avaya pension plan for salaried employees (514 ) (2 ) (516 ) General unsecured creditors' claims 227 — 227 Net gain on settlement of Liabilities subject to compromise $ 1,804 $ (26 ) $ 1,778 17. Cancellation of Predecessor Preferred and Common Stock. All common stock, Series A and B preferred stock and all other equity awards of the Predecessor Company were cancelled on the Emergence Date without any recovery on account thereof. 18. Issuance of Successor Common Stock and Emergence Date Warrants. In settlement of the Company's $5,721 million Predecessor first lien obligations and Predecessor second lien obligations, the holders of the Predecessor first lien obligations received a total of 99.3 million shares of common stock (fair value of $1,509 million ) and $2,061 million in cash and the holders of the Predecessor second lien obligations received a total of 4.4 million shares of common stock (fair value of $67 million ) and 5.6 million Emergence Date Warrants to purchase a like amount of common shares (fair value of $17 million ). In addition, as part of the Plan of Reorganization, the Company completed a distressed termination of the APPSE in accordance with the Stipulation Settlement with the PBGC, the PBGC received $340 million in cash and 6.1 million shares of common stock (fair value of $92 million ). 19. Accumulated Deficit. (In millions) As Previously Reported Adjustments Revised Accumulated deficit: Net gain on settlement of liabilities subject to compromise $ 1,804 $ (26 ) $ 1,778 Expense for certain professional fees (26 ) — (26 ) Benefit from income taxes 118 — 118 Cancellation of Predecessor equity awards 6 — 6 Cancellation of Predecessor Preferred stock Series B 397 — 397 Cancellation of Predecessor Preferred stock Series A 186 — 186 Cancellation of Predecessor Common stock 2,387 — 2,387 Total $ 4,872 $ (26 ) $ 4,846 20. Accumulated Comprehensive Loss. The changes to Accumulated comprehensive loss relate to the settlement of the APPSE and the Avaya Supplemental Pension Plan ("ASPP") and associated taxes. Fresh Start Adjustments At the Emergence Date, the Company met the requirements under ASC 852 for the adoption of fresh start accounting. These adjustments reflect actual amounts recorded as of the Emergence Date. 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. The following table reflects the components of property, plant and equipment, net as of December 15, 2017 : (In millions) Buildings and improvements $ 82 Machinery and equipment 38 Rental equipment 85 Assets under construction 13 Internal use software 92 Total property, plant and equipment 310 Less: accumulated depreciation and amortization — Property, plant and equipment, net $ 310 25. Deferred Income Tax. T he adjustment represents the release of the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of future taxable income from the reversal of deferred tax liabilities that were established as part of fresh start accounting. 26. Intangible Assets. The Company recorded an adjustment to intangible assets for $3,137 million as follows: Successor Predecessor (In millions) December 16, 2017 Post-emergence December 15, 2017 Pre-emergence Difference Customer relationships and other intangible assets $ 2,155 $ 96 $ 2,059 Technology and patents 905 12 893 Trademarks and trade names 375 190 185 Total $ 3,435 $ 298 $ 3,137 The fair value of customer relationships was determined using the excess earnings method, a derivation of the income approach that calculates residual profit attributable to an asset after proper returns are paid to complementary or contributory assets. The fair value of technology and patents and trademarks and trade names determined using the royalty savings method, a derivation of the income approach that estimates the royalties saved through ownership of the assets. 27. Goodwill. Predecessor goodwill of $3,541 million was eliminated and Successor goodwill of $2,658 million was established based on the calculated reorganization value. (In millions) As Previously Reported Adjustments Revised Reorganization value of Successor Company $ 7,583 $ 26 $ 7,609 Less: Fair value of Successor Company assets (4,951 ) — (4,951 ) Reorganization value of Successor Company assets in excess of fair value - goodwill $ 2,632 $ 26 $ 2,658 28. Other Assets. The $27 million decrease to other assets is related to prepaid commissions that do not meet the definition of an asset upon emergence as there is no future benefit to the Successor Company. 29. Deferred Revenue. The fair value of deferred revenue, which principally relates to payments on annual maintenance contracts, was determined by deducting selling costs and associated profit from the Predecessor deferred revenue balance to arrive at the costs and profit associated with fulfilling the liability. Additionally, the decrease includes the impact of an accounting policy change whereby the Successor Company no longer recognizes deferred revenue relating to sales transactions that have been billed, but for which the related account receivable has not yet been collected. 30. Other Current Liabilities. The decrease of $3 million to other current liabilities is related to the fair value of real estate leases determined to be above or below market using the income approach based on the difference between the contractual rental rate and the estimated market rental rate, discounted utilizing a risk-related discount rate. 31. Long-term Debt . The fair value of the Term Loan Credit Agreement was determined based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices. 32. Deferred Income Taxes. The adjustment represents the establishment of deferred tax liabilities related to book/tax differences created by fresh start accounting adjustments. The amount is net of the release of the valuation allowance on deferred tax assets, which management believes more likely than not will be realized as a result of future taxable income from the reversal of such deferred tax liabilities. 33. Business Restructuring Reserve. The Company recorded an increase to its non-current business restructuring reserves based on estimated future cash flows applied to a current discount rate at emergence. 34. Other Liabilities. A decrease in other liabilities of $43 million relates to deferred revenue and real estate leases as previously discussed. 35. Accumulated Other Comprehensive Loss. The remaining balance in Accumulated comprehensive loss was reversed to Reorganization expenses, net. 36. Fresh Start Adjustments. The following table reflects the cumulative impact of the fresh start adjustments as discussed above, the elimination of the Predecessor Company's accumulated other comprehensive loss and the adjustments required to eliminate accumulated deficit: (In millions) As Previously Reported Adjustments Revised Eliminate Predecessor Intangible assets $ (298 ) $ — $ (298 ) Eliminate Predecessor Goodwill (3,541 ) — (3,541 ) Establish Successor Intangible assets 3,435 — 3,435 Establish Successor Goodwill 2,632 26 2,658 Fair value adjustment to Inventory 29 — 29 Fair value adjustment to Other current assets (66 ) — (66 ) Fair value adjustment to Property, plant and equipment 116 — 116 Fair value adjustment to Other assets (27 ) — (27 ) Fair value adjustment to Deferred revenue 235 — 235 Fair value adjustment to Business restructuring reserves (4 ) — (4 ) Fair value adjustment to Other current liabilities 3 — 3 Fair value adjustment to Long-term debt (96 ) (96 ) Fair value adjustment to Other liabilities 43 — 43 Release Predecessor Accumulated comprehensive loss (790 ) — (790 ) Fresh start adjustments included in Reorganization items, net 1,671 26 1,697 Tax impact of fresh start adjustments (565 ) — (565 ) Gain on fresh start accounting, net $ 1,106 $ 26 $ 1,132 |
Goodwill And Intangible Assets
Goodwill And Intangible Assets | 9 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill Goodwill is not amortized but is subject to periodic testing for impairment in accordance with GAAP at the reporting unit level, which is one level below the Company’s operating segments. The Company performs impairment testing annually or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company determined that no events occurred or circumstances changed during the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor) that would more likely than not reduce the fair value of any of the Company's reporting units below their respective carrying amounts. However, if conditions deteriorate or there is a change in the business, it may be necessary to record impairment charges in the future. The Company adjusted the carrying value of goodwill upon application of fresh start accounting. As discussed in Note 1, "Revision of Prior Period Amounts", prior period amounts as reported have been revised, where applicable. The carrying value of goodwill by operating segments for the periods indicated was as follows: As Previously Reported (In millions) Global Communications Solutions Avaya Global Services Total Cost $ 2,669 $ 2,501 $ 5,170 Accumulated impairment (1,576 ) (52 ) (1,628 ) September 30, 2017 (Predecessor) $ 1,093 $ 2,449 $ 3,542 Adjustments (1 ) — (1 ) Impact of fresh start accounting 68 (977 ) (909 ) December 15, 2017 (Predecessor) $ 1,160 $ 1,472 $ 2,632 December 16, 2017 (Successor) $ 1,160 $ 1,472 $ 2,632 Adjustments (In millions) Global Communications Solutions Avaya Global Services Total Cost $ — $ — $ — Accumulated impairment — — — September 30, 2017 (Predecessor) $ — $ — $ — Adjustments — — — Impact of fresh start accounting 11 15 26 December 15, 2017 (Predecessor) $ 11 $ 15 $ 26 December 16, 2017 (Successor) $ 11 $ 15 $ 26 Revised (In millions) Global Communications Solutions Avaya Global Services Total Cost $ 2,669 $ 2,501 $ 5,170 Accumulated impairment (1,576 ) (52 ) (1,628 ) September 30, 2017 (Predecessor) 1,093 2,449 3,542 Adjustments (1 ) — (1 ) Impact of fresh start accounting 79 (962 ) (883 ) December 15, 2017 (Predecessor) $ 1,171 $ 1,487 $ 2,658 December 16, 2017 (Successor) $ 1,171 $ 1,487 $ 2,658 Spoken acquisition 120 — 120 Impact of foreign currency fluctuations (3 ) (4 ) (7 ) June 30, 2018 (Successor) $ 1,288 $ 1,483 $ 2,771 As a result of the sale of certain assets and liabilities of the Company's former Networking business to Extreme in July 2017, it was determined that the fair value of the Networking services component was less than its carrying value. As a result, the Company recorded a goodwill impairment charge of $52 million in the third quarter of fiscal year 2017 . Intangible Assets Intangible assets include technology, customer relationships, trademarks and trade names and other intangibles. Intangible assets with finite lives are amortized using the straight-line method over the estimated economic lives of the assets, which range from one year to nineteen years . Long-lived assets, including intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Intangible assets determined to have indefinite useful lives are not amortized. The Company performs impairment testing annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. The Company determined that no events had occurred or circumstances changed during the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor) that would indicate that its long-lived assets, including intangible assets with finite lives, may not be recoverable or that it is more likely than not that its intangible assets with indefinite lives are impaired. However, if conditions deteriorate or there is a change in the business, it may be necessary to record impairment charges in the future. The Company adjusted the carrying value of intangible assets upon application of fresh start accounting. The gross carrying amount and accumulated amortization by major intangible asset category as of June 30, 2018 (Successor) and September 30, 2017 (Predecessor) were as follows: Successor As of June 30, 2018 (In millions) Technology Customer Trademarks Total Finite-lived intangible assets: Cost $ 960 $ 2,156 $ 43 $ 3,159 Accumulated amortization (92 ) (84 ) (2 ) (178 ) Finite-lived intangible assets, net 868 2,072 41 2,981 Indefinite-lived intangible assets 5 — 332 337 Intangible assets, net $ 873 $ 2,072 $ 373 $ 3,318 Predecessor As of September 30, 2017 (In millions) Technology Customer Trademarks Total Finite-lived intangible assets: Cost $ 1,427 $ 2,196 $ — $ 3,623 Accumulated amortization (1,411 ) (2,091 ) — (3,502 ) Finite-lived intangible assets, net 16 105 — 121 Indefinite-lived intangible assets: Cost — — 545 545 Accumulated impairment — — (355 ) (355 ) Indefinite-lived intangible assets, net — — 190 190 Intangible assets, net $ 16 $ 105 $ 190 $ 311 Due to the Company filing for bankruptcy and also experiencing a decline in revenues, a revision of its five year forecast was completed in the third quarter ended June 30, 2017. Due to the decline in revenue in the five year forecast, the Company tested its intangible assets with indefinite lives and other long-lived assets for impairment. The Company estimated the fair values of its indefinite-lived intangible assets using the royalty savings method, which values an asset by estimating the royalties saved through ownership of the asset. As a result of the impairment test, the Company estimated the fair value of its trademarks and trade names to be $190 million as compared to a carrying amount of $255 million and recorded an impairment charge of $65 million in the third quarter of fiscal year 2017 . No impairments have been recognized in fiscal 2018 . Amortization expense related to intangible assets was $83 million , $178 million and $13 million for the three months ended June 30, 2018 (Successor), the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor), respectively. Amortization expense related to intangible assets was $62 million and $186 million for the three and nine months ended June 30, 2017 (Predecessor), respectively. Amortizable technology and patents have useful lives that range between 1 year and 10 years with a weighted average remaining useful life of 5.2 years . IPR&D activities are considered indefinite-lived until projects are completed or abandoned. Customer relationships have useful lives that range between 1 year and 19 years with a weighted average remaining useful life of 14.1 years . Amortizable product trade names have useful lives of 10 years with a weighted average remaining useful life of 9.5 years . The Avaya trade name is expected to generate cash flows indefinitely and, consequently, this asset is classified as an indefinite-lived intangible. Future amortization expense related to amortizable intangible assets as of June 30, 2018 is as follows: (In millions) Remainder of fiscal 2018 $ 84 2019 333 2020 333 2021 332 2022 305 2023 and thereafter 1,594 Total $ 2,981 |
Supplementary Financial Informa
Supplementary Financial Information | 9 Months Ended |
Jun. 30, 2017 | |
Supplementary Financial Information [Abstract] | |
Supplementary Financial Information | Supplementary Financial Information Supplemental Operations Information A summary of other expense, net for the periods indicated is presented in the following table: Successor Predecessor Successor Predecessor (In millions) Three months ended Three months ended Period from December 16, 2017 Period from October 1, 2017 through December 15, 2017 Nine months ended OTHER INCOME (EXPENSE), NET Interest income $ 1 $ 1 $ 2 $ 2 $ 2 Foreign currency gains, net 25 2 24 — 1 Income from TSA, net 1 — 5 3 — Other pension and post-retirement benefit credits (costs), net 4 (12 ) 9 (8 ) (29 ) Change in fair value of Emergence Date Warrants 6 — (9 ) — — Gain on sale of long-lived assets — — 1 — — Other, net — — — 1 (1 ) Total other income (expense), net $ 37 $ (9 ) $ 32 $ (2 ) $ (27 ) As discussed in Note 2, “Recent Accounting Pronouncements - Recently Adopted Accounting Pronouncements”, the adoption of ASU 2017-07 resulted in the recognition of Other pension and post-retirement benefit credits (costs), net (including the interest cost, expected return on plan assets, amortization and curtailments and settlements) in Other income (expense), net. Prior period amounts have been reclassified to conform to the current period presentation. The Foreign currency gains, net for both the three months ended June 30, 2018 (Successor) and the period from December 16, 2017 through June 30, 2018 (Successor) were principally due to the strengthening of the U.S. dollar compared to certain foreign exchange rates on U.S. dollar denominated receivables maintained in non-U.S. locations, mainly Argentina, India and Mexico. A summary of reorganization items, net for the periods indicated is presented in the following tables: Successor Predecessor (In millions) Three months ended Three months ended June 30, 2017 REORGANIZATION ITEMS, NET Bankruptcy-related professional fees $ — $ (31 ) DIP Credit Agreement financing costs — — Contract rejection fees — (4 ) Net gain on settlement of liabilities subject to compromise — — Net gain on fresh start adjustments — — Other items, net — — Reorganization items, net $ — $ (35 ) Cash payments for reorganization items $ — $ 33 Successor Predecessor As Previously Reported Adjustments Revised (In millions) Period from December 16, 2017 Period from October 1, 2017 through December 15, 2017 Period from October 1, 2017 through December 15, 2017 Period from October 1, 2017 through December 15, 2017 Nine months ended REORGANIZATION ITEMS, NET Bankruptcy-related professional fees $ — $ (56 ) $ — $ (56 ) $ (59 ) DIP Credit Agreement financing costs — — — — (14 ) Contract rejection fees — — — — (4 ) Net gain on settlement of liabilities subject to compromise — 1,804 (26 ) 1,778 — Net gain on fresh start adjustments — 1,671 26 1,697 — Other items, net — (3 ) — (3 ) — Reorganization items, net $ — $ 3,416 $ — $ 3,416 $ (77 ) Cash payments for reorganization items $ 1 $ 2,524 $ — $ 2,524 $ 39 Costs directly attributable to the implementation of the Plan of Reorganization were reported as reorganization items, net. The cash payments for reorganization items for the period from October 1, 2017 through December 15, 2017 (Predecessor) included $2,468 million of claims paid related to liabilities subject to compromise and $56 million for bankruptcy-related professional fees, including emergence and success fees paid on the Emergence Date. As discussed in Note 1, "Revision of Prior Period Amounts", prior period amounts as reported have been revised, where applicable. |
Business Restructuring Reserves
Business Restructuring Reserves And Programs | 9 Months Ended |
Jun. 30, 2018 | |
Restructuring Reserve [Abstract] | |
Business Restructuring Reserves and Programs | Business Restructuring Reserves and Programs For the three months ended June 30, 2018 and 2017 , the Company recognized restructuring charges of $30 million and $8 million , respectively. For the period from December 16, 2017 through June 30, 2018 (Successor), the period from October 1, 2017 through December 15, 2017 (Predecessor) and the nine months ended June 30, 2017 (Predecessor), the Company recognized restructuring charges of $80 million , $14 million and $22 million , respectively. The restructuring charges include adjustments to the restructuring programs of prior fiscal years consisting of the termination/buyout of leases and employee separation costs. As the Company continues to evaluate opportunities to streamline its operations, it may identify cost savings globally and take additional restructuring actions in the future and the costs of those actions could be material. Fiscal 2018 Restructuring Program Recognized restructuring charges for fiscal 2018 restructuring programs included employee separation costs associated with employee severance actions primarily in Europe, Middle East and Africa ("EMEA"), the U.S. and Asia-Pacific ("APAC"), for which the related payments are expected to be completed by the beginning of fiscal 2025 . The separation charges include, but are not limited to, termination payments, pension fund payments, and health care and unemployment insurance costs to be paid to, or on behalf of, the affected employees. Lease obligation charges were also incurred in connection with the termination of certain U.S. real estate leases. The following table summarizes the components of the fiscal 2018 restructuring program for the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor): (In millions) Employee Separation Costs Lease Obligations Total 2018 restructuring charges $ 12 $ — $ 12 Cash payments (3 ) — (3 ) Balance as of December 15, 2017 (Predecessor) $ 9 $ — $ 9 Balance as of December 16, 2017 (Successor) $ 9 $ — $ 9 2018 restructuring charges 68 10 78 Cash payments (16 ) (10 ) (26 ) Impact of foreign currency fluctuations (2 ) — (2 ) Balance as of June 30, 2018 (Successor) $ 59 $ — $ 59 Fiscal 2017 Restructuring Program During fiscal 2017 , the Company identified opportunities to streamline operations and generate costs savings, which included eliminating employee positions. These obligations are primarily for employee separation costs associated with fiscal 2017 employee severance actions in the U.S. and EMEA, for which the related payments are expected to be completed in fiscal 2023 . The separation charges include, but are not limited to, pension fund payments and health care and unemployment insurance costs to be paid to, or on behalf of, the affected employees. The following table summarizes the components of the fiscal 2017 restructuring program for the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor): (In millions) Employee Separation Costs Lease Obligations Total Balance as of September 30, 2017 (Predecessor) $ 4 $ 1 $ 5 Cash payments (1 ) (1 ) (2 ) Balance as of December 15, 2017 (Predecessor) $ 3 $ — $ 3 Balance as of December 16, 2017 (Successor) $ 3 $ — $ 3 Cash payments (1 ) — (1 ) Balance as of June 30, 2018 (Successor) $ 2 $ — $ 2 Fiscal 2008 through 2016 Restructuring Programs During fiscal years 2008 through 2016 , the Company identified opportunities to streamline operations and generate cost savings, which included eliminating employee positions and exiting facilities. The remaining obligations related to these restructuring programs are for employee severance costs and are primarily associated with EMEA plans expected to be completed by fiscal 2023 . The following table aggregates the components of the fiscal 2008 through 2016 restructuring programs for the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor): (In millions) Employee Separation Costs Lease Obligations Total Balance as of September 30, 2017 (Predecessor) $ 51 $ 24 $ 75 Cash payments (3 ) (17 ) (20 ) Expense 1 1 2 Adjustments - fresh start and reorganization items $ 4 $ (1 ) $ 3 Balance as of December 15, 2017 (Predecessor) $ 53 $ 7 $ 60 Balance as of December 16, 2017 (Successor) $ 53 $ 7 $ 60 Expense 1 1 2 Cash payments (12 ) (2 ) (14 ) Impact of foreign currency fluctuations — — — Balance as of June 30, 2018 (Successor) $ 42 $ 6 $ 48 As of September 30, 2017 , the Business restructuring reserve of $80 million included $11 million that was recorded in Liabilities subject to compromise in the Condensed Consolidated Balance Sheets. |
Financing Arrangements
Financing Arrangements | 9 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | Financing Arrangements The following table reflects principal amounts of debt and debt net of discounts and issuance costs as of June 30, 2018 (Successor) and September 30, 2017 (Predecessor) , which includes the impact of adequate protection payments and accrued interest as of January 19, 2017, the date the Company filed for bankruptcy: Successor Predecessor June 30, 2018 September 30, 2017 (In millions) Principal amount Net of discounts and issuance costs Principal amount Net of discounts and issuance costs Term Loan Credit Agreement $ 2,910 $ 2,876 $ — $ — Convertible 2.25% senior notes due June 15, 2023 350 252 — — DIP Credit Agreement due January 19, 2018 — — 725 725 First lien debt: Senior secured term B-3 loans — — 594 594 Senior secured term B-4 loans — — 1 1 Senior secured term B-6 loans — — 519 519 Senior secured term B-7 loans — — 2,012 2,012 7% senior secured notes — — 982 982 9% senior secured notes — — 284 284 Second lien debt: 10.50% senior secured notes — — 1,440 1,440 Total debt $ 3,260 3,128 $ 6,557 6,557 Debt maturing within one year (29 ) (725 ) Long-term debt, net of current portion (1) $ 3,099 $ 5,832 (1) Pre-petition long-term debt as of September 30, 2017 (Predecessor) was included in liabilities subject to compromise. On the Emergence Date: 1. the Successor Company entered into the Term Loan Credit Agreement and the ABL Credit Agreement; 2. the DIP Credit Agreement was paid in full; 3. the holders of the Predecessor first lien obligations received cash and Successor Company common stock (aggregate fair value of $3,570 million ) and the Company cancelled $4,281 million of the Predecessor first lien obligations; and 4. the holders of the Predecessor second lien obligations received Successor Company common stock and Emergence Date Warrants to purchase common stock (aggregate fair value of $84 million ) and the Company cancelled $1,440 million of the Predecessor second lien obligations. Successor Financing Term Loan and ABL Credit Agreements On the Emergence Date, Avaya Inc. entered into (i) the Term Loan Credit Agreement among Avaya Inc., as borrower, Avaya Holdings, the lending institutions from time to time party thereto, and Goldman Sachs Bank USA, as administrative agent and collateral agent, which provided a $2,925 million term loan facility maturing on December 15, 2024 and (ii) the ABL Credit Agreement maturing on December 15, 2022 , among Avaya Inc., as borrower, Avaya Holdings, the several other borrowers party thereto, the several lenders from time to time party thereto, and Citibank, N.A., as administrative agent and collateral agent, which provided a revolving credit facility consisting of a U.S. tranche and a foreign tranche allowing for borrowings of up to an aggregate principal amount of $300 million from time to time, subject to borrowing base availability (the ABL Credit Agreement together with the Term Loan Credit Agreement, the “Credit Agreements”). On June 18, 2018, the Company amended the Term Loan Credit Agreement to reduce interest rates and to reduce the London Inter-bank Offered Rate ("LIBOR") floor that existed under the original agreement from 1.00% to 0.00% . After the amendment, the Term Loan Credit Agreement (a) in the case of alternative base rate ("ABR") Loans, bears interest at a rate per annum equal to 3.25% plus the highest of (i) the Federal Funds Rate plus 0.50% , (ii) the U.S. prime rate as publicly announced in the Wall Street Journal and (iii) the LIBOR Rate for an interest period of one month and (b) in the case of LIBOR Loans, bears interest at a rate per annum equal to 4.25% plus the applicable LIBOR rate, subject to a 0.00% floor. Prior to the amendment, the Term Loan Credit Agreement, in the case of ABR Loans, bore interest at a rate per annum equal to 3.75% plus the highest of (i) the Federal Funds Rate plus 0.50% , (ii) the U.S. prime rate as publicly announced in the Wall Street Journal and (iii) the LIBOR Rate for an interest period of one month and in the case of LIBOR Loans, bore interest at a rate per annum equal to 4.75% plus the applicable LIBOR rate, subject to a 1.00% floor. As a result of the amendment, outstanding loan balances under the original Term Loan Credit Agreement were paid in full and new debt was issued for the same outstanding principal amount. The amendment was accounted for as a loan modification under ASC 470, "Debt". The ABL Credit Agreement bears interest: 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. The Credit Agreements limit, among other things, Avaya Inc.’s ability to (i) incur indebtedness, (ii) incur liens, (iii) dispose of assets, (iv) make investments, (v) make dividends, or conduct redemptions and repurchases of capital stock, (vi) prepay junior indebtedness or amend junior indebtedness documents, (vii) enter into restricted agreements, (viii) enter into transactions with affiliates and (ix) modify the terms of any of its organizational documents. The Term Loan Credit Agreement does not contain any financial covenants. The ABL Credit Agreement does not contain any financial covenants other than a requirement to maintain a minimum fixed charge coverage ratio of 1 : 1 that becomes applicable only in the event that the net borrowing availability under the ABL Credit Agreement is less than the greater of $25 million and 10% of the lesser of the total borrowing base and the ABL commitments (commonly known as the "line cap"). As of June 30, 2018 , the Company was not in default under any of its debt agreements. Under the terms of the ABL Credit Agreement, the Company can issue letters of credit up to $150 million . At June 30, 2018 , the Company had issued and outstanding letters of credit and guarantees of $48 million . The aggregate additional principal amount that may be borrowed under the ABL Credit Agreement, based on the borrowing base less $48 million of outstanding letters of credit and guarantees, was $195 million at June 30, 2018 . The weighted average contractual interest rate of the Company’s outstanding debt as of June 30, 2018 was 6.4% . Convertible Notes On June 11, 2018, the Company issued its 2.25% Convertible Notes in an aggregate principal of $350 million (including the underwriters’ exercise in full of an over-allotment option of $50 million ), which mature on June 15, 2023 (“Convertible Notes”). The Convertible Notes were issued under an indenture (“Indenture”), by and between the Company and the Bank of New York Mellon Trust Company N.A., as Trustee. The Company received net proceeds from the offering of $314 million after giving effect to debt issuance costs, including the underwriting discount, the net cash used to purchase a bond hedge and the proceeds from the issuance of warrants, which are discussed below. The Convertible Notes accrue interest at a rate of 2.25% per annum, payable semi-annually on June 15 and December 15 of each year beginning on December 15, 2018 . On or after March 15, 2023 , and until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert the Convertible Notes at the holders' option. The Convertible Notes are convertible at an initial rate of 36.0295 shares per $1,000 of principal (equivalent to an initial conversion price of $27.76 per share of the Company's common stock). The conversion rate is subject to customary adjustments for certain events as described in the Indenture. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company's election. It is the Company’s current intent to settle conversions of the Convertible Notes through combination settlement, which involves repayment of the principal portion in cash and any excess of the conversion value over the principal amount in shares of its common stock. Holders may convert the Convertible Notes, at the holders' option, prior to March 15, 2023 only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on September 30, 2018 (and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five business day period after any five consecutive trading day period (the “Measurement Period”) in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sales price of the Company's common stock and the conversion rate on each such trading day; or • upon the occurrence of specified corporate events. The Company may not redeem the Convertible Notes prior to their maturity date, and no sinking fund is provided for them. If the Company undergoes a fundamental change, as described in the Indenture, subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of the Convertible Notes. The fundamental change repurchase price is equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest up to, but excluding, the fundamental change repurchase date. If holders elect to convert the Convertible Notes in connection with a make-whole fundamental change, as described in the Indenture, the Company will, to the extent provided in the Indenture, increase the conversion rate applicable to the Convertible Notes. The Convertible Notes are senior unsecured obligations and rank senior in right of payment to any of the Company's indebtedness that is expressly subordinated in right of payment to the Convertible Notes and equal in right of payment to any of its existing and future unsecured indebtedness that is not subordinated. The Convertible Notes are effectively junior in right of payment to any of the Company's secured indebtedness (to the extent of the value of assets securing such indebtedness) and structurally junior to all existing and future indebtedness and other liabilities, including trade payables, of its subsidiaries. The Indenture does not limit the amount of debt that the Company or its subsidiaries may incur. The Convertible Notes are not guaranteed by any of the Company's subsidiaries. The Indenture does not contain any financial or operating covenants or restrictions on the payment of dividends, the incurrence of indebtedness, or the issuance or repurchase of securities by the Company or any of its subsidiaries. The Indenture contains customary events of default with respect to the Convertible Notes and provides that upon certain events of default occurring and continuing, the Trustee may, and the Trustee at the request of holders of at least 25% in principal amount of the Convertible Notes shall, declare all principal and accrued and unpaid interest, if any, of the Convertible Notes to be due and payable. In case of certain events of bankruptcy, insolvency or reorganization, all of the principal of and accrued and unpaid interest on the Convertible Notes will automatically become due and payable. In accounting for the issuance of the Convertible Notes, the Company separated the Convertible Notes into liability and equity components. The Company allocated $258 million of the Convertible Notes to the liability component, and $92 million to the equity component. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component, which represents the conversion option and does not meet the criteria for separate accounting as a derivative as it is indexed to the Company's own stock, was determined by deducting the fair value of the liability component from the par value of the Convertible Notes. The excess of the principal amount of the liability component over its carrying amount represents a debt discount, which is recorded as a direct deduction from the related debt liability in the Condensed Consolidated Balance Sheets and is amortized to interest expense over the term of the Convertible Notes using the effective interest method. The equity component is included in Additional paid-in capital in the Condensed Consolidated Balance Sheets and will not be remeasured as long as it continues to meet the conditions for equity classification. The Company incurred issuance costs of $10 million related to the Convertible Notes. Issuance costs were allocated to the liability and equity components based on the same proportion used to allocate the proceeds. Issuance costs attributable to the liability component are being amortized to interest expense over the term of the Convertible Notes, and issuance costs attributable to the equity component are included along with the equity component in stockholders' equity. For the three months ended June 30, 2018 , the Company recognized interest expense of $1 million related to the Convertible Notes, which mainly consisted of amortization of the underwriting discount. The net carrying amount of the Convertible Notes for the period indicated was as follows: (In millions) June 30, 2018 Principal $ 350 Less: Unamortized debt discount (91 ) Unamortized issuance costs (7 ) Net carrying amount $ 252 The net carrying amount of the equity component of the Convertible Notes for the period indicated was as follows: (In millions) June 30, 2018 Debt discount for conversion option $ 92 Less: Issuance costs (3 ) Net carrying amount $ 89 Bond Hedge and Call Spread Warrants In connection with the issuance of the Convertible Notes, the Company also entered into privately negotiated transactions to purchase hedge instruments (“Bond Hedge”), covering 12.6 million shares of its common stock at a cost of $84 million . The Bond Hedge is subject to anti-dilution provisions substantially similar to those of the Convertible Notes, has a strike price of $27.76 per share, is exercisable by the Company upon any conversion under the Convertible Notes, and expires on June 15, 2023 . The Bond Hedge was recorded in equity and the cost of the Bond Hedge was recorded as a reduction of Additional paid-in capital in the accompanying Condensed Consolidated Balance Sheets. The Company also sold warrants for the purchase of up to 12.6 million shares of its common stock for aggregate proceeds of $58 million (“Call Spread Warrants”). The Call Spread Warrants have a strike price of $37.3625 per share and are subject to customary anti-dilution provisions. The Call Spread Warrants will expire in ratable portions on a series of expiration dates commencing on September 15, 2023 . The Call Spread Warrants were recorded in equity and the proceeds from the issuance of the Call Spread Warrants were recorded as an increase to Additional paid-in capital. The Bond Hedge and Call Spread Warrants are intended to reduce the potential dilution with respect to the Company’s common stock and/or reduce the Company’s exposure to potential cash payments that the Company may be required to make upon conversion of the Convertible Notes by, in effect, increasing the conversion price, from the Company’s economic standpoint, to $37.3625 per share. However, the Call Spread Warrants could have a dilutive effect with respect to the Company's common stock or, if the Company so elects, obligate the Company to make cash payments to the extent that the market price of common stock exceeds $37.3625 per share on any date upon which the Call Spread Warrants are exercised. Predecessor Financing The Bankruptcy Filing constituted an event of default that accelerated the Predecessor’s payment obligations under the senior secured credit agreements and the senior secured notes. As a result of the Bankruptcy Filing, the principal and interest due under the Predecessor’s debt agreements became due and payable. However, any efforts to enforce such payment obligations were automatically stayed as a result of the Bankruptcy Filing, and the creditors’ rights of enforcement were subject to the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. Consequently, all debt outstanding was classified as liabilities subject to compromise and all unamortized debt issuance costs and unaccreted debt discounts were expensed. DIP Credit Agreement. In connection with the Bankruptcy Filing, on the Petition Date, the Predecessor entered into the DIP Credit Agreement, which provided a $725 million term loan facility due January 2018, and a cash collateralized letter of credit facility in an aggregate amount equal to $150 million . All letters of credit were cash collateralized in an amount equal to 101.5% of the face amount of such letters of credit denominated in U.S. dollars and 103% of the face amount of letters of credit denominated in alternative currencies. The DIP Credit Agreement, in the case of the Base Rate Loans, bore interest at a rate per annum equal to 6.5% plus the highest of (i) Citibank, N.A.’s prime rate, (ii) the Federal Funds Rate plus 0.5% and (iii) the Eurocurrency Rate for an interest period of one month, subject to a 2% floor, and in the case of the Eurocurrency Loans, bore interest at a rate per annum equal to 7.5% plus the applicable Eurocurrency Rate, subject to a 1% floor. Capital Lease Obligations Included in Other liabilities is $15 million and $14 million of capital lease obligations, net of imputed interest as of June 30, 2018 (Successor) and September 30, 2017 (Predecessor), respectively, and excluded amounts included in Liabilities subject to compromise of $12 million as of September 30, 2017 . The Company outsources certain delivery services associated with the Avaya Private Cloud Services business. That agreement also included the sale of specified assets owned by the Company, which are being leased-back by the Company and accounted for as a capital lease. As of June 30, 2018 (Successor) and September 30, 2017 (Predecessor), capital lease obligations associated with this agreement were $14 million and $24 million , respectively, and include $10 million within Liabilities subject to compromise as of September 30, 2017 . |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities The Company accounts for derivative financial instruments in accordance with ASC 815, "Derivatives and Hedging" ("ASC 815") and does not enter into derivatives for trading or speculative purposes. Interest Rate Contracts The Company, from time-to-time, enters into interest rate swap contracts as a hedge against changes in interest rates on its variable rate loans outstanding. On May 16, 2018, the Company entered into interest rate swap agreements with six counterparties, which fixed a portion of the variable interest due on its Term Loan Credit Agreement. Under the terms of the interest rate swap agreements, which mature on December 15, 2022 , the Company pays a fixed rate of 2.935% and receives a variable rate of interest based on one-month LIBOR. As of June 30, 2018 , the total notional amount of the six interest rate swap agreements was $1,800 million . The interest rate swaps are designated as cash flow hedges as defined under ASC 815. As a result, the unrealized gains or losses on these contracts are initially recorded in Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets. As interest expense is recognized on the Term Loan Credit Agreement, the corresponding deferred gain or loss on the interest rate swaps is reclassified from Accumulated other comprehensive loss to Interest expense in the Condensed Consolidated Statements of Operations. Based on the amount in Accumulated other comprehensive loss at June 30, 2018 , approximately $10 million would be reclassified into net income in the next twelve months . It is management's intention that the notional amount of interest rate swaps be less than the variable rate loans outstanding during the life of the derivatives. Emergence Date Warrants In accordance with the Plan of Reorganization, the Company issued Emergence Date Warrants to purchase 5,645,200 shares of Successor Company common stock to the holders of the Predecessor second lien obligations pursuant to a warrant agreement. Each Emergence Date Warrant has an exercise price of $25.55 per share and expires December 15, 2022 . The Emergence Date Warrants contain certain derivative features that require them to be classified as a liability and for changes in fair value of the liability to be recognized in earnings each reporting period. None of the Emergence Date Warrants have been exercised as of June 30, 2018 . As discussed in Note 1, "Revision of Prior Period Amounts", prior period amounts as reported have been revised, where applicable. The fair value of the Emergence Date Warrants was determined using a probability weighted Black-Scholes option pricing model. This model requires certain input assumptions including risk-free interest rates, volatility, expected life and dividend rates. Selection of these inputs involves significant judgment. The fair value of the Emergence Date Warrants upon emergence and as of June 30, 2018 was recorded in Non-current liabilities - Other liabilities in the Condensed Consolidated Balance Sheets, and was determined by using the Black-Scholes option pricing model with the input assumptions summarized below: As Previously Reported Revised June 30, 2018 December 15, 2017 December 15, 2017 Expected volatility 50.96 % 54.57 % 54.38 % Risk-free interest rates 2.68 % 2.20 % 2.20 % Expected remaining life (in years) 4.46 5.00 5.00 Price per share of common stock $20.08 $14.93 $15.16 In determining the fair value of the Emergence Date Warrants, the dividend yield was assumed to be zero as the Company does not anticipate paying dividends. The following table summarizes the fair value of the Company's derivatives on a gross basis segregated between those that are designated as hedging instruments and those that are not designated as hedging instruments: Successor Predecessor June 30, 2018 September 30, 2017 (In millions) Balance Sheet Caption Asset Liability Asset Liability Derivatives Designated as Hedging Instruments: Interest rate contracts Other current liabilities $ — $ 11 $ — $ — Interest rate contracts Other liabilities — 5 — — — 16 — — Derivatives Not Designated as Hedging Instruments: Emergence Date Warrants Other liabilities — 26 — — Total derivative fair value $ — $ 42 $ — $ — The following table provides information regarding the location and amount of pre-tax gains (losses) for derivatives designated as cash flow hedges: Successor Predecessor Three months ended Period from December 16, 2017 through June 30, 2018 Period from October 1, 2017 through December 15, 2017 (In millions) Interest Expense Other Comprehensive Income (Loss) Interest Expense Other Comprehensive Income (Loss) Interest Expense Other Comprehensive Income (Loss) Financial Statement Line Item in which Cash Flow Hedges are Recorded $ (56 ) $ (16 ) $ (112 ) $ (41 ) $ (14 ) $ 658 Impact of cash flow hedging relationships: Loss recognized in AOCI - on interest rate swaps — (17 ) — (17 ) — — Interest expense reclassified from AOCI (2 ) 2 (2 ) 2 — — The following table provides information regarding the pre-tax effects for derivatives not designated as hedging instruments on the Condensed Consolidated Statements of Operations: Successor Predecessor (In millions) Location of Derivative Pre-tax Gain (Loss) Three months ended Period from December 16, 2017 Period from October 1, 2017 through December 15, 2017 Emergence Date Warrants Other income (expense), net $ 6 $ (9 ) $ — The Company records its derivatives on a gross basis in the Condensed Consolidated Balance Sheets. The Company has master netting agreements with several of its financial institution counterparties. The following table provides information on the Company's derivative positions as if those subject to master netting arrangements were presented on a net basis, allowing for the right to offset by counterparty per the master netting agreements: Successor Predecessor June 30, 2018 September 30, 2017 (In millions) Asset Liability Asset Liability Gross amounts recognized in the consolidated balance sheet $ — $ 42 $ — $ — Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet — — — — Net amounts $ — $ 42 $ — $ — |
Fair Value Measures
Fair Value Measures | 9 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measures | Fair Value Measures Pursuant to the accounting guidance for fair value measurements, fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Fair Value Hierarchy The accounting guidance for fair value measurements also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The inputs are prioritized into three levels that may be used to measure fair value: Level 1: Inputs that reflect quoted prices for identical assets or liabilities in active markets that are observable. Level 2: Inputs that reflect quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3: Inputs that are unobservable to the extent that observable inputs are not available for the asset or liability at the measurement date. Asset and Liabilities Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis as of June 30, 2018 (Successor) and September 30, 2017 (Predecessor) were as follows: Successor June 30, 2018 Fair Value Measurements Using (In millions) Total Level 1 Level 2 Level 3 Other Non-Current Assets: Investments $ 2 $ 2 $ — $ — Liabilities: Interest rate contracts $ 16 $ — $ 16 $ — Spoken acquisition Earn-outs 15 — — 15 Emergence Date Warrants 26 — — 26 Total liabilities $ 57 $ — $ 16 $ 41 Predecessor September 30, 2017 Fair Value Measurements Using (In millions) Total Level 1 Level 2 Level 3 Other Non-Current Assets: Investments $ 1 $ 1 $ — $ — Investments Investments classified as Level 1 assets are priced using quoted market prices for identical assets in active markets that are observable. Interest rate contracts Interest rate contracts classified as Level 2 liabilities are not actively traded and are valued using pricing models that use observable inputs. Spoken acquisition Earn-outs The Spoken acquisition Earn-outs classified as Level 3 liabilities are measured using a probability-weighted discounted cash flow model. Significant unobservable inputs, which included probability of the achievement of the earn out targets and discount rate assumption, reflected the assumptions market participants would use in valuing these liabilities. Emergence Date Warrants Emergence Date Warrants classified as Level 3 liabilities are priced using the Black-Scholes option pricing model. The change in fair value of the Emergence Date Warrants is recognized in Other income (expense), net in the Condensed Consolidated Statements of Operations. During fiscal 2018, there were no transfers between Level 1 and Level 2, or into and out of Level 3. The following table summarizes the activity for the Company's Level 3 liabilities measured at fair value on a recurring basis: (In millions) Emergence Date Warrants Spoken Acquisition Earn-outs Total September 30, 2017 (Predecessor) $ — $ — $ — Issuance of Emergence Date Warrants 17 — 17 December 15, 2017 (Predecessor) $ 17 $ — $ 17 December 16, 2017 (Successor) $ 17 $ — $ 17 Contingent consideration — 14 14 Change in fair value (1) 15 — 15 March 31, 2018 (Successor) 32 14 46 Accretion of interest (1) — 1 1 Change in fair value (1) (6 ) — (6 ) June 30, 2018 (Successor) $ 26 $ 15 $ 41 (1) Changes in fair value of the Emergence Date Warrants and accretion of interest on the Spoken acquisition earn-outs are included in Other income (expense), net. Fair Value of Financial Instruments The fair values of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, to the extent the underlying liability will be settled in cash, approximate carrying values because of the short-term nature of these instruments. As of June 30, 2018 (Successor), the estimated fair value of the Convertible Notes was determined based on the quoted price of the Convertible Notes in an inactive market on the last trading day of the reporting period and has been classified as Level 2. The estimated fair values of amounts borrowed under the Company’s other financing arrangements at June 30, 2018 (Successor) and September 30, 2017 (Predecessor) were estimated based on a Level 2 input based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices. The estimated fair values of the amounts borrowed under the Company’s financing agreements at June 30, 2018 (Successor) and September 30, 2017 (Predecessor) are as follows: Successor Predecessor June 30, 2018 September 30, 2017 (In millions) Principal Amount Fair Value Principal Amount Fair Value Term Loan Credit Agreement due December 15, 2024 $ 2,910 $ 2,919 $ — $ — Convertible 2.25% senior notes due June 15, 2023 350 342 — — DIP Credit Agreement due January 19, 2018 — — 725 732 Variable rate Term B-3 Loans due October 26, 2017 — — 594 503 Variable rate Term B-4 Loans due October 26, 2017 — — 1 1 Variable rate Term B-6 Loans due March 31, 2018 — — 519 440 Variable rate Term B-7 Loans due May 29, 2020 — — 2,012 1,709 7% senior secured notes due April 1, 2019 — — 982 832 9% senior secured notes due April 1, 2019 — — 284 241 10.50% senior secured notes due March 1, 2021 — — 1,440 67 Total $ 3,260 $ 3,261 $ 6,557 $ 4,525 The Company adjusted the carrying value of debt to fair value upon application of fresh start accounting. |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the period from October 1, 2017 through December 15, 2017 (Predecessor), the difference between the Company’s recorded provision and the provision that would result from applying the U.S. statutory rate of 35% was primarily attributable to: (1) income and losses taxed at different foreign tax rates, (2) losses generated within certain foreign jurisdictions for which no benefit was recorded because it is more likely than not that the tax benefits would not be realized, (3) non-U.S. withholding taxes on foreign earnings, (4) current period changes to unrecognized tax positions, (5) U.S. state and local income taxes, and (6) the impact of reorganization and fresh start adjustments. For the three months ended June 30, 2018 (Successor) and the period from December 16, 2017 through June 30, 2018 (Successor), the difference between the Company’s recorded (provision) benefit and the benefit that would result from applying the new U.S. statutory rate of 24.5% , was primarily attributable to: (1) income and losses taxed at different foreign tax rates, (2) losses generated within certain foreign jurisdictions for which no benefit was recorded because it is more likely than not that the tax benefits would not be realized, (3) non-U.S. withholding taxes on foreign earnings, (4) current period changes to unrecognized tax positions, (5) U.S. state and local income taxes, (6) an increase in estimated current year tax loss, which is eliminated as part of the attribute reduction related to the cancellation of indebtedness income (“CODI”), and (7) the impact of the Tax Cuts and Jobs Act (“the Act”), which only affects the December 16, 2017 through June 30, 2018 (Successor) period. The Act and CODI are more fully described below. For the three months ended June 30, 2017 (Predecessor) and the nine months ended June 30, 2017 (Predecessor), the difference between the Company’s recorded benefit and the benefit that would result from applying the U.S. statutory rate of 35% was primarily attributable to: (1) income and losses taxed at different foreign tax rates, (2) losses generated within certain foreign jurisdictions for which no benefit was recorded because it is more likely than not that the tax benefits would not be realized, (3) non-U.S. withholding taxes on foreign earnings, (4) current period changes to unrecognized tax positions, (5) U.S. state and local income taxes, and (6) changes in the valuation allowance established against the Company’s deferred tax assets. Under the Plan of Reorganization, a substantial amount of the Company’s debt was extinguished. Absent an exception, a debtor recognizes CODI upon discharge of its outstanding indebtedness for an amount of consideration that is less than its adjusted issue price. The Internal Revenue Code of 1986, as amended, provides that a debtor in a bankruptcy case may exclude CODI from taxable income but must reduce certain of its tax attributes by the amount of any CODI recognized as a result of the consummation of the Plan of Reorganization. The amount of CODI recognized by a taxpayer is the adjusted issue price of any indebtedness discharged less the sum of (i) the amount of cash paid, (ii) the issue price of any new indebtedness issued and (iii) the fair market value of any other consideration, including equity, issued. The reduction in tax attributes does not occur until the first day of the Company’s first tax year subsequent to the date of emergence, which is October 1, 2018. The Company estimates that the U.S. federal net operating loss (“NOL”) and tax credits disclosed in its September 30, 2017 Consolidated Financial Statements and the tax loss generated during the September 30, 2018 tax year will be eliminated on October 1, 2018. The Company estimates that $92 million of the tax loss generated during the period from October 1, 2017 through December 15, 2017 (Predecessor) will be absorbed by taxable income generated during the period from December 16, 2017 through September 30, 2018 (Successor). These estimates are subject to revision and any changes in the estimates will affect income or loss from continuing operations in the fiscal year ending September 30, 2018 . Prior to September 30, 2017 , a full valuation allowance was established in any jurisdiction that had a net deferred tax asset. A portion of the U.S. valuation allowance in the amount of $787 million was reversed as part of the reorganization adjustments as it was previously established against (i) the NOL and tax credits, which will be eliminated as a result of the CODI rules and (ii) other deferred tax assets that were previously established for liabilities that were discharged in the Plan of Reorganization and eliminated as part of the reorganization adjustments. The valuation allowance in the amount of $47 million was reversed in certain non-U.S. jurisdictions as part of the reorganization adjustments as management concluded it is more likely than not that the related deferred tax assets will be realized. The remaining U.S. valuation allowance in the amount of $461 million was reversed as part of the fresh start adjustments because management concluded it is more likely than not that the deferred tax assets will be realized primarily due to future sources of taxable income that will be generated by the reversal of deferred tax liabilities established in the fresh start adjustments. On December 22, 2017, the Act was signed into law. The Act lowered the U.S. federal corporate tax rate from 35% to 21% effective January 1, 2018. Corporations with a fiscal year-end that is not a calendar year but includes January 1, 2018 are subject to a blended tax rate based on the number of days in the fiscal year before and after January 1, 2018. The Company has a September 30 th tax year-end and therefore the U.S. federal tax rate for the fiscal year ending September 30, 2018 is 24.5% . The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) on December 22, 2017, which provided guidance to registrants on the accounting for tax related impacts under the Act. The guidance provides a measurement period of up to one year after the enactment date for companies to complete the tax accounting implications of the Act. As of the first quarter, the Company has provided a provisional estimate related to the revaluation of its deferred taxes and the deemed repatriation of unremitted foreign earnings. The Company will continue to refine its estimate, which could result in a material adjustment, given additional guidance under the Act, interpretations, available information and assumptions made by the Company. As a fiscal year-end tax filer, we are subject to various provisions under the Act for fiscal 2018 , including the change to the U.S. federal statutory tax rate and the mandatory deemed repatriation of unremitted foreign earnings. Beginning in the Company's 2019 fiscal year, various other newly enacted provisions will become effective, including provisions that may result in the current U.S. taxation of certain income earned by the Company’s foreign subsidiaries. The FASB has published guidance (Topic 740, No. 5), regarding how to account for the Global Intangible Low-Taxed Income (“GILTI”) provisions included in the Act. The guidance states that a company may make a policy decision with respect to the accounting for taxes related to GILTI and whether deferred taxes should be established. The Company estimates that it will generate income that may be taxed as GILTI beginning in fiscal 2019 . On a provisional basis, no deferred taxes have been established for GILTI as of June 30, 2018 . The Company does not expect to incur a cash tax liability with respect to the one-time tax on foreign earnings due to historical foreign deficits. The Company previously established a deferred tax liability for non-U.S. withholding taxes to be incurred upon the remittance of foreign earnings. The Condensed Consolidated Financial Statements for the Predecessor and Successor periods include an adjustment for such withholding taxes attributable to current period earnings. In prior periods, the Company established a U.S. deferred income tax liability for certain foreign earnings under the assumption that such earnings would be remitted to the U.S. This deferred tax liability has been adjusted in the Successor period based on the taxation of such earnings under the Act. A net deferred tax liability was established at the U.S. federal tax rates in effect on December 15, 2017 as part of fresh start accounting for U.S. book-to-tax differences. These deferred taxes are primarily related to differences arising from recording intangible and other assets at fair market value. As of the December 22, 2017 enactment date of the Act, deferred taxes were adjusted to reflect the new tax rates in effect as of the date the deferred tax amounts are expected to be realized. The provisional amount of the reduction to the net deferred tax liability as a result of the Act is $242 million and has been recorded as an income tax benefit from continuing operations in the period from December 16, 2017 through June 30, 2018 (Successor). |
Benefit Obligations
Benefit Obligations | 9 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Benefit Obligations | Benefit Obligations The Company sponsors non-contributory defined benefit pension plans covering a portion of its U.S. employees and retirees, and post-retirement benefit plans covering a portion of its U.S. retirees that include healthcare benefits and life insurance coverage. Certain non-U.S. operations have various retirement benefit programs covering substantially all of their employees. Some of these programs are considered to be defined benefit pension plans for accounting purposes. Effective January 25, 2018, the Company and the Communications Workers of America (“CWA”) and the International Brotherhood of Electrical Workers (“IBEW”), agreed to extend the 2009 Collective Bargaining Agreement (“CBA”), previously extended through June 14, 2018, until September 21, 2019. The contract extensions did not affect the Company’s obligation for pension and post-retirement benefits available to U.S. employees of the Company who are represented by the CWA or IBEW (“represented employees”). In September 2015, the Company amended the post-retirement medical plan for represented retirees effective January 1, 2017, to replace medical coverage through the Company’s group plan for represented retirees who are retired as of October 15, 2015 and their eligible dependents, with medical coverage through the private and public insurance marketplace. The change allows the existing retirees to choose insurance from the marketplace and receive financial support from the Company toward the cost of coverage through a Health Reimbursement Arrangement ("HRA"). On December 15, 2017 , the APPSE, a qualified pension plan, was settled with the PBGC. At that time, the Company and the PBGC executed a termination and trusteeship agreement to terminate the APPSE and to appoint the PBGC as the statutory trustee of the plan. The Company also paid settlement consideration to the PBGC consisting of $340 million in cash and 6.1 million shares of Successor Company common stock (fair value of $92 million ). With this payment, any accrued but unpaid minimum funding contributions due were deemed to have been paid in full. As a result of the plan termination on December 15, 2017 , the Company's projected benefit obligation and pension trust assets were reduced by $2,192 million and $1,573 million , respectively. Including the settlement consideration and $703 million of Accumulated other comprehensive loss recorded in the Condensed Consolidated Balance Sheet, a settlement loss of $516 million was recorded in Reorganization items, net in the Condensed Consolidated Statement of Operations for the period from October 1, 2017 through December 15, 2017 (Predecessor). On December 15, 2017 , the unfunded ASPP, a non-qualified excess benefit pension plan, was also terminated and settled. Benefit liabilities for ASPP participants were included as allowed claims in the general unsecured recovery pool. Settlement consideration of $17 million in the form of allowed claims payable to ASPP participants was estimated based upon claims data as of the Emergence Date as amounts due to individual general unsecured creditors had not been finalized and paid. As a result of the termination, the Company's projected benefit obligation was reduced by $88 million . Including the settlement consideration and $18 million of Accumulated other comprehensive loss recorded in the Condensed Consolidated Balance Sheet, a settlement gain of $53 million was recorded in Reorganization items, net in the Condensed Consolidated Statements of Operations for the period from October 1, 2017 through December 15, 2017 (Predecessor). The components of the pension and post-retirement net periodic benefit (credit) cost for the periods indicated are provided in the tables below: Successor Predecessor Successor Predecessor (In millions) Three months ended Three months ended Period from December 16, 2017 Period from October 1, 2017 through December 15, 2017 Nine months ended Pension Benefits - U.S. Components of Net Periodic Benefit (Credit) Cost Service cost $ 1 $ 1 $ 2 $ 1 $ 3 Interest cost 9 24 19 22 73 Expected return on plan assets (17 ) (44 ) (35 ) (38 ) (134 ) Amortization of unrecognized prior service cost — — — — 1 Amortization of previously unrecognized net actuarial loss — 26 — 20 77 Settlement loss (1) — — — — — Net periodic benefit (credit) cost $ (7 ) $ 7 $ (14 ) $ 5 $ 20 (1) Excludes Plan of Reorganization related settlements that were recorded in Reorganization items, net in the Condensed Consolidated Statements of Operations. Successor Predecessor Successor Predecessor (In millions) Three months ended Three months ended Period from December 16, 2017 Period from October 1, 2017 through December 15, 2017 Nine months ended Pension Benefits - Non-U.S. Components of Net Periodic Benefit Cost Service cost $ 1 $ 1 $ 3 $ 2 $ 5 Interest cost 3 2 5 3 6 Expected return on plan assets — — — — (1 ) Amortization of previously unrecognized net actuarial loss — 4 — 1 12 Net periodic benefit cost $ 4 $ 7 $ 8 $ 6 $ 22 Successor Predecessor Successor Predecessor (In millions) Three months ended Three months ended Period from December 16, 2017 Period from October 1, 2017 through December 15, 2017 Nine months ended Post-retirement Benefits - U.S. Components of Net Periodic Benefit Cost (Credit) Service cost $ 1 $ — $ 1 $ — $ 1 Interest cost 4 4 7 3 10 Expected return on plan assets (3 ) (2 ) (5 ) (2 ) (7 ) Amortization of unrecognized prior service cost — (5 ) — (3 ) (13 ) Amortization of previously unrecognized net actuarial loss — 3 — 2 9 Curtailment — — — — (4 ) Net periodic benefit cost (credit) $ 2 $ — $ 3 $ — $ (4 ) The service components of net periodic benefit cost (credit) are recorded similar to compensation expense, while all other components are recorded in Other income (expense), net. The Company's general funding policy with respect to its U.S. qualified pension plans is to contribute amounts at least sufficient to satisfy the minimum amount required by applicable laws and regulations, or to directly pay benefits where appropriate. As a result of the Bankruptcy Filing in January 2017, there was an automatic stay on the Company's contributions to the U.S. pension plans during fiscal 2017 . Therefore, the minimum funding requirements for the U.S. pension plans were not met during fiscal 2017 . The Plan of Reorganization included contributions to or settlements of all U.S. pension plans, which are the Avaya Pension Plan for Represented Employees ("APP"), the APPSE and the ASPP. On December 15, 2017 , the Company paid the aggregate unpaid required minimum funding for the APP, a qualified plan, of $49 million . Remeasurement as a result of fresh start accounting increased the APP and other post-retirement benefit plan obligations by $3 million on December 15, 2017 . The Company made $22 million in contributions to satisfy minimum statutory funding requirements for its U.S funded defined benefit pension plans for the period from December 16, 2017 through June 30, 2018 (Successor) and no contributions to satisfy minimum statutory funding requirements for its U.S. funded defined benefit pension plans for the period from October 1, 2017 through December 15, 2017 (Predecessor), exclusive of the payments discussed above as part of the Plan of Reorganization for the APP and settlement consideration to the PBGC for the APPSE. Estimated payments to satisfy minimum statutory funding requirements for the remainder of fiscal 2018 are $20 million . The Company provides for certain pension benefits for non-U.S. employees, the majority of which are not pre-funded. The Company made payments for these non-U.S. pension benefits for the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor) totaling $19 million and $3 million , respectively. Estimated payments for these non-U.S. pension benefits for the remainder of fiscal 2018 are $6 million . During the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor), the Company contributed $2 million and $2 million , respectively, to the represented employees’ post-retirement health trust to fund current benefit claims and costs of administration in compliance with the terms of the CBA, as extended through September 21, 2019. It is anticipated that there will be $3 million estimated payments under the terms of the 2009 agreement as extended for the remainder of fiscal 2018 . The Company also provides certain retiree medical benefits for U.S. employees through an HRA, which are not pre-funded. Consequently, the Company makes payments as these benefits are disbursed. For the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor), the Company made payments totaling $1 million and $0 million , respectively, for these retiree medical benefits. It is anticipated that there will be no additional payments made for the remainder of fiscal 2018 . |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Jun. 30, 2018 | |
Share-based Compensation [Abstract] | |
Share-based Compensation | Share-based Compensation The Predecessor Company's common and preferred stock were cancelled and new common stock was issued on the Emergence Date. Accordingly, the Predecessor Company's then existing share-based compensation awards were also cancelled, which resulted in the recognition of any previously unamortized expense on the date of cancellation. Share-based compensation for the Successor and Predecessor periods are not comparable. Successor Pursuant to terms of the Plan of Reorganization, the Avaya Holdings Corp. 2017 Equity Incentive Plan ("2017 Equity Incentive Plan") became effective on the Emergence Date. The Successor Company's Board of Directors or any committee duly authorized thereby will administer the 2017 Equity Incentive Plan. The administrator has broad authority to, among other things: (i) select participants; (ii) determine the types of awards that participants are to receive and the number of shares that are to be granted under such awards; and (iii) establish the terms and conditions of awards, including the price to be paid for the shares or the award. Persons eligible to receive awards under the 2017 Equity Incentive Plan include non-employee directors, employees of the Successor Company or any of its affiliates, and certain consultants and advisors to the Successor Company or any of its affiliates. The types of awards that may be granted under the 2017 Equity Incentive Plan include stock options, restricted stock, restricted stock units, performance awards and other forms of awards granted or denominated in shares of Successor common stock, as well as certain cash-based awards. The maximum number of shares of common stock that may be issued or granted under the 2017 Equity Incentive Plan is 7,381,609 shares. If any option or other stock-based award granted under the 2017 Equity Incentive Plan expires, terminates or is cancelled for any reason without having been exercised in full, the number of shares of common stock underlying any unexercised award will again be available for the purpose of awards under the 2017 Equity Incentive Plan. If any shares of restricted stock, performance awards or other stock-based awards denominated in shares of common stock awarded under the 2017 Equity Incentive Plan to a participant are forfeited for any reason, the number of forfeited shares of restricted stock, performance awards or other stock-based awards denominated in shares of common stock will again be available for purposes of awards under the 2017 Equity Incentive Plan. Any award under the 2017 Equity Incentive Plan settled in cash will not be counted against the foregoing maximum share limitations. Shares withheld by the Company in satisfaction of the applicable exercise price or withholding taxes upon the issuance, vesting or settlement of awards, in each case, shall not be available for future issuance under the 2017 Equity Incentive Plan. The aggregate grant date fair value of all awards granted to any non-employee director during any calendar year (excluding awards made pursuant to deferred compensation arrangements made in lieu of all or a portion of cash retainers and any dividends payable in respect of outstanding awards) may not exceed $750,000 . On the Emergence Date, share-based compensation awards granted by the Company consisted of 3,440,528 restricted stock units and 1,146,835 non-qualified stock options to executives and other employees. The fair value of the premium-priced stock options granted on the Emergence Date was determined using a lattice option pricing model. The awards are subject to time-based vesting. The Black-Scholes option pricing model is used to value Successor stock options for all options granted thereafter. The valuation assumptions include the following: (1) expected term based on the vesting terms of the option and a contractual life of ten years ; (2) volatility based on peer group companies adjusted for the Company's leverage; (3) risk-free interest rate based on U.S. Treasury yields with a term equal to the expected option term; and (4) dividend yield assumed to be zero as the Company does not anticipate paying dividends. In addition to the above Emergence Date grants, the Company granted 422,532 restricted stock units and 87,065 non-qualified stock options for the period from December 16, 2017 through June 30, 2018 . Cancellations of restricted stock units and non-qualified stock options were 291,725 and 89,281 , respectively, for the period from December 16, 2017 through June 30, 2018 , which were added back to the 2017 Equity Incentive Plan for future issuance. The following assumptions were used in calculating the fair value of the options granted for the period from December 16, 2017 through June 30, 2018 : Range Exercise price $ 19.46 - $ 21.79 Expected volatility (1) 49.25 % - 56.59 % Expected life (in years) (2) 5.86 years - 6.65 years Risk-free interest rate (3) 2.35 % - 2.95 % Dividend yield (4) — % (1) Expected volatility based on peer group companies adjusted for the Company's leverage. (2) Expected life based on the vesting terms of the option and a contractual life of ten years. (3) Risk-free interest rate based on U.S. Treasury yields with a term equal to the expected option term. (4) Dividend yield was assumed to be zero as the Company does not anticipate paying dividends. As of June 30, 2018 , there were 2,665,655 shares remaining under the 2017 Equity Incentive Plan available to be granted. Share-based compensation expense recorded for the three months ended June 30, 2018 and the period from December 16, 2017 through June 30, 2018 was $7 million and $13 million , respectively. As of the Emergence Date, forfeitures are accounted for as incurred. Predecessor Prior to the Emergence Date, the Predecessor Company had granted share-based awards that were cancelled upon emergence from bankruptcy. In conjunction with the cancellation, the Predecessor Company accelerated the unrecognized share-based compensation expense and recorded $3 million of compensation expense in the period from October 1, 2017 through December 15, 2017 principally in reorganization costs. Share-based compensation expense recorded for the three and nine months ended June 30, 2017 was $4 million and $10 million , respectively. |
Capital Stock
Capital Stock | 9 Months Ended |
Jun. 30, 2018 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Capital Stock | Successor Preferred Stock. The Successor Company's certificate of incorporation authorizes it to issue up to 55.0 million shares of preferred stock with a par value of $0.01 per share. As of June 30, 2018 , there were no preferred shares issued or outstanding. Common Stock. The Successor Company's certificate of incorporation authorizes it to issue up to 550.0 million shares of common stock with a par value of $0.01 per share. As of June 30, 2018 , there were 110.2 million shares issued and 110.0 million outstanding with the remaining 0.2 million shares distributable in accordance with the Plan of Reorganization. Predecessor In connection with the Company's Plan of Reorganization and emergence from bankruptcy, all equity interests in the Predecessor Company were cancelled, including preferred and common stock, warrants and equity-based awards. |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share | 9 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Common Share | Earnings (Loss) Per Common Share Basic earnings per share is calculated by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share reflects the potential dilution that would occur if equity awards granted under the various share-based compensation plans were vested or exercised, if the Company's Convertible Notes or Call Spread Warrants were exercised, and/or if the Emergence Date Warrants were exercised, resulting in the issuance of common shares that would participate in the earnings of the Company. The following table sets forth the calculation of net (loss) income attributable to common shareholders and the computation of basic and diluted (loss) earnings per share for the periods indicated: Successor Predecessor Successor Predecessor (In millions, except per share amounts) Three months ended Three months ended Period from December 16, 2017 Period from October 1, 2017 through December 15, 2017 Nine months ended Net (loss) income per share: Numerator Net (loss) income $ (88 ) $ (98 ) $ 19 $ 2,977 $ (209 ) Dividends to preferred stockholders — (8 ) — (6 ) (23 ) Undistributed earnings (88 ) (106 ) 19 2,971 (232 ) Percentage allocated to common stockholders (1) 100.0 % 100.0 % 100.0 % 86.9 % 100.0 % Numerator for basic and diluted earnings per common share $ (88 ) $ (106 ) $ 19 $ 2,582 $ (232 ) Denominator Denominator for basic earnings per weighted average common shares 109.8 497.2 109.8 497.3 497.0 Effect of dilutive securities Restricted stock units — — 1.2 — — Stock options — — — — — Convertible Notes — — — — — Call Spread Warrants — — — — — Emergence Date Warrants — — — — — Denominator for diluted earnings per weighted average common shares 109.8 497.2 111.0 497.3 497.0 Per common share net (loss) income Basic $ (0.80 ) $ (0.22 ) $ 0.17 $ 5.19 $ (0.47 ) Diluted $ (0.80 ) $ (0.22 ) $ 0.17 $ 5.19 $ (0.47 ) (1) Basic weighted average common stock outstanding 109.8 497.2 109.8 497.3 497.0 Basic weighted average common stock and common stock equivalents (preferred shares) 109.8 497.2 109.8 572.4 497.0 Percentage allocated to common stockholders 100.0 % 100.0 % 100.0 % 86.9 % 100.0 % For the three months ended June 30, 2018 , the Company excluded 1.1 million stock options, 3.3 million restricted stock units, and 5.6 million Emergence Date Warrants to purchase common shares from the diluted earnings per share calculation as their effect would be anti-dilutive. For the period from December 16, 2017 through June 30, 2018 , the Company excluded 1.1 million stock options, and 5.6 million Emergence Date Warrants to purchase common shares from the diluted earnings per share calculation as their effect would be anti-dilutive. For purposes of considering the Convertible Notes in determining diluted earnings per share, it is the current intent of the Company to settle conversions of the Convertible Notes through combination settlement by repaying the principal portion in cash and any excess of the conversion value over the principal amount (the “Conversion Premium”) in shares of the Company's common stock. Therefore, only the impact of the Conversion Premium will be included in diluted weighted average shares outstanding using the treasury stock method. Since the Convertible Notes were out of the money and anti-dilutive as of June 30, 2018 , they were excluded from the diluted earnings per share calculation for the three months ended June 30, 2018 and the period from December 16, 2017 through June 30, 2018 . The Call Spread Warrants sold in connection with the issuance of the Convertible Notes will not be considered in calculating diluted weighted average shares outstanding until the price per share of the Company’s common stock exceeds the strike price of $37.3625 per share. When the price per share of the Company’s common stock exceeds the strike price per share of the Call Spread Warrants, the effect of the additional shares that may be issued upon exercise of the Call Spread Warrants will be included in diluted weighted average shares outstanding using the treasury stock method. The Bond Hedge purchased in connection with the issuance of the Convertible Notes is considered to be anti-dilutive and therefore does not impact the Company’s calculation of diluted earnings per share. Refer to Note 9 , "Financing Arrangements”, for further discussion regarding the Convertible Notes. |
Operating Segments
Operating Segments | 9 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Reportable Segments | Operating Segments The GCS segment primarily develops, markets, and sells unified communications and contact center solutions, offered on premises, in the cloud, or as a hybrid solution. These integrate multiple forms of communications, including telephony, email, instant messaging and video. The AGS segment develops, markets and sells comprehensive end-to-end global service offerings that enable customers to evaluate, plan, design, implement, monitor, manage and optimize complex enterprise communications networks. The Networking segment portfolio of software and hardware products offered integrated networking products. On July 14, 2017, the Company sold its Networking business to Extreme. Prior to the sale, the Company had three separate operating segments. After the sale, the Company has two operating segments, GCS consisting of the Company's products portfolio and AGS consisting of the Company's services portfolio. Both GCS and Networking made up the Company’s Enterprise Collaboration Solutions ("ECS") products portfolio. The Company’s chief operating decision maker makes financial decisions and allocates resources based on segment profit information obtained from the Company’s internal management systems. Management does not include in its segment measures of profitability selling, general, and administrative expenses, research and development expenses, amortization of intangible assets, and certain discrete items, such as fair value adjustments recognized upon emergence from bankruptcy, charges relating to restructuring actions, impairment charges, and merger-related costs as these costs are not core to the measurement of segment performance, but rather are controlled at the corporate level. Summarized financial information relating to the Company’s operating segments is shown in the following table for the periods indicated: Successor Predecessor Successor Predecessor (In millions) Three months ended Three months ended Period from December 16, 2017 Period from October 1, 2017 through December 15, 2017 Nine months ended REVENUE Global Communications Solutions $ 322 $ 302 $ 716 $ 253 $ 957 Avaya Networking (1) — 43 — — 137 Enterprise Collaboration Solutions 322 345 716 253 1,094 Avaya Global Services 433 458 967 351 1,388 Unallocated amounts (2) (63 ) — (171 ) — — $ 692 $ 803 $ 1,512 $ 604 $ 2,482 GROSS PROFIT Global Communications Solutions $ 210 $ 210 $ 473 $ 169 $ 653 Avaya Networking (1) — 14 — — 47 Enterprise Collaboration Solutions 210 224 473 169 700 Avaya Global Services 257 274 582 196 828 Unallocated amounts (3) (115 ) (5 ) (302 ) (3 ) (16 ) 352 493 753 362 1,512 OPERATING EXPENSES Selling, general and administrative 281 295 613 264 923 Research and development 51 59 110 38 178 Amortization of intangible assets 39 57 86 10 170 Impairment of indefinite-lived intangible assets — 65 — — 65 Goodwill impairment — 52 — — 52 Restructuring charges, net 30 8 80 14 22 401 536 889 326 1,410 OPERATING (LOSS) INCOME (49 ) (43 ) (136 ) 36 102 INTEREST EXPENSE, OTHER INCOME (EXPENSE), NET AND REORGANIZATION ITEMS, NET (19 ) (61 ) (80 ) 3,400 (333 ) (LOSS) INCOME BEFORE INCOME TAXES $ (68 ) $ (104 ) $ (216 ) $ 3,436 $ (231 ) (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. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Loss Changes in Accumulated other comprehensive loss for the periods indicated were as follows: (In millions) Foreign Currency Translation Interest Rate Swaps Total Balance at March 31, 2018 (Successor) $ (25 ) $ — $ (25 ) Other comprehensive income (loss) before reclassifications (4 ) (17 ) (21 ) Amounts reclassified to earnings — 2 2 Benefit from income taxes — 3 3 Balance at June 30, 2018 (Successor) $ (29 ) $ (12 ) $ (41 ) (In millions) Unamortized pension, post-retirement and postemployment benefit-related items Foreign Currency Translation Interest Rate Swaps Other Total Balance at September 30, 2017 (Predecessor) $ (1,375 ) $ (72 ) $ — $ (1 ) $ (1,448 ) Other comprehensive (loss) income before reclassifications (24 ) 3 — — (21 ) Amounts reclassified to earnings 16 — — — 16 Pension settlement 721 — — — 721 Provision for income taxes (58 ) — — — (58 ) Balance at December 15, 2017 (Predecessor) (720 ) (69 ) — (1 ) (790 ) Elimination of Predecessor Company accumulated other comprehensive loss 720 69 — 1 790 Balance at December 15, 2017 (Predecessor) $ — $ — $ — $ — $ — Balance at December 16, 2017 (Successor) $ — $ — $ — $ — $ — Other comprehensive loss before reclassifications — (29 ) (17 ) — (46 ) Amounts reclassified to earnings — — 2 — 2 Benefit from income taxes — — 3 — 3 Balance at June 30, 2018 (Successor) $ — $ (29 ) $ (12 ) $ — $ (41 ) (In millions) Unamortized pension, postretirement and postemployment benefit-related items Foreign Currency Translation Other Total Balance at March 31, 2017 (Predecessor) $ (1,598 ) $ (7 ) $ (1 ) $ (1,606 ) Other comprehensive loss before reclassifications — (42 ) — (42 ) Amounts reclassified to earnings 26 — — 26 Provision for income taxes (1 ) (2 ) — (3 ) Balance at June 30, 2017 (Predecessor) $ (1,573 ) $ (51 ) $ (1 ) $ (1,625 ) (In millions) Unamortized pension, post-retirement and postemployment benefit-related items Foreign Currency Translation Other Total Balance at September 30, 2016 (Predecessor) $ (1,627 ) $ (33 ) $ (1 ) $ (1,661 ) Other comprehensive income before reclassifications — (17 ) — (17 ) Amounts reclassified to earnings 70 — — 70 Provision for income taxes (16 ) (1 ) — (17 ) Balance at June 30, 2017 (Predecessor) $ (1,573 ) $ (51 ) $ (1 ) $ (1,625 ) The amounts reclassified out of Accumulated other comprehensive loss for the unamortized pension, post-retirement and postemployment benefit-related items are recorded in Other income (expense), net in the Condensed Consolidated Statement of Operations. The amounts reclassified out of Accumulated other comprehensive loss for the interest rate swaps are recorded in Interest expense in the Condensed Consolidated Statements of Operations. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Pursuant to the Plan of Reorganization confirmed by the Bankruptcy Court, the Successor Company's Board of Directors is comprised of seven directors, including the Successor Company's Chief Executive Officer, James M. Chirico, Jr., and six non-employee directors, William D. Watkins, Ronald A. Rittenmeyer, Stephan Scholl, Susan L. Spradley, Stanley J. Sutula, III and Scott D. Vogel. With the resignation of Mr. Rittenmeyer effective April 29, 2018, the Company's Board of Directors currently has one vacancy. Specific Arrangements Involving the Company’s Directors and Executive Officers Laurent Philonenko is a Senior Vice President of Avaya Holdings and he served as an Advisor to Koopid, Inc., a software development company specializing in mobile communications, from February 2017 through February 2018. For the period from December 16, 2017 through June 30, 2018 , the Company purchased goods and services from Koopid, Inc. of $1 million . Ronald A. Rittenmeyer was a Director of Avaya Holdings through April 29, 2018. While he was a Director of Avaya Holdings, Mr. Rittenmeyer served on the board of directors of American International Group, Inc. (“AIG”), a global insurance organization. For the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor), sales of the Company’s products and services to AIG were $5 million and $2 million , respectively. William D. Watkins is a director and Chair of the Board of Directors of Avaya Holdings. Mr. Watkins currently serves on the board of directors of Flex Ltd., an electronics design manufacturer. For the period from December 16, 2017 through June 30, 2018 (Successor), the period from October 1, 2017 through December 15, 2017 (Predecessor) and for fiscal 2017 , the Company purchased goods and services from subsidiaries of Flex Ltd. of $13 million , $6 million and $38 million , respectively. Specific Arrangements Among the Predecessor Company, Silver Lake Partners and TPG Capital and their Affiliates In connection with the Plan of Reorganization, all agreements between the Predecessor Company and Silver Lake Partners, TPG Capital and their respective affiliates (collectively, the "Predecessor Sponsors") were terminated on the Emergence Date, including the stockholders' agreement, registration rights agreement and management services agreement. In addition, all Predecessor Company equity held by the Predecessor Sponsors was cancelled. No fees were paid to the Predecessor Sponsors in the period from October 1, 2017 through December 15, 2017 (Predecessor). |
Commitments And Contingencies
Commitments And Contingencies | 9 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings General The Company records accruals for legal contingencies to the extent that it has concluded it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. No estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made at this time regarding the matters specifically described below because the inherently unpredictable nature of legal proceedings may be exacerbated by various factors, including: (i) the damages sought in the proceedings are unsubstantiated or indeterminate; (ii) discovery is not complete; (iii) the proceeding is in its early stages; (iv) the matters present legal uncertainties; (v) there are significant facts in dispute; (vi) there are a large number of parties (including where it is uncertain how liability, if any, will be shared among multiple defendants); or (vii) there is a wide range of potential outcomes. In the ordinary course of business, the Company is involved in litigation, claims, government inquiries, investigations and proceedings, including, but not limited to, those identified below, relating to intellectual property, commercial, employment, environmental and regulatory matters. The Company believes that it has meritorious defenses in connection with its current lawsuits and material claims and disputes, and intends to vigorously contest each of them. Based on the Company's experience, management believes that the damages amounts claimed in a case are not a meaningful indicator of the potential liability. Claims, suits, investigations and proceedings are inherently uncertain and it is not possible to predict the ultimate outcome of cases. Other than as described below, in the opinion of the Company's management based upon information currently available to the Company, while the outcome of these lawsuits, claims and disputes is uncertain, the likely results of these lawsuits, claims and disputes are not expected, either individually or in the aggregate, to have a material adverse effect on the Company's financial position, results of operations or cash flows, although the effect could be material to the Company's consolidated results of operations or consolidated cash flows for any interim reporting period. During the period from December 16, 2017 through June 30, 2018 (Successor), the period from October 1, 2017 through December 15, 2017 (Predecessor) and the nine months ended June 30, 2017 (Predecessor), costs incurred in connection with certain legal matters were $0 million , $37 million and $0 million , respectively. Antitrust Litigation In 2006, the Company instituted an action in the U.S. District Court, District of New Jersey, against defendants Telecom Labs, Inc., TeamTLI.com Corp. and Continuant Technologies, Inc. (“TLI/Continuant”) and subsequently amended its complaint to include certain individual officers of these companies as defendants. Defendants purportedly provide maintenance services to customers who have purchased or leased the Company's communications equipment. The Company asserted in its amended complaint that, among other things, defendants, or each of them, engaged in tortious conduct by improperly accessing and utilizing the Company's proprietary software, including passwords, logins and maintenance service permissions, to perform certain maintenance services on the Company's customers' equipment. TLI/Continuant filed counterclaims against the Company alleging that the Company has violated the Sherman Act's prohibitions against anticompetitive conduct through the manner in which the Company sells its products and services. TLI/Continuant sought to recover the profits they claim they would have earned from maintaining Avaya's products, and asked for injunctive relief prohibiting the conduct they claim is anticompetitive. The trial commenced on September 9, 2013. On January 7, 2014, the Court issued an order dismissing the Company's affirmative claims. With respect to TLI/Continuant’s counterclaims, on March 27, 2014, a jury found against the Company on two of eight claims and awarded damages of $20 million . Under the federal antitrust laws, the jury’s award is subject to automatic trebling, or $60 million . Following the jury verdict, TLI/Continuant sought an injunction regarding the Company’s ongoing business operations. On June 30, 2014, a federal judge rejected the demands of TLI/Continuant’s proposed injunction and stated that “only a narrow injunction is appropriate.” Instead, the judge issued an order relating to customers who purchased an Avaya PBX system between January 1, 1990 and April 30, 2008 only. Those customers and their agents will have free access to the on demand maintenance commands that were installed on their systems at the time of the purchase transaction. The court specified that this right “does not extend to access on a system purchased after April 30, 2008.” Consequently, the injunction affected only systems sold prior to April 30, 2008. The judge denied all other requests TLI/Continuant made in its injunction filing. The Company complied with the injunction although it has now been vacated by the September 30, 2016 decision discussed below. The Company and TLI/Continuant filed post-trial motions seeking to overturn the jury’s verdict, which motions were denied. In September 2014, the Court entered judgment in the amount of $63 million , which included the jury's award of $20 million , subject to automatic trebling, or $60 million , plus prejudgment interest in the amount of $3 million . On October 10, 2014, the Company filed a Notice of Appeal, and on October 23, 2014, TLI/Continuant filed a Notice of Conditional Cross-Appeal. On October 23, 2014, the Company filed its supersedeas bond with the Court in the amount of $63 million . The Company secured posting of the bond through the issuance of a letter of credit under its then existing credit facilities. On November 10, 2014, TLI/Continuant made an application for attorney's fees, expenses and costs, which the Company contested. TLI/Continuant’s application for attorneys’ fees, expenses and costs was approximately $71 million and represented activity through February 28, 2015. On February 22, 2016, the Company posted a bond in the amount of $8 million in connection with TLC/Continuant's attorneys' fees application. In September 2016, a Special Master appointed by the trial court to assist in evaluating TLI/Continuant's application rendered a Recommendation, finding that TLI/Continuant should receive approximately $61 million in attorneys' fees, expenses and costs. Subsequently, the parties submitted letters to the Special Master seeking an Amended Recommendation. However, in light of the Third Circuit's favorable opinion, outlined below, the trial court proceedings relating to TLI/Continuant's application have not proceeded. TLI/Continuant is no longer entitled to attorneys' fees, expenses and costs, because it no longer is a prevailing party, subject to further proceedings on appeal or retrial. On September 30, 2016, the Third Circuit issued a favorable ruling for the Company, which included: (1) reversing the mid-trial decision to dismiss four of the Company’s affirmative claims and reinstated them; (2) vacating the jury verdict on the two claims decided in TLI/Continuant’s favor; (3) entering judgment in the Company’s favor on a portion of TLI/Continuant’s claim relating to attempted monopolization; (4) dismissing TLI/Continuant’s PDS patches claim as a matter of law; (5) vacating the damages award to TLI/Continuant; (6) vacating the award of prejudgment interest to TLI/Continuant; and (7) vacating the injunction. On October 28, 2016, TLI/Continuant sought panel rehearing or rehearing en banc review of the opinion, which was denied on November 16, 2016. On November 22, 2016, TLI/Continuant filed a Motion for Stay of Mandate, which was denied. On December 5, 2016, the Third Circuit issued a certified judgment in lieu of a formal mandate, returning jurisdiction to the trial court. As a result of the Third Circuit’s opinion, on November 23, 2016, the Company filed a Notice of Motion to Release the Supersedeas Bonds, which the court granted on December 23, 2016. On December 12, 2016, the Court issued an Order Upon Mandate and For Status Conference, which i) vacated the Court’s January 7, 2014 order dismissing Avaya’s claims against TLI/Continuant and the order of judgment entered on September 17, 2014 and ii) scheduled a status conference for January 6, 2017 to discuss the Joint Plan for Retrial. On January 13, 2017, the Court entered an Order staying the matter pending mediation. On January 20, 2017, the Company filed a Notice of Suggestion on Pendency of Bankruptcy For Avaya Inc., et. al. and Automatic Stay of Proceedings. TLI/Continuant filed a proof of claim in the Bankruptcy Court. On November 30, 2017, the Company filed a motion in the Bankruptcy Court seeking to estimate TLI/Continuant’s claim. On June 21, 2018, the Company entered into a settlement resolving this litigation, and on June 28, 2018, the parties filed a Stipulation of Dismissal in the U.S. District Court, District of New Jersey. The Company considers this matter closed, except for distribution of the pre-petition allowed claim in accordance with the general unsecured claims procedure in the Company's Plan of Reorganization. Patent Infringement In July 2016, BlackBerry Limited (“BlackBerry”) filed a complaint for patent infringement against the Company in the Northern District of Texas, alleging infringement of multiple patents with respect to a variety of technologies including user interface design, encoding/decoding and call routing. In September 2016, the Company filed a motion to dismiss these claims and in October 2016, the Company also filed a motion to transfer this matter to the Northern District of California. In January 2017, the Company filed a notice of Suggestion of Pendency of Bankruptcy, which initially stayed the proceedings. The stay was partially lifted to allow the court in Texas to rule on the two pending motions. The Company’s motion to transfer the case from Texas to California has been denied. The Company’s motion to dismiss BlackBerry’s indirect infringement and willfulness claims was granted, although BlackBerry was provided an opportunity to file an Amended Complaint to cure the deficiencies, which it did on October 19, 2017. BlackBerry filed a proof of claim in the Bankruptcy Court. On February 20, 2018, the Company and BlackBerry entered into a settlement agreement resolving this dispute, and on February 23, 2018, the parties jointly filed a Stipulation of Dismissal with Prejudice with the Court in the Northern District of Texas. The Company considers this matter closed, except for distribution of the pre-petition allowed claim in accordance with the general unsecured claims procedure pursuant to the Company's Plan of Reorganization. In September 2011, Network-1 Security Solutions, Inc. (“Network-1”) filed a complaint for patent infringement against the Company and other corporations in the Eastern District of Texas (Tyler Division), alleging infringement of its patent with respect to power over Ethernet technology. Network-1 seeks to recover for alleged reasonable royalties, enhanced damages and attorneys’ fees. In January 2017, the Company filed a Notice of Suggestion of Pendency of Bankruptcy, which informed the Court of the Company’s voluntary bankruptcy petition filing and stay of proceedings. On October 16, 2017, the Bankruptcy Court entered an order approving a settlement agreement with Network-1 and on November 7, 2017 the Tyler Division district court entered an order dismissing the lawsuit, with prejudice. The Company considers this matter closed, except for distribution of the pre-petition allowed claim in accordance with the general unsecured claims procedure in the Company's Plan of Reorganization. Intellectual Property and Commercial Disputes In January 2010, SAE Power Incorporated and SAE Power Company (“SAE”) filed a complaint in the New Jersey Superior Court asserting various claims including breach of contract, unjust enrichment, promissory estoppel, and breach of the covenant of good faith and fair dealing arising out of Avaya’s relationship with SAE as a supplier of various power supply products. SAE has since asserted additional claims against Avaya for fraud, negligent misrepresentation, misappropriation of trade secrets, and civil conspiracy. SAE seeks to recover for alleged losses stemming from Avaya’s termination of its power supply purchases from SAE, including for Avaya’s alleged disclosure of SAE’s alleged trade secret and/or confidential information to another power supply vendor. On July 19, 2016, the Court entered an order granting Avaya’s motion for partial summary judgment, dismissing certain of SAE’s claims regarding the alleged disclosure of trade secrets. In January 2017, the Company filed a Notice of Suggestion of Pendency of Bankruptcy, which informed the Court of the Company’s voluntary bankruptcy petition filing and stay of proceedings. SAE filed a proof of claim in the Bankruptcy Court. On September 28, 2017, the Company filed a motion in the Bankruptcy Court seeking to estimate SAE’s claim, and the estimation hearing took place on February 15, 2018. On June 12, 2018, the Bankruptcy Court entered an Order estimating SAE’s pre-petition misappropriation claim in the amount of $1.21 million plus interest, its fraud claim at $0 million and declined to estimate SAE’s breach of contract claim, leaving it to be resolved through the bankruptcy claims allowance process. Once the stay of proceedings is lifted, SAE may pursue its liability claims against Avaya in the New Jersey state court action, subject to the estimation Order of the Bankruptcy Court. On June 22, 2018, SAE filed a Notice of Appeal and Motion for Stay of Estimation Order Pending Appeal. This matter, although not yet closed, will receive distribution in accordance with the general unsecured claims procedure in the Company's Plan of Reorganization. In the ordinary course of business, the Company is involved in litigation alleging it has infringed upon third parties’ intellectual property rights, including patents and copyrights; some litigation may involve claims for infringement against customers, distributors and resellers by third parties relating to the use of Avaya’s products, as to which the Company may provide indemnifications of varying scope to certain parties. The Company is also involved in litigation pertaining to general commercial disputes with customers, suppliers, vendors and other third parties including royalty disputes. Much of the pending litigation against the Debtors has been stayed as result of the Chapter 11 filing and will be subject to resolution in accordance with the Bankruptcy Code and the orders of the Bankruptcy Court. Based on discussions with parties that have filed claims against the Debtors, the Company provided loss provisions for certain matters. However, these matters are on-going and the outcomes are subject to inherent uncertainties. As a result, the Company cannot be assured that any such matter will not have a material adverse effect on its financial position, results of operations or cash flows. Product Warranties The Company recognizes a liability for the estimated costs that may be incurred to remedy certain deficiencies of quality or performance of the Company’s products. These product warranties extend over a specified period of time generally ranging up to two years from the date of sale depending upon the product subject to the warranty. The Company accrues a provision for estimated future warranty costs based upon the historical relationship of warranty claims to sales. The Company periodically reviews the adequacy of its product warranties and adjusts, if necessary, the warranty percentage and accrued warranty reserve, which is included in other current and non-current liabilities in the Condensed Consolidated Balance Sheets, for actual experience. As of June 30, 2018 and September 30, 2017 , the amount reserved was $2 million and $2 million , respectively. Guarantees of Indebtedness and Other Off-Balance Sheet Arrangements Letters of Credit and Guarantees The Company provides guarantees, letters of credit and surety bonds to various parties as required for certain transactions initiated during the ordinary course of business to guarantee the Company's performance in accordance with contractual or legal obligations. As of June 30, 2018 (Successor), the maximum potential payment obligation with regards to letters of credit, guarantees and surety bonds was $63 million . The outstanding letters of credit are collateralized by restricted cash of $4 million included in other assets on the Condensed Consolidated Balance Sheets as of June 30, 2018 (Successor). Purchase Commitments and Termination Fees The Company purchases components from a variety of suppliers and uses several contract manufacturers to provide manufacturing services for its products. 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 provided by the Company. If the Company does not meet these specified purchase commitments, it could be required to purchase the inventory, or in the case of certain agreements, pay an early termination fee. Historically, the Company has not been required to pay a charge for not meeting its designated purchase commitments with these suppliers, but has been obligated to purchase certain excess inventory levels from its outsourced manufacturers due to actual sales of product varying from forecast and due to transition of manufacturing from one vendor to another. The Company’s outsourcing agreements with its most significant contract manufacturers automatically renew in July and September for successive periods of twelve months each, subject to specific termination rights for the Company and the contract manufacturers. All manufacturing of the Company’s products is performed in accordance with either detailed requirements or specifications and product designs furnished by the Company, and is subject to rigorous quality control standards. Long-Term Incentive Cash Bonus Plan The Predecessor Company had established a long-term incentive cash bonus plan (“LTIP”). Under the LTIP, the Predecessor Company would pay cash awards and recognize compensation expense to certain key employees upon specific triggering events. As of the Emergence Date, no triggering event had occurred, therefore no cash awards were paid and no compensation expense recognized. Upon emergence from bankruptcy, all awards to persons deemed "insiders" for purposes of Chapter 11 proceedings were cancelled. Credit Facility Indemnification In connection with the Successor Company's obligations under its post-emergence credit facilities, the Company has agreed to indemnify the third-party lending institutions for costs incurred by the institutions related to non-compliance with environmental law and other liabilities that may arise with respect to the execution, delivery, enforcement, performance and administration of the financing documentation. As of June 30, 2018 (Successor), no amounts were paid or accrued pursuant to this indemnity. Transactions with Nokia Pursuant to the Contribution and Distribution Agreement effective October 1, 2000, Lucent Technologies, Inc. (now Nokia) contributed to the Company substantially all of the assets, liabilities and operations associated with its enterprise networking businesses (the “Company’s Businesses”) and distributed the Company’s stock pro-rata to the shareholders of Lucent (“distribution”). The Contribution and Distribution Agreement, among other things, provides that, in general, the Company will indemnify Nokia for all liabilities including certain pre-distribution tax obligations of Nokia relating to the Company’s Businesses and all contingent liabilities primarily relating to the Company’s Businesses or otherwise assigned to the Company. In addition, the Contribution and Distribution Agreement provides that certain contingent liabilities not allocated to one of the parties will be shared by Nokia and the Company in prescribed percentages. The Contribution and Distribution Agreement also provides that each party will share specified portions of contingent liabilities based upon agreed percentages related to the business of the other party that exceed $50 million . The Company is unable to determine the maximum potential amount of other future payments, if any, that it could be required to make under this agreement. In addition, in connection with the distribution, the Company and Lucent entered into a Tax Sharing Agreement that governs Nokia’s and the Company’s respective rights, responsibilities and obligations after the distribution with respect to taxes for the periods ending on or before the distribution. Generally, pre-distribution taxes or benefits that are clearly attributable to the business of one party will be borne solely by that party and other pre-distribution taxes or benefits will be shared by the parties based on a formula set forth in the Tax Sharing Agreement. The Company may be subject to additional taxes or benefits pursuant to the Tax Sharing Agreement related to future settlements of audits by state and local and foreign taxing authorities for the periods prior to the Company’s separation from Nokia. |
Accounting Policy Changes (Poli
Accounting Policy Changes (Policies) | 9 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Avaya Holdings has no material assets or standalone operations other than its ownership of Avaya Inc. and its subsidiaries. The accompanying unaudited interim Condensed Consolidated Financial Statements as of June 30, 2018 and for the period from December 16, 2017 through June 30, 2018 , the period from October 1, 2017 through December 15, 2017 and the nine months ended June 30, 2017 , reflect the operating results of Avaya Holdings and its consolidated subsidiaries, and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial statements, and should be read in conjunction with the Consolidated Financial Statements and other financial information for the fiscal year ended September 30, 2017 , included in Amendment No. 3 to the Company’s Form 10 filed with the SEC on January 10, 2018. In management’s opinion, these unaudited interim Condensed Consolidated Financial Statements reflect all adjustments, consisting of normal and recurring adjustments, necessary to state fairly the results of operations, financial position and cash flows for the periods indicated. The condensed consolidated results of operations for the interim periods reported are not necessarily indicative of the results for the entire fiscal year. Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenue and expenses during the periods reported. These estimates include assessing the collectability of accounts receivable, sales returns and allowances, the use and recoverability of inventory, the realization of deferred tax assets, business restructuring reserves, pension and post-retirement benefit costs, the fair value of equity compensation, the fair value of assets and liabilities in connection with fresh start accounting as well as those acquired in business combinations, the recoverability of long-lived assets, useful lives and impairment of tangible and intangible assets including goodwill, the amount of exposure from potential loss contingencies, and fair value measurements, among others. The markets for the Company’s products are characterized by intense competition, rapid technological development and frequent new product introductions, all of which could affect the future recoverability of the Company’s assets. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Actual results could differ from these estimates. On January 19, 2017 (the “Petition Date”), Avaya Holdings, together with certain of its affiliates, namely Avaya CALA Inc., Avaya EMEA Ltd., Avaya Federal Solutions, Inc., Avaya Holdings LLC, Avaya Holdings Two, LLC, Avaya Inc., Avaya Integrated Cabinet Solutions Inc., Avaya Management Services Inc., Avaya Services Inc., Avaya World Services Inc., Octel Communications LLC, Sierra Asia Pacific Inc., Sierra Communication International LLC, Technology Corporation of America, Inc., Ubiquity Software Corporation, VPNet Technologies, Inc., and Zang, Inc. (the “Debtors”), filed voluntary petitions for relief (the “Bankruptcy Filing”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court"). The cases were jointly administered as Case No. 17-10089 (SMB). The Debtors operated their businesses as "debtors-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of Chapter 11 of the Bankruptcy Code and the orders of the Bankruptcy Court until their emergence from bankruptcy on December 15, 2017. During Chapter 11 proceedings, all expenses, gains and losses directly associated with the reorganization proceedings were reported as Reorganization items, net in the accompanying Condensed Consolidated Statements of Operations. In addition, Liabilities subject to compromise during Chapter 11 proceedings were distinguished from liabilities of the non-debtors and from post-petition liabilities in the accompanying Condensed Consolidated Balance Sheets. The Company's other subsidiaries that were not part of the Bankruptcy Filing ("non-debtors") continued to operate in the ordinary course of business. Upon emergence from bankruptcy on December 15, 2017 (the "Emergence Date"), the Company applied fresh start accounting, which resulted in a new basis of accounting and the Company becoming a new entity for financial reporting purposes. As a result of the application of fresh start accounting and the effects of the implementation of the Second Amended Joint Plan of Reorganization filed by the Debtors on October 24, 2017 and approved by the Bankruptcy Court on November 28, 2017 (the "Plan of Reorganization"), the consolidated financial statements after the Emergence Date, are not comparable with the consolidated financial statements on or before that date. Upon emergence, income and expense on non-U.S. dollar functional currency subsidiaries are translated into U.S. dollars using an average rate for the period rather than the applicable spot rate. Refer to Note 4, "Fresh Start Accounting," for additional information. The accompanying Condensed Consolidated Financial Statements of the Company have been prepared on a basis that assumes that the Company will continue as a going concern and contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. During the Chapter 11 proceedings, the Company's ability to continue as a going concern was contingent upon its ability to comply with the financial and other covenants contained in its debtor-in-possession credit agreement, the Bankruptcy Court's approval of the Company's Plan of Reorganization and the Company's ability to successfully implement the Plan of Reorganization, among other factors. As a result of the execution of the Plan of Reorganization, there is no longer substantial doubt about the Company's ability to continue as a going concern. References to "Successor" or "Successor Company" relate to the financial position and results of operations of the reorganized Avaya Holdings after the Emergence Date. References to "Predecessor" or "Predecessor Company" refer to the financial position and results of operations of Avaya Holdings on or before the Emergence Date. Revision of Prior Period Amounts Subsequent to filing the first quarter fiscal 2018 Form 10-Q, the Company identified certain amounts that should have been recorded in the Predecessor Company's consolidated financial statements as of December 15, 2017 , the Emergence Date. Such errors resulted in a $26 million understatement of cash and cash equivalents and cash flows from operating activities with a corresponding overstatement of accounts receivable. Because of the application of fresh start accounting as of December 15, 2017 , Stockholders’ Equity and Goodwill were also each understated by the same amount at December 15, 2017 and December 31, 2017 . These errors had no effect on the reported consolidated net income (loss) for the Predecessor and Successor periods. The Company assessed the materiality of the above errors individually and in the aggregate on the December 31, 2017 interim Condensed Consolidated Financial Statements in accordance with SEC Staff Accounting Bulletin No. 99 and, based on an analysis of quantitative and qualitative factors, determined that the errors were not material to the Company's Predecessor and Successor periods in the interim Condensed Consolidated Financial Statements for the quarter ended December 31, 2017 . The Condensed Consolidated Balance Sheet as of December 16, 2017 , the Condensed Consolidated Statement of Cash Flows for the Predecessor period from October 1, 2017 through December 15, 2017 , and the notes thereto have been revised to include the effects of these errors and the cash flow reclassification as follows: December 16, 2017 (Successor) (In millions, except per share amounts) As Previously Reported Adjustments Revised Condensed Consolidated Balance Sheet: Cash $ 340 $ 26 $ 366 Accounts receivable 417 (26 ) 391 Goodwill 2,632 26 2,658 Total Assets 7,583 26 7,609 Additional paid-in capital (Successor) 1,641 26 1,667 Total Stockholders' Equity 1,642 26 1,668 Total Liabilities and Stockholders' Equity 7,583 26 7,609 Successor common stock value per share $ 14.93 $ 0.23 $ 15.16 Period from October 1, 2017 through December 15, 2017 (Predecessor) (In millions) As Previously Reported Adjustments Revised Condensed Consolidated Statement of Cash Flows: Change in Accounts receivable $ 14 $ 26 $ 40 Net gain on settlement of Liabilities subject to compromise (1,804 ) 26 (1,778 ) Fresh start adjustments (1,671 ) (26 ) (1,697 ) Net Cash Used from Operating Activities (440 ) 26 (414 ) Net decrease in cash and cash equivalents (536 ) 26 (510 ) For additional information refer to Notes: 4. “Fresh Start Accounting”; 6. “Goodwill and Intangible Assets”; 7. “Supplementary Financial Information”; and 10. “Derivative Instruments and Hedging Activities”. |
Recently Adopted Accounting Policies | Recently Adopted Accounting Pronouncements In August 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” This standard sets forth targeted improvements to accounting for hedging activities and will make more financial and non-financial hedging strategies eligible for hedge accounting. It also modifies the presentation and disclosure requirements for hedging activities and changes how companies assess hedge effectiveness. The Company elected to early adopt this standard as of April 1, 2018, applying the updated provisions retrospectively to the beginning of the current fiscal year. As the Company did not maintain any hedging instruments prior to April 1, 2018, there was no retrospective impact due to this interim adoption. The new guidance will be applied to all hedging transactions entered into on or after April 1, 2018. In March 2017, the FASB issued ASU No. 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost." This standard changes how employers that sponsor defined benefit pension and other post-retirement benefit plans present net periodic benefit cost in the income statement. This amendment requires that the service cost component be disaggregated from the other components of pension and post-retirement benefit costs on the income statement. The service cost component is reported in the same line items as other compensation costs and the other components of pension and post-retirement benefit costs (including interest cost, expected return on plan assets, amortization and curtailments and settlements) are reported in Other income (expense), net in the Company's Condensed Consolidated Financial Statements. The Company early adopted this accounting standard as of October 1, 2017. Changes to the Condensed Consolidated Financial Statements have been applied retrospectively. As a result, the Company reclassified $12 million and $29 million of other pension and post-retirement benefit costs to Other income (expense), net for the three and nine months ended June 30, 2017 (Predecessor) , respectively. For the three months ended June 30, 2018 (Successor), the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor), the Company recorded $4 million , $9 million and $(8) million , respectively, of other pension and post-retirement benefit credits (costs) in Other income (expense), net. In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." This standard simplifies the accounting for share-based payments and their presentation in the statements of cash flows as well as the income tax effects of share-based payments. The Company adopted this standard as of October 1, 2017 on a prospective basis. The adoption of this standard did not have a material impact on the Company's Condensed Consolidated Financial Statements. Recent Standards Not Yet Effective In February 2018, the FASB issued ASU No. 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." This new standard allows companies to reclassify from accumulated other comprehensive income to retained earnings any stranded tax benefits resulting from the enactment of the Tax Cuts and Jobs Act. This standard is effective for the Company beginning in the first quarter of fiscal 2020. The Company is currently evaluating the impact that the adoption of this standard may have on its Condensed Consolidated Financial Statements. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." The standard requires the recognition of assets and liabilities for all leases with lease terms of more than 12 months. Subsequently, the FASB issued other standards that clarified certain aspects of the standard. This standard is effective for the Company in the first quarter of fiscal 2020 with early adoption permitted. The Company is currently evaluating the method of adoption and the effect that the adoption of the standard may have on its Condensed Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” This standard supersedes most of the current revenue recognition guidance under GAAP and is intended to improve and converge with international standards the financial reporting requirements for revenue recognition. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. Subsequently, the FASB issued several standards that clarified certain aspects of the standard but did not change the original standard. This new guidance is effective for the Company beginning in the first quarter of fiscal 2019. The ASU may be applied retrospectively (a) to each reporting period presented or (b) with the cumulative effect in retained earnings at the beginning of the adoption period. The Company will adopt the new standard effective October 1, 2018 using the modified retrospective method whereby the cumulative effect is recorded to retained earnings at the beginning of the adoption period. Adoption of the standard is dependent on completion of a detailed accounting assessment, the success of the design and implementation phase for changes to the Company's processes, internal controls and system functionality and the completion of the analysis of information necessary to assess the overall impact of adoption of this guidance on its Condensed Consolidated Financial Statements. The Company continues to make progress on its accounting assessment phase and the design and implementation phases to implement the required business process and system changes to comply with the new accounting policies and disclosures in the consolidated financial statements. The Company will continue to monitor and assess the impact of changes to the standard and interpretations as they become available. The Company expects revenue recognition related to stand-alone product shipments and maintenance services to remain substantially unchanged. However, the Company continues to evaluate its preliminary conclusion and assess the impact on other sources of revenue recognition. |
Background and Basis of Prese29
Background and Basis of Presentation (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Prior Period Adjustments | The Condensed Consolidated Balance Sheet as of December 16, 2017 , the Condensed Consolidated Statement of Cash Flows for the Predecessor period from October 1, 2017 through December 15, 2017 , and the notes thereto have been revised to include the effects of these errors and the cash flow reclassification as follows: December 16, 2017 (Successor) (In millions, except per share amounts) As Previously Reported Adjustments Revised Condensed Consolidated Balance Sheet: Cash $ 340 $ 26 $ 366 Accounts receivable 417 (26 ) 391 Goodwill 2,632 26 2,658 Total Assets 7,583 26 7,609 Additional paid-in capital (Successor) 1,641 26 1,667 Total Stockholders' Equity 1,642 26 1,668 Total Liabilities and Stockholders' Equity 7,583 26 7,609 Successor common stock value per share $ 14.93 $ 0.23 $ 15.16 Period from October 1, 2017 through December 15, 2017 (Predecessor) (In millions) As Previously Reported Adjustments Revised Condensed Consolidated Statement of Cash Flows: Change in Accounts receivable $ 14 $ 26 $ 40 Net gain on settlement of Liabilities subject to compromise (1,804 ) 26 (1,778 ) Fresh start adjustments (1,671 ) (26 ) (1,697 ) Net Cash Used from Operating Activities (440 ) 26 (414 ) Net decrease in cash and cash equivalents (536 ) 26 (510 ) For additional information refer to Notes: 4. “Fresh Start Accounting”; 6. “Goodwill and Intangible Assets”; 7. “Supplementary Financial Information”; and 10. “Derivative Instruments and Hedging Activities”. |
Fresh Start Accounting (Tables)
Fresh Start Accounting (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Reorganizations [Abstract] | |
Schedule of Fresh-Start Adjustments | The reorganization and fresh start adjustments set forth in the following consolidated balance sheet as of December 16, 2017 reflect the effect of the consummation of the transactions contemplated by the Plan of Reorganization (reflected in the column "Reorganization Adjustments") as well as fair value adjustments as a result of applying fresh start accounting (reflected in the column "Fresh Start Adjustments"). The explanatory notes highlight methods used to determine fair values or other amounts of the assets and liabilities, as well as significant assumptions or inputs. As Previously Reported (In millions) Predecessor Company December 15, Reorganization Adjustments Fresh Start Adjustments Successor Company December 16, ASSETS Current assets: Cash and cash equivalents $ 744 $ (404 ) (1) $ — $ 340 Accounts receivable, net 523 — (106 ) (21) 417 Inventory 98 — 29 (22) 127 Other current assets 366 (58 ) (2) (66 ) (23) 242 TOTAL CURRENT ASSETS 1,731 (462 ) (143 ) 1,126 Property, plant and equipment, net 194 — 116 (24) 310 Deferred income taxes, net — 48 (3) (17 ) (25) 31 Intangible assets, net 298 — 3,137 (26) 3,435 Goodwill 3,541 — (909 ) (27) 2,632 Other assets 70 6 (4) (27 ) (28) 49 TOTAL ASSETS $ 5,834 $ (408 ) $ 2,157 $ 7,583 LIABILITIES Current liabilities: Debt maturing within one year $ 725 $ (696 ) (5) $ — $ 29 Accounts payable 325 (49 ) (6) — 276 Payroll and benefit obligations 123 23 (7) — 146 Deferred revenue 627 50 (8) (341 ) (29) 336 Business restructuring reserve 35 3 (9) — 38 Other current liabilities 97 65 (6,10) (3 ) (30) 159 TOTAL CURRENT LIABILITIES 1,932 (604 ) (344 ) 984 Non-current liabilities: Long-term debt, net of current portion — 2,771 (11) 96 (31) 2,867 Pension obligations 539 246 (12) — 785 Other post-retirement obligations — 212 (13) — 212 Deferred income taxes, net 28 113 (14) 548 (32) 689 Business restructuring reserve 26 4 (9) 4 (33) 34 Other liabilities 180 233 (8,15) (43 ) (29,34) 370 TOTAL NON-CURRENT LIABILITIES 773 3,579 605 4,957 LIABILITIES SUBJECT TO COMPROMISE 7,585 (7,585 ) (16) — — TOTAL LIABILITIES 10,290 (4,610 ) 261 5,941 Commitments and contingencies Equity awards on redeemable shares 6 (6 ) (17) — — Preferred stock: Series B 397 (397 ) (17) — — Series A 186 (186 ) (17) — — STOCKHOLDERS' (DEFICIT) EQUITY Common stock (Successor) — 1 (18) — 1 Additional paid-in capital (Successor) — 1,641 (18) — 1,641 Common stock (Predecessor) — — — — Additional paid-in capital (Predecessor) 2,387 (2,387 ) (17) — — (Accumulated deficit) retained earnings (5,978 ) 4,872 (19) 1,106 (36) — Accumulated other comprehensive (loss) income (1,454 ) 664 (20) 790 (35) — TOTAL STOCKHOLDERS' (DEFICIT) EQUITY (5,045 ) 4,791 1,896 1,642 TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY $ 5,834 $ (408 ) $ 2,157 $ 7,583 Adjustments (In millions) Predecessor Company December 15, Reorganization Adjustments Fresh Start Adjustments Successor Company December 16, ASSETS Current assets: Cash and cash equivalents $ 26 $ — $ — $ 26 Accounts receivable, net (26 ) — — (26 ) Inventory — — — — Other current assets — — — — TOTAL CURRENT ASSETS — — — — Property, plant and equipment, net — — — — Deferred income taxes, net — — — — Intangible assets, net — — — — Goodwill — — 26 (27) 26 Other assets — — — — TOTAL ASSETS $ — $ — $ 26 $ 26 LIABILITIES Current liabilities: Debt maturing within one year $ — $ — $ — $ — Accounts payable — — — — Payroll and benefit obligations — — — — Deferred revenue — — — — Business restructuring reserve — — — — Other current liabilities — — — — TOTAL CURRENT LIABILITIES — — — — Non-current liabilities: Long-term debt — — — — Pension obligations — — — — Other postretirement obligations — — — — Deferred income taxes, net — — — — Business restructuring reserve — — — — Other liabilities — — — — TOTAL NON-CURRENT LIABILITIES — — — — LIABILITIES SUBJECT TO COMPROMISE — — — — TOTAL LIABILITIES — — — — Commitments and contingencies Equity awards on redeemable shares — — — — Preferred stock: Series B — — — — Series A — — — — STOCKHOLDERS' (DEFICIT) EQUITY Common stock (Successor) — — — — Additional paid-in capital (Successor) — 26 (18) — 26 Common stock (Predecessor) — — — — Additional paid-in capital (Predecessor) — — — — (Accumulated deficit) retained earnings — (26 ) (19) 26 (36) — Accumulated other comprehensive (loss) income — — — — TOTAL STOCKHOLDERS' (DEFICIT) EQUITY — — 26 26 TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY $ — $ — $ 26 $ 26 Revised (In millions) Predecessor Company December 15, 2017 Reorganization Adjustments Fresh Start Adjustments Successor Company December 16, 2017 ASSETS Current assets: Cash and cash equivalents $ 770 $ (404 ) (1) $ — $ 366 Accounts receivable, net 497 — (106 ) (21) 391 Inventory 98 — 29 (22) 127 Other current assets 366 (58 ) (2) (66 ) (23) 242 TOTAL CURRENT ASSETS 1,731 (462 ) (143 ) 1,126 Property, plant and equipment, net 194 — 116 (24) 310 Deferred income taxes, net — 48 (3) (17 ) (25) 31 Intangible assets, net 298 — 3,137 (26) 3,435 Goodwill 3,541 — (883 ) (27) 2,658 Other assets 70 6 (4) (27 ) (28) 49 TOTAL ASSETS $ 5,834 $ (408 ) $ 2,183 $ 7,609 LIABILITIES Current liabilities: Debt maturing within one year $ 725 $ (696 ) (5) $ — $ 29 Accounts payable 325 (49 ) (6) — 276 Payroll and benefit obligations 123 23 (7) — 146 Deferred revenue 627 50 (8) (341 ) (29) 336 Business restructuring reserve 35 3 (9) — 38 Other current liabilities 97 65 (6,10) (3 ) (30) 159 TOTAL CURRENT LIABILITIES 1,932 (604 ) (344 ) 984 Non-current liabilities: Long-term debt, net of current portion — 2,771 (11) 96 (31) 2,867 Pension obligations 539 246 (12) — 785 Other post-retirement obligations — 212 (13) — 212 Deferred income taxes, net 28 113 (14) 548 (32) 689 Business restructuring reserve 26 4 (9) 4 (33) 34 Other liabilities 180 233 (8,15) (43 ) (29,34) 370 TOTAL NON-CURRENT LIABILITIES 773 3,579 605 4,957 LIABILITIES SUBJECT TO COMPROMISE 7,585 (7,585 ) (16) — — TOTAL LIABILITIES 10,290 (4,610 ) 261 5,941 Commitments and contingencies Equity awards on redeemable shares 6 (6 ) (17) — — Preferred stock: Series B 397 (397 ) (17) — — Series A 186 (186 ) (17) — — STOCKHOLDERS' (DEFICIT) EQUITY Common stock (Successor) — 1 (18) — 1 Additional paid-in capital (Successor) — 1,667 (18) — 1,667 Common stock (Predecessor) — — — — Additional paid-in capital (Predecessor) 2,387 (2,387 ) (17) — — (Accumulated deficit) retained earnings (5,978 ) 4,846 (19) 1,132 (36) — Accumulated other comprehensive (loss) income (1,454 ) 664 (20) 790 (35) — TOTAL STOCKHOLDERS' (DEFICIT) EQUITY (5,045 ) 4,791 1,922 1,668 TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY $ 5,834 $ (408 ) $ 2,183 $ 7,609 Reorganization Adjustments In accordance with the Plan of Reorganization, the following adjustments were made: 1. Sources and Uses of Cash. The following reflects the net cash payments recorded as of the Emergence Date as a result of implementing the Plan of Reorganization: (In millions) Sources: Proceeds from Term Loan Credit Agreement, net of original issue discount $ 2,896 Release of restricted cash 76 Total sources of cash 2,972 Uses: Repayment of DIP Credit Agreement (725 ) Payment of DIP Credit Agreement accrued interest (1 ) Cash paid to Predecessor first lien debt-holders (2,061 ) Cash paid to PBGC (340 ) Payment for professional fees escrow account (56 ) Funding payment for Avaya represented employee pension plan (49 ) Payment of accrued professional & administrative fees (27 ) Costs incurred for Term Loan Credit Agreement and ABL Credit Agreement (59 ) Payment for general unsecured claims (58 ) Total uses of cash (3,376 ) Net uses of cash $ (404 ) 2. Other Current Assets. (In millions) Release of restricted cash $ (76 ) Reclassification of prepaid debt issuance costs related to the Term Loan Credit Agreement (42 ) Payment of fees related to the ABL Credit Agreement 5 Restricted cash for bankruptcy related professional fees 55 Total other current assets $ (58 ) 3. Deferred Income Taxes. The adjustment represents the release of the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of the bankruptcy reorganization. 4. Other Assets. The adjustment represents the re-establishment of foreign prepaid taxes. 5. Debt Maturing Within One Year. The adjustment represents the net effect of the Company’s repayment of $725 million for the DIP Credit Agreement and Term Loan Credit Agreement principal payments of $29 million due over the next year. 6. Accounts Payable . The net decrease of $49 million includes $50 million for professional fees that were reclassified to Other current liabilities for accrued bankruptcy related professional fees that will be paid from an escrow account and a payment of $3 million for bankruptcy related professional fees, partially offset by reinstatement of $4 million contract cure costs from liabilities subject to compromise. 7. Payroll and Benefi t Obligations. The Company reinstated $23 million of liabilities subject to compromise related to the post-employment and post-retirement benefit obligations. 8. Deferred Revenue. The reinstatement of liabilities subject to compromise was $79 million of which $50 million is included in deferred revenue and $29 million in other liabilities. 9. Business Restructuring Reserve. The reinstatement of liabilities subject to compromise was $7 million , of which $3 million is current and $4 million is non-current. 10. Other Current Liabilities. (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 11. Exit Financing. In accordance with the Plan of Reorganization, the Company entered into the Term Loan Credit Agreement with a principal amount of $2,925 million maturing seven years from the date of issuance, and the ABL Credit Agreement, which allows borrowings up to an aggregate principal amount of $300 million , subject to borrowing base availability, maturing five years from the date of issuance. (In millions) Term Loan Credit Agreement $ 2,925 Less: Discount (29 ) Upfront and underwriting fees (54 ) Cash received upon emergence from bankruptcy 2,842 Reclassification of debt issuance cost incurred prior to emergence from bankruptcy (42 ) Current portion of Long-term debt (29 ) Long-term debt, net of current portion $ 2,771 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. 16. Liabilities Subject to Compromise. Liabilities subject to compromise were reinstated or settled as follows in accordance with the Plan of Reorganization: (In millions) Liabilities subject to compromise $ 7,585 Less amounts settled per the Plan of Reorganization Pre-petition first lien debt (4,281 ) Pre-petition second lien debt (1,440 ) Avaya Pension Plan for Salaried Employees (620 ) Amounts reinstated: Accounts payable (4 ) Payroll and benefit obligations (23 ) Deferred revenue (50 ) Business restructuring reserves (7 ) Other current liabilities (16 ) Pension obligations (295 ) Other post-retirement obligations (212 ) Deferred income taxes, net (118 ) Other liabilities (216 ) Total liabilities reinstated at emergence (941 ) General unsecured credit claims (1) (303 ) Liabilities subject to compromise $ — (1) In settlement of allowed general unsecured claims, each claimant will receive a pro-rata distribution of $58 million of the general unsecured claims account. The following table displays the detail on the gain on settlement of liabilities subject to compromise: (In millions) As Previously Reported Adjustments Revised Pre-petition first lien debt $ 734 $ (23 ) $ 711 Pre-petition second lien debt 1,357 (1 ) 1,356 Avaya pension plan for salaried employees (514 ) (2 ) (516 ) General unsecured creditors' claims 227 — 227 Net gain on settlement of Liabilities subject to compromise $ 1,804 $ (26 ) $ 1,778 17. Cancellation of Predecessor Preferred and Common Stock. All common stock, Series A and B preferred stock and all other equity awards of the Predecessor Company were cancelled on the Emergence Date without any recovery on account thereof. 18. Issuance of Successor Common Stock and Emergence Date Warrants. In settlement of the Company's $5,721 million Predecessor first lien obligations and Predecessor second lien obligations, the holders of the Predecessor first lien obligations received a total of 99.3 million shares of common stock (fair value of $1,509 million ) and $2,061 million in cash and the holders of the Predecessor second lien obligations received a total of 4.4 million shares of common stock (fair value of $67 million ) and 5.6 million Emergence Date Warrants to purchase a like amount of common shares (fair value of $17 million ). In addition, as part of the Plan of Reorganization, the Company completed a distressed termination of the APPSE in accordance with the Stipulation Settlement with the PBGC, the PBGC received $340 million in cash and 6.1 million shares of common stock (fair value of $92 million ). 19. Accumulated Deficit. (In millions) As Previously Reported Adjustments Revised Accumulated deficit: Net gain on settlement of liabilities subject to compromise $ 1,804 $ (26 ) $ 1,778 Expense for certain professional fees (26 ) — (26 ) Benefit from income taxes 118 — 118 Cancellation of Predecessor equity awards 6 — 6 Cancellation of Predecessor Preferred stock Series B 397 — 397 Cancellation of Predecessor Preferred stock Series A 186 — 186 Cancellation of Predecessor Common stock 2,387 — 2,387 Total $ 4,872 $ (26 ) $ 4,846 20. Accumulated Comprehensive Loss. The changes to Accumulated comprehensive loss relate to the settlement of the APPSE and the Avaya Supplemental Pension Plan ("ASPP") and associated taxes. Fresh Start Adjustments At the Emergence Date, the Company met the requirements under ASC 852 for the adoption of fresh start accounting. These adjustments reflect actual amounts recorded as of the Emergence Date. 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. The following table reflects the components of property, plant and equipment, net as of December 15, 2017 : (In millions) Buildings and improvements $ 82 Machinery and equipment 38 Rental equipment 85 Assets under construction 13 Internal use software 92 Total property, plant and equipment 310 Less: accumulated depreciation and amortization — Property, plant and equipment, net $ 310 25. Deferred Income Tax. T he adjustment represents the release of the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of future taxable income from the reversal of deferred tax liabilities that were established as part of fresh start accounting. 26. Intangible Assets. The Company recorded an adjustment to intangible assets for $3,137 million as follows: Successor Predecessor (In millions) December 16, 2017 Post-emergence December 15, 2017 Pre-emergence Difference Customer relationships and other intangible assets $ 2,155 $ 96 $ 2,059 Technology and patents 905 12 893 Trademarks and trade names 375 190 185 Total $ 3,435 $ 298 $ 3,137 The fair value of customer relationships was determined using the excess earnings method, a derivation of the income approach that calculates residual profit attributable to an asset after proper returns are paid to complementary or contributory assets. The fair value of technology and patents and trademarks and trade names determined using the royalty savings method, a derivation of the income approach that estimates the royalties saved through ownership of the assets. 27. Goodwill. Predecessor goodwill of $3,541 million was eliminated and Successor goodwill of $2,658 million was established based on the calculated reorganization value. (In millions) As Previously Reported Adjustments Revised Reorganization value of Successor Company $ 7,583 $ 26 $ 7,609 Less: Fair value of Successor Company assets (4,951 ) — (4,951 ) Reorganization value of Successor Company assets in excess of fair value - goodwill $ 2,632 $ 26 $ 2,658 28. Other Assets. The $27 million decrease to other assets is related to prepaid commissions that do not meet the definition of an asset upon emergence as there is no future benefit to the Successor Company. 29. Deferred Revenue. The fair value of deferred revenue, which principally relates to payments on annual maintenance contracts, was determined by deducting selling costs and associated profit from the Predecessor deferred revenue balance to arrive at the costs and profit associated with fulfilling the liability. Additionally, the decrease includes the impact of an accounting policy change whereby the Successor Company no longer recognizes deferred revenue relating to sales transactions that have been billed, but for which the related account receivable has not yet been collected. 30. Other Current Liabilities. The decrease of $3 million to other current liabilities is related to the fair value of real estate leases determined to be above or below market using the income approach based on the difference between the contractual rental rate and the estimated market rental rate, discounted utilizing a risk-related discount rate. 31. Long-term Debt . The fair value of the Term Loan Credit Agreement was determined based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices. 32. Deferred Income Taxes. The adjustment represents the establishment of deferred tax liabilities related to book/tax differences created by fresh start accounting adjustments. The amount is net of the release of the valuation allowance on deferred tax assets, which management believes more likely than not will be realized as a result of future taxable income from the reversal of such deferred tax liabilities. 33. Business Restructuring Reserve. The Company recorded an increase to its non-current business restructuring reserves based on estimated future cash flows applied to a current discount rate at emergence. 34. Other Liabilities. A decrease in other liabilities of $43 million relates to deferred revenue and real estate leases as previously discussed. 35. Accumulated Other Comprehensive Loss. The remaining balance in Accumulated comprehensive loss was reversed to Reorganization expenses, net. 36. Fresh Start Adjustments. The following table reflects the cumulative impact of the fresh start adjustments as discussed above, the elimination of the Predecessor Company's accumulated other comprehensive loss and the adjustments required to eliminate accumulated deficit: (In millions) As Previously Reported Adjustments Revised Eliminate Predecessor Intangible assets $ (298 ) $ — $ (298 ) Eliminate Predecessor Goodwill (3,541 ) — (3,541 ) Establish Successor Intangible assets 3,435 — 3,435 Establish Successor Goodwill 2,632 26 2,658 Fair value adjustment to Inventory 29 — 29 Fair value adjustment to Other current assets (66 ) — (66 ) Fair value adjustment to Property, plant and equipment 116 — 116 Fair value adjustment to Other assets (27 ) — (27 ) Fair value adjustment to Deferred revenue 235 — 235 Fair value adjustment to Business restructuring reserves (4 ) — (4 ) Fair value adjustment to Other current liabilities 3 — 3 Fair value adjustment to Long-term debt (96 ) (96 ) Fair value adjustment to Other liabilities 43 — 43 Release Predecessor Accumulated comprehensive loss (790 ) — (790 ) Fresh start adjustments included in Reorganization items, net 1,671 26 1,697 Tax impact of fresh start adjustments (565 ) — (565 ) Gain on fresh start accounting, net $ 1,106 $ 26 $ 1,132 |
Goodwill And Intangible Assets
Goodwill And Intangible Assets (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | he carrying value of goodwill by operating segments for the periods indicated was as follows: As Previously Reported (In millions) Global Communications Solutions Avaya Global Services Total Cost $ 2,669 $ 2,501 $ 5,170 Accumulated impairment (1,576 ) (52 ) (1,628 ) September 30, 2017 (Predecessor) $ 1,093 $ 2,449 $ 3,542 Adjustments (1 ) — (1 ) Impact of fresh start accounting 68 (977 ) (909 ) December 15, 2017 (Predecessor) $ 1,160 $ 1,472 $ 2,632 December 16, 2017 (Successor) $ 1,160 $ 1,472 $ 2,632 Adjustments (In millions) Global Communications Solutions Avaya Global Services Total Cost $ — $ — $ — Accumulated impairment — — — September 30, 2017 (Predecessor) $ — $ — $ — Adjustments — — — Impact of fresh start accounting 11 15 26 December 15, 2017 (Predecessor) $ 11 $ 15 $ 26 December 16, 2017 (Successor) $ 11 $ 15 $ 26 Revised (In millions) Global Communications Solutions Avaya Global Services Total Cost $ 2,669 $ 2,501 $ 5,170 Accumulated impairment (1,576 ) (52 ) (1,628 ) September 30, 2017 (Predecessor) 1,093 2,449 3,542 Adjustments (1 ) — (1 ) Impact of fresh start accounting 79 (962 ) (883 ) December 15, 2017 (Predecessor) $ 1,171 $ 1,487 $ 2,658 December 16, 2017 (Successor) $ 1,171 $ 1,487 $ 2,658 Spoken acquisition 120 — 120 Impact of foreign currency fluctuations (3 ) (4 ) (7 ) June 30, 2018 (Successor) $ 1,288 $ 1,483 $ 2,771 |
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class | The gross carrying amount and accumulated amortization by major intangible asset category as of June 30, 2018 (Successor) and September 30, 2017 (Predecessor) were as follows: Successor As of June 30, 2018 (In millions) Technology Customer Trademarks Total Finite-lived intangible assets: Cost $ 960 $ 2,156 $ 43 $ 3,159 Accumulated amortization (92 ) (84 ) (2 ) (178 ) Finite-lived intangible assets, net 868 2,072 41 2,981 Indefinite-lived intangible assets 5 — 332 337 Intangible assets, net $ 873 $ 2,072 $ 373 $ 3,318 Predecessor As of September 30, 2017 (In millions) Technology Customer Trademarks Total Finite-lived intangible assets: Cost $ 1,427 $ 2,196 $ — $ 3,623 Accumulated amortization (1,411 ) (2,091 ) — (3,502 ) Finite-lived intangible assets, net 16 105 — 121 Indefinite-lived intangible assets: Cost — — 545 545 Accumulated impairment — — (355 ) (355 ) Indefinite-lived intangible assets, net — — 190 190 Intangible assets, net $ 16 $ 105 $ 190 $ 311 |
Schedule of Future Amortization Expense | Future amortization expense related to amortizable intangible assets as of June 30, 2018 is as follows: (In millions) Remainder of fiscal 2018 $ 84 2019 333 2020 333 2021 332 2022 305 2023 and thereafter 1,594 Total $ 2,981 |
Supplementary Financial Infor32
Supplementary Financial Information (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Supplementary Financial Information [Abstract] | |
Schedule of Additional Financial Information | A summary of other expense, net for the periods indicated is presented in the following table: Successor Predecessor Successor Predecessor (In millions) Three months ended Three months ended Period from December 16, 2017 Period from October 1, 2017 through December 15, 2017 Nine months ended OTHER INCOME (EXPENSE), NET Interest income $ 1 $ 1 $ 2 $ 2 $ 2 Foreign currency gains, net 25 2 24 — 1 Income from TSA, net 1 — 5 3 — Other pension and post-retirement benefit credits (costs), net 4 (12 ) 9 (8 ) (29 ) Change in fair value of Emergence Date Warrants 6 — (9 ) — — Gain on sale of long-lived assets — — 1 — — Other, net — — — 1 (1 ) Total other income (expense), net $ 37 $ (9 ) $ 32 $ (2 ) $ (27 ) As discussed in Note 2, “Recent Accounting Pronouncements - Recently Adopted Accounting Pronouncements”, the adoption of ASU 2017-07 resulted in the recognition of Other pension and post-retirement benefit credits (costs), net (including the interest cost, expected return on plan assets, amortization and curtailments and settlements) in Other income (expense), net. Prior period amounts have been reclassified to conform to the current period presentation. The Foreign currency gains, net for both the three months ended June 30, 2018 (Successor) and the period from December 16, 2017 through June 30, 2018 (Successor) were principally due to the strengthening of the U.S. dollar compared to certain foreign exchange rates on U.S. dollar denominated receivables maintained in non-U.S. locations, mainly Argentina, India and Mexico. A summary of reorganization items, net for the periods indicated is presented in the following tables: Successor Predecessor (In millions) Three months ended Three months ended June 30, 2017 REORGANIZATION ITEMS, NET Bankruptcy-related professional fees $ — $ (31 ) DIP Credit Agreement financing costs — — Contract rejection fees — (4 ) Net gain on settlement of liabilities subject to compromise — — Net gain on fresh start adjustments — — Other items, net — — Reorganization items, net $ — $ (35 ) Cash payments for reorganization items $ — $ 33 Successor Predecessor As Previously Reported Adjustments Revised (In millions) Period from December 16, 2017 Period from October 1, 2017 through December 15, 2017 Period from October 1, 2017 through December 15, 2017 Period from October 1, 2017 through December 15, 2017 Nine months ended REORGANIZATION ITEMS, NET Bankruptcy-related professional fees $ — $ (56 ) $ — $ (56 ) $ (59 ) DIP Credit Agreement financing costs — — — — (14 ) Contract rejection fees — — — — (4 ) Net gain on settlement of liabilities subject to compromise — 1,804 (26 ) 1,778 — Net gain on fresh start adjustments — 1,671 26 1,697 — Other items, net — (3 ) — (3 ) — Reorganization items, net $ — $ 3,416 $ — $ 3,416 $ (77 ) Cash payments for reorganization items $ 1 $ 2,524 $ — $ 2,524 $ 39 |
Business Restructuring Reserv33
Business Restructuring Reserves And Programs (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Fiscal 2018 Restructuring Program | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring and Related Costs | The following table summarizes the components of the fiscal 2018 restructuring program for the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor): (In millions) Employee Separation Costs Lease Obligations Total 2018 restructuring charges $ 12 $ — $ 12 Cash payments (3 ) — (3 ) Balance as of December 15, 2017 (Predecessor) $ 9 $ — $ 9 Balance as of December 16, 2017 (Successor) $ 9 $ — $ 9 2018 restructuring charges 68 10 78 Cash payments (16 ) (10 ) (26 ) Impact of foreign currency fluctuations (2 ) — (2 ) Balance as of June 30, 2018 (Successor) $ 59 $ — $ 59 |
Fiscal 2017 Restructuring Program | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring and Related Costs | The following table summarizes the components of the fiscal 2017 restructuring program for the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor): (In millions) Employee Separation Costs Lease Obligations Total Balance as of September 30, 2017 (Predecessor) $ 4 $ 1 $ 5 Cash payments (1 ) (1 ) (2 ) Balance as of December 15, 2017 (Predecessor) $ 3 $ — $ 3 Balance as of December 16, 2017 (Successor) $ 3 $ — $ 3 Cash payments (1 ) — (1 ) Balance as of June 30, 2018 (Successor) $ 2 $ — $ 2 |
Fiscal 2008-2016 Restructuring Programs | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring and Related Costs | The following table aggregates the components of the fiscal 2008 through 2016 restructuring programs for the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor): (In millions) Employee Separation Costs Lease Obligations Total Balance as of September 30, 2017 (Predecessor) $ 51 $ 24 $ 75 Cash payments (3 ) (17 ) (20 ) Expense 1 1 2 Adjustments - fresh start and reorganization items $ 4 $ (1 ) $ 3 Balance as of December 15, 2017 (Predecessor) $ 53 $ 7 $ 60 Balance as of December 16, 2017 (Successor) $ 53 $ 7 $ 60 Expense 1 1 2 Cash payments (12 ) (2 ) (14 ) Impact of foreign currency fluctuations — — — Balance as of June 30, 2018 (Successor) $ 42 $ 6 $ 48 As of September 30, 2017 , the Business restructuring reserve of $80 million included $11 million that was recorded in Liabilities subject to compromise in the Condensed Consolidated Balance Sheets. |
Financing Arrangements (Tables)
Financing Arrangements (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table reflects principal amounts of debt and debt net of discounts and issuance costs as of June 30, 2018 (Successor) and September 30, 2017 (Predecessor) , which includes the impact of adequate protection payments and accrued interest as of January 19, 2017, the date the Company filed for bankruptcy: Successor Predecessor June 30, 2018 September 30, 2017 (In millions) Principal amount Net of discounts and issuance costs Principal amount Net of discounts and issuance costs Term Loan Credit Agreement $ 2,910 $ 2,876 $ — $ — Convertible 2.25% senior notes due June 15, 2023 350 252 — — DIP Credit Agreement due January 19, 2018 — — 725 725 First lien debt: Senior secured term B-3 loans — — 594 594 Senior secured term B-4 loans — — 1 1 Senior secured term B-6 loans — — 519 519 Senior secured term B-7 loans — — 2,012 2,012 7% senior secured notes — — 982 982 9% senior secured notes — — 284 284 Second lien debt: 10.50% senior secured notes — — 1,440 1,440 Total debt $ 3,260 3,128 $ 6,557 6,557 Debt maturing within one year (29 ) (725 ) Long-term debt, net of current portion (1) $ 3,099 $ 5,832 (1) Pre-petition long-term debt as of September 30, 2017 (Predecessor) was included in liabilities subject to compromise. |
Convertible Debt | The net carrying amount of the Convertible Notes for the period indicated was as follows: (In millions) June 30, 2018 Principal $ 350 Less: Unamortized debt discount (91 ) Unamortized issuance costs (7 ) Net carrying amount $ 252 The net carrying amount of the equity component of the Convertible Notes for the period indicated was as follows: (In millions) June 30, 2018 Debt discount for conversion option $ 92 Less: Issuance costs (3 ) Net carrying amount $ 89 |
Derivative Instruments and He35
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Assumptions Used | The fair value of the Emergence Date Warrants upon emergence and as of June 30, 2018 was recorded in Non-current liabilities - Other liabilities in the Condensed Consolidated Balance Sheets, and was determined by using the Black-Scholes option pricing model with the input assumptions summarized below: As Previously Reported Revised June 30, 2018 December 15, 2017 December 15, 2017 Expected volatility 50.96 % 54.57 % 54.38 % Risk-free interest rates 2.68 % 2.20 % 2.20 % Expected remaining life (in years) 4.46 5.00 5.00 Price per share of common stock $20.08 $14.93 $15.16 |
Schedule of Derivative Liabilities at Fair Value | The following table summarizes the fair value of the Company's derivatives on a gross basis segregated between those that are designated as hedging instruments and those that are not designated as hedging instruments: Successor Predecessor June 30, 2018 September 30, 2017 (In millions) Balance Sheet Caption Asset Liability Asset Liability Derivatives Designated as Hedging Instruments: Interest rate contracts Other current liabilities $ — $ 11 $ — $ — Interest rate contracts Other liabilities — 5 — — — 16 — — Derivatives Not Designated as Hedging Instruments: Emergence Date Warrants Other liabilities — 26 — — Total derivative fair value $ — $ 42 $ — $ — |
Derivatives Designated as Cash Flow Hedges | The following table provides information regarding the location and amount of pre-tax gains (losses) for derivatives designated as cash flow hedges: Successor Predecessor Three months ended Period from December 16, 2017 through June 30, 2018 Period from October 1, 2017 through December 15, 2017 (In millions) Interest Expense Other Comprehensive Income (Loss) Interest Expense Other Comprehensive Income (Loss) Interest Expense Other Comprehensive Income (Loss) Financial Statement Line Item in which Cash Flow Hedges are Recorded $ (56 ) $ (16 ) $ (112 ) $ (41 ) $ (14 ) $ 658 Impact of cash flow hedging relationships: Loss recognized in AOCI - on interest rate swaps — (17 ) — (17 ) — — Interest expense reclassified from AOCI (2 ) 2 (2 ) 2 — — |
Derivatives Not Designated as Hedging Instruments | The following table provides information regarding the pre-tax effects for derivatives not designated as hedging instruments on the Condensed Consolidated Statements of Operations: Successor Predecessor (In millions) Location of Derivative Pre-tax Gain (Loss) Three months ended Period from December 16, 2017 Period from October 1, 2017 through December 15, 2017 Emergence Date Warrants Other income (expense), net $ 6 $ (9 ) $ — |
Schedule of Outstanding Derivative Positions Presented on a Net Basis | The following table provides information on the Company's derivative positions as if those subject to master netting arrangements were presented on a net basis, allowing for the right to offset by counterparty per the master netting agreements: Successor Predecessor June 30, 2018 September 30, 2017 (In millions) Asset Liability Asset Liability Gross amounts recognized in the consolidated balance sheet $ — $ 42 $ — $ — Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet — — — — Net amounts $ — $ 42 $ — $ — |
Fair Value Measures (Tables)
Fair Value Measures (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table summarizes the activity for the Company's Level 3 liabilities measured at fair value on a recurring basis: (In millions) Emergence Date Warrants Spoken Acquisition Earn-outs Total September 30, 2017 (Predecessor) $ — $ — $ — Issuance of Emergence Date Warrants 17 — 17 December 15, 2017 (Predecessor) $ 17 $ — $ 17 December 16, 2017 (Successor) $ 17 $ — $ 17 Contingent consideration — 14 14 Change in fair value (1) 15 — 15 March 31, 2018 (Successor) 32 14 46 Accretion of interest (1) — 1 1 Change in fair value (1) (6 ) — (6 ) June 30, 2018 (Successor) $ 26 $ 15 $ 41 (1) Changes in fair value of the Emergence Date Warrants and accretion of interest on the Spoken acquisition earn-outs are included in Other income (expense), net. Assets and liabilities measured at fair value on a recurring basis as of June 30, 2018 (Successor) and September 30, 2017 (Predecessor) were as follows: Successor June 30, 2018 Fair Value Measurements Using (In millions) Total Level 1 Level 2 Level 3 Other Non-Current Assets: Investments $ 2 $ 2 $ — $ — Liabilities: Interest rate contracts $ 16 $ — $ 16 $ — Spoken acquisition Earn-outs 15 — — 15 Emergence Date Warrants 26 — — 26 Total liabilities $ 57 $ — $ 16 $ 41 Predecessor September 30, 2017 Fair Value Measurements Using (In millions) Total Level 1 Level 2 Level 3 Other Non-Current Assets: Investments $ 1 $ 1 $ — $ — |
Carry Values and Estimated Fair Value of Debt Instruments | The estimated fair values of the amounts borrowed under the Company’s financing agreements at June 30, 2018 (Successor) and September 30, 2017 (Predecessor) are as follows: Successor Predecessor June 30, 2018 September 30, 2017 (In millions) Principal Amount Fair Value Principal Amount Fair Value Term Loan Credit Agreement due December 15, 2024 $ 2,910 $ 2,919 $ — $ — Convertible 2.25% senior notes due June 15, 2023 350 342 — — DIP Credit Agreement due January 19, 2018 — — 725 732 Variable rate Term B-3 Loans due October 26, 2017 — — 594 503 Variable rate Term B-4 Loans due October 26, 2017 — — 1 1 Variable rate Term B-6 Loans due March 31, 2018 — — 519 440 Variable rate Term B-7 Loans due May 29, 2020 — — 2,012 1,709 7% senior secured notes due April 1, 2019 — — 982 832 9% senior secured notes due April 1, 2019 — — 284 241 10.50% senior secured notes due March 1, 2021 — — 1,440 67 Total $ 3,260 $ 3,261 $ 6,557 $ 4,525 |
Benefit Obligations (Tables)
Benefit Obligations (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Costs | The components of the pension and post-retirement net periodic benefit (credit) cost for the periods indicated are provided in the tables below: Successor Predecessor Successor Predecessor (In millions) Three months ended Three months ended Period from December 16, 2017 Period from October 1, 2017 through December 15, 2017 Nine months ended Pension Benefits - U.S. Components of Net Periodic Benefit (Credit) Cost Service cost $ 1 $ 1 $ 2 $ 1 $ 3 Interest cost 9 24 19 22 73 Expected return on plan assets (17 ) (44 ) (35 ) (38 ) (134 ) Amortization of unrecognized prior service cost — — — — 1 Amortization of previously unrecognized net actuarial loss — 26 — 20 77 Settlement loss (1) — — — — — Net periodic benefit (credit) cost $ (7 ) $ 7 $ (14 ) $ 5 $ 20 (1) Excludes Plan of Reorganization related settlements that were recorded in Reorganization items, net in the Condensed Consolidated Statements of Operations. Successor Predecessor Successor Predecessor (In millions) Three months ended Three months ended Period from December 16, 2017 Period from October 1, 2017 through December 15, 2017 Nine months ended Pension Benefits - Non-U.S. Components of Net Periodic Benefit Cost Service cost $ 1 $ 1 $ 3 $ 2 $ 5 Interest cost 3 2 5 3 6 Expected return on plan assets — — — — (1 ) Amortization of previously unrecognized net actuarial loss — 4 — 1 12 Net periodic benefit cost $ 4 $ 7 $ 8 $ 6 $ 22 Successor Predecessor Successor Predecessor (In millions) Three months ended Three months ended Period from December 16, 2017 Period from October 1, 2017 through December 15, 2017 Nine months ended Post-retirement Benefits - U.S. Components of Net Periodic Benefit Cost (Credit) Service cost $ 1 $ — $ 1 $ — $ 1 Interest cost 4 4 7 3 10 Expected return on plan assets (3 ) (2 ) (5 ) (2 ) (7 ) Amortization of unrecognized prior service cost — (5 ) — (3 ) (13 ) Amortization of previously unrecognized net actuarial loss — 3 — 2 9 Curtailment — — — — (4 ) Net periodic benefit cost (credit) $ 2 $ — $ 3 $ — $ (4 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Share-based Compensation [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following assumptions were used in calculating the fair value of the options granted for the period from December 16, 2017 through June 30, 2018 : Range Exercise price $ 19.46 - $ 21.79 Expected volatility (1) 49.25 % - 56.59 % Expected life (in years) (2) 5.86 years - 6.65 years Risk-free interest rate (3) 2.35 % - 2.95 % Dividend yield (4) — % (1) Expected volatility based on peer group companies adjusted for the Company's leverage. (2) Expected life based on the vesting terms of the option and a contractual life of ten years. (3) Risk-free interest rate based on U.S. Treasury yields with a term equal to the expected option term. (4) Dividend yield was assumed to be zero as the Company does not anticipate paying dividends. |
Earnings (Loss) Per Common Sh39
Earnings (Loss) Per Common Share (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | The following table sets forth the calculation of net (loss) income attributable to common shareholders and the computation of basic and diluted (loss) earnings per share for the periods indicated: Successor Predecessor Successor Predecessor (In millions, except per share amounts) Three months ended Three months ended Period from December 16, 2017 Period from October 1, 2017 through December 15, 2017 Nine months ended Net (loss) income per share: Numerator Net (loss) income $ (88 ) $ (98 ) $ 19 $ 2,977 $ (209 ) Dividends to preferred stockholders — (8 ) — (6 ) (23 ) Undistributed earnings (88 ) (106 ) 19 2,971 (232 ) Percentage allocated to common stockholders (1) 100.0 % 100.0 % 100.0 % 86.9 % 100.0 % Numerator for basic and diluted earnings per common share $ (88 ) $ (106 ) $ 19 $ 2,582 $ (232 ) Denominator Denominator for basic earnings per weighted average common shares 109.8 497.2 109.8 497.3 497.0 Effect of dilutive securities Restricted stock units — — 1.2 — — Stock options — — — — — Convertible Notes — — — — — Call Spread Warrants — — — — — Emergence Date Warrants — — — — — Denominator for diluted earnings per weighted average common shares 109.8 497.2 111.0 497.3 497.0 Per common share net (loss) income Basic $ (0.80 ) $ (0.22 ) $ 0.17 $ 5.19 $ (0.47 ) Diluted $ (0.80 ) $ (0.22 ) $ 0.17 $ 5.19 $ (0.47 ) (1) Basic weighted average common stock outstanding 109.8 497.2 109.8 497.3 497.0 Basic weighted average common stock and common stock equivalents (preferred shares) 109.8 497.2 109.8 572.4 497.0 Percentage allocated to common stockholders 100.0 % 100.0 % 100.0 % 86.9 % 100.0 % |
Operating Segments (Tables)
Operating Segments (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Summarized financial information relating to the Company’s operating segments is shown in the following table for the periods indicated: Successor Predecessor Successor Predecessor (In millions) Three months ended Three months ended Period from December 16, 2017 Period from October 1, 2017 through December 15, 2017 Nine months ended REVENUE Global Communications Solutions $ 322 $ 302 $ 716 $ 253 $ 957 Avaya Networking (1) — 43 — — 137 Enterprise Collaboration Solutions 322 345 716 253 1,094 Avaya Global Services 433 458 967 351 1,388 Unallocated amounts (2) (63 ) — (171 ) — — $ 692 $ 803 $ 1,512 $ 604 $ 2,482 GROSS PROFIT Global Communications Solutions $ 210 $ 210 $ 473 $ 169 $ 653 Avaya Networking (1) — 14 — — 47 Enterprise Collaboration Solutions 210 224 473 169 700 Avaya Global Services 257 274 582 196 828 Unallocated amounts (3) (115 ) (5 ) (302 ) (3 ) (16 ) 352 493 753 362 1,512 OPERATING EXPENSES Selling, general and administrative 281 295 613 264 923 Research and development 51 59 110 38 178 Amortization of intangible assets 39 57 86 10 170 Impairment of indefinite-lived intangible assets — 65 — — 65 Goodwill impairment — 52 — — 52 Restructuring charges, net 30 8 80 14 22 401 536 889 326 1,410 OPERATING (LOSS) INCOME (49 ) (43 ) (136 ) 36 102 INTEREST EXPENSE, OTHER INCOME (EXPENSE), NET AND REORGANIZATION ITEMS, NET (19 ) (61 ) (80 ) 3,400 (333 ) (LOSS) INCOME BEFORE INCOME TAXES $ (68 ) $ (104 ) $ (216 ) $ 3,436 $ (231 ) (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. |
Accumulated Other Comprehensi41
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Schedule of Components of Accumulated Other Comprehensive Income (Loss) | periods indicated were as follows: (In millions) Foreign Currency Translation Interest Rate Swaps Total Balance at March 31, 2018 (Successor) $ (25 ) $ — $ (25 ) Other comprehensive income (loss) before reclassifications (4 ) (17 ) (21 ) Amounts reclassified to earnings — 2 2 Benefit from income taxes — 3 3 Balance at June 30, 2018 (Successor) $ (29 ) $ (12 ) $ (41 ) (In millions) Unamortized pension, post-retirement and postemployment benefit-related items Foreign Currency Translation Interest Rate Swaps Other Total Balance at September 30, 2017 (Predecessor) $ (1,375 ) $ (72 ) $ — $ (1 ) $ (1,448 ) Other comprehensive (loss) income before reclassifications (24 ) 3 — — (21 ) Amounts reclassified to earnings 16 — — — 16 Pension settlement 721 — — — 721 Provision for income taxes (58 ) — — — (58 ) Balance at December 15, 2017 (Predecessor) (720 ) (69 ) — (1 ) (790 ) Elimination of Predecessor Company accumulated other comprehensive loss 720 69 — 1 790 Balance at December 15, 2017 (Predecessor) $ — $ — $ — $ — $ — Balance at December 16, 2017 (Successor) $ — $ — $ — $ — $ — Other comprehensive loss before reclassifications — (29 ) (17 ) — (46 ) Amounts reclassified to earnings — — 2 — 2 Benefit from income taxes — — 3 — 3 Balance at June 30, 2018 (Successor) $ — $ (29 ) $ (12 ) $ — $ (41 ) (In millions) Unamortized pension, postretirement and postemployment benefit-related items Foreign Currency Translation Other Total Balance at March 31, 2017 (Predecessor) $ (1,598 ) $ (7 ) $ (1 ) $ (1,606 ) Other comprehensive loss before reclassifications — (42 ) — (42 ) Amounts reclassified to earnings 26 — — 26 Provision for income taxes (1 ) (2 ) — (3 ) Balance at June 30, 2017 (Predecessor) $ (1,573 ) $ (51 ) $ (1 ) $ (1,625 ) (In millions) Unamortized pension, post-retirement and postemployment benefit-related items Foreign Currency Translation Other Total Balance at September 30, 2016 (Predecessor) $ (1,627 ) $ (33 ) $ (1 ) $ (1,661 ) Other comprehensive income before reclassifications — (17 ) — (17 ) Amounts reclassified to earnings 70 — — 70 Provision for income taxes (16 ) (1 ) — (17 ) Balance at June 30, 2017 (Predecessor) $ (1,573 ) $ (51 ) $ (1 ) $ (1,625 ) |
Commitments And Contingencies (
Commitments And Contingencies (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Product Warranty Liability | The Company periodically reviews the adequacy of its product warranties and adjusts, if necessary, the warranty percentage and accrued warranty reserve, which is included in other current and non-current liabilities in the Condensed Consolidated Balance Sheets, for actual experience. As of June 30, 2018 and September 30, 2017 , the amount reserved was $2 million and $2 million , respectively. |
Background and Basis of Prese43
Background and Basis of Presentation (Details) $ in Millions | Jul. 14, 2017segment | Jul. 13, 2017Segments | Jun. 30, 2018USD ($)segment | Dec. 16, 2017USD ($) | Dec. 15, 2017USD ($) |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Number of operating segments | 2 | 3 | 2 | ||
Cash | $ 685 | $ 366 | $ 366 | ||
Accounts receivable, net | $ 367 | 391 | |||
Adjustments | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Cash | 26 | ||||
Accounts receivable, net | $ (26) |
Background and Basis of Prese44
Background and Basis of Presentation - Balance Sheet (Details) - USD ($) | Jun. 30, 2018 | Dec. 16, 2017 | Dec. 15, 2017 | Sep. 30, 2017 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Cash | $ 685,000,000 | $ 366,000,000 | $ 366,000,000 | |
Accounts receivable, net | 367,000,000 | 391,000,000 | ||
Goodwill | 2,771,000,000 | 2,658,000,000 | 2,658,000,000 | |
Total Assets | 7,826,000,000 | 7,609,000,000 | ||
Additional paid-in capital (Successor) | 1,667,000,000 | |||
Total Stockholders' Equity | 1,718,000,000 | 1,668,000,000 | 1,668,000,000 | |
Total Liabilities and Stockholders' Equity | $ 7,826,000,000 | 7,609,000,000 | ||
Successor common stock value per share (in dollars per share) | 15.16 | |||
As Previously Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Cash | 340,000,000 | |||
Accounts receivable, net | 417,000,000 | |||
Goodwill | 2,632,000,000 | $ 2,632,000,000 | $ 3,542,000,000 | |
Total Assets | 7,583,000,000 | |||
Additional paid-in capital (Successor) | 1,641,000,000 | |||
Total Stockholders' Equity | 1,642,000,000 | |||
Total Liabilities and Stockholders' Equity | 7,583,000,000 | |||
Successor common stock value per share (in dollars per share) | 14.93 | |||
Adjustments | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Cash | 26,000,000 | |||
Accounts receivable, net | (26,000,000) | |||
Goodwill | 26,000,000 | |||
Total Assets | 26,000,000 | |||
Additional paid-in capital (Successor) | 26,000,000 | |||
Total Stockholders' Equity | 26,000,000 | |||
Total Liabilities and Stockholders' Equity | 26,000,000 | |||
Successor common stock value per share (in dollars per share) | $ 0.23 |
Background and Basis of Prese45
Background and Basis of Presentation - Cash Flow (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | |
Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Change in Accounts receivable | $ 23 | ||||
Net gain on settlement of Liabilities subject to compromise | $ 26 | $ 0 | 0 | ||
Fresh start adjustments, net | (26) | $ 0 | 0 | ||
Net Cash Used For Operating Activities | 177 | ||||
Net decrease in cash and cash equivalents | $ 319 | ||||
As Previously Reported | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Change in Accounts receivable | 14 | ||||
Net gain on settlement of Liabilities subject to compromise | (1,804) | ||||
Fresh start adjustments, net | (1,671) | ||||
Net Cash Used For Operating Activities | (440) | ||||
Net decrease in cash and cash equivalents | (536) | ||||
Adjustments | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Change in Accounts receivable | 26 | ||||
Net gain on settlement of Liabilities subject to compromise | 26 | ||||
Fresh start adjustments, net | (26) | ||||
Net Cash Used For Operating Activities | 26 | ||||
Net decrease in cash and cash equivalents | 26 | ||||
Predecessor | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Change in Accounts receivable | 40 | $ 85 | |||
Net gain on settlement of Liabilities subject to compromise | (1,778) | $ 0 | 0 | ||
Fresh start adjustments, net | (1,697) | $ 0 | 0 | ||
Net Cash Used For Operating Activities | (414) | 125 | |||
Net decrease in cash and cash equivalents | $ (510) | $ 393 |
Recent Accounting Pronounceme46
Recent Accounting Pronouncements (Details) - Accounting Standards Update 2017-07 - other income (expense) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | |
Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Other pension and post-retirement benefit costs | $ (4) | $ (9) | |||
Predecessor | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Other pension and post-retirement benefit costs | $ 8 | $ 12 | $ 29 |
Emergence from Voluntary Reor47
Emergence from Voluntary Reorganization under Chapter 11 Proceedings (Details) - USD ($) | Dec. 15, 2017 | Jun. 30, 2018 | Dec. 16, 2017 |
Fresh-Start Adjustment [Line Items] | |||
Repayment of debtor-in-possession financing | $ 725,000,000 | $ 0 | |
Shares authorized (in shares) | 605,000,000 | ||
Preferred stock, shares authorized | 55,000,000 | ||
Preferred stock, par value (in usd per share) | $ 0.01 | ||
Common stock, shares authorized | 550,000,000 | ||
Common stock, par value (in usd per share) | $ 0.01 | ||
Common stock, shares issued | 110,160,835 | 110,000,000 | |
Debt face amount | $ 3,260,000,000 | ||
Class of warrant or right, number of securities called by each warrant or right (in Shares) | 5,600,000 | ||
Class of warrant or right, exercise price of warrants or rights (USD per share) | $ 25.55 | ||
Payment to PBGC | $ 0 | ||
Common stock issued for GUC (in shares) | 200,000 | 200,000 | |
Payment of unsecured claims | $ 0 | ||
General Unsecured Creditor Reserve | |||
Fresh-Start Adjustment [Line Items] | |||
Payment of unsecured claims | $ 58,000,000 | ||
Term Loan | |||
Fresh-Start Adjustment [Line Items] | |||
Debt face amount | $ 2,910,000,000 | ||
First Lien Debt | |||
Fresh-Start Adjustment [Line Items] | |||
Common stock issued for debt (in shares) | 99,300,000 | ||
Repayments of long-term Debt | $ 2,061,000,000 | ||
Second Lien Debt | |||
Fresh-Start Adjustment [Line Items] | |||
Common stock issued for debt (in shares) | 4,400,000 | ||
Term Loan Credit Agreement due December 15, 2024 | Term Loan | |||
Fresh-Start Adjustment [Line Items] | |||
Debt face amount | $ 2,925,000,000 | ||
7% senior secured notes | |||
Fresh-Start Adjustment [Line Items] | |||
Interest rate, stated percentage | 7.00% | ||
7% senior secured notes | First Lien Debt | |||
Fresh-Start Adjustment [Line Items] | |||
Debt face amount | $ 0 | ||
Interest rate, stated percentage | 7.00% | ||
9% senior secured notes | |||
Fresh-Start Adjustment [Line Items] | |||
Interest rate, stated percentage | 9.00% | ||
9% senior secured notes | First Lien Debt | |||
Fresh-Start Adjustment [Line Items] | |||
Debt face amount | $ 0 | ||
Interest rate, stated percentage | 9.00% | ||
10.50% senior secured notes | |||
Fresh-Start Adjustment [Line Items] | |||
Interest rate, stated percentage | 10.50% | ||
10.50% senior secured notes | Second Lien Debt | |||
Fresh-Start Adjustment [Line Items] | |||
Debt face amount | $ 0 | ||
Interest rate, stated percentage | 10.50% | ||
Revolving Credit Facility | ABL Credit Agreement | Line of Credit | |||
Fresh-Start Adjustment [Line Items] | |||
Line of credit facility, current borrowing capacity | $ 300,000,000 | ||
Avaya Inc. Pension Plan for Salaried Employees | |||
Fresh-Start Adjustment [Line Items] | |||
Common stock issued for PBGC (in shares) | 6,100,000 | ||
Payment to PBGC | $ 340,000,000 |
Fresh Start Accounting - Narrat
Fresh Start Accounting - Narrative (Details) - USD ($) shares in Millions | Dec. 15, 2017 | Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 16, 2017 | Sep. 30, 2017 |
Fresh-Start Adjustment [Line Items] | |||||||||
Enterprise value | $ 5,721,000,000 | ||||||||
Repayment of debtor-in-possession financing | $ 725,000,000 | $ 0 | |||||||
Debt maturing within one year | (29,000,000) | $ (29,000,000) | $ (29,000,000) | (29,000,000) | $ (29,000,000) | ||||
Debt face amount | 3,260,000,000 | 3,260,000,000 | 3,260,000,000 | ||||||
Funding payment for Avaya represented employee pension plan | 0 | ||||||||
Debt cancelled due to bankruptcy | $ 5,721,000,000 | ||||||||
Class of warrant or right, number of securities called by each warrant or right (in Shares) | 5.6 | 5.6 | |||||||
Payment to PBGC | 0 | ||||||||
Establish Successor Goodwill | $ 2,632,000,000 | $ 2,632,000,000 | 2,658,000,000 | ||||||
Net gain on settlement of liabilities subject to compromise | (26,000,000) | 0 | 0 | ||||||
Discharge of Debt | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Adjustments, accounts payable | (49,000,000) | (49,000,000) | |||||||
Adjustments, accounts payable, reclassification of accrued bankruptcy related professional fees | (50,000,000) | (50,000,000) | |||||||
Adjustments, accounts payable, payment of bankruptcy professional fees | (3,000,000) | (3,000,000) | |||||||
Adjustments, accounts payable, reinstatement of contract cure costs | 4,000,000 | 4,000,000 | |||||||
Adjustments, payroll and benefit obligations | 23,000,000 | 23,000,000 | |||||||
Fair value adjustment to Deferred revenue | 79,000,000 | 79,000,000 | |||||||
Adjustments, deferred revenue | 50,000,000 | 50,000,000 | |||||||
Adjustments, other liabilities, deferred revenue | 29,000,000 | 29,000,000 | |||||||
Adjustments, restructuring reserve | 7,000,000 | 7,000,000 | |||||||
Adjustments, business restructuring reserve | 3,000,000 | 3,000,000 | |||||||
Adjustments, business restructuring reserve | 4,000,000 | 4,000,000 | |||||||
Adjustments, liabilities subject to compromise, pension obligation | (295,000,000) | (295,000,000) | |||||||
Funding payment for Avaya represented employee pension plan | (49,000,000) | ||||||||
Adjustments, other post-retirement obligation | 212,000,000 | 212,000,000 | |||||||
Adjustments, other liabilities | 233,000,000 | 233,000,000 | |||||||
Payment to PBGC | 340,000,000 | ||||||||
Adjustments, other assets | 6,000,000 | 6,000,000 | |||||||
Adjustments, other current liabilities | 65,000,000 | 65,000,000 | |||||||
Revaluation of Assets | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Adjustments, property, plant and equipment | 116,000,000 | 116,000,000 | |||||||
Adjustments, intangible assets, net | 3,137,000,000 | 3,137,000,000 | |||||||
Adjustments, other assets | (27,000,000) | (27,000,000) | |||||||
Revaluation of Liabilities | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Adjustments, deferred revenue | (341,000,000) | (341,000,000) | |||||||
Adjustments, business restructuring reserve | 4,000,000 | 4,000,000 | |||||||
Adjustments, other liabilities | (43,000,000) | (43,000,000) | |||||||
Adjustments, other current liabilities | $ (3,000,000) | (3,000,000) | |||||||
Minimum | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Enterprise value | 5,100,000,000 | ||||||||
Maximum | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Enterprise value | 7,100,000,000 | ||||||||
Term Loan | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Debt face amount | 2,910,000,000 | 2,910,000,000 | 2,910,000,000 | ||||||
First Lien Debt | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Debt cancelled due to bankruptcy | 4,281,000,000 | ||||||||
Common stock issued for debt (in shares) | 99.3 | ||||||||
Common stock issued for Predecessor debt | $ 1,509,000,000 | ||||||||
Repayment of long-term debt | $ 2,061,000,000 | ||||||||
Second Lien Debt | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Debt cancelled due to bankruptcy | 1,440,000,000 | ||||||||
Common stock issued for debt (in shares) | 4.4 | ||||||||
Common stock issued for Predecessor debt | $ 67,000,000 | ||||||||
Term Loan Credit Agreement due December 15, 2024 | Term Loan | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Debt face amount | $ 2,925,000,000 | 2,925,000,000 | |||||||
Debt term | 7 years | ||||||||
Revolving Credit Facility | ABL Credit Agreement | Line of Credit | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Debt term | 5 years | ||||||||
Line of credit facility, current borrowing capacity | $ 300,000,000 | $ 300,000,000 | |||||||
Letter of Credit | ABL Credit Agreement | Line of Credit | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Letters of credit outstanding | $ 48,000,000 | $ 48,000,000 | $ 48,000,000 | ||||||
Avaya Inc. Pension Plan for Salaried Employees | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Payment to PBGC | $ 340,000,000 | ||||||||
Common stock issued for PBGC (in shares) | 6.1 | 6.1 | |||||||
Common stock issued to Pension Benefit Guaranty Corporation | $ 92,000,000 | $ 92,000,000 | |||||||
As Previously Reported | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Pre-petition first lien debt | 734,000,000 | ||||||||
Pre-petition second lien debt | 1,357,000,000 | ||||||||
Avaya pension plan for salaried employees | (514,000,000) | ||||||||
Enterprise value | 5,721,000,000 | ||||||||
Goodwill | 3,541,000,000 | 3,541,000,000 | |||||||
Establish Successor Goodwill | 2,632,000,000 | ||||||||
General unsecured creditors' claims | 227,000,000 | ||||||||
Net gain on settlement of liabilities subject to compromise | 1,804,000,000 | ||||||||
As Previously Reported | Discharge of Debt | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Adjustments, accounts payable | (49,000,000) | (49,000,000) | |||||||
Adjustments, payroll and benefit obligations | 23,000,000 | 23,000,000 | |||||||
Adjustments, deferred revenue | 50,000,000 | 50,000,000 | |||||||
Adjustments, business restructuring reserve | 3,000,000 | 3,000,000 | |||||||
Adjustments, business restructuring reserve | 4,000,000 | 4,000,000 | |||||||
Adjustments, other post-retirement obligation | 212,000,000 | 212,000,000 | |||||||
Adjustments, other liabilities | 233,000,000 | 233,000,000 | |||||||
Adjustments, other assets | 6,000,000 | 6,000,000 | |||||||
Adjustments, other current liabilities | 65,000,000 | 65,000,000 | |||||||
As Previously Reported | Revaluation of Assets | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Adjustments, property, plant and equipment | 116,000,000 | 116,000,000 | |||||||
Adjustments, intangible assets, net | 3,137,000,000 | 3,137,000,000 | |||||||
Adjustments, other assets | (27,000,000) | (27,000,000) | |||||||
As Previously Reported | Revaluation of Liabilities | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Fair value adjustment to Deferred revenue | (235,000,000) | (235,000,000) | |||||||
Adjustments, deferred revenue | (341,000,000) | (341,000,000) | |||||||
Adjustments, business restructuring reserve | 4,000,000 | 4,000,000 | |||||||
Adjustments, other liabilities | (43,000,000) | (43,000,000) | |||||||
Adjustments, other current liabilities | (3,000,000) | (3,000,000) | |||||||
Predecessor | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Pre-petition first lien debt | 711,000,000 | ||||||||
Pre-petition second lien debt | 1,356,000,000 | ||||||||
Avaya pension plan for salaried employees | (516,000,000) | ||||||||
Repayment of debtor-in-possession financing | 725,000,000 | $ 0 | |||||||
Debt maturing within one year | $ (725,000,000) | ||||||||
Debt face amount | 6,557,000,000 | ||||||||
Funding payment for Avaya represented employee pension plan | (49,000,000) | 0 | |||||||
Payment to PBGC | 340,000,000 | 0 | |||||||
Common stock issued to Pension Benefit Guaranty Corporation | 92,000,000 | 92,000,000 | |||||||
Goodwill | 3,541,000,000 | 3,541,000,000 | |||||||
General unsecured creditors' claims | 227,000,000 | ||||||||
Net gain on settlement of liabilities subject to compromise | 1,778,000,000 | $ 0 | $ 0 | ||||||
Predecessor | Revaluation of Assets | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Adjustments, property, plant and equipment | 116,000,000 | 116,000,000 | |||||||
Adjustments, other assets | (27,000,000) | (27,000,000) | |||||||
Predecessor | Revaluation of Liabilities | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Fair value adjustment to Deferred revenue | (235,000,000) | (235,000,000) | |||||||
Adjustments, business restructuring reserve | 4,000,000 | 4,000,000 | |||||||
Adjustments, other liabilities | (43,000,000) | (43,000,000) | |||||||
Adjustments, other current liabilities | (3,000,000) | (3,000,000) | |||||||
Predecessor | Term Loan | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Debt face amount | $ 0 | ||||||||
Warrants | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Fair value of warrant liability | 17,000,000 | 17,000,000 | |||||||
Adjustments | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Enterprise value | 0 | ||||||||
Goodwill | 0 | 0 | |||||||
Establish Successor Goodwill | $ 26,000,000 | ||||||||
Adjustments | Discharge of Debt | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Adjustments, accounts payable | 0 | 0 | |||||||
Adjustments, payroll and benefit obligations | 0 | 0 | |||||||
Adjustments, deferred revenue | 0 | 0 | |||||||
Adjustments, business restructuring reserve | 0 | 0 | |||||||
Adjustments, business restructuring reserve | 0 | 0 | |||||||
Adjustments, other post-retirement obligation | 0 | 0 | |||||||
Adjustments, other liabilities | 0 | 0 | |||||||
Adjustments, other assets | 0 | 0 | |||||||
Adjustments, other current liabilities | 0 | 0 | |||||||
Adjustments | Revaluation of Assets | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Adjustments, property, plant and equipment | 0 | 0 | |||||||
Adjustments, intangible assets, net | 0 | 0 | |||||||
Adjustments, other assets | 0 | 0 | |||||||
Adjustments | Revaluation of Liabilities | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Fair value adjustment to Deferred revenue | 0 | 0 | |||||||
Adjustments, deferred revenue | 0 | 0 | |||||||
Adjustments, business restructuring reserve | 0 | 0 | |||||||
Adjustments, other liabilities | 0 | 0 | |||||||
Adjustments, other current liabilities | 0 | 0 | |||||||
Adjustments | As Previously Reported | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Net gain on settlement of liabilities subject to compromise | (26,000,000) | ||||||||
Adjustments | Predecessor | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Pre-petition first lien debt | (23,000,000) | ||||||||
Pre-petition second lien debt | (1,000,000) | ||||||||
Avaya pension plan for salaried employees | (2,000,000) | ||||||||
Goodwill | $ 0 | 0 | |||||||
General unsecured creditors' claims | 0 | ||||||||
Net gain on settlement of liabilities subject to compromise | $ (26,000,000) |
Fresh Start Accounting - Enterp
Fresh Start Accounting - Enterprise Value To The Estimated Fair Value Of The Successor Common Stock (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 30, 2018 | Dec. 16, 2017 | Dec. 15, 2017 |
Fresh-Start Adjustment [Line Items] | |||
Posconfirmation Assets, Fair Value | $ 4,951 | ||
Enterprise value | 5,721 | ||
Cash and cash equivalents | 366 | $ 340 | |
Minimum cash required for operations | (120) | ||
Fair value of Term Loan Credit Agreement | (2,896) | ||
Fair value of capitalized leases | (20) | ||
Fair value of pension and other post-retirement obligations, net of tax | (856) | ||
Change in net deferred tax liabilities from reorganization | (510) | ||
Fair value of Successor warrants | (17) | ||
Fair value of Successor common stock | $ 1,668 | $ 1,642 | |
Shares issued at December 15, 2017 (in shares) | 110,160,835 | 110,000,000 | |
Per share value (usd per share) | $ 15.16 | ||
Debt, fair value, percent of par | 99.00% | ||
Other Postretirement Benefits Plan | |||
Fresh-Start Adjustment [Line Items] | |||
Rate of return on plan assets | 5.90% | ||
Discount rate | 3.77% | ||
UNITED STATES | Pension Plan | |||
Fresh-Start Adjustment [Line Items] | |||
Rate of return on plan assets | 7.75% | ||
Discount rate | 3.70% | ||
Foreign Plan | Pension Plan | |||
Fresh-Start Adjustment [Line Items] | |||
Rate of return on plan assets | 3.80% | ||
Discount rate | 1.52% | ||
Adjustments | |||
Fresh-Start Adjustment [Line Items] | |||
Posconfirmation Assets, Fair Value | $ 0 | ||
Enterprise value | 0 | ||
Cash and cash equivalents | 26 | ||
Minimum cash required for operations | 0 | ||
Fair value of Term Loan Credit Agreement | 0 | ||
Fair value of capitalized leases | 0 | ||
Fair value of pension and other post-retirement obligations, net of tax | 0 | ||
Change in net deferred tax liabilities from reorganization | 0 | ||
Fair value of Successor warrants | 0 | ||
Fair value of Successor common stock | $ 26 | ||
Per share value (usd per share) | $ 0.23 | ||
As Previously Reported | |||
Fresh-Start Adjustment [Line Items] | |||
Posconfirmation Assets, Fair Value | $ 4,951 | ||
Enterprise value | 5,721 | ||
Minimum cash required for operations | (120) | ||
Fair value of Term Loan Credit Agreement | (2,896) | ||
Fair value of capitalized leases | (20) | ||
Fair value of pension and other post-retirement obligations, net of tax | (856) | ||
Change in net deferred tax liabilities from reorganization | (510) | ||
Fair value of Successor warrants | (17) | ||
Fair value of Successor common stock | $ 1,642 | ||
Shares issued at December 15, 2017 (in shares) | 110,200,000 | 110,000,000 | |
Per share value (usd per share) | $ 14.93 | ||
As Previously Reported | Adjustments | |||
Fresh-Start Adjustment [Line Items] | |||
Shares issued at December 15, 2017 (in shares) | 0 |
Fresh Start Accounting - Ente50
Fresh Start Accounting - Enterprise Value To The Estimated Reorganization Value (Details) $ in Millions | Dec. 16, 2017USD ($) |
Enterprise value | $ 5,721 |
Plus: | |
Non-debt current liabilities | 955 |
Non-debt non-current liabilities | 2,090 |
Excess cash and cash equivalents | 246 |
Less: | |
Fair value of pension and other post-retirement obligations, net of tax | (856) |
Fair value of capitalized leases | (20) |
Change in net deferred tax liabilities from reorganization | (510) |
Fair value of Successor warrants | (17) |
Reorganization value of Successor assets | 7,609 |
As Previously Reported | |
Enterprise value | 5,721 |
Plus: | |
Non-debt current liabilities | 955 |
Non-debt non-current liabilities | 2,090 |
Excess cash and cash equivalents | 220 |
Less: | |
Fair value of pension and other post-retirement obligations, net of tax | (856) |
Fair value of capitalized leases | (20) |
Change in net deferred tax liabilities from reorganization | (510) |
Fair value of Successor warrants | (17) |
Reorganization value of Successor assets | 7,583 |
Adjustments | |
Enterprise value | 0 |
Plus: | |
Non-debt current liabilities | 0 |
Non-debt non-current liabilities | 0 |
Excess cash and cash equivalents | 26 |
Less: | |
Fair value of pension and other post-retirement obligations, net of tax | 0 |
Fair value of capitalized leases | 0 |
Change in net deferred tax liabilities from reorganization | 0 |
Fair value of Successor warrants | 0 |
Reorganization value of Successor assets | $ 26 |
Fresh Start Accounting - Fresh
Fresh Start Accounting - Fresh Start Accounting - Balance Sheet (Details) - USD ($) $ in Millions | Dec. 16, 2017 | Dec. 15, 2017 |
Postconfirmation, Current Assets [Abstract] | ||
Cash and cash equivalents | $ 366 | $ 340 |
Accounts receivable, net | 391 | 417 |
Inventory | 127 | 127 |
Other current assets | 242 | 242 |
TOTAL CURRENT ASSETS | 1,126 | 1,126 |
Property, plant and equipment, net | 310 | 310 |
Deferred income taxes, net | 31 | 31 |
Intangible assets, net | 3,435 | 3,435 |
Establish Successor Goodwill | 2,658 | 2,632 |
Other assets | 49 | 49 |
Reorganization value of Successor Company | 7,609 | 7,583 |
Postconfirmation, Current Liabilities [Abstract] | ||
Debt maturing within one year | 29 | 29 |
Postconfirmation, Accounts Payable | 276 | 276 |
Payroll and benefit obligations | 146 | 146 |
Deferred revenue | 336 | 336 |
Business restructuring reserve | 38 | 38 |
Other current liabilities | 159 | 159 |
TOTAL CURRENT LIABILITIES | 984 | 984 |
Long-term debt, net of current portion | 2,867 | 2,867 |
Pension obligations | 785 | 785 |
Other post-retirement obligations | 212 | 212 |
Deferred income taxes, net | 689 | 689 |
Business restructuring reserve | 34 | 34 |
Other liabilities | 370 | 370 |
TOTAL NON-CURRENT LIABILITIES | 4,957 | 4,957 |
TOTAL LIABILITIES | 5,941 | 5,941 |
Postconfirmation, Stockholders' Equity [Abstract] | ||
Common stock (Successor) | 1 | 1 |
Additional paid-in capital (Successor) | 1,667 | 1,641 |
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY | 1,668 | 1,642 |
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | 7,609 | 7,583 |
Discharge of Debt | ||
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract] | ||
Adjustments, cash and cash equivalents | (404) | |
Adjustments, other current assets | (58) | |
Adjustments, Total Current Assets | (462) | |
Adjustments, deferred income taxes, net | 48 | |
Adjustments, other assets | 6 | |
Adjustments, Total Assets | (408) | |
Fresh-Start Adjustment, Increase (Decrease), Current Liabilities [Abstract] | ||
Adjustments, debt maturing within one year | (696) | |
Adjustments, accounts payable | (49) | |
Adjustments, payroll and benefit obligations | 23 | |
Adjustments, deferred revenue | 50 | |
Adjustments, business restructuring reserve | 3 | |
Adjustments, other current liabilities | 65 | |
Adjustments, Total Current Liabilities | (604) | |
Adjustments, long-term debt, net of current portion | 2,771 | |
Adjustments, pension obligations | 246 | |
Adjustments, other post-retirement obligation | 212 | |
Adjustments, deferred revenue | 113 | |
Adjustments, business restructuring reserve | 4 | |
Adjustments, other liabilities | 233 | |
Adjustments, Total Non-Current Liabilities | 3,579 | |
Adjustments, Liabilities Subject To Compromise | (7,585) | |
Adjustments, Total Liabilities | (4,610) | |
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | ||
Adjustments, equity awards on redeemable shares | (6) | |
Adjustments, common stock | 1 | |
Adjustments, additional paid-in capital | 1,641 | |
Adjustments, (Accumulated deficit) retained earnings | 4,846 | |
Adjustments, accumulated other comprehensive (loss) income | 664 | |
Adjustments, Total Stockholders' Equity | 4,791 | |
Adjustments, Total Liabilities and Stockholders' (Deficit) Equity | (408) | |
Revaluation of Assets | ||
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract] | ||
Adjustments, accounts receivable, net | (106) | |
Adjustments, inventory | 29 | |
Adjustments, other current assets | (66) | |
Adjustments, Total Current Assets | (143) | |
Adjustments, property, plant and equipment | 116 | |
Adjustments, deferred income taxes, net | (17) | |
Adjustments, intangible assets, net | 3,137 | |
Adjustments, goodwill | (883) | |
Adjustments, other assets | (27) | |
Adjustments, Total Assets | 2,183 | |
Revaluation of Liabilities | ||
Fresh-Start Adjustment, Increase (Decrease), Current Liabilities [Abstract] | ||
Adjustments, deferred revenue | (341) | |
Adjustments, other current liabilities | (3) | |
Adjustments, Total Current Liabilities | (344) | |
Adjustments, long-term debt, net of current portion | 96 | |
Adjustments, deferred revenue | 548 | |
Adjustments, business restructuring reserve | 4 | |
Adjustments, other liabilities | (43) | |
Adjustments, Total Non-Current Liabilities | 605 | |
Adjustments, Total Liabilities | 261 | |
Exchange of Stock for Stock | ||
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | ||
Adjustments, (Accumulated deficit) retained earnings | 1,132 | |
Adjustments, accumulated other comprehensive (loss) income | 790 | |
Adjustments, Total Stockholders' Equity | 1,922 | |
Adjustments, Total Liabilities and Stockholders' (Deficit) Equity | 2,183 | |
As Previously Reported | ||
Preconfirmation, Current Assets [Abstract] | ||
Cash and cash equivalents | 744 | |
Accounts receivable, net | 523 | |
Inventory | 98 | |
Other current assets | 366 | |
TOTAL CURRENT ASSETS | 1,731 | |
Property, plant and equipment, net | 194 | |
Deferred income taxes, net | 0 | |
Intangible assets, net | 298 | |
Goodwill | 3,541 | |
Other assets | 70 | |
TOTAL ASSETS | 5,834 | |
Preconfirmation, Current Liabilities [Abstract] | ||
Debt maturing within one year | 725 | |
Accounts payable | 325 | |
Payroll and benefit obligations | 123 | |
Deferred revenue | 627 | |
Business restructuring reserve | 35 | |
Other current liabilities | 97 | |
TOTAL CURRENT LIABILITIES | 1,932 | |
Pension obligations | 539 | |
Other post-retirement obligations | 0 | |
Deferred income taxes, net | 28 | |
Business restructuring reserve | 26 | |
Other liabilities | 180 | |
TOTAL NON-CURRENT LIABILITIES | 773 | |
LIABILITIES SUBJECT TO COMPROMISE | 7,585 | |
TOTAL LIABILITIES | 10,290 | |
Equity awards on redeemable shares | 6 | |
Preconfirmation, Stockholders' Equity [Abstract] | ||
Additional paid-in capital (Predecessor) | 2,387 | |
(Accumulated deficit) retained earnings | (5,978) | |
Accumulated other comprehensive (loss) income | (1,454) | |
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY | (5,045) | |
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | 5,834 | |
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract] | ||
Adjustments, goodwill | (909) | |
Postconfirmation, Current Assets [Abstract] | ||
Establish Successor Goodwill | 2,632 | |
Reorganization value of Successor Company | 7,583 | |
Postconfirmation, Stockholders' Equity [Abstract] | ||
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY | 1,642 | |
As Previously Reported | Discharge of Debt | ||
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract] | ||
Adjustments, cash and cash equivalents | (404) | |
Adjustments, other current assets | (58) | |
Adjustments, Total Current Assets | (462) | |
Adjustments, deferred income taxes, net | 48 | |
Adjustments, other assets | 6 | |
Adjustments, Total Assets | (408) | |
Fresh-Start Adjustment, Increase (Decrease), Current Liabilities [Abstract] | ||
Adjustments, debt maturing within one year | (696) | |
Adjustments, accounts payable | (49) | |
Adjustments, payroll and benefit obligations | 23 | |
Adjustments, deferred revenue | 50 | |
Adjustments, business restructuring reserve | 3 | |
Adjustments, other current liabilities | 65 | |
Adjustments, Total Current Liabilities | (604) | |
Adjustments, long-term debt, net of current portion | 2,771 | |
Adjustments, pension obligations | 246 | |
Adjustments, other post-retirement obligation | 212 | |
Adjustments, deferred revenue | 113 | |
Adjustments, business restructuring reserve | 4 | |
Adjustments, other liabilities | 233 | |
Adjustments, Total Non-Current Liabilities | 3,579 | |
Adjustments, Liabilities Subject To Compromise | (7,585) | |
Adjustments, Total Liabilities | (4,610) | |
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | ||
Adjustments, equity awards on redeemable shares | (6) | |
Adjustments, common stock | 1 | |
Adjustments, additional paid-in capital | (2,387) | |
Adjustments, (Accumulated deficit) retained earnings | 4,872 | |
Adjustments, accumulated other comprehensive (loss) income | 664 | |
Adjustments, Total Stockholders' Equity | 4,791 | |
Adjustments, Total Liabilities and Stockholders' (Deficit) Equity | (408) | |
As Previously Reported | Revaluation of Assets | ||
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract] | ||
Adjustments, accounts receivable, net | (106) | |
Adjustments, inventory | 29 | |
Adjustments, other current assets | (66) | |
Adjustments, Total Current Assets | (143) | |
Adjustments, property, plant and equipment | 116 | |
Adjustments, deferred income taxes, net | (17) | |
Adjustments, intangible assets, net | 3,137 | |
Adjustments, goodwill | (909) | |
Adjustments, other assets | (27) | |
Adjustments, Total Assets | 2,157 | |
As Previously Reported | Revaluation of Liabilities | ||
Fresh-Start Adjustment, Increase (Decrease), Current Liabilities [Abstract] | ||
Adjustments, deferred revenue | (341) | |
Adjustments, other current liabilities | (3) | |
Adjustments, Total Current Liabilities | (344) | |
Adjustments, long-term debt, net of current portion | 96 | |
Adjustments, deferred revenue | 548 | |
Adjustments, business restructuring reserve | 4 | |
Adjustments, other liabilities | (43) | |
Adjustments, Total Non-Current Liabilities | 605 | |
Adjustments, Total Liabilities | 261 | |
As Previously Reported | Exchange of Stock for Stock | ||
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | ||
Adjustments, (Accumulated deficit) retained earnings | 1,106 | |
Adjustments, accumulated other comprehensive (loss) income | 790 | |
Adjustments, Total Stockholders' Equity | 1,896 | |
Adjustments, Total Liabilities and Stockholders' (Deficit) Equity | 2,157 | |
Predecessor | ||
Preconfirmation, Current Assets [Abstract] | ||
Cash and cash equivalents | 770 | |
Accounts receivable, net | 497 | |
Inventory | 98 | |
Other current assets | 366 | |
TOTAL CURRENT ASSETS | 1,731 | |
Property, plant and equipment, net | 194 | |
Deferred income taxes, net | 0 | |
Intangible assets, net | 298 | |
Goodwill | 3,541 | |
Other assets | 70 | |
TOTAL ASSETS | 5,834 | |
Preconfirmation, Current Liabilities [Abstract] | ||
Debt maturing within one year | 725 | |
Accounts payable | 325 | |
Payroll and benefit obligations | 123 | |
Deferred revenue | 627 | |
Business restructuring reserve | 35 | |
Other current liabilities | 97 | |
TOTAL CURRENT LIABILITIES | 1,932 | |
Pension obligations | 539 | |
Other post-retirement obligations | 0 | |
Deferred income taxes, net | 28 | |
Business restructuring reserve | 26 | |
Other liabilities | 180 | |
TOTAL NON-CURRENT LIABILITIES | 773 | |
LIABILITIES SUBJECT TO COMPROMISE | 7,585 | |
TOTAL LIABILITIES | 10,290 | |
Equity awards on redeemable shares | 6 | |
Preconfirmation, Stockholders' Equity [Abstract] | ||
Additional paid-in capital (Predecessor) | 2,387 | |
(Accumulated deficit) retained earnings | (5,978) | |
Accumulated other comprehensive (loss) income | (1,454) | |
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY | (5,045) | |
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | 5,834 | |
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract] | ||
Adjustments, goodwill | (883) | |
Predecessor | Discharge of Debt | ||
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | ||
Adjustments, additional paid-in capital | (2,387) | |
Predecessor | Revaluation of Assets | ||
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract] | ||
Adjustments, inventory | 29 | |
Adjustments, other current assets | (66) | |
Adjustments, property, plant and equipment | 116 | |
Adjustments, other assets | (27) | |
Predecessor | Revaluation of Liabilities | ||
Fresh-Start Adjustment, Increase (Decrease), Current Liabilities [Abstract] | ||
Adjustments, other current liabilities | (3) | |
Adjustments, long-term debt, net of current portion | 96 | |
Adjustments, business restructuring reserve | 4 | |
Adjustments, other liabilities | (43) | |
Predecessor | Exchange of Stock for Stock | ||
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | ||
Adjustments, accumulated other comprehensive (loss) income | 790 | |
Successor [Member] | Discharge of Debt | ||
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | ||
Adjustments, additional paid-in capital | 1,667 | |
Series B preferred stock | Discharge of Debt | ||
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | ||
Adjustments, preferred stock | (397) | |
Series B preferred stock | As Previously Reported | ||
Preconfirmation, Current Liabilities [Abstract] | ||
Preferred stock | 397 | |
Series B preferred stock | As Previously Reported | Discharge of Debt | ||
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | ||
Adjustments, preferred stock | (397) | |
Series B preferred stock | Predecessor | ||
Preconfirmation, Current Liabilities [Abstract] | ||
Preferred stock | 397 | |
Series A preferred stock | Discharge of Debt | ||
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | ||
Adjustments, preferred stock | (186) | |
Series A preferred stock | As Previously Reported | ||
Preconfirmation, Current Liabilities [Abstract] | ||
Preferred stock | 186 | |
Series A preferred stock | As Previously Reported | Discharge of Debt | ||
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | ||
Adjustments, preferred stock | (186) | |
Series A preferred stock | Predecessor | ||
Preconfirmation, Current Liabilities [Abstract] | ||
Preferred stock | 186 | |
Adjustments | ||
Preconfirmation, Current Assets [Abstract] | ||
Intangible assets, net | 0 | |
Goodwill | 0 | |
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract] | ||
Adjustments, goodwill | 26 | |
Postconfirmation, Current Assets [Abstract] | ||
Cash and cash equivalents | 26 | |
Accounts receivable, net | (26) | |
Inventory | 0 | |
Other current assets | 0 | |
TOTAL CURRENT ASSETS | 0 | |
Property, plant and equipment, net | 0 | |
Deferred income taxes, net | 0 | |
Intangible assets, net | 0 | |
Establish Successor Goodwill | 26 | |
Other assets | 0 | |
Reorganization value of Successor Company | 26 | |
Postconfirmation, Current Liabilities [Abstract] | ||
Debt maturing within one year | 0 | |
Postconfirmation, Accounts Payable | 0 | |
Payroll and benefit obligations | 0 | |
Deferred revenue | 0 | |
Business restructuring reserve | 0 | |
Other current liabilities | 0 | |
TOTAL CURRENT LIABILITIES | 0 | |
Long-term debt, net of current portion | 0 | |
Pension obligations | 0 | |
Other post-retirement obligations | 0 | |
Deferred income taxes, net | 0 | |
Business restructuring reserve | 0 | |
Other liabilities | 0 | |
TOTAL NON-CURRENT LIABILITIES | 0 | |
TOTAL LIABILITIES | 0 | |
Postconfirmation, Stockholders' Equity [Abstract] | ||
Common stock (Successor) | 0 | |
Additional paid-in capital (Successor) | 26 | |
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY | 26 | |
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | $ 26 | |
Adjustments | Discharge of Debt | ||
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract] | ||
Adjustments, cash and cash equivalents | 0 | |
Adjustments, other current assets | 0 | |
Adjustments, Total Current Assets | 0 | |
Adjustments, deferred income taxes, net | 0 | |
Adjustments, other assets | 0 | |
Adjustments, Total Assets | 0 | |
Fresh-Start Adjustment, Increase (Decrease), Current Liabilities [Abstract] | ||
Adjustments, debt maturing within one year | 0 | |
Adjustments, accounts payable | 0 | |
Adjustments, payroll and benefit obligations | 0 | |
Adjustments, deferred revenue | 0 | |
Adjustments, business restructuring reserve | 0 | |
Adjustments, other current liabilities | 0 | |
Adjustments, Total Current Liabilities | 0 | |
Adjustments, long-term debt, net of current portion | 0 | |
Adjustments, pension obligations | 0 | |
Adjustments, other post-retirement obligation | 0 | |
Adjustments, deferred revenue | 0 | |
Adjustments, business restructuring reserve | 0 | |
Adjustments, other liabilities | 0 | |
Adjustments, Total Non-Current Liabilities | 0 | |
Adjustments, Liabilities Subject To Compromise | 0 | |
Adjustments, Total Liabilities | 0 | |
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | ||
Adjustments, equity awards on redeemable shares | 0 | |
Adjustments, common stock | 0 | |
Adjustments, additional paid-in capital | 26 | |
Adjustments, (Accumulated deficit) retained earnings | (26) | |
Adjustments, accumulated other comprehensive (loss) income | 0 | |
Adjustments, Total Stockholders' Equity | 0 | |
Adjustments, Total Liabilities and Stockholders' (Deficit) Equity | 0 | |
Adjustments | Revaluation of Assets | ||
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract] | ||
Adjustments, accounts receivable, net | 0 | |
Adjustments, inventory | 0 | |
Adjustments, other current assets | 0 | |
Adjustments, Total Current Assets | 0 | |
Adjustments, property, plant and equipment | 0 | |
Adjustments, deferred income taxes, net | 0 | |
Adjustments, intangible assets, net | 0 | |
Adjustments, goodwill | 26 | |
Adjustments, other assets | 0 | |
Adjustments, Total Assets | 26 | |
Adjustments | Revaluation of Liabilities | ||
Fresh-Start Adjustment, Increase (Decrease), Current Liabilities [Abstract] | ||
Adjustments, deferred revenue | 0 | |
Adjustments, other current liabilities | 0 | |
Adjustments, Total Current Liabilities | 0 | |
Adjustments, long-term debt, net of current portion | 0 | |
Adjustments, deferred revenue | 0 | |
Adjustments, business restructuring reserve | 0 | |
Adjustments, other liabilities | 0 | |
Adjustments, Total Non-Current Liabilities | 0 | |
Adjustments, Total Liabilities | 0 | |
Adjustments | Exchange of Stock for Stock | ||
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | ||
Adjustments, (Accumulated deficit) retained earnings | 26 | |
Adjustments, accumulated other comprehensive (loss) income | 0 | |
Adjustments, Total Stockholders' Equity | 26 | |
Adjustments, Total Liabilities and Stockholders' (Deficit) Equity | 26 | |
Adjustments | Predecessor | ||
Preconfirmation, Current Assets [Abstract] | ||
Cash and cash equivalents | 26 | |
Accounts receivable, net | (26) | |
Inventory | 0 | |
Other current assets | 0 | |
TOTAL CURRENT ASSETS | 0 | |
Property, plant and equipment, net | 0 | |
Deferred income taxes, net | 0 | |
Intangible assets, net | 0 | |
Goodwill | 0 | |
Other assets | 0 | |
TOTAL ASSETS | 0 | |
Preconfirmation, Current Liabilities [Abstract] | ||
Debt maturing within one year | 0 | |
Accounts payable | 0 | |
Payroll and benefit obligations | 0 | |
Deferred revenue | 0 | |
Business restructuring reserve | 0 | |
Other current liabilities | 0 | |
TOTAL CURRENT LIABILITIES | 0 | |
Pension obligations | 0 | |
Other post-retirement obligations | 0 | |
Deferred income taxes, net | 0 | |
Business restructuring reserve | 0 | |
Other liabilities | 0 | |
TOTAL NON-CURRENT LIABILITIES | 0 | |
LIABILITIES SUBJECT TO COMPROMISE | 0 | |
TOTAL LIABILITIES | 0 | |
Equity awards on redeemable shares | 0 | |
Preconfirmation, Stockholders' Equity [Abstract] | ||
Additional paid-in capital (Predecessor) | 0 | |
(Accumulated deficit) retained earnings | 0 | |
Accumulated other comprehensive (loss) income | 0 | |
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY | 0 | |
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | 0 | |
Adjustments | Predecessor | Discharge of Debt | ||
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | ||
Adjustments, additional paid-in capital | 0 | |
Adjustments | Series B preferred stock | Discharge of Debt | ||
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | ||
Adjustments, preferred stock | 0 | |
Adjustments | Series B preferred stock | Predecessor | ||
Preconfirmation, Current Liabilities [Abstract] | ||
Preferred stock | 0 | |
Adjustments | Series A preferred stock | Discharge of Debt | ||
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | ||
Adjustments, preferred stock | 0 | |
Adjustments | Series A preferred stock | Predecessor | ||
Preconfirmation, Current Liabilities [Abstract] | ||
Preferred stock | $ 0 |
Fresh Start Accounting - Source
Fresh Start Accounting - Sources And Uses Of Cash (Details) - USD ($) $ in Millions | Dec. 15, 2017 | Jun. 30, 2018 |
Uses: | ||
Cash paid to PBGC | $ 0 | |
Funding payment for Avaya represented employee pension plan | 0 | |
Payment for general unsecured claims | $ 0 | |
Discharge of Debt | ||
Sources: | ||
Proceeds from Term Loan Credit Agreement, net of original issue discount | $ 2,896 | |
Release of restricted cash | 76 | |
Total sources of cash | 2,972 | |
Uses: | ||
Repayment of DIP Credit Agreement | (725) | |
Payment of DIP Credit Agreement accrued interest | (1) | |
Cash paid to Predecessor first lien debt-holders | (2,061) | |
Cash paid to PBGC | (340) | |
Payment for professional fees escrow account | (56) | |
Funding payment for Avaya represented employee pension plan | (49) | |
Payment of accrued professional & administrative fees | (27) | |
Costs incurred for Term Loan Credit Agreement and ABL Credit Agreement | (59) | |
Payment for general unsecured claims | (58) | |
Total uses of cash | (3,376) | |
Net uses of cash | $ (404) |
Fresh Start Accounting - Other
Fresh Start Accounting - Other Current Assets (Details) $ in Millions | Dec. 15, 2017USD ($) |
Discharge of Debt | |
Fresh-Start Adjustment [Line Items] | |
Fair value adjustment to Other assets | $ 6 |
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) |
Revaluation of Assets | |
Fresh-Start Adjustment [Line Items] | |
Fair value adjustment to Other assets | (27) |
Total other current assets | $ (66) |
Fresh Start Accounting - Othe54
Fresh Start Accounting - Other Current Liabilities (Details) - Discharge of Debt $ in Millions | Dec. 15, 2017USD ($) |
Fresh-Start Adjustment [Line Items] | |
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 |
Fresh Start Accounting - Exit F
Fresh Start Accounting - Exit Financing (Details) - USD ($) | Jun. 30, 2018 | Dec. 15, 2017 |
Fresh-Start Adjustment [Line Items] | ||
Debt face amount | $ 3,260,000,000 | |
Debt, Current | (29,000,000) | $ (29,000,000) |
Discharge of Debt | ||
Fresh-Start Adjustment [Line Items] | ||
Discount | (29,000,000) | |
Upfront and underwriting fees | (54,000,000) | |
Cash received upon emergence from bankruptcy | 2,842,000,000 | |
Reclassification of debt issuance cost incurred prior to emergence from bankruptcy | (42,000,000) | |
Long-term debt, net of current portion | 2,771,000,000 | |
Term Loan | ||
Fresh-Start Adjustment [Line Items] | ||
Debt face amount | $ 2,910,000,000 | |
Term Loan | Term Loan Credit Agreement due December 15, 2024 | ||
Fresh-Start Adjustment [Line Items] | ||
Debt face amount | $ 2,925,000,000 |
Fresh Start Accounting - Liabil
Fresh Start Accounting - Liabilities Subject to Compromise (Details) - USD ($) $ in Millions | Dec. 15, 2017 | Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Amounts reinstated: | ||||||
Liabilities subject to compromise | $ 0 | $ 0 | ||||
Payment of unsecured claims | $ 0 | |||||
Gain On Settlement of Liabilities Subject To Compromise [Abstract] | ||||||
Net gain on settlement of liabilities subject to compromise | (26) | $ 0 | $ 0 | |||
Discharge of Debt | ||||||
Less amounts settled per the Plan of Reorganization | ||||||
Pre-petition first lien debt | (4,281) | (4,281) | ||||
Pre-petition second lien debt | (1,440) | (1,440) | ||||
Avaya Pension Plan for Salaried Employees | (620) | (620) | ||||
Amounts reinstated: | ||||||
Accounts payable | (4) | (4) | ||||
Payroll and benefit obligations | (23) | (23) | ||||
Deferred revenue | (50) | (50) | ||||
Business restructuring reserves | (7) | (7) | ||||
Other current liabilities | (16) | (16) | ||||
Pension obligations | (295) | (295) | ||||
Other post-retirement obligations | (212) | (212) | ||||
Deferred income taxes, net | (118) | (118) | ||||
Other liabilities | (216) | (216) | ||||
Total liabilities reinstated at emergence | (941) | (941) | ||||
General unsecured credit claims | (303) | (303) | ||||
Payment of unsecured claims | 58 | |||||
As Previously Reported | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Liabilities subject to compromise | 7,585 | 7,585 | ||||
Gain On Settlement of Liabilities Subject To Compromise [Abstract] | ||||||
Pre-petition first lien debt | 734 | |||||
Pre-petition second lien debt | 1,357 | |||||
Avaya pension plan for salaried employees | (514) | |||||
General unsecured creditors' claims | 227 | |||||
Net gain on settlement of liabilities subject to compromise | 1,804 | |||||
Predecessor | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Liabilities subject to compromise | 7,585 | 7,585 | ||||
Amounts reinstated: | ||||||
Payment of unsecured claims | 58 | $ 0 | ||||
Gain On Settlement of Liabilities Subject To Compromise [Abstract] | ||||||
Pre-petition first lien debt | 711 | |||||
Pre-petition second lien debt | 1,356 | |||||
Avaya pension plan for salaried employees | (516) | |||||
General unsecured creditors' claims | 227 | |||||
Net gain on settlement of liabilities subject to compromise | 1,778 | $ 0 | $ 0 | |||
General Unsecured Creditor Reserve | ||||||
Amounts reinstated: | ||||||
Payment of unsecured claims | 58 | |||||
Adjustments | As Previously Reported | ||||||
Gain On Settlement of Liabilities Subject To Compromise [Abstract] | ||||||
Net gain on settlement of liabilities subject to compromise | (26) | |||||
Adjustments | Predecessor | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Liabilities subject to compromise | $ 0 | 0 | ||||
Gain On Settlement of Liabilities Subject To Compromise [Abstract] | ||||||
Pre-petition first lien debt | (23) | |||||
Pre-petition second lien debt | (1) | |||||
Avaya pension plan for salaried employees | (2) | |||||
General unsecured creditors' claims | 0 | |||||
Net gain on settlement of liabilities subject to compromise | $ (26) |
Fresh Start Accounting - Accumu
Fresh Start Accounting - Accumulated Deficit (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | |
Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Fresh-Start Adjustment [Line Items] | |||||
Net gain on settlement of liabilities subject to compromise | $ (26) | $ 0 | $ 0 | ||
Discharge of Debt | |||||
Fresh-Start Adjustment [Line Items] | |||||
Expense for certain professional fees | (26) | ||||
Benefit from income taxes | 118 | ||||
Cancellation of Predecessor equity awards | 6 | ||||
Cancellation of Predecessor Common stock | 2,387 | ||||
Total | 4,846 | ||||
Series B preferred stock | Discharge of Debt | |||||
Fresh-Start Adjustment [Line Items] | |||||
Cancellation of Predecessor Preferred stock | 397 | ||||
Series A preferred stock | Discharge of Debt | |||||
Fresh-Start Adjustment [Line Items] | |||||
Cancellation of Predecessor Preferred stock | 186 | ||||
As Previously Reported | |||||
Fresh-Start Adjustment [Line Items] | |||||
Net gain on settlement of liabilities subject to compromise | 1,804 | ||||
As Previously Reported | Discharge of Debt | |||||
Fresh-Start Adjustment [Line Items] | |||||
Expense for certain professional fees | (26) | ||||
Benefit from income taxes | 118 | ||||
Cancellation of Predecessor equity awards | 6 | ||||
Cancellation of Predecessor Common stock | 2,387 | ||||
Total | 4,872 | ||||
As Previously Reported | Series B preferred stock | Discharge of Debt | |||||
Fresh-Start Adjustment [Line Items] | |||||
Cancellation of Predecessor Preferred stock | 397 | ||||
As Previously Reported | Series A preferred stock | Discharge of Debt | |||||
Fresh-Start Adjustment [Line Items] | |||||
Cancellation of Predecessor Preferred stock | 186 | ||||
Predecessor | |||||
Fresh-Start Adjustment [Line Items] | |||||
Net gain on settlement of liabilities subject to compromise | 1,778 | $ 0 | $ 0 | ||
Adjustments | Discharge of Debt | |||||
Fresh-Start Adjustment [Line Items] | |||||
Expense for certain professional fees | 0 | ||||
Benefit from income taxes | 0 | ||||
Cancellation of Predecessor equity awards | 0 | ||||
Cancellation of Predecessor Common stock | 0 | ||||
Total | (26) | ||||
Adjustments | Series B preferred stock | Discharge of Debt | |||||
Fresh-Start Adjustment [Line Items] | |||||
Cancellation of Predecessor Preferred stock | 0 | ||||
Adjustments | Series A preferred stock | Discharge of Debt | |||||
Fresh-Start Adjustment [Line Items] | |||||
Cancellation of Predecessor Preferred stock | 0 | ||||
Adjustments | As Previously Reported | |||||
Fresh-Start Adjustment [Line Items] | |||||
Net gain on settlement of liabilities subject to compromise | (26) | ||||
Adjustments | Predecessor | |||||
Fresh-Start Adjustment [Line Items] | |||||
Net gain on settlement of liabilities subject to compromise | $ (26) |
Fresh Start Accounting - Proper
Fresh Start Accounting - Property, Plant and Equipment (Details) - USD ($) $ in Millions | Dec. 16, 2017 | Dec. 15, 2017 |
Fresh-Start Adjustment [Line Items] | ||
Total property, plant and equipment | $ 310 | |
Less: accumulated depreciation and amortization | 0 | |
Property, plant and equipment, net | $ 310 | 310 |
Buildings and improvements | ||
Fresh-Start Adjustment [Line Items] | ||
Total property, plant and equipment | 82 | |
Machinery and equipment | ||
Fresh-Start Adjustment [Line Items] | ||
Total property, plant and equipment | 38 | |
Rental equipment | ||
Fresh-Start Adjustment [Line Items] | ||
Total property, plant and equipment | 85 | |
Assets under construction | ||
Fresh-Start Adjustment [Line Items] | ||
Total property, plant and equipment | 13 | |
Internal use software | ||
Fresh-Start Adjustment [Line Items] | ||
Total property, plant and equipment | $ 92 |
Fresh Start Accounting - Intang
Fresh Start Accounting - Intangible Assets (Details) - USD ($) $ in Millions | Dec. 16, 2017 | Dec. 15, 2017 |
Fresh-Start Adjustment [Line Items] | ||
Establish Successor Intangible assets | $ 3,435 | $ 3,435 |
Revaluation of Assets | ||
Fresh-Start Adjustment [Line Items] | ||
Adjustments, intangible assets, net | 3,137 | |
Predecessor | ||
Fresh-Start Adjustment [Line Items] | ||
Intangible assets, net | 298 | |
Customer relationships and other intangibles | ||
Fresh-Start Adjustment [Line Items] | ||
Establish Successor Intangible assets | 2,155 | |
Customer relationships and other intangibles | Revaluation of Assets | ||
Fresh-Start Adjustment [Line Items] | ||
Adjustments, intangible assets, net | 2,059 | |
Customer relationships and other intangibles | Predecessor | ||
Fresh-Start Adjustment [Line Items] | ||
Intangible assets, net | 96 | |
Technology and patents | ||
Fresh-Start Adjustment [Line Items] | ||
Establish Successor Intangible assets | 905 | |
Technology and patents | Revaluation of Assets | ||
Fresh-Start Adjustment [Line Items] | ||
Adjustments, intangible assets, net | 893 | |
Technology and patents | Predecessor | ||
Fresh-Start Adjustment [Line Items] | ||
Intangible assets, net | 12 | |
Trademarks and trade names | Trademarks and trade names | ||
Fresh-Start Adjustment [Line Items] | ||
Establish Successor Intangible assets | $ 375 | |
Trademarks and trade names | Trademarks and trade names | Revaluation of Assets | ||
Fresh-Start Adjustment [Line Items] | ||
Adjustments, intangible assets, net | 185 | |
Trademarks and trade names | Trademarks and trade names | Predecessor | ||
Fresh-Start Adjustment [Line Items] | ||
Intangible assets, net | $ 190 |
Fresh Start Accounting - Goodwi
Fresh Start Accounting - Goodwill (Details) - USD ($) $ in Millions | Dec. 16, 2017 | Dec. 15, 2017 |
Reorganization value of Successor Company | $ 7,609 | $ 7,583 |
Less: Fair value of Successor Company assets | (4,951) | |
Reorganization value of Successor Company assets in excess of fair value - goodwill | 2,658 | $ 2,632 |
As Previously Reported | ||
Reorganization value of Successor Company | 7,583 | |
Less: Fair value of Successor Company assets | (4,951) | |
Reorganization value of Successor Company assets in excess of fair value - goodwill | 2,632 | |
Adjustments | ||
Reorganization value of Successor Company | 26 | |
Less: Fair value of Successor Company assets | 0 | |
Reorganization value of Successor Company assets in excess of fair value - goodwill | $ 26 |
Fresh Start Accounting - Fres61
Fresh Start Accounting - Fresh Start Adjustments (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | ||
Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 16, 2017 | |
Fresh-Start Adjustment [Line Items] | ||||||
Debtor Reorganization Items, Gain (Loss) on Settlement of Other Claims, Net | $ (26) | $ 0 | $ 0 | |||
Establish Successor Intangible assets | 3,435 | $ 3,435 | ||||
Establish Successor Goodwill | 2,632 | 2,658 | ||||
Fresh start adjustments included in Reorganization items, net | 26 | $ 0 | $ 0 | |||
Revaluation of Assets | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Fair value adjustment to Inventory | 29 | |||||
Fair value adjustment to Other current assets | (66) | |||||
Fair value adjustment to Property, plant and equipment | 116 | |||||
Fair value adjustment to Other assets | (27) | |||||
Revaluation of Liabilities | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Fair value adjustment to Business restructuring reserves | (4) | |||||
Fair value adjustment to Other current liabilities | 3 | |||||
Fair value adjustment to Long-term debt | (96) | |||||
Fair value adjustment to Other liabilities | 43 | |||||
Exchange of Stock for Stock | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Release Predecessor Accumulated comprehensive loss | (790) | |||||
Predecessor | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Debtor Reorganization Items, Gain (Loss) on Settlement of Other Claims, Net | 1,778 | $ 0 | $ 0 | |||
Eliminate Predecessor Intangible assets | (298) | |||||
Eliminate Predecessor Goodwill | (3,541) | |||||
Fresh start adjustments included in Reorganization items, net | 1,697 | $ 0 | $ 0 | |||
Tax impact of fresh start adjustments | (565) | |||||
Gain on fresh start accounting, net | 1,132 | |||||
Predecessor | Revaluation of Assets | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Fair value adjustment to Inventory | 29 | |||||
Fair value adjustment to Other current assets | (66) | |||||
Fair value adjustment to Property, plant and equipment | 116 | |||||
Fair value adjustment to Other assets | (27) | |||||
Predecessor | Revaluation of Liabilities | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Fair value adjustment to Deferred revenue | 235 | |||||
Fair value adjustment to Business restructuring reserves | (4) | |||||
Fair value adjustment to Other current liabilities | 3 | |||||
Fair value adjustment to Long-term debt | (96) | |||||
Fair value adjustment to Other liabilities | 43 | |||||
Predecessor | Exchange of Stock for Stock | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Release Predecessor Accumulated comprehensive loss | (790) | |||||
As Previously Reported | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Debtor Reorganization Items, Gain (Loss) on Settlement of Other Claims, Net | 1,804 | |||||
Eliminate Predecessor Intangible assets | (298) | |||||
Eliminate Predecessor Goodwill | (3,541) | |||||
Establish Successor Goodwill | 2,632 | |||||
Fresh start adjustments included in Reorganization items, net | 1,671 | |||||
Tax impact of fresh start adjustments | (565) | |||||
Gain on fresh start accounting, net | 1,106 | |||||
As Previously Reported | Revaluation of Assets | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Fair value adjustment to Inventory | 29 | |||||
Fair value adjustment to Other current assets | (66) | |||||
Fair value adjustment to Property, plant and equipment | 116 | |||||
Fair value adjustment to Other assets | (27) | |||||
As Previously Reported | Revaluation of Liabilities | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Fair value adjustment to Deferred revenue | 235 | |||||
Fair value adjustment to Business restructuring reserves | (4) | |||||
Fair value adjustment to Other current liabilities | 3 | |||||
Fair value adjustment to Long-term debt | (96) | |||||
Fair value adjustment to Other liabilities | 43 | |||||
As Previously Reported | Exchange of Stock for Stock | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Release Predecessor Accumulated comprehensive loss | (790) | |||||
Adjustments | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Eliminate Predecessor Intangible assets | 0 | |||||
Eliminate Predecessor Goodwill | 0 | |||||
Establish Successor Intangible assets | 0 | |||||
Establish Successor Goodwill | $ 26 | |||||
Fresh start adjustments included in Reorganization items, net | 26 | |||||
Tax impact of fresh start adjustments | 0 | |||||
Gain on fresh start accounting, net | 26 | |||||
Adjustments | Revaluation of Assets | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Fair value adjustment to Inventory | 0 | |||||
Fair value adjustment to Other current assets | 0 | |||||
Fair value adjustment to Property, plant and equipment | 0 | |||||
Fair value adjustment to Other assets | 0 | |||||
Adjustments | Revaluation of Liabilities | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Fair value adjustment to Deferred revenue | 0 | |||||
Fair value adjustment to Business restructuring reserves | 0 | |||||
Fair value adjustment to Other current liabilities | 0 | |||||
Fair value adjustment to Long-term debt | 0 | |||||
Fair value adjustment to Other liabilities | 0 | |||||
Adjustments | Exchange of Stock for Stock | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Release Predecessor Accumulated comprehensive loss | 0 | |||||
Adjustments | Predecessor | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Debtor Reorganization Items, Gain (Loss) on Settlement of Other Claims, Net | (26) | |||||
Eliminate Predecessor Intangible assets | 0 | |||||
Eliminate Predecessor Goodwill | 0 | |||||
Adjustments | As Previously Reported | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Debtor Reorganization Items, Gain (Loss) on Settlement of Other Claims, Net | $ (26) |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ in Millions | Mar. 09, 2018 | Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2018 | Dec. 16, 2017 | Dec. 15, 2017 |
Acquisition of businesses, net of cash acquired | $ 157 | |||||
Goodwill adjustment | 120 | |||||
Goodwill | $ 2,771 | 2,771 | $ 2,771 | $ 2,658 | $ 2,658 | |
Revenue | 692 | 1,512 | ||||
Operating loss | 49 | 136 | ||||
Compensation expense | 13 | |||||
Amortization of intangible assets | 83 | 178 | ||||
Spoken [Member] | ||||||
Acquisition price | $ 172 | |||||
Acquisition of businesses, net of cash acquired | 157 | |||||
Net payable to company in settlement of contingent consideration | 1 | |||||
Goodwill adjustment | 120 | |||||
Fair value of intangible assets acquired | 64 | |||||
Net liabilities acquired | 12 | |||||
Goodwill | 122 | |||||
Acquisition related costs | 3 | |||||
Compensation expense related to acquisition | 7 | |||||
Revenue | 4 | 5 | ||||
Operating loss | 12 | $ 19 | ||||
Compensation expense | 2 | |||||
Amortization of intangible assets | $ 3 | |||||
Technology-Based Intangible Assets [Member] | Spoken [Member] | ||||||
Fair value of intangible assets acquired | 56 | |||||
Customer Relationships And Other Intangibles [Member] | ||||||
Useful life of intangible assets | 14 years 22 days | |||||
Customer Relationships And Other Intangibles [Member] | Spoken [Member] | ||||||
Fair value of intangible assets acquired | 3 | |||||
Minimum | ||||||
Useful life of intangible assets | 1 year | |||||
Minimum | Customer Relationships And Other Intangibles [Member] | ||||||
Useful life of intangible assets | 1 year | |||||
Maximum | ||||||
Useful life of intangible assets | 19 years | |||||
Maximum | Technology-Based Intangible Assets [Member] | Spoken [Member] | ||||||
Useful life of intangible assets | 4 years 11 months | |||||
Maximum | Customer Relationships And Other Intangibles [Member] | ||||||
Useful life of intangible assets | 19 years | |||||
Maximum | Customer Relationships And Other Intangibles [Member] | Spoken [Member] | ||||||
Useful life of intangible assets | 7 years 6 months | |||||
Estimate of Fair Value Measurement [Member] | Spoken [Member] | ||||||
Contingent consideration | 14 | |||||
Former owners and employees [Member] | Spoken [Member] | ||||||
Contingent consideration | $ 16 | |||||
Performance targets | 3 | |||||
Spoken employees [Member] | Spoken [Member] | ||||||
Contingent consideration | $ 4 | |||||
In Process Research and Development | Spoken [Member] | ||||||
Fair value of intangible assets acquired | $ 5 |
Goodwill And Intangible Asset63
Goodwill And Intangible Assets - Goodwill (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | ||
Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Sep. 30, 2017 | |
Goodwill [Roll Forward] | ||||||
Goodwill, start | $ 2,658 | |||||
Goodwill adjustment | 120 | |||||
Impact of foreign currency fluctuations | $ (7) | |||||
Goodwill, end | 2,658 | $ 2,771 | 2,771 | |||
Goodwill impairment | 0 | 0 | ||||
Global Communications Solutions | ||||||
Goodwill [Roll Forward] | ||||||
Goodwill, start | 1,171 | |||||
Goodwill adjustment | 120 | |||||
Impact of foreign currency fluctuations | (3) | |||||
Goodwill, end | 1,171 | 1,288 | 1,288 | |||
Avaya Global Services | ||||||
Goodwill [Roll Forward] | ||||||
Goodwill, start | 1,487 | |||||
Goodwill adjustment | 0 | |||||
Impact of foreign currency fluctuations | (4) | |||||
Goodwill, end | 1,487 | $ 1,483 | 1,483 | |||
As Previously Reported | ||||||
Goodwill [Line Items] | ||||||
Cost | $ 5,170 | |||||
Accumulated impairment | (1,628) | |||||
Goodwill [Roll Forward] | ||||||
Goodwill, start | 3,542 | 2,632 | ||||
Adjustments | (1) | |||||
Impact of fresh start accounting | (909) | |||||
Goodwill, end | 2,632 | |||||
As Previously Reported | Global Communications Solutions | ||||||
Goodwill [Line Items] | ||||||
Cost | 2,669 | |||||
Accumulated impairment | (1,576) | |||||
Goodwill [Roll Forward] | ||||||
Goodwill, start | 1,093 | 1,160 | ||||
Adjustments | (1) | |||||
Impact of fresh start accounting | 68 | |||||
Goodwill, end | 1,160 | |||||
As Previously Reported | Avaya Global Services | ||||||
Goodwill [Line Items] | ||||||
Cost | 2,501 | |||||
Accumulated impairment | (52) | |||||
Goodwill [Roll Forward] | ||||||
Goodwill, start | 2,449 | 1,472 | ||||
Adjustments | 0 | |||||
Impact of fresh start accounting | (977) | |||||
Goodwill, end | 1,472 | |||||
Predecessor | ||||||
Goodwill [Roll Forward] | ||||||
Goodwill, start | 3,542 | 2,658 | ||||
Adjustments | (1) | |||||
Impact of fresh start accounting | (883) | |||||
Goodwill, end | 2,658 | |||||
Goodwill impairment | 0 | $ 52 | $ 52 | |||
Predecessor | Global Communications Solutions | ||||||
Goodwill [Roll Forward] | ||||||
Goodwill, start | 1,093 | 1,171 | ||||
Adjustments | (1) | |||||
Impact of fresh start accounting | 79 | |||||
Goodwill, end | 1,171 | |||||
Predecessor | Avaya Global Services | ||||||
Goodwill [Roll Forward] | ||||||
Goodwill, start | 2,449 | 1,487 | ||||
Adjustments | 0 | |||||
Impact of fresh start accounting | (962) | |||||
Goodwill, end | 1,487 | |||||
Adjustments | ||||||
Goodwill [Line Items] | ||||||
Cost | 0 | |||||
Accumulated impairment | 0 | |||||
Goodwill [Roll Forward] | ||||||
Goodwill, start | 0 | 26 | ||||
Adjustments | 0 | |||||
Impact of fresh start accounting | 26 | |||||
Goodwill, end | 26 | |||||
Adjustments | Global Communications Solutions | ||||||
Goodwill [Line Items] | ||||||
Cost | 0 | |||||
Accumulated impairment | 0 | |||||
Goodwill [Roll Forward] | ||||||
Goodwill, start | 0 | 11 | ||||
Adjustments | 0 | |||||
Impact of fresh start accounting | 11 | |||||
Goodwill, end | 11 | |||||
Adjustments | Avaya Global Services | ||||||
Goodwill [Line Items] | ||||||
Cost | 0 | |||||
Accumulated impairment | $ 0 | |||||
Goodwill [Roll Forward] | ||||||
Goodwill, start | 0 | $ 15 | ||||
Adjustments | 0 | |||||
Impact of fresh start accounting | 15 | |||||
Goodwill, end | $ 15 |
Goodwill And Intangible Asset64
Goodwill And Intangible Assets - Intangible Assets (Details) - USD ($) | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | |||
Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Sep. 30, 2017 | |
Finite-lived intangible assets: | |||||||
Finite-lived intangible assets | $ 3,159,000,000 | $ 3,159,000,000 | $ 3,159,000,000 | ||||
Accumulated Amortization | (178,000,000) | (178,000,000) | (178,000,000) | ||||
Total | 2,981,000,000 | 2,981,000,000 | 2,981,000,000 | ||||
Indefinite-lived intangible assets: | |||||||
Indefinite-lived intangible assets, net | 337,000,000 | 337,000,000 | 337,000,000 | ||||
Intangible assets, net | 3,318,000,000 | 3,318,000,000 | 3,318,000,000 | ||||
Intangible asset impairment | 0 | 0 | 0 | ||||
Amortization of intangible assets | 83,000,000 | 178,000,000 | |||||
Technology and patents | |||||||
Indefinite-lived intangible assets: | |||||||
Indefinite-lived intangible assets, net | 5,000,000 | 5,000,000 | 5,000,000 | ||||
Trademarks and trade names | |||||||
Indefinite-lived intangible assets: | |||||||
Indefinite-lived intangible assets, net | 332,000,000 | 332,000,000 | $ 332,000,000 | ||||
Technology and patents | |||||||
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items] | |||||||
Useful life of intangible assets | 5 years 1 month 29 days | ||||||
Finite-lived intangible assets: | |||||||
Finite-lived intangible assets | 960,000,000 | 960,000,000 | $ 960,000,000 | ||||
Accumulated Amortization | (92,000,000) | (92,000,000) | (92,000,000) | ||||
Total | 868,000,000 | 868,000,000 | $ 868,000,000 | ||||
Customer relationships and other intangibles | |||||||
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items] | |||||||
Useful life of intangible assets | 14 years 22 days | ||||||
Finite-lived intangible assets: | |||||||
Finite-lived intangible assets | 2,156,000,000 | 2,156,000,000 | $ 2,156,000,000 | ||||
Accumulated Amortization | (84,000,000) | (84,000,000) | (84,000,000) | ||||
Total | 2,072,000,000 | 2,072,000,000 | $ 2,072,000,000 | ||||
Trademarks and trade names | |||||||
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items] | |||||||
Useful life of intangible assets | 9 years 5 months 16 days | ||||||
Finite-lived intangible assets: | |||||||
Finite-lived intangible assets | 43,000,000 | 43,000,000 | $ 43,000,000 | ||||
Accumulated Amortization | (2,000,000) | (2,000,000) | (2,000,000) | ||||
Total | $ 41,000,000 | 41,000,000 | $ 41,000,000 | ||||
Minimum | |||||||
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items] | |||||||
Useful life of intangible assets | 1 year | ||||||
Minimum | Technology and patents | |||||||
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items] | |||||||
Useful life of intangible assets | 1 year | ||||||
Minimum | Customer relationships and other intangibles | |||||||
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items] | |||||||
Useful life of intangible assets | 1 year | ||||||
Maximum | |||||||
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items] | |||||||
Useful life of intangible assets | 19 years | ||||||
Maximum | Technology and patents | |||||||
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items] | |||||||
Useful life of intangible assets | 10 years | ||||||
Maximum | Customer relationships and other intangibles | |||||||
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items] | |||||||
Useful life of intangible assets | 19 years | ||||||
Maximum | Trademarks and trade names | |||||||
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items] | |||||||
Useful life of intangible assets | 10 years | ||||||
Predecessor | |||||||
Finite-lived intangible assets: | |||||||
Finite-lived intangible assets | $ 3,623,000,000 | ||||||
Accumulated Amortization | (3,502,000,000) | ||||||
Total | 121,000,000 | ||||||
Indefinite-lived intangible assets: | |||||||
Indefinite-lived intangible assets | 545,000,000 | ||||||
Accumulated Impairment | (355,000,000) | ||||||
Indefinite-lived intangible assets, net | 190,000,000 | ||||||
Intangible assets, net | 311,000,000 | ||||||
Intangible asset impairment | $ 0 | $ 65,000,000 | $ 65,000,000 | ||||
Amortization of intangible assets | $ 13,000,000 | 62,000,000 | 186,000,000 | ||||
Predecessor | Trademarks and trade names | |||||||
Indefinite-lived intangible assets: | |||||||
Indefinite-lived intangible assets | 545,000,000 | ||||||
Accumulated Impairment | (355,000,000) | ||||||
Indefinite-lived intangible assets, net | 190,000,000 | ||||||
Predecessor | Technology and patents | |||||||
Finite-lived intangible assets: | |||||||
Finite-lived intangible assets | 1,427,000,000 | ||||||
Accumulated Amortization | (1,411,000,000) | ||||||
Total | 16,000,000 | ||||||
Predecessor | Customer relationships and other intangibles | |||||||
Finite-lived intangible assets: | |||||||
Finite-lived intangible assets | 2,196,000,000 | ||||||
Accumulated Amortization | (2,091,000,000) | ||||||
Total | 105,000,000 | ||||||
Predecessor | Trademarks and trade names | |||||||
Finite-lived intangible assets: | |||||||
Finite-lived intangible assets | 0 | ||||||
Accumulated Amortization | 0 | ||||||
Total | 0 | ||||||
Technology and patents | |||||||
Indefinite-lived intangible assets: | |||||||
Intangible assets, net | $ 873,000,000 | 873,000,000 | $ 873,000,000 | ||||
Technology and patents | Predecessor | |||||||
Indefinite-lived intangible assets: | |||||||
Intangible assets, net | 16,000,000 | ||||||
Customer relationships and other intangibles | |||||||
Indefinite-lived intangible assets: | |||||||
Intangible assets, net | 2,072,000,000 | 2,072,000,000 | 2,072,000,000 | ||||
Customer relationships and other intangibles | Predecessor | |||||||
Indefinite-lived intangible assets: | |||||||
Intangible assets, net | 105,000,000 | ||||||
Trademarks and trade names | |||||||
Indefinite-lived intangible assets: | |||||||
Intangible assets, net | $ 373,000,000 | $ 373,000,000 | $ 373,000,000 | ||||
Trademarks and trade names | Predecessor | |||||||
Indefinite-lived intangible assets: | |||||||
Indefinite-lived intangible assets, net | 255,000,000 | 255,000,000 | |||||
Intangible assets, net | $ 190,000,000 | ||||||
Intangible asset fair value | $ 190,000,000 | $ 190,000,000 |
Goodwill And Intangible Asset65
Goodwill And Intangible Assets - Amortization Expense (Details) $ in Millions | Jun. 30, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of fiscal 2018 | $ 84 |
2,019 | 333 |
2,020 | 333 |
2,021 | 332 |
2,022 | 305 |
2023 and thereafter | 1,594 |
Total | $ 2,981 |
Supplementary Financial Infor66
Supplementary Financial Information (Other (Expense) Income, Net) (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | |
Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
OTHER INCOME (EXPENSE), NET | |||||
Interest income | $ 1 | $ 2 | |||
Foreign currency gains, net | 25 | 24 | |||
Income from TSA, net | 1 | 5 | |||
Change in fair value of Emergence Date Warrants | (6) | 9 | |||
Loss on disposal/sale of long-lived assets, net | 3 | ||||
Other, net | 0 | 0 | |||
Total other income (expense), net | 37 | 32 | |||
Predecessor | |||||
OTHER INCOME (EXPENSE), NET | |||||
Interest income | $ 2 | $ 1 | $ 2 | ||
Foreign currency gains, net | 0 | 2 | 1 | ||
Income from TSA, net | 3 | 0 | 0 | ||
Change in fair value of Emergence Date Warrants | 0 | 0 | 0 | ||
Loss on disposal/sale of long-lived assets, net | 1 | 0 | |||
Other, net | 1 | 0 | (1) | ||
Total other income (expense), net | (2) | (9) | (27) | ||
Other income (expense), net | |||||
OTHER INCOME (EXPENSE), NET | |||||
Loss on disposal/sale of long-lived assets, net | 0 | 0 | 0 | 1 | 0 |
Other income (expense), net | Accounting Standards Update 2017-07 [Member] | |||||
OTHER INCOME (EXPENSE), NET | |||||
Other pension and post-retirement benefit credits (costs), net | $ 4 | $ 9 | |||
Other income (expense), net | Accounting Standards Update 2017-07 [Member] | Predecessor | |||||
OTHER INCOME (EXPENSE), NET | |||||
Other pension and post-retirement benefit credits (costs), net | $ (8) | $ (12) | $ (29) |
Supplementary Financial Infor67
Supplementary Financial Information (Reorganization Items) (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | |
Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Supplementary Financial Information [Line Items] | |||||
Bankruptcy-related professional fees | $ 0 | $ 0 | $ 0 | ||
DIP Credit Agreement financing costs | 0 | 0 | 0 | ||
Contract rejection fees | 0 | 0 | |||
Net gain on settlement of liabilities subject to compromise | (26) | 0 | 0 | ||
Net gain on fresh start adjustments | 26 | 0 | 0 | ||
Other items, net | 0 | 0 | 0 | ||
Reorganization items, net | 0 | 0 | 0 | ||
Cash payments for reorganization items | 0 | $ 0 | $ 1 | ||
Predecessor | |||||
Supplementary Financial Information [Line Items] | |||||
Bankruptcy-related professional fees | (56) | $ (31) | $ (59) | ||
DIP Credit Agreement financing costs | 0 | 0 | (14) | ||
Contract rejection fees | 0 | (4) | (4) | ||
Net gain on settlement of liabilities subject to compromise | 1,778 | 0 | 0 | ||
Net gain on fresh start adjustments | 1,697 | 0 | 0 | ||
Other items, net | (3) | 0 | 0 | ||
Reorganization items, net | 3,416 | (35) | (77) | ||
Cash payments for reorganization items | 2,524 | $ 33 | $ 39 | ||
As Previously Reported | |||||
Supplementary Financial Information [Line Items] | |||||
Bankruptcy-related professional fees | (56) | ||||
DIP Credit Agreement financing costs | 0 | ||||
Net gain on settlement of liabilities subject to compromise | 1,804 | ||||
Net gain on fresh start adjustments | 1,671 | ||||
Other items, net | (3) | ||||
Reorganization items, net | 3,416 | ||||
Cash payments for reorganization items | $ 2,524 |
Supplementary Financial Infor68
Supplementary Financial Information (Narrative) (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | |
Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Supplementary Financial Information [Line Items] | |||||
Debtor Reorganization Items, Debtor-in-Possession Facility Financing Costs | $ 0 | $ 0 | $ 0 | ||
Predecessor | |||||
Supplementary Financial Information [Line Items] | |||||
Payments for liabilities subject to compromise | 2,468 | ||||
Payments for emergence and success fees | 56 | ||||
Debtor Reorganization Items, Debtor-in-Possession Facility Financing Costs | $ 0 | $ 0 | $ 14 |
Business Restructuring Reserv69
Business Restructuring Reserves And Programs - Restructuring Reserve (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | ||
Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Sep. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ (30) | $ (80) | ||||
Restructuring Reserve [Roll Forward] | ||||||
Liabilities subject to compromise | 0 | 0 | ||||
Fiscal 2018 Restructuring Program | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | (78) | |||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 9 | |||||
Cash payments | (26) | |||||
Impact of foreign currency fluctuations | (2) | |||||
Ending balance | $ 9 | 59 | 59 | |||
Fiscal 2017 Restructuring Program | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 3 | |||||
Cash payments | (1) | |||||
Ending balance | 3 | 2 | 2 | |||
Fiscal 2008-2016 Restructuring Programs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | (2) | |||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 60 | |||||
Cash payments | (14) | |||||
Impact of foreign currency fluctuations | 0 | |||||
Ending balance | 60 | 48 | 48 | |||
Employee Separation Costs | Fiscal 2018 Restructuring Program | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | (68) | |||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 9 | |||||
Cash payments | (16) | |||||
Impact of foreign currency fluctuations | (2) | |||||
Ending balance | 9 | 59 | 59 | |||
Employee Separation Costs | Fiscal 2017 Restructuring Program | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 3 | |||||
Cash payments | (1) | |||||
Ending balance | 3 | 2 | 2 | |||
Employee Separation Costs | Fiscal 2008-2016 Restructuring Programs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | (1) | |||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 53 | |||||
Cash payments | (12) | |||||
Impact of foreign currency fluctuations | 0 | |||||
Ending balance | 53 | 42 | 42 | |||
Lease Obligations | Fiscal 2018 Restructuring Program | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | (10) | |||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 0 | |||||
Cash payments | (10) | |||||
Impact of foreign currency fluctuations | 0 | |||||
Ending balance | 0 | 0 | 0 | |||
Lease Obligations | Fiscal 2017 Restructuring Program | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 0 | |||||
Cash payments | 0 | |||||
Ending balance | 0 | 0 | 0 | |||
Lease Obligations | Fiscal 2008-2016 Restructuring Programs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | (1) | |||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 7 | |||||
Cash payments | (2) | |||||
Impact of foreign currency fluctuations | 0 | |||||
Ending balance | 7 | $ 6 | 6 | |||
Predecessor | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | (14) | $ (8) | $ (22) | |||
Restructuring Reserve [Roll Forward] | ||||||
Liabilities subject to compromise | $ 7,705 | |||||
Predecessor | Fiscal 2018 Restructuring Program | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | (12) | |||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 9 | |||||
Cash payments | (3) | |||||
Ending balance | 9 | |||||
Predecessor | Fiscal 2017 Restructuring Program | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 5 | 3 | ||||
Cash payments | (2) | |||||
Ending balance | 3 | |||||
Predecessor | Fiscal 2008-2016 Restructuring Programs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | (2) | |||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 75 | 60 | ||||
Cash payments | (20) | |||||
Adjustments - fresh start and reorganization items | 3 | |||||
Ending balance | 60 | |||||
Liabilities subject to compromise | $ 11 | |||||
Predecessor | Employee Separation Costs | Fiscal 2018 Restructuring Program | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | (12) | |||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 9 | |||||
Cash payments | (3) | |||||
Ending balance | 9 | |||||
Predecessor | Employee Separation Costs | Fiscal 2017 Restructuring Program | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 4 | 3 | ||||
Cash payments | (1) | |||||
Ending balance | 3 | |||||
Predecessor | Employee Separation Costs | Fiscal 2008-2016 Restructuring Programs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | (1) | |||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 51 | 53 | ||||
Cash payments | (3) | |||||
Adjustments - fresh start and reorganization items | 4 | |||||
Ending balance | 53 | |||||
Predecessor | Lease Obligations | Fiscal 2018 Restructuring Program | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 0 | |||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 0 | |||||
Cash payments | 0 | |||||
Ending balance | 0 | |||||
Predecessor | Lease Obligations | Fiscal 2017 Restructuring Program | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 1 | 0 | ||||
Cash payments | (1) | |||||
Ending balance | 0 | |||||
Predecessor | Lease Obligations | Fiscal 2008-2016 Restructuring Programs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | (1) | |||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 24 | $ 7 | ||||
Cash payments | (17) | |||||
Adjustments - fresh start and reorganization items | (1) | |||||
Ending balance | $ 7 |
Financing Arrangements - Schedu
Financing Arrangements - Schedule of Debt (Details) - USD ($) | Jun. 30, 2018 | Jun. 11, 2018 | Dec. 15, 2017 | Sep. 30, 2017 |
Debt Instrument [Line Items] | ||||
Principal amount | $ 3,260,000,000 | |||
Net of discounts and issuance costs | 3,128,000,000 | |||
Debt maturing within one year | (29,000,000) | $ (29,000,000) | ||
Long-term debt, net of current portion | $ 3,099,000,000 | |||
7% senior secured notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 7.00% | |||
9% senior secured notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 9.00% | |||
10.50% senior secured notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 10.50% | |||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 2,910,000,000 | |||
Net of discounts and issuance costs | $ 2,876,000,000 | |||
Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 2.25% | 2.25% | ||
Principal amount | $ 350,000,000 | $ 350,000,000 | ||
Net of discounts and issuance costs | 252,000,000 | |||
DIP Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 0 | |||
Net of discounts and issuance costs | 0 | |||
First Lien Debt | Senior secured term B-3 loans | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 0 | |||
Net of discounts and issuance costs | 0 | |||
First Lien Debt | Senior secured term B-4 loans | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 0 | |||
Net of discounts and issuance costs | 0 | |||
First Lien Debt | Senior secured term B-6 loans | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 0 | |||
Net of discounts and issuance costs | 0 | |||
First Lien Debt | Senior secured term B-7 loans | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 0 | |||
Net of discounts and issuance costs | $ 0 | |||
First Lien Debt | 7% senior secured notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 7.00% | |||
Principal amount | $ 0 | |||
Net of discounts and issuance costs | $ 0 | |||
First Lien Debt | 9% senior secured notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 9.00% | |||
Principal amount | $ 0 | |||
Net of discounts and issuance costs | $ 0 | |||
Second Lien Debt | 10.50% senior secured notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 10.50% | |||
Principal amount | $ 0 | |||
Net of discounts and issuance costs | $ 0 | |||
Predecessor | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 6,557,000,000 | |||
Net of discounts and issuance costs | 6,557,000,000 | |||
Debt maturing within one year | (725,000,000) | |||
Long-term debt, net of current portion | 0 | |||
Predecessor | Senior secured term B-3 loans | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 594,000,000 | |||
Net of discounts and issuance costs | 594,000,000 | |||
Predecessor | Senior secured term B-4 loans | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 1,000,000 | |||
Net of discounts and issuance costs | 1,000,000 | |||
Predecessor | Senior secured term B-6 loans | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 519,000,000 | |||
Net of discounts and issuance costs | 519,000,000 | |||
Predecessor | Senior secured term B-7 loans | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 2,012,000,000 | |||
Net of discounts and issuance costs | 2,012,000,000 | |||
Predecessor | 7% senior secured notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 982,000,000 | |||
Net of discounts and issuance costs | 982,000,000 | |||
Predecessor | 9% senior secured notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 284,000,000 | |||
Net of discounts and issuance costs | 284,000,000 | |||
Predecessor | 10.50% senior secured notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 1,440,000,000 | |||
Net of discounts and issuance costs | 1,440,000,000 | |||
Predecessor | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 0 | |||
Net of discounts and issuance costs | 0 | |||
Predecessor | Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 0 | |||
Net of discounts and issuance costs | 0 | |||
Predecessor | DIP Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 725,000,000 | |||
Net of discounts and issuance costs | 725,000,000 | |||
Liabilities Subject To Compromise | Predecessor | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, net of current portion | $ 5,832,000,000 |
Financing Arrangements - Narrat
Financing Arrangements - Narrative (Details) $ / shares in Units, shares in Millions | Jun. 18, 2018 | Jun. 11, 2018USD ($)day$ / sharesshares | Dec. 15, 2017USD ($)$ / shares | Jan. 19, 2017USD ($) | Jun. 30, 2018USD ($)$ / shares | Jun. 30, 2018USD ($)$ / shares | Sep. 30, 2017USD ($) |
Debt Instrument [Line Items] | |||||||
Debt cancelled due to bankruptcy | $ 5,721,000,000 | ||||||
Debt face amount | $ 3,260,000,000 | $ 3,260,000,000 | |||||
Weighted average contractual interest rate of debt | 6.40% | 6.40% | |||||
Class of warrant or right, exercise price of warrants or rights (USD per share) | $ / shares | $ 25.55 | ||||||
Capital lease obligations | $ 15,000,000 | $ 15,000,000 | |||||
Affiliated Entity | |||||||
Debt Instrument [Line Items] | |||||||
Capital lease obligations | 14,000,000 | 14,000,000 | |||||
Predecessor | |||||||
Debt Instrument [Line Items] | |||||||
Debt face amount | $ 6,557,000,000 | ||||||
Capital lease obligations | 14,000,000 | ||||||
Liabilities subject to compromise, capital lease obligations and accrued interest | 12,000,000 | ||||||
Predecessor | Affiliated Entity | |||||||
Debt Instrument [Line Items] | |||||||
Capital lease obligations | 24,000,000 | ||||||
Liabilities subject to compromise, capital lease obligations and accrued interest | 10,000,000 | ||||||
First Lien Debt | |||||||
Debt Instrument [Line Items] | |||||||
Fair value of assets received by debt holders | $ 3,570,000,000 | ||||||
Debt cancelled due to bankruptcy | 4,281,000,000 | ||||||
Second Lien Debt | |||||||
Debt Instrument [Line Items] | |||||||
Fair value of assets received by debt holders | 84,000,000 | ||||||
Debt cancelled due to bankruptcy | 1,440,000,000 | ||||||
Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Debt face amount | 2,910,000,000 | 2,910,000,000 | |||||
Term Loan | Predecessor | |||||||
Debt Instrument [Line Items] | |||||||
Debt face amount | 0 | ||||||
Term Loan | Term Loan Credit Agreement due December 15, 2024 | |||||||
Debt Instrument [Line Items] | |||||||
Debt face amount | $ 2,925,000,000 | ||||||
Term Loan | Revolving Credit Facility | ABR Loans | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, stated percentage | 3.75% | ||||||
Term Loan | Revolving Credit Facility | ABR Loans | Federal Funds Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 0.50% | ||||||
Term Loan | Revolving Credit Facility | LIBOR Loans | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, stated percentage | 4.75% | ||||||
Term Loan | Revolving Credit Facility | LIBOR Loans | Federal Funds Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 0.50% | ||||||
Term Loan | Revolving Credit Facility | LIBOR Loans | Floor | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 0.00% | 1.00% | |||||
Term Loan | Revolving Credit Facility | LIBOR Loans | Alternative Base Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 3.25% | ||||||
Term Loan | Revolving Credit Facility | LIBOR Loans | LIBOR | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 4.25% | ||||||
Line of Credit | Revolving Credit Facility | ABL Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, current borrowing capacity | $ 300,000,000 | ||||||
Minimum fixed charge coverage ratio | 1 | ||||||
Minimum net borrowing availability | $ 25,000,000 | ||||||
Percent of total borrowing base | 10.00% | ||||||
Line of Credit | Revolving Credit Facility | Base Rate Loans | |||||||
Debt Instrument [Line Items] | |||||||
Step up or step down percentage | 0.25% | ||||||
Line of Credit | Revolving Credit Facility | Base Rate Loans | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, stated percentage | 0.75% | ||||||
Line of Credit | Revolving Credit Facility | Base Rate Loans | Federal Funds Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 0.50% | ||||||
Line of Credit | Revolving Credit Facility | LIBOR Loans Denominated In US Dollars | |||||||
Debt Instrument [Line Items] | |||||||
Step up or step down percentage | 0.25% | ||||||
Line of Credit | Revolving Credit Facility | LIBOR Loans Denominated In US Dollars | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, stated percentage | 1.75% | ||||||
Line of Credit | Revolving Credit Facility | Canadian Prime Rate Loans | |||||||
Debt Instrument [Line Items] | |||||||
Step up or step down percentage | 0.25% | ||||||
Line of Credit | Revolving Credit Facility | Canadian Prime Rate Loans | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, stated percentage | 0.75% | ||||||
Line of Credit | Revolving Credit Facility | CDOR Loans | |||||||
Debt Instrument [Line Items] | |||||||
Step up or step down percentage | 0.25% | ||||||
Line of Credit | Revolving Credit Facility | CDOR Loans | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, stated percentage | 1.75% | ||||||
Line of Credit | Revolving Credit Facility | LIBOR Loans Denominated In Sterling | |||||||
Debt Instrument [Line Items] | |||||||
Step up or step down percentage | 0.25% | ||||||
Line of Credit | Revolving Credit Facility | LIBOR Loans Denominated In Sterling | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, stated percentage | 1.75% | ||||||
Line of Credit | Revolving Credit Facility | EURIBOR Loans Denominated In Euro | |||||||
Debt Instrument [Line Items] | |||||||
Step up or step down percentage | 0.25% | ||||||
Line of Credit | Revolving Credit Facility | EURIBOR Loans Denominated In Euro | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, stated percentage | 1.75% | ||||||
Line of Credit | Revolving Credit Facility | Overnight LIBOR Loans | |||||||
Debt Instrument [Line Items] | |||||||
Step up or step down percentage | 0.25% | ||||||
Line of Credit | Revolving Credit Facility | Overnight LIBOR Loans | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, stated percentage | 1.75% | ||||||
Line of Credit | Letter of Credit | ABL Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Letters of credit, maximum amount | $ 150,000,000 | ||||||
Letters of credit outstanding | 48,000,000 | 48,000,000 | |||||
Letter of credit, remaining borrowing capacity | 195,000,000 | 195,000,000 | |||||
Convertible Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt face amount | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 | ||||
Interest rate, stated percentage | 2.25% | 2.25% | 2.25% | ||||
Proceeds from convertible debt | $ 314,000,000 | ||||||
Conversion ratio (shares per principal) | 36.0295 | ||||||
Conversion price (in usd per share) | $ / shares | $ 27.76 | ||||||
Redemption price | 100.00% | ||||||
Amount held | 25.00% | ||||||
Liability component of debt | $ 258,000,000 | ||||||
Equity component of debt | 92,000,000 | ||||||
Unamortized issuance costs | (10,000,000) | $ (7,000,000) | $ (7,000,000) | ||||
Interest expense on debt | 1,000,000 | ||||||
Convertible Notes | Predecessor | |||||||
Debt Instrument [Line Items] | |||||||
Debt face amount | 0 | ||||||
DIP Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Debt face amount | $ 0 | $ 0 | |||||
DIP Credit Agreement | Predecessor | |||||||
Debt Instrument [Line Items] | |||||||
Debt face amount | $ 725,000,000 | ||||||
DIP Credit Agreement | Base Rate Loans | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, stated percentage | 6.50% | ||||||
DIP Credit Agreement | Base Rate Loans | Federal Funds Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 0.50% | ||||||
DIP Credit Agreement | Base Rate Loans | Eurocurrency Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.00% | ||||||
DIP Credit Agreement | DIP Credit Agreement due January 19, 2018 | Predecessor | |||||||
Debt Instrument [Line Items] | |||||||
Letters of credit outstanding | $ 150,000,000 | ||||||
Liability component of debt | $ 725,000,000 | ||||||
Cash collateralization percent, US dollar | 101.50% | ||||||
Cash collateralization percent, alternative currencies | 103.00% | ||||||
DIP Credit Agreement | Eurocurrency Loans | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate, stated percentage | 7.50% | ||||||
DIP Credit Agreement | Eurocurrency Loans | Eurocurrency Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.00% | ||||||
Over-Allotment Option | Convertible Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt face amount | $ 50,000,000 | ||||||
Conversion Circumstance One | Convertible Notes | |||||||
Debt Instrument [Line Items] | |||||||
Trading days | day | 20 | ||||||
Consecutive trading days | day | 30 | ||||||
Conversion price threshold | 130.00% | ||||||
Conversion Circumstance Two | Convertible Notes | |||||||
Debt Instrument [Line Items] | |||||||
Consecutive trading days | day | 5 | ||||||
Conversion price threshold | 98.00% | ||||||
Business day threshold | 5 days | ||||||
Bond Hedge | |||||||
Debt Instrument [Line Items] | |||||||
Amount of shares hedged (in shares) | shares | 12.6 | ||||||
Purchase of convertible note bond hedge | $ 84,000,000 | ||||||
Bond hedge strike price (in usd per share) | $ / shares | $ 27.76 | ||||||
Bond Hedge And Call Spread Warrants | |||||||
Debt Instrument [Line Items] | |||||||
Conversion price (in usd per share) | $ / shares | $ 37.3625 | $ 37.3625 | |||||
Call Spread | |||||||
Debt Instrument [Line Items] | |||||||
Warrants issued (in shares) | shares | 12.6 | ||||||
Value of warrants | $ 58,000,000 | ||||||
Class of warrant or right, exercise price of warrants or rights (USD per share) | $ / shares | $ 37.3625 |
Financing Arrangements - Carryi
Financing Arrangements - Carrying Amount of Convertible Debt (Details) - USD ($) | Jun. 30, 2018 | Jun. 11, 2018 |
Debt Instrument [Line Items] | ||
Principal amount | $ 3,260,000,000 | |
Convertible Notes | ||
Debt Instrument [Line Items] | ||
Principal amount | 350,000,000 | $ 350,000,000 |
Unamortized debt discount | (91,000,000) | |
Unamortized issuance costs | (7,000,000) | $ (10,000,000) |
Net carrying amount | $ 252,000,000 |
Financing Arrangements - Equity
Financing Arrangements - Equity Component of Convertible Debt (Details) - Convertible Notes - USD ($) $ in Millions | Jun. 30, 2018 | Jun. 11, 2018 |
Debt Instrument [Line Items] | ||
Debt discount for conversion option | $ 92 | |
Issuance costs | $ (7) | $ (10) |
Net carrying amount | 252 | |
Convertible Debt, Equity Component | ||
Debt Instrument [Line Items] | ||
Debt discount for conversion option | 92 | |
Issuance costs | (3) | |
Net carrying amount | $ 89 |
Derivative Instruments and He74
Derivative Instruments and Hedging Activities - Narrative (Details) $ / shares in Units, shares in Millions, $ in Millions | May 16, 2018counterparty | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($)agreement | Dec. 15, 2017$ / sharesshares |
Class of Warrant or Right [Line Items] | ||||
Derivative, number of counterparties | counterparty | 6 | |||
Class of warrant or right, number of securities called by each warrant or right (in Shares) | shares | 5.6 | |||
Class of warrant or right, exercise price of warrants or rights (USD per share) | $ / shares | $ 25.55 | |||
Interest Rate Swap | ||||
Class of Warrant or Right [Line Items] | ||||
Derivative, fixed interest rate | 2.935% | |||
Derivative, number of instruments held | agreement | 6 | |||
Derivative, notional amount | $ 1,800 | |||
Scenario, Forecast | Interest Rate Swap | ||||
Class of Warrant or Right [Line Items] | ||||
Derivative instruments, loss reclassified from AOCI into net income | $ 10 |
Derivative Instruments and He75
Derivative Instruments and Hedging Activities - Assumptions Used (Details) - $ / shares | Dec. 15, 2017 | Dec. 15, 2017 | Jun. 30, 2018 |
Warrants | |||
Class of Warrant or Right [Line Items] | |||
Volatility | 54.38% | 50.96% | |
Risk-free rate | 2.20% | 2.68% | |
Expected remaining life (in years) | 5 years | 4 years 5 months 15 days | |
Stock price (USD per share) | $ 15.16 | $ 15.16 | $ 20.08 |
As Previously Reported | |||
Class of Warrant or Right [Line Items] | |||
Volatility | 54.57% | ||
Risk-free rate | 2.20% | ||
Expected remaining life (in years) | 5 years | ||
Stock price (USD per share) | $ 14.93 | $ 14.93 |
Derivative Instruments and He76
Derivative Instruments and Hedging Activities - Fair Value (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2017 |
Derivative [Line Items] | |||
Asset | $ 0 | ||
Liability | 42 | ||
Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Asset | 0 | ||
Liability | 16 | ||
Predecessor | |||
Derivative [Line Items] | |||
Asset | $ 0 | $ 0 | |
Liability | 0 | ||
Predecessor | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Asset | 0 | ||
Liability | 0 | ||
Other current liabilities | Designated as Hedging Instrument | Interest rate contracts | |||
Derivative [Line Items] | |||
Asset | 0 | ||
Liability | 11 | ||
Other current liabilities | Predecessor | Designated as Hedging Instrument | Interest rate contracts | |||
Derivative [Line Items] | |||
Asset | 0 | ||
Liability | 0 | ||
Other liabilities | Designated as Hedging Instrument | Interest rate contracts | |||
Derivative [Line Items] | |||
Asset | 0 | ||
Liability | 5 | ||
Other liabilities | Not Designated as Hedging Instrument | Emergence Date Warrants | |||
Derivative [Line Items] | |||
Asset | 0 | ||
Liability | $ 26 | ||
Other liabilities | Predecessor | Designated as Hedging Instrument | Interest rate contracts | |||
Derivative [Line Items] | |||
Asset | 0 | ||
Liability | 0 | ||
Other liabilities | Predecessor | Not Designated as Hedging Instrument | Emergence Date Warrants | |||
Derivative [Line Items] | |||
Asset | 0 | ||
Liability | $ 0 |
Derivative Instruments and He77
Derivative Instruments and Hedging Activities - Derivatives Designated as Cash Flow Hedges (Details) - Designated as Hedging Instrument - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended |
Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2018 | |
Interest Expense | |||
Derivative [Line Items] | |||
Financial Statement Line Item in which Cash Flow Hedges are Recorded | $ (56) | $ (112) | |
Impact of cash flow hedging relationships: | |||
Loss recognized in AOCI - on interest rate swaps | 0 | 0 | |
Interest expense reclassified from AOCI | (2) | (2) | |
Interest Expense | Predecessor | |||
Derivative [Line Items] | |||
Financial Statement Line Item in which Cash Flow Hedges are Recorded | $ (14) | ||
Impact of cash flow hedging relationships: | |||
Loss recognized in AOCI - on interest rate swaps | 0 | ||
Interest expense reclassified from AOCI | 0 | ||
Other Comprehensive Income (Loss) | |||
Derivative [Line Items] | |||
Financial Statement Line Item in which Cash Flow Hedges are Recorded | (16) | (41) | |
Impact of cash flow hedging relationships: | |||
Loss recognized in AOCI - on interest rate swaps | (17) | (17) | |
Interest expense reclassified from AOCI | $ 2 | $ 2 | |
Other Comprehensive Income (Loss) | Predecessor | |||
Derivative [Line Items] | |||
Financial Statement Line Item in which Cash Flow Hedges are Recorded | 658 | ||
Impact of cash flow hedging relationships: | |||
Loss recognized in AOCI - on interest rate swaps | 0 | ||
Interest expense reclassified from AOCI | $ 0 |
Derivative Instruments and He78
Derivative Instruments and Hedging Activities - Derivatives Not Designated as Hedging Instruments (Details) - Other income (expense), net - Not Designated as Hedging Instrument - Emergence Date Warrants - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended |
Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2018 | |
Derivative [Line Items] | |||
Pre-tax gain (loss) | $ 5.8 | $ (9) | |
Predecessor | |||
Derivative [Line Items] | |||
Pre-tax gain (loss) | $ 0 |
Derivative Instruments and He79
Derivative Instruments and Hedging Activities - Presented on a Net Basis (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2017 |
Asset | |||
Gross amounts recognized in the consolidated balance sheet | $ 0 | ||
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet | 0 | ||
Net amounts | 0 | ||
Liability | |||
Gross amounts recognized in the consolidated balance sheet | 42 | ||
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet | 0 | ||
Net amounts | $ 42 | ||
Predecessor | |||
Asset | |||
Gross amounts recognized in the consolidated balance sheet | $ 0 | $ 0 | |
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet | 0 | ||
Net amounts | 0 | ||
Liability | |||
Gross amounts recognized in the consolidated balance sheet | 0 | ||
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet | 0 | ||
Net amounts | $ 0 |
Fair Value Measures (Assets and
Fair Value Measures (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - Recurring - USD ($) $ in Millions | Jun. 30, 2018 | Sep. 30, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 2 | |
Fair value of warrant liability | 57 | |
Interest rate contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of warrant liability | 16 | |
Spoken acquisition Earn-outs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of warrant liability | 15 | |
Emergence Date Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of warrant liability | 26 | |
Quoted prices in active markets for identical instruments (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 2 | |
Fair value of warrant liability | 0 | |
Quoted prices in active markets for identical instruments (Level 1) | Interest rate contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of warrant liability | 0 | |
Quoted prices in active markets for identical instruments (Level 1) | Spoken acquisition Earn-outs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of warrant liability | 0 | |
Quoted prices in active markets for identical instruments (Level 1) | Emergence Date Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of warrant liability | 0 | |
Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | |
Fair value of warrant liability | 16 | |
Significant other observable inputs (Level 2) | Interest rate contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of warrant liability | 16 | |
Significant other observable inputs (Level 2) | Spoken acquisition Earn-outs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of warrant liability | 0 | |
Significant other observable inputs (Level 2) | Emergence Date Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of warrant liability | 0 | |
Unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | |
Fair value of warrant liability | 41 | |
Unobservable inputs (Level 3) | Interest rate contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of warrant liability | 0 | |
Unobservable inputs (Level 3) | Spoken acquisition Earn-outs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of warrant liability | 15 | |
Unobservable inputs (Level 3) | Emergence Date Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of warrant liability | $ 26 | |
Predecessor | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 1 | |
Predecessor | Quoted prices in active markets for identical instruments (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 1 | |
Predecessor | Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | |
Predecessor | Unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 0 |
Fair Value Measures Fair Value
Fair Value Measures Fair Value Measures (Level 3 Liabilities Measured at Fair Value on a Recurring Basis) (Details) - Unobservable inputs (Level 3) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 4 Months Ended |
Dec. 15, 2017 | Jun. 30, 2018 | Mar. 31, 2018 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Fair value of derivative liability, beginning balance | $ 46 | $ 17 | |
Contingent consideration | 14 | ||
Accretion of interest | 1 | ||
Change in fair value | (6) | 15 | |
Fair value of derivative liability, ending balance | $ 17 | 41 | 46 |
Predecessor | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Fair value of derivative liability, beginning balance | 0 | 17 | |
Issuance of Emergence Date Warrants | 17 | ||
Fair value of derivative liability, ending balance | 17 | ||
Emergence Date Warrants | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Fair value of derivative liability, beginning balance | 32 | 17 | |
Contingent consideration | 0 | ||
Accretion of interest | 0 | ||
Change in fair value | (6) | 15 | |
Fair value of derivative liability, ending balance | 17 | 26 | 32 |
Emergence Date Warrants | Predecessor | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Fair value of derivative liability, beginning balance | 0 | 17 | |
Issuance of Emergence Date Warrants | 17 | ||
Fair value of derivative liability, ending balance | 17 | ||
Spoken acquisition Earn-outs | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Fair value of derivative liability, beginning balance | 14 | 0 | |
Contingent consideration | 14 | ||
Accretion of interest | 1 | ||
Change in fair value | 0 | 0 | |
Fair value of derivative liability, ending balance | 0 | $ 15 | 14 |
Spoken acquisition Earn-outs | Predecessor | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Fair value of derivative liability, beginning balance | 0 | $ 0 | |
Issuance of Emergence Date Warrants | 0 | ||
Fair value of derivative liability, ending balance | $ 0 |
Fair Value Measures (Fair Value
Fair Value Measures (Fair Value of Financial Instruments) (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Sep. 30, 2017 |
Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | $ 3,260 | |
Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 3,261 | |
Term Loan Credit Agreement due December 15, 2024 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 2,910 | |
Term Loan Credit Agreement due December 15, 2024 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | $ 2,919 | |
Convertible 2.25% senior notes due June 15, 2023 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate, stated percentage | 2.25% | |
Convertible 2.25% senior notes due June 15, 2023 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | $ 350 | |
Convertible 2.25% senior notes due June 15, 2023 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 342 | |
DIP Credit Agreement due January 19, 2018 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 0 | |
DIP Credit Agreement due January 19, 2018 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 0 | |
Variable rate Term B-3 Loans due October 26, 2017 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 0 | |
Variable rate Term B-3 Loans due October 26, 2017 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 0 | |
Variable rate Term B-4 Loans due October 26, 2017 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 0 | |
Variable rate Term B-4 Loans due October 26, 2017 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 0 | |
Variable rate Term B-6 Loans due March 31, 2018 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 0 | |
Variable rate Term B-6 Loans due March 31, 2018 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 0 | |
Variable rate Term B-7 Loans due May 29, 2020 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 0 | |
Variable rate Term B-7 Loans due May 29, 2020 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | $ 0 | |
7% senior secured notes due April 1, 2019 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate, stated percentage | 7.00% | |
7% senior secured notes due April 1, 2019 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | $ 0 | |
7% senior secured notes due April 1, 2019 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | $ 0 | |
9% senior secured notes due April 1, 2019 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate, stated percentage | 9.00% | |
9% senior secured notes due April 1, 2019 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | $ 0 | |
9% senior secured notes due April 1, 2019 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | $ 0 | |
10.50% senior secured notes due March 1, 2021 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate, stated percentage | 10.50% | |
10.50% senior secured notes due March 1, 2021 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | $ 0 | |
10.50% senior secured notes due March 1, 2021 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | $ 0 | |
Predecessor | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | $ 6,557 | |
Predecessor | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 4,525 | |
Predecessor | Term Loan Credit Agreement due December 15, 2024 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 0 | |
Predecessor | Term Loan Credit Agreement due December 15, 2024 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 0 | |
Predecessor | Convertible 2.25% senior notes due June 15, 2023 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 0 | |
Predecessor | Convertible 2.25% senior notes due June 15, 2023 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 0 | |
Predecessor | DIP Credit Agreement due January 19, 2018 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 725 | |
Predecessor | DIP Credit Agreement due January 19, 2018 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 732 | |
Predecessor | Variable rate Term B-3 Loans due October 26, 2017 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 594 | |
Predecessor | Variable rate Term B-3 Loans due October 26, 2017 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 503 | |
Predecessor | Variable rate Term B-4 Loans due October 26, 2017 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 1 | |
Predecessor | Variable rate Term B-4 Loans due October 26, 2017 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 1 | |
Predecessor | Variable rate Term B-6 Loans due March 31, 2018 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 519 | |
Predecessor | Variable rate Term B-6 Loans due March 31, 2018 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 440 | |
Predecessor | Variable rate Term B-7 Loans due May 29, 2020 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 2,012 | |
Predecessor | Variable rate Term B-7 Loans due May 29, 2020 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 1,709 | |
Predecessor | 7% senior secured notes due April 1, 2019 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 982 | |
Predecessor | 7% senior secured notes due April 1, 2019 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 832 | |
Predecessor | 9% senior secured notes due April 1, 2019 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 284 | |
Predecessor | 9% senior secured notes due April 1, 2019 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 241 | |
Predecessor | 10.50% senior secured notes due March 1, 2021 | Principal Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 1,440 | |
Predecessor | 10.50% senior secured notes due March 1, 2021 | Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | $ 67 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 2 Months Ended | 7 Months Ended | 9 Months Ended | 10 Months Ended | 12 Months Ended |
Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | |
Income Tax [Line Items] | |||||
Operating loss carryforward, estimated utilization in remainder of fiscal year | $ 92 | ||||
Statutory tax rate | 35.00% | 35.00% | |||
Tax cuts and jobs act, change in tax rate, DTL, income tax benefit | $ 242 | ||||
Net Operating Loss And Tax Carryforwards And Other | |||||
Income Tax [Line Items] | |||||
Valuation allowance increase (decrease) | $ (787) | ||||
Deferred Tax Asset For Non-US Jurisdictions | |||||
Income Tax [Line Items] | |||||
Valuation allowance increase (decrease) | (47) | ||||
Fresh Start Accounting Adjustments | |||||
Income Tax [Line Items] | |||||
Valuation allowance increase (decrease) | $ (461) | ||||
Scenario, Forecast | |||||
Income Tax [Line Items] | |||||
Statutory tax rate | 21.00% | 24.50% |
Benefit Obligations - Schedule
Benefit Obligations - Schedule of Net Benefit Costs (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | |
Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Components of Net Periodic Benefit (Credit) Cost | |||||
Curtailment | $ 0 | ||||
Predecessor | |||||
Components of Net Periodic Benefit (Credit) Cost | |||||
Curtailment | $ 0 | $ (4) | |||
Other Postretirement Benefits Plan | |||||
Components of Net Periodic Benefit (Credit) Cost | |||||
Service cost | $ 1 | 1 | |||
Interest cost | 4 | 7 | |||
Expected return on plan assets | (3) | (5) | |||
Amortization of unrecognized prior service cost | 0 | 0 | |||
Amortization of previously unrecognized net actuarial loss | 0 | 0 | |||
Curtailment | 0 | 0 | |||
Net periodic benefit (credit) cost | 2 | 3 | |||
Other Postretirement Benefits Plan | Predecessor | |||||
Components of Net Periodic Benefit (Credit) Cost | |||||
Service cost | 0 | $ 0 | 1 | ||
Interest cost | 3 | 4 | 10 | ||
Expected return on plan assets | (2) | (2) | (7) | ||
Amortization of unrecognized prior service cost | (3) | (5) | (13) | ||
Amortization of previously unrecognized net actuarial loss | 2 | 3 | 9 | ||
Curtailment | 0 | 0 | (4) | ||
Net periodic benefit (credit) cost | 0 | 0 | (4) | ||
UNITED STATES | Pension Plan [Member] | |||||
Components of Net Periodic Benefit (Credit) Cost | |||||
Service cost | 1 | 2 | |||
Interest cost | 9 | 19 | |||
Expected return on plan assets | (17) | (35) | |||
Amortization of unrecognized prior service cost | 0 | 0 | |||
Amortization of previously unrecognized net actuarial loss | 0 | 0 | |||
Settlement loss(1) | 0 | 0 | |||
Net periodic benefit (credit) cost | (7) | (14) | |||
UNITED STATES | Pension Plan [Member] | Predecessor | |||||
Components of Net Periodic Benefit (Credit) Cost | |||||
Service cost | 1 | 1 | 3 | ||
Interest cost | 22 | 24 | 73 | ||
Expected return on plan assets | (38) | (44) | (134) | ||
Amortization of unrecognized prior service cost | 0 | 0 | 1 | ||
Amortization of previously unrecognized net actuarial loss | 20 | 26 | 77 | ||
Settlement loss(1) | 0 | 0 | 0 | ||
Net periodic benefit (credit) cost | 5 | 7 | 20 | ||
Foreign Plan | Pension Plan [Member] | |||||
Components of Net Periodic Benefit (Credit) Cost | |||||
Service cost | 1 | 3 | |||
Interest cost | 3 | 5 | |||
Expected return on plan assets | 0 | 0 | |||
Amortization of previously unrecognized net actuarial loss | 0 | 0 | |||
Net periodic benefit (credit) cost | $ 4 | $ 8 | |||
Foreign Plan | Pension Plan [Member] | Predecessor | |||||
Components of Net Periodic Benefit (Credit) Cost | |||||
Service cost | 2 | 1 | 5 | ||
Interest cost | 3 | 2 | 6 | ||
Expected return on plan assets | 0 | 0 | (1) | ||
Amortization of previously unrecognized net actuarial loss | 1 | 4 | 12 | ||
Net periodic benefit (credit) cost | $ 6 | $ 7 | $ 22 |
Benefit Obligations - Narrative
Benefit Obligations - Narrative (Details) - USD ($) shares in Millions | Dec. 15, 2017 | Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Defined Benefit Plan Disclosure [Line Items] | ||||||
Payment to PBGC | $ 0 | |||||
Net gain on settlement of Liabilities subject to compromise | $ 26,000,000 | $ 0 | 0 | |||
Expected future contributions to satisfy funding requirements, remainder of fiscal year | 20,000,000 | 20,000,000 | ||||
Avaya Inc. Pension Plan for Salaried Employees | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Payment to PBGC | $ 340,000,000 | |||||
Common stock issued for PBGC (in shares) | 6.1 | 6.1 | ||||
Common stock issued to Pension Benefit Guaranty Corporation | $ 92,000,000 | $ 92,000,000 | ||||
Plan termination increase (decrease) in benefit obligation | (2,192,000,000) | |||||
Plan termination increase (decrease) in plan assets | (1,573,000,000) | |||||
ASPP Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Plan termination increase (decrease) in benefit obligation | (88,000,000) | |||||
Net gain on settlement of Liabilities subject to compromise | (53,000,000) | |||||
Settlement consideration | 17,000,000 | |||||
APP And Other | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Plan termination increase (decrease) in benefit obligation | 3,000,000 | |||||
Pension Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Contributions by employer (less than $1 million) | 49,000,000 | |||||
Postemployment Retirement Benefits | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Expected future employer contributions, remainder of fiscal year (less than $1 million) | 3,000,000 | 3,000,000 | ||||
Postretirement Health Coverage [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Contributions by employer (less than $1 million) | 0 | 1,000,000 | ||||
Domestic Plan [Member] | Pension Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Contributions to satisfy minimum funding requirements | 0 | 22,000,000 | ||||
Foreign Plan | Pension Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Contributions by employer (less than $1 million) | 19,000,000 | |||||
Expected future employer contributions, remainder of fiscal year (less than $1 million) | 6,000,000 | 6,000,000 | ||||
Predecessor | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Payment to PBGC | 340,000,000 | $ 0 | ||||
Common stock issued to Pension Benefit Guaranty Corporation | 92,000,000 | 92,000,000 | ||||
Loss on settlement recorded in Reorganization items, net | 516,000,000 | |||||
Pension settlement | 721,000,000 | |||||
Net gain on settlement of Liabilities subject to compromise | (1,778,000,000) | $ 0 | $ 0 | |||
Predecessor | Postemployment Retirement Benefits | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Contributions by employer (less than $1 million) | 2,000,000 | 2,000,000 | ||||
Predecessor | Domestic Plan [Member] | Pension Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Contributions to satisfy minimum funding requirements | 0 | |||||
Predecessor | Foreign Plan | Pension Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Contributions by employer (less than $1 million) | 3,000,000 | |||||
Maximum | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Expected future employer contributions, remainder of fiscal year (less than $1 million) | $ 0 | $ 0 | ||||
Change in unamortized pension, postretirement and postemployment benefit-related items | Avaya Inc. Pension Plan for Salaried Employees | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Pension settlement | 703,000,000 | |||||
Change in unamortized pension, postretirement and postemployment benefit-related items | ASPP Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Pension settlement | $ 18,000,000 | |||||
Change in unamortized pension, postretirement and postemployment benefit-related items | Predecessor | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Pension settlement | $ 721,000,000 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) | Dec. 15, 2017 | Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation expense | $ 7,000,000 | $ 4,000,000 | $ 13,000,000 | $ 10,000,000 | ||
Predecessor | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Accelerated compensation cost | $ 3,000,000 | |||||
Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expiration period | 10 years | |||||
Dividend yield | 0.00% | |||||
2017 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Maximum number of shares authorized (shares) | 7,400,000 | 7,400,000 | ||||
Number of shares available for grant (shares) | 2,700,000 | 2,700,000 | ||||
2017 Equity Incentive Plan | Restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
RSUs granted (shares) | 3,440,528 | 400,000 | ||||
Options granted (shares) | 1,146,835 | 100,000 | ||||
Cancellations (in shares) | 291,725 | |||||
2017 Equity Incentive Plan | Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Cancellations (in shares) | 89,281 | |||||
2017 Equity Incentive Plan | Director | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Maximum award | $ 750,000 | $ 750,000 |
Share-Based Compensation - Assu
Share-Based Compensation - Assumptions (Details) - Stock options | 7 Months Ended |
Jun. 30, 2018$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility, minimum | 49.25% |
Expected volatility, maximum | 56.59% |
Risk-free interest rate, minimum | 2.35% |
Risk-free interest rate, maximum | 2.95% |
Dividend yield | 0.00% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ 19.46 |
Expected life (in years) | 5 years 10 months 10 days |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ 21.79 |
Expected life (in years) | 6 years 7 months 24 days |
Capital Stock (Details)
Capital Stock (Details) - $ / shares | Jun. 30, 2018 | Dec. 16, 2017 | Dec. 15, 2017 |
Class of Stock [Line Items] | |||
Preferred stock, shares authorized | 55,000,000 | ||
Preferred stock, par value (in usd per share) | $ 0.01 | ||
Preferred stock, shares issued | 0 | ||
Preferred stock, shares outstanding | 0 | ||
Common stock, shares authorized | 550,000,000 | ||
Common stock, par value (in usd per share) | $ 0.01 | ||
Common stock, shares issued | 110,160,835 | 110,000,000 | |
Common stock, share outstanding | 109,954,972 | ||
Common stock issued for GUC (in shares) | 200,000 | 200,000 | |
As Previously Reported | |||
Class of Stock [Line Items] | |||
Common stock, shares issued | 110,200,000 | 110,000,000 |
Earnings (Loss) Per Common Sh89
Earnings (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | |||
Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 16, 2017 | Sep. 30, 2017 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||
Common stock, shares issued | 110,160,835 | 110,160,835 | 110,000,000 | ||||
Common stock, share outstanding | 109,954,972 | 109,954,972 | |||||
Numerator | |||||||
Net income (loss) | $ (88) | $ 19 | |||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | (104) | (22) | |||||
Dividends to preferred stockholders | 0 | 0 | |||||
Undistributed earnings | $ (88) | $ 19 | |||||
Percentage allocated to common stockholders | 100.00% | 100.00% | |||||
Numerator for basic and diluted earnings per common share | $ (88) | $ 19 | |||||
Denominator | |||||||
Denominator for basic earnings per weighted average common shares (shares) | 109,800,000 | 109,800,000 | |||||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | |||||||
Warrants (shares) | 0 | 0 | |||||
Denominator for diluted earnings per weighted average common shares (shares) | 109,800,000 | 111,000,000 | |||||
Per common share net (loss) income | |||||||
Basic (USD per share) | $ (0.80) | $ 0.17 | |||||
Diluted (USD per share) | $ (0.80) | $ 0.17 | |||||
Basic (shares) | 109,800,000 | 109,800,000 | |||||
Basic weighted average common stock and common stock equivalents (preferred shares) | 109,800,000 | 109,800,000 | |||||
Predecessor | |||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||
Common stock, shares issued | 494,768,243 | ||||||
Common stock, share outstanding | 494,768,243 | ||||||
Numerator | |||||||
Net income (loss) | $ 2,977 | $ (98) | $ (209) | ||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | 4,425 | (117) | (173) | ||||
Dividends to preferred stockholders | (6) | (8) | (23) | ||||
Undistributed earnings | $ 2,971 | $ (106) | $ (232) | ||||
Percentage allocated to common stockholders | 86.90% | 100.00% | 100.00% | ||||
Numerator for basic and diluted earnings per common share | $ 2,582 | $ (106) | $ (232) | ||||
Denominator | |||||||
Denominator for basic earnings per weighted average common shares (shares) | 497,300,000 | 497,200,000 | 497,000,000 | ||||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | |||||||
Warrants (shares) | 0 | 0 | 0 | ||||
Denominator for diluted earnings per weighted average common shares (shares) | 497,300,000 | 497,200,000 | 497,000,000 | ||||
Per common share net (loss) income | |||||||
Basic (USD per share) | $ 5.19 | $ (0.22) | $ (0.47) | ||||
Diluted (USD per share) | $ 5.19 | $ (0.22) | $ (0.47) | ||||
Basic (shares) | 497,300,000 | 497,200,000 | 497,000,000 | ||||
Basic weighted average common stock and common stock equivalents (preferred shares) | 572,400,000 | 497,200,000 | 497,000,000 | ||||
Restricted stock units | |||||||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | |||||||
Share-based payment arrangements (shares) | 0 | 1,200,000 | |||||
Restricted stock units | Predecessor | |||||||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | |||||||
Share-based payment arrangements (shares) | 0 | 0 | 0 | ||||
Stock options | |||||||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | |||||||
Share-based payment arrangements (shares) | 0 | 0 | |||||
Stock options | Predecessor | |||||||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | |||||||
Share-based payment arrangements (shares) | 0 | 0 | 0 | ||||
Convertible Notes | |||||||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | |||||||
Share-based payment arrangements (shares) | 0 | 0 | |||||
Convertible Notes | Predecessor | |||||||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | |||||||
Share-based payment arrangements (shares) | 0 | 0 | 0 | ||||
Warrants | |||||||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | |||||||
Warrants (shares) | 0 | 0 | |||||
Warrants | Predecessor | |||||||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | |||||||
Warrants (shares) | 0 | 0 | 0 |
Earnings (Loss) Per Common Sh90
Earnings (Loss) Per Common Share Narrative (Details) - shares shares in Millions | 3 Months Ended | 7 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1.1 | 1.1 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 3.3 | |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5.6 | 5.6 |
Operating Segments (Details)
Operating Segments (Details) | Jul. 14, 2017segment | Jul. 13, 2017Segments | Dec. 15, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2018USD ($)segment | Jun. 30, 2017USD ($) |
Segment Reporting [Abstract] | ||||||||
Number of operating segments | 2 | 3 | 2 | |||||
Segment Reporting Information [Line Items] | ||||||||
REVENUE | $ 692,000,000 | $ 1,512,000,000 | ||||||
GROSS PROFIT | 352,000,000 | 753,000,000 | ||||||
Selling, general and administrative | 281,000,000 | 613,000,000 | ||||||
Research and development | 51,000,000 | 110,000,000 | ||||||
Amortization of intangible assets | 39,000,000 | 86,000,000 | ||||||
Intangible asset impairment | 0 | 0 | $ 0 | |||||
Goodwill impairment | 0 | 0 | ||||||
Restructuring charges, net | 30,000,000 | 80,000,000 | ||||||
TOTAL OPERATING EXPENSES | 401,000,000 | 889,000,000 | ||||||
OPERATING (LOSS) INCOME | (49,000,000) | (136,000,000) | ||||||
INTEREST EXPENSE, OTHER INCOME (EXPENSE), NET AND REORGANIZATION ITEMS, NET | (19,000,000) | (80,000,000) | ||||||
(LOSS) INCOME BEFORE INCOME TAXES | (68,000,000) | (216,000,000) | ||||||
Global Communications Solutions | ||||||||
Segment Reporting Information [Line Items] | ||||||||
REVENUE | 322,000,000 | 716,000,000 | ||||||
Networking | ||||||||
Segment Reporting Information [Line Items] | ||||||||
REVENUE | 0 | 0 | ||||||
Enterprise Collaboration Solutions | ||||||||
Segment Reporting Information [Line Items] | ||||||||
REVENUE | 322,000,000 | 716,000,000 | ||||||
Avaya Global Services | ||||||||
Segment Reporting Information [Line Items] | ||||||||
REVENUE | 433,000,000 | 967,000,000 | ||||||
Predecessor | ||||||||
Segment Reporting Information [Line Items] | ||||||||
REVENUE | $ 604,000,000 | $ 803,000,000 | $ 2,482,000,000 | |||||
GROSS PROFIT | 362,000,000 | 493,000,000 | 1,512,000,000 | |||||
Selling, general and administrative | 264,000,000 | 295,000,000 | 923,000,000 | |||||
Research and development | 38,000,000 | 59,000,000 | 178,000,000 | |||||
Amortization of intangible assets | 10,000,000 | 57,000,000 | 170,000,000 | |||||
Intangible asset impairment | 0 | 65,000,000 | 65,000,000 | |||||
Goodwill impairment | 0 | 52,000,000 | 52,000,000 | |||||
Restructuring charges, net | 14,000,000 | 8,000,000 | 22,000,000 | |||||
TOTAL OPERATING EXPENSES | 326,000,000 | 536,000,000 | 1,410,000,000 | |||||
OPERATING (LOSS) INCOME | 36,000,000 | (43,000,000) | 102,000,000 | |||||
INTEREST EXPENSE, OTHER INCOME (EXPENSE), NET AND REORGANIZATION ITEMS, NET | 3,400,000,000 | (61,000,000) | (333,000,000) | |||||
(LOSS) INCOME BEFORE INCOME TAXES | 3,436,000,000 | (104,000,000) | (231,000,000) | |||||
Predecessor | Global Communications Solutions | ||||||||
Segment Reporting Information [Line Items] | ||||||||
REVENUE | 253,000,000 | 302,000,000 | 957,000,000 | |||||
Predecessor | Networking | ||||||||
Segment Reporting Information [Line Items] | ||||||||
REVENUE | 0 | 43,000,000 | 137,000,000 | |||||
Predecessor | Enterprise Collaboration Solutions | ||||||||
Segment Reporting Information [Line Items] | ||||||||
REVENUE | 253,000,000 | 345,000,000 | 1,094,000,000 | |||||
Predecessor | Avaya Global Services | ||||||||
Segment Reporting Information [Line Items] | ||||||||
REVENUE | 351,000,000 | 458,000,000 | 1,388,000,000 | |||||
Operating Segments | Global Communications Solutions | ||||||||
Segment Reporting Information [Line Items] | ||||||||
GROSS PROFIT | 210,000,000 | 473,000,000 | ||||||
Operating Segments | Networking | ||||||||
Segment Reporting Information [Line Items] | ||||||||
GROSS PROFIT | 0 | 0 | ||||||
Operating Segments | Enterprise Collaboration Solutions | ||||||||
Segment Reporting Information [Line Items] | ||||||||
GROSS PROFIT | 210,000,000 | 473,000,000 | ||||||
Operating Segments | Avaya Global Services | ||||||||
Segment Reporting Information [Line Items] | ||||||||
GROSS PROFIT | 257,000,000 | 582,000,000 | ||||||
Operating Segments | Predecessor | Global Communications Solutions | ||||||||
Segment Reporting Information [Line Items] | ||||||||
GROSS PROFIT | 169,000,000 | 210,000,000 | 653,000,000 | |||||
Operating Segments | Predecessor | Networking | ||||||||
Segment Reporting Information [Line Items] | ||||||||
GROSS PROFIT | 0 | 14,000,000 | 47,000,000 | |||||
Operating Segments | Predecessor | Enterprise Collaboration Solutions | ||||||||
Segment Reporting Information [Line Items] | ||||||||
GROSS PROFIT | 169,000,000 | 224,000,000 | 700,000,000 | |||||
Operating Segments | Predecessor | Avaya Global Services | ||||||||
Segment Reporting Information [Line Items] | ||||||||
GROSS PROFIT | 196,000,000 | 274,000,000 | 828,000,000 | |||||
Unallocated Amounts | ||||||||
Segment Reporting Information [Line Items] | ||||||||
REVENUE | (63,000,000) | (171,000,000) | ||||||
GROSS PROFIT | $ (115,000,000) | $ (302,000,000) | ||||||
Unallocated Amounts | Predecessor | ||||||||
Segment Reporting Information [Line Items] | ||||||||
REVENUE | 0 | 0 | 0 | |||||
GROSS PROFIT | $ (3,000,000) | $ (5,000,000) | $ (16,000,000) |
Accumulated Other Comprehensi92
Accumulated Other Comprehensive Income (Loss) - Schedule of Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | Dec. 15, 2017 | Dec. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
AOCI Attributable to Parent, Net of Tax | ||||||
Beginning balance | $ 1,668 | |||||
Other comprehensive income (loss) before reclassifications | (46) | |||||
Elimination of Predecessor Company accumulated other comprehensive loss | $ 0 | 0 | ||||
Ending balance | $ 1,668 | $ 1,668 | 1,718 | 1,718 | ||
Accumulated Other Comprehensive Income (Loss) | ||||||
AOCI Attributable to Parent, Net of Tax | ||||||
Beginning balance | (25) | 0 | ||||
Other comprehensive income (loss) before reclassifications | (21) | |||||
Amounts reclassified to earnings | 2 | |||||
Provision for income taxes | 3 | |||||
Balance as of December 15, 2017 (Predecessor) | 0 | 0 | ||||
Ending balance | 0 | 0 | (41) | (41) | ||
Change in unamortized pension, postretirement and postemployment benefit-related items | ||||||
AOCI Attributable to Parent, Net of Tax | ||||||
Other comprehensive income (loss) before reclassifications | 0 | |||||
Balance as of December 15, 2017 (Predecessor) | 0 | 0 | ||||
Ending balance | 0 | 0 | ||||
Foreign Currency Translation | ||||||
AOCI Attributable to Parent, Net of Tax | ||||||
Beginning balance | (25) | |||||
Other comprehensive income (loss) before reclassifications | (4) | (29) | ||||
Amounts reclassified to earnings | 0 | |||||
Provision for income taxes | 0 | |||||
Balance as of December 15, 2017 (Predecessor) | 0 | 0 | ||||
Ending balance | (29) | (29) | ||||
Interest Rate Swaps | ||||||
AOCI Attributable to Parent, Net of Tax | ||||||
Beginning balance | 0 | |||||
Other comprehensive income (loss) before reclassifications | (17) | (17) | ||||
Amounts reclassified to earnings | 2 | |||||
Provision for income taxes | 3 | |||||
Balance as of December 15, 2017 (Predecessor) | 0 | 0 | ||||
Ending balance | (12) | (12) | ||||
Other | ||||||
AOCI Attributable to Parent, Net of Tax | ||||||
Other comprehensive income (loss) before reclassifications | 0 | |||||
Balance as of December 15, 2017 (Predecessor) | 0 | 0 | ||||
Ending balance | $ 0 | 0 | ||||
Predecessor | ||||||
AOCI Attributable to Parent, Net of Tax | ||||||
Beginning balance | (5,013) | $ (1,606) | 1,668 | $ (1,661) | ||
Other comprehensive income (loss) before reclassifications | (21) | (42) | (17) | |||
Amounts reclassified to earnings | 16 | 26 | 2 | 70 | ||
Pension settlement | 721 | |||||
Provision for income taxes | (58) | (3) | 3 | (17) | ||
Balance as of December 15, 2017 (Predecessor) | (1,380) | (1,380) | ||||
Elimination of Predecessor Company accumulated other comprehensive loss | 1,380 | 790 | 0 | 0 | ||
Ending balance | 1,668 | 1,668 | (1,625) | (1,625) | ||
Predecessor | Accumulated Other Comprehensive Income (Loss) | ||||||
AOCI Attributable to Parent, Net of Tax | ||||||
Beginning balance | (1,448) | 0 | ||||
Balance as of December 15, 2017 (Predecessor) | (790) | (790) | ||||
Elimination of Predecessor Company accumulated other comprehensive loss | 790 | |||||
Ending balance | 0 | 0 | ||||
Predecessor | Change in unamortized pension, postretirement and postemployment benefit-related items | ||||||
AOCI Attributable to Parent, Net of Tax | ||||||
Beginning balance | (1,375) | (1,598) | 0 | (1,627) | ||
Other comprehensive income (loss) before reclassifications | (24) | 0 | 0 | |||
Amounts reclassified to earnings | 16 | 26 | 0 | 70 | ||
Pension settlement | 721 | |||||
Provision for income taxes | (58) | (1) | 0 | (16) | ||
Balance as of December 15, 2017 (Predecessor) | (720) | (720) | ||||
Elimination of Predecessor Company accumulated other comprehensive loss | 720 | |||||
Ending balance | 0 | 0 | (1,573) | (1,573) | ||
Predecessor | Foreign Currency Translation | ||||||
AOCI Attributable to Parent, Net of Tax | ||||||
Beginning balance | (72) | (7) | 0 | (33) | ||
Other comprehensive income (loss) before reclassifications | 3 | (42) | (17) | |||
Amounts reclassified to earnings | 0 | 0 | 0 | 0 | ||
Pension settlement | 0 | |||||
Provision for income taxes | 0 | (2) | 0 | (1) | ||
Balance as of December 15, 2017 (Predecessor) | (69) | (69) | ||||
Elimination of Predecessor Company accumulated other comprehensive loss | 69 | |||||
Ending balance | 0 | 0 | (51) | (51) | ||
Predecessor | Interest Rate Swaps | ||||||
AOCI Attributable to Parent, Net of Tax | ||||||
Beginning balance | 0 | 0 | ||||
Other comprehensive income (loss) before reclassifications | 0 | |||||
Amounts reclassified to earnings | 0 | 2 | ||||
Pension settlement | 0 | |||||
Provision for income taxes | 0 | 3 | ||||
Balance as of December 15, 2017 (Predecessor) | 0 | 0 | ||||
Elimination of Predecessor Company accumulated other comprehensive loss | 0 | |||||
Ending balance | 0 | 0 | ||||
Predecessor | Other | ||||||
AOCI Attributable to Parent, Net of Tax | ||||||
Beginning balance | (1) | (1) | 0 | (1) | ||
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | |||
Amounts reclassified to earnings | 0 | 0 | 0 | 0 | ||
Pension settlement | 0 | |||||
Provision for income taxes | 0 | 0 | $ 0 | 0 | ||
Balance as of December 15, 2017 (Predecessor) | (1) | (1) | ||||
Elimination of Predecessor Company accumulated other comprehensive loss | 1 | |||||
Ending balance | $ 0 | $ 0 | $ (1) | $ (1) |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Millions | 2 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 15, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2018director | Sep. 30, 2017USD ($) | |
Related Party Transaction [Line Items] | ||||
Number of directors on the Successor Company's Board of Directors | director | 7 | |||
Number of non-employee directors on the Successor Company's Board of Directors | director | 6 | |||
Senior Vice President | Purchased goods and services from Koopid, Inc. | ||||
Related Party Transaction [Line Items] | ||||
Purchases from related party (less than) | $ 1 | |||
Director | Sales of products and services to AIG | ||||
Related Party Transaction [Line Items] | ||||
Sales to related party (less than) | 5 | |||
Chair of the Board of Directors | Purchased goods and services from Flex Ltd. | ||||
Related Party Transaction [Line Items] | ||||
Purchases from related party (less than) | $ 13 | |||
Predecessor | Director | Sales of products and services to AIG | ||||
Related Party Transaction [Line Items] | ||||
Sales to related party (less than) | $ 2 | |||
Predecessor | Chair of the Board of Directors | Purchased goods and services from Flex Ltd. | ||||
Related Party Transaction [Line Items] | ||||
Purchases from related party (less than) | 6 | $ 38 | ||
Predecessor | Affiliated Entity | Stockholders' agreement, registration rights agreement and management services agreement | ||||
Related Party Transaction [Line Items] | ||||
Expenses from transactions with related party (less than) | $ 0 |
Commitments And Contingencies -
Commitments And Contingencies - Narrative (Details) | Sep. 30, 2016claim | Nov. 10, 2014USD ($) | Sep. 30, 2014USD ($) | Mar. 27, 2014USD ($)claim | Sep. 30, 2016USD ($) | Dec. 15, 2017USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Jun. 12, 2018USD ($) | Sep. 30, 2017USD ($) | Jan. 31, 2017claim | Feb. 22, 2016USD ($) | Oct. 23, 2014USD ($) |
Loss Contingencies [Line Items] | ||||||||||||||
Legal fees | $ 0 | |||||||||||||
Product warranty maximum duration | 2 years | |||||||||||||
Maximum potential payment obligation with regards to letters of credit, guarantees and surety bonds | 63,000,000 | $ 63,000,000 | ||||||||||||
Warranty accrual | 2,000,000 | 2,000,000 | ||||||||||||
Cash awards | 0 | |||||||||||||
Compensation expense | 0 | |||||||||||||
Lending institutions | Indemnification agreement | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Loss contingency accrual, payments | 0 | |||||||||||||
Loss contingency accrual | 0 | 0 | ||||||||||||
Nokia | Indemnification agreement | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Estimate of possible loss | 50,000,000 | 50,000,000 | ||||||||||||
Letter of Credit | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Cash collateral | $ 4,000,000 | $ 4,000,000 | ||||||||||||
Antitrust Litigation | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Number of claims settled | claim | 2 | |||||||||||||
Number of pending claims | claim | 8 | |||||||||||||
Damages awarded, value | $ 20,000,000 | |||||||||||||
Damages awarded, value trebled | 60,000,000 | |||||||||||||
Amount awarded to other party | $ 71,000,000 | $ 63,000,000 | ||||||||||||
Prejudgment interest | $ 3,000,000 | |||||||||||||
Bond posted | $ 8,000,000 | $ 63,000,000 | ||||||||||||
Damages sought, value | $ 61,000,000 | |||||||||||||
Number of reinstated claims | claim | 4 | |||||||||||||
Number of vacated claim | claim | 2 | |||||||||||||
Patent Infringement Case Filed By BlackBerry Limited | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Number of pending claims | claim | 2 | |||||||||||||
Misappropriations Claim [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Estimated Litigation Liability | $ 1,000,000 | |||||||||||||
Fraud Claim [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Estimated Litigation Liability | $ 0 | |||||||||||||
Predecessor | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Legal fees | $ 37,000,000 | $ 0 | ||||||||||||
Warranty accrual | $ 2,000,000 |
Uncategorized Items - cik000111
Label | Element | Value |
Additional Paid-in Capital [Member] | Predecessor [Member] | ||
Cancellation Of Predecessor Equity | cik0001116521_CancellationOfPredecessorEquity | $ 2,387,000,000 |
Common Stock [Member] | Predecessor [Member] | ||
Cancellation Of Predecessor Equity, Shares | cik0001116521_CancellationOfPredecessorEquityShares | 494,800,000 |
Retained Earnings [Member] | Predecessor [Member] | ||
Cancellation Of Predecessor Equity | cik0001116521_CancellationOfPredecessorEquity | $ (2,977,000,000) |