UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

The number of shares of the Registrant’s Common Stock, outstanding as of July 31, 2015April 30, 2016 was 309,792,980.279,217,323.

 

We have made no materialother changes to the significant accounting policies disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2014.2015.

Recently Issued Accounting Standards

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board and are adopted by us as of the specified effective dates. Unless otherwise discussed, such pronouncements did not have or will not have a significant impact on our condensed consolidated financial position, results of operations and cash flows or do not apply to our operations.

In April 2015,March 2016, the Financial Accounting Standards Board (FASB)("FASB") issued ASU No. 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting Standards Update (ASU)("ASU 2016-09"), which is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of

In April 2015, the FASB issued ASU No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs" ("ASU 2015-03"). The amendments in the ASU 2015-03 require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for us in the first quarter of fiscal year 2017, with early adoption permitted. ASU 2015-03 should be applied on a retrospective basis to each individual period presented. Upon implementation, the change in reporting debt issuance costs will require us to reclassify our deferred financing costs, which are $20.9 million and $15.7 million at March 31, 2016 and September 30, 2015, respectively, from an asset to a reduction of the reported debt balance. ASU 2015-03 will reduce our assets and liabilities but will have no impact on our shareholders' equity, results of operations or cash flows.

In February 2015, the FASB issued Accounting Standards Update No. 2015-02, “Amendments to the Consolidation Analysis” ("ASU 2015-02"). The amendments in ASU 2015-02 provide guidance on evaluating whether a company should consolidate certain legal entities. In accordance with the guidance, all legal entities are subject to reevaluation under the revised consolidation model. ASU 2015-02 is effective for us in the first quarter of fiscal year 2017 with early adoption permitted. We do not believe that ASU 2015-02 will have a material impact on our consolidated financial statements.

In August 2014, the FASB issued Accounting Standards Update No. 2014-15, "Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern" ("ASU 2014-15"), to provide guidance on management's responsibility in evaluating whether there is substantial doubt about a company's ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for us in the first quarter of fiscal year 2017, with early adoption permitted. We do not believe that ASU 2014-15 will have a material impact on our consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, "Revenue from Contracts with Customers: Topic 606" ("ASU 2014-09"), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for us in our first quarter of fiscal year 20182019 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements.

As part of our business strategy, we may acquire certain businesses and technologies primarily to expand our products and service offerings. Acquisitions of such businesses and technologies in fiscal years 2016 and 2015 have not been significant individually or in the aggregate. During fiscal year 2016, we completed a business acquisition in our Healthcare segment for total cash consideration of $27.3 million. During fiscal year 2015, we acquired several immaterial businessescompleted a business acquisition in our Mobile and Consumer and Healthcare segmentssegment for total initial cash consideration of $47.9 million together with future contingent payments.$47.6 million. The future contingent payments may require us to make payments up to $19.9 million as additional consideration contingent upon the achievementresults of specified objectives, which at closing had an estimated fair value of $16.1 million. In allocating the total purchase consideration for these acquisitions based on preliminary estimated fair values, we recorded $22.6 million of goodwill and $35.8 million of identifiable intangibles assets. Intangible assets acquired included customer relationships and core and completed technology with weighted average useful lives of 6.6 years. The most significantoperations of these acquisitions are treated as asset purchases, and the goodwill resulting from these acquisitions is expected to be deductible for tax purposes.have been included in our financial results since their respective acquisition dates.

WePro forma results of operations have not furnished pro forma financial information relatedbeen presented because the effects of these business combinations, individually and in aggregate, were not material to our current year acquisitions because such information is not material, individually or in the aggregate, to ourconsolidated financial results.

Acquisition-related costs include costs related to business and other acquisitions, including potential acquisitions. These costs consist of (i) transition and integration costs, including retention payments, transitional employee costs and earn-out payments treated as compensation expense, as well as the costs of integration-related activities including services provided by third-parties; (ii) professional service fees, including third party costs related to the acquisitions, and legal and other professional service fees associated with disputes and regulatory matters related to acquired entities; and (iii) adjustments to acquisition-related items that are required to be marked to fair value each reporting period, such as contingent consideration, and other items related to acquisitions for which the measurement period has ended.

The changes in the carrying amount of goodwill and intangible assets for the ninesix months ended June 30, 2015March 31, 2016, are as follows (dollars in thousands): 

We operate our business in countries throughout the world and transact business in various foreign currencies. Our foreign currency exposures typically arise from transactions denominated in currencies other than the functional currency of our operations. We have a program that primarily utilizes foreign currency forward contracts to offset the risks associated with the effect of certain foreign currency exposures. Our program is designed so that increases or decreases in our foreign currency exposures are offset by gains or losses on the foreign currency forward contracts in order to mitigate the risks and volatility associated with our foreign currency transactions. Generally, we enter into such contracts for less than 90 days and have no cash requirements until maturity. At June 30, 2015March 31, 2016 and September 30, 2014,2015, we had outstanding contracts with a total notional value of $161.9$186.5 million and $283.1$138.5 million, respectively.

We have not designated these forward contracts as hedging instruments pursuant to the authoritative guidance for derivatives and hedging, and accordingly, we record the fair value of these contracts at the end of each reporting period in our consolidated balance sheet, with the unrealized gains and losses recognized immediately in earnings as other income (expense) income,, net in our consolidated statements of operations. The cash flows related to the settlement of these contracts are included in cash flows from investing activities within our condensed consolidated statement of cash flows.

From time to time we enter into agreements that allow us to issue shares of our common stock as part or all of the consideration related to business acquisitions, partnering and technology acquisition activities. Some of these shares are issued subject to security price guarantees, which are accounted for as derivatives. We have determined that these instruments would not be considered equity instruments if they were freestanding. Certain of the security price guarantees require payment from either us to a third party, or from a third party to us, based upon the difference between the price of our common stock on the issue date and an average price of our common stock approximately six months following the issue date. We have also issued minimum price guarantees that may require payments from us to a third party based on the average share price of our common stock approximately six months following the issue date if our stock price falls below the minimum price guarantee. Changes in the fair value of these security price guarantees are reported in other income (expense) income,, net in our consolidated statements of operations. We have no outstanding shares subject to security price guarantees at June 30, 2015.March 31, 2016.

Financial instruments including cash equivalents, accounts receivable and accounts payable are carried in the consolidated financial statements at amounts that approximate their fair value based on the short maturities of those instruments. Marketable securities and derivative instruments are carried at fair value.

Fair value is defined as the price that would be received for an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. Valuation techniques must maximize the use of observable inputs and minimize the use of unobservable inputs. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.

The following summarizes the three levels of inputs required to measure fair value, of which the first two are considered observable and the third is considered unobservable:

Assets and liabilities measured at fair value on a recurring basis at June 30, 2015March 31, 2016 and September 30, 20142015 consisted of (dollars in thousands):

Our financial liabilities valued based upon Level 3 inputs are composed of contingent consideration arrangements relating to our acquisitions. We are contractually obligated to pay contingent consideration to the selling shareholders upon the achievement of specified objectives, including the achievement of future bookings and sales targets related to the products of the acquired entities and therefore are recorded as contingent consideration liabilities at the time of the acquisitions. We update our assumptions each reporting period based on new developments and record such amounts at fair value based on the revised assumptions until the consideration is paid upon the achievement of the specified objectives or eliminated upon failure to achieve the specified objectives.

Contingent acquisition payment liabilities are scheduled to be paid in periods through fiscal year 2016.2019. As of June 30, 2015,March 31, 2016, we could be required to pay up to $36.0$31.6 million for contingent consideration arrangements if the specified objectives are achieved. We have determined the fair value of the liabilities for the contingent consideration based on a probability-weighted discounted cash flow analysis. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement within the fair value hierarchy. The fair value of the contingent consideration liability associated with future payments was based on several factors, the most significant of which are the estimated cash flows projected from future product sales and the risk adjusted discount rate for the fair value measurement.

Deferred maintenance revenue consists of prepaid fees received for post-contract customer support for our products, including telephone support and the right to receive unspecified upgrades/updates on a when-and-if-available basis. Unearned revenue includes upfront fees for setup and implementation activities as well as fees related to hosted offerings; certain software arrangements for which we do not have fair value of post-contract customer support, resulting in ratable revenue recognition for the entire arrangement on a straight-line basis; and fees in excess of estimated earnings on percentage-of-completion service contracts.

Restructuring and other charges, net include restructuring expenses together with other charges that are unusual in nature and are the result of unplanned events, and arise outside of the ordinary course of continuing operations. Restructuring expenses consist of employee severance costs and may also include charges for excess facility space and other contract termination costs. Other charges may include gains or losses on non-controlling strategic equity interests, litigation contingency reserves and gains or losses on the sale or disposition of certain non-strategic assets or product lines.

During May 2015, our management approved athe three and six months ended March 31, 2016, we recorded restructuring plan,charges of $6.5 million and $14.4 million, respectively. The restructuring charges for the six months ended March 31, 2016 included $9.5 million for severance related to the reduction of approximately 200 employees as part of our initiatives to reduce costs and optimize processes, under which we reduced headcount by approximately 200 employees and closedprocesses. The restructuring charges also included a $4.9 million charge for the closure of certain excess facility space resulting in a charge of $7.5 million for the three months ended June 30, 2015. and other restructuring activity that totaled $0.1 million.

We expect that the remaining severance payments of $2.4$5.1 million will be substantially paid by the end of fiscal year 2015.

During the six months ended March 31, 2015, we recorded restructuring charges of $1.9 million. The restructuring charges included $1.6 million for severance related to the reduction of approximately 60 employees that eliminated duplicative positions, and a $0.3 million charge for the closure of certain long-lived assets asexcess facility space resulting from acquisitions.

In March 2016, our Board of Directors approved a resultrepurchase agreement with Icahn Partners LP, Icahn Partners Master Fund LP and High River Limited Partnership (collectively, the “Icahn Group”) to repurchase 26.3 million shares of our strategic realignmentcommon stock from the Icahn Group at a price of our product portfolio.$19.00 per share, for a total purchase price of $500.0 million (the “Repurchase”). At the closing of the Repurchase, we paid $375.0 million in cash and issued a promissory note in the amount of approximately $125.0 million. The promissory note bears interest at a rate per annum equal to approximately 2.64% and has a maturity date of June 13, 2016. On April 15, 2016, we fully repaid the promissory note.

At JuneMarch 31, 2016 and September 30, 2015, and September 30, 2014, we had the following long-term borrowing obligations (dollars in thousands): 

In JuneDecember 2015, we issued $263.9$676.5 million in aggregate principal amount of 1.50%1.0% Senior Convertible Debentures due in 2035 (the “2035“1.0% 2035 Debentures”) in exchange for $256.2. Total proceeds, net of debt issuance costs, were $663.8 million, and we used a portion to repurchase $38.3 million in aggregate principal amount ofon our 2.75% Senior Convertible Debentures due in 2031 (the “2031 Debentures”). Total proceeds, net and to repay the aggregate principal balance of debt issuance costs, were $253.5 million.$472.5 million on our term loan under the amended and restated credit agreement. The 2035 Debentures were issued at 97.09% of the principal amount, which resulted in a discount of $7.7 million. The1.0% 2035 Debentures bear interest at 1.50%1.0% per year, payable in cash semi-annually in arrears, beginning on November 1, 2015.June 15, 2016. In addition to ordinary interest and default additional interest, beginning with the semi-annual interest period commencing on November 1, 2021,December 15, 2022, contingent interest will accrue during any regular semi-annual interest period where the average trading price of our 1.0% 2035 Debentures for the ten trading day period immediately preceding the first day of such semi-annual period is greater than or equal to $1,200 per $1,000 principal amount of our 1.0% 2035 Debentures, in which case, contingent interest will accrue at a rate of 0.50% per annum of such average trading price. The 1.0% 2035 Debentures mature on November 1,December 15, 2035, subject to the right of the holders to require us to redeem the 1.0% 2035 Debentures on November 1, 2021, 2026,December 15, 2022, 2027, or 2031.2032. The 1.0% 2035 Debentures are general senior unsecured obligations and rank equally in right of payment with all of our existing and future unsecured, unsubordinated indebtedness and senior in right of payment to any indebtedness that is contractually subordinated to the 1.0% 2035 Debentures. The 1.0% 2035 Debentures will be effectively subordinated to indebtedness and other liabilities of our subsidiaries.

We account separately for the liability and equity components of the 1.0% 2035 Debentures in accordance with authoritative guidance for convertible debt instruments that may be settled in cash upon conversion. The guidance requires the carrying amount of the liability component to be estimated by measuring the fair value of a similar liability that does not have an associated conversion feature and record the remainder in stockholders’ equity. At issuance, we allocated $208.6$495.4 million to long-term debt, and $55.3$181.1 million has been recorded as additional paid-in capital. The aggregate debt discount of $63.0 millioncapital, which is being amortized to interest expense using the effective interest rate method through November 2021.December 2022. As of June 30, 2015,March 31, 2016, the ending unamortized deferred debt issuance costs were $2.2$8.9 million.

If converted, the principal amount of the 1.0% 2035 Debentures is payable in cash and any amounts payable in excess of the principal amount, will (based on an initial conversion rate, which represents an initial conversion price of approximately $23.26$27.22 per share, subject to adjustment) be paid in cash or shares of our common stock, at our election, only in the following circumstances and to the following extent: (i) prior to May 1,June 15, 2035, on any date during any fiscal quarter beginning after September 30, 2015March 31, 2016 (and only during such fiscal quarter) if the closing sale price of our common stock was more than 130% of the then current conversion price for at least 20 trading days in the period of the 30 consecutive trading days ending on the last trading day of the previous fiscal quarter; (ii) during the five consecutive business-day period following any five consecutive trading-day period in which the trading price for $1,000 principal amount of the 1.0% 2035 Debentures for each day during such five trading-day period was less than 98% of the closing sale price of our common stock multiplied by the then current conversion rate; (iii) upon the occurrence of specified corporate transactions, as described in the indenture for the 1.0% 2035 Debentures; or (iv) at the option of the holder at any time on or after May 1,June 15, 2035. Additionally, we may redeem the 1.0% 2035 Debentures, in whole or in part, on or after November 5, 2021December 20, 2022 for cash at a price equal to 100% of the principal amount of the 1.0% 2035 Debentures to be purchased plus any accrued and unpaid interest, including any additional interest to, but excluding, the repurchase date. Each holder shall have the right, at such holder’s option, to require us to repurchase all or any portion of the 1.0% 2035 Debentures held by such holder on November 1, 2021, November 1, 2026,December 15, 2022, December 15, 2027, or November 1, 2031December 15, 2032 at par plus accrued and unpaid interest. Upon repurchase, we will pay the principal amount in cash and any amounts payable in excess of the principal amount will be paid in cash or shares of our common stock, at our election,

In JuneDecember 2015, we entered into separate privately negotiated agreements with certain holders of our 2031 Debentures to exchange, in a private placement, $256.2repurchase $38.3 million in aggregate principal amountwith proceeds received from the issuance of our 2031 Debentures for approximately $263.9 million in aggregate principal amount of our new1.0% 2035 Debentures. In accordance with the authoritative guidance for convertible debt instruments, a loss on extinguishment is equal to the difference between the reacquisition price and the net carrying amount of the extinguished debt for our 2031 Debentures, including any unamortized debt discount or issuance costs, and $17.7costs. Upon repurchase we recorded an extinguishment loss of $2.4 million was recorded in other (expense) income net.(expense), net, in the accompanying consolidated statements of operations. Following the closings of the exchange, $433.8repayment, $395.5 million in aggregate principal amount of our 2031 Debentures remain outstanding. The 2031 Debentures bear interest at 2.75% per year, payable in cash semi-annually in arrears. The 2031 Debentures mature on November 1, 2031, subject to the right of the holders to require us to redeem the 2031 Debentures on November 1, 2017, 2021, and 2026. The 2031 Debentures are general senior unsecured obligations and rank equally in right of payment with all of our existing and future unsecured, unsubordinated indebtedness and senior in right of payment to any indebtedness that is contractually subordinated to the 2031 Debentures. The 2031 Debentures will be effectively subordinated to indebtedness and other liabilities of our subsidiaries. The aggregate debt discount of $89.7 million is being amortized to interest expense using the effective interest rate method through November 2017. As of June 30, 2015March 31, 2016 and September 30, 20142015, the ending unamortized deferred debt issuance costs were $2.6$1.6 million and $5.5$2.3 million, respectively. As of June 30, 2015March 31, 2016 and September 30, 2014,2015, none of the conversion criteria were met for the 2031 Debentures. If the conversion criteria were met, we could be required to repay all or some of the aggregate principal amount in cash prior to the maturity date.

The Credit Facilityamended and restated credit agreement, entered into on August 7, 2013, includes a term loan and a $75.0 million revolving credit line, includingagreement, inclusive of any issued letters of credit.credit (together, the "Credit Facility"). In December 2015, we repaid the aggregate principal balance of $472.5 million on the term loan with proceeds received from the issuance of our 1.0% 2035 Debentures. The term loans mature on August 7, 2019 and the revolving credit line maturesagreement terminates on August 7, 2018. We recorded a loss of $2.5 million on the extinguishment, representing the unamortized debt discount and issuance costs, in other income (expense), net, in the accompanying consolidated statements of operations. As of June 30, 2015,March 31, 2016, there were $5.7$6.3 million of letters of credit issued, and there were no other outstanding borrowings under the revolving credit line.agreement.

At June 30, 2015, the applicable margin for the term loans was 2.75%, with an effective rate of 2.94%, on the outstanding balance of $473.8 million maturing in August 2019. We are required to pay a commitment fee for unutilized commitments under the revolving credit facility at a rate ranging from 0.250% to 0.375% per annum, based upon our net leverage ratio. As of June 30, 2015,March 31, 2016, the commitment fee rate was 0.375%.

The Credit Facility contains covenants including, among other things, covenants that restrict our ability and those of our subsidiaries to incur certain additional indebtedness or issue guarantees, create or permit liens on assets, enter into sale-leaseback transactions, make loans or investments, sell assets, make certain acquisitions, pay dividends, repurchase stock, or merge or consolidate with any entity, and enter into certain transactions with affiliates. The agreement also contains events of default, including failure to make payments of principal or interest, failure to observe covenants, breaches of representations and warranties, defaults under certain other material indebtedness, failure to satisfy material judgments, a change of control and certain insolvency events. As of June 30, 2015,March 31, 2016, we were in compliance with the covenants under the Credit Facility. The covenants on our other long-term debt are less restrictive, and as of June 30, 2015,March 31, 2016, we were in compliance with the requirements of our other long-term debt.

Our obligations under the Credit Facility are unconditionally guaranteed by, subject to certain exceptions, each of our existing and future direct and indirect wholly-owned domestic subsidiaries. The Credit Facility and the guarantees thereof are secured by first priority liens and security interests in the following: 100% of the capital stock of substantially all of our domestic subsidiaries and 65% of the outstanding voting equity interests and 100% of the non-voting equity interests of first-tier foreign subsidiaries, all our material tangible and intangible assets and those of the guarantors, and any present and future intercompany debt. The Credit Facility also contains provisions for mandatory prepayments of outstanding term loans upon receipt of the

On April 15, 2016, we entered into a provisioncredit agreement that provides for a $242.5 million revolving credit line, including letters of credit (together, the “Revolving Credit Facility”). The Revolving Credit Facility matures on April 15, 2021. Any amounts outstanding under the Credit Facility will bear interest, at either (i) LIBOR plus an annual excess cash flow sweep,applicable margin of 1.50% or 1.75%, or (ii) the alternative base rate plus an applicable margin of 0.50% or 0.75%. The Revolving Credit Facility is secured by substantially all assets of ours and certain of our domestic subsidiaries. The Revolving Credit Facility contains customary affirmative and negative covenants and conditions to borrowing, as defined inwell as customary events of default. In connection with entering into the agreement, payable in the first quarter of each fiscal year, based on the excess cash flow generated in the previous fiscal year. No excess cash flow sweep was required in the first quarter of fiscal year 2015 as no excess cash flow, as defined in the agreement, was generated in fiscal year 2014. At the current time,Revolving Credit Facility, we are unable to predict the amount of the outstanding principal, if any, that we may be required to repay in future fiscal years pursuant to the excess cash flow sweep provisions.terminated our prior $75.0 million revolving credit agreement.

Share Repurchases

On April 29, 2013, our Board of Directors approved a share repurchase program for up to $500.0 million of our outstanding shares of common stock. On April 29, 2015, our Board of Directors approved an additional $500.0 million under our share repurchase program. We repurchased 16.59.4 million shares for $242.7$197.5 million during the ninesix months ended June 30, 2015.March 31, 2016, including 1.0 million shares repurchased from our Chief Executive Officer. Since the commencement of the program, we have repurchased 27.940.7 million shares for $453.5$707.5 million. Approximately $546.5$292.5 million remained available for share repurchases as of June 30, 2015March 31, 2016 pursuant to our share repurchase program. Under the terms of the share repurchase program, we expect to continuehave the ability to repurchase shares from time to time through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades, accelerated stock repurchase transactions, or any combination of such methods. The timing and the amount of any purchases will be determined by management based on an evaluation of market conditions, capital allocation alternatives, and other factors. We expect the repurchase of shares under the program to be limited in the foreseeable future. The share repurchase program does not require us to acquire any specific number of shares and may be modified, suspended, extended or terminated by us at any time without prior notice.

We recognize stock-based compensation expense over the requisite service period. Our share-based awards are accounted for as equity instruments. The amounts included in the consolidated statements of operations relating to stock-based compensation are as follows (dollars in thousands):