Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | |
Dec. 31, 2022 | Apr. 30, 2023 | |
Cover [Abstract] | ||
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | AVYA | |
Entity Information, Former Legal or Registered Name | None | |
Entity Central Index Key | 0001418100 | |
Entity Incorporation, State or Country Code | DE | |
Document Transition Report | false | |
Document Quarterly Report | true | |
Document Type | 10-Q | |
Document Fiscal Year Focus | 2023 | |
Document Period End Date | Dec. 31, 2022 | |
Entity File Number | 001-38289 | |
Entity Registrant Name | AVAYA HOLDINGS CORP. | |
Entity Tax Identification Number | 26-1119726 | |
Entity Address, Address Line One | 350 Mt. Kemble Avenue | |
Entity Address, City or Town | Morristown, | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07960 | |
City Area Code | 908 | |
Local Phone Number | 953-6000 | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | No | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 86,846,958 | |
Document Information [Line Items] | ||
Entity Current Reporting Status | No | |
Entity Interactive Data Current | No |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Dec. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06, "Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity." This standard simplifies the accounting for convertible instruments and the application of the derivatives scope exception for contracts in an entity's own equity. The standard also amends the accounting for convertible instruments in the diluted earnings per share calculation and requires enhanced disclosures of convertible instruments and contracts in an entity's own equity. The Company adopted the standard on a modified retrospective basis effective October 1, 2022. Upon adoption, the Company recorded a cumulative effect adjustment which decreased the opening balance of Accumulated deficit on the Condensed Consolidated Balance Sheet by $47 million, decreased Additional paid-in-capital by $118 million and increased Debt maturing within one year and Long-term debt by $10 million and $61 million, respectively, to eliminate the historical separation of debt and equity components of the Company's convertible or exchangeable debt instruments. Recent Standards Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): "Facilitation of the Effects of Reference Rate Reform on Financial Reporting". This standard, along with other guidance subsequently issued by the FASB, contains practical expedients for reference rate reform related activities that impact debt, derivatives and other contracts. The guidance in this standard is optional and may be elected at any time as reference rate reform activities occur. The standard may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2024. The Company intends to use the expedients, if needed, for the reference rate transition. The Company continues to monitor activities related to reference rate reform and does not currently expect this standard to have a material impact on the Company's Condensed Consolidated Financial Statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): "Accounting for Contract Assets and Contract Liabilities from Contracts with Customers." This standard requires contract assets and contract liabilities acquired in a business combination to be recognized in accordance with Topic 606 as if the acquirer had originated the contracts. This standard is effective for the Company in the first quarter of fiscal 2024, with early adoption permitted. The impact of this standard will depend on the nature of future transactions within its scope. In March 2022, the FASB issued ASU 2022-02, "Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures." This standard requires an entity to disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases measured at amortized cost. The standard also eliminates the existing troubled debt restructuring recognition and measurement guidance and, instead, requires an entity to evaluate whether the modification represents a new loan or a continuation of an existing loan in a manner consistent with other loan modifications. This standard is effective for the Company in the first quarter of fiscal 2024, with early adoption permitted. The Company is currently assessing the impact the new guidance will have on its Condensed Consolidated Financial Statements. In September 2022, the FASB issued ASU 2022-04, "Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations." This standard requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. The amendments in this standard do not affect the recognition, measurement, or financial statement presentation of obligations covered by supplier finance programs. The standard is effective for the Company in the first quarter of fiscal 2024, with early adoption permitted. Certain disclosures required by the standard are effective in the first quarter of fiscal 2025. The Company is currently assessing the impact the new guidance will have on its disclosures within its Condensed Consolidated Financial Statements. |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
REVENUE | ||
Revenue | $ 418,000,000 | $ 713,000,000 |
COSTS | ||
TOTAL COST OF REVENUE | 270,000,000 | 344,000,000 |
Gross profit | 148,000,000 | 369,000,000 |
OPERATING EXPENSES | ||
Selling, general and administrative | 221,000,000 | 262,000,000 |
Research and development | 50,000,000 | 61,000,000 |
Amortization of intangible assets | 39,000,000 | 40,000,000 |
Restructuring charges, net | 10,000,000 | 7,000,000 |
TOTAL OPERATING EXPENSES | 329,000,000 | 370,000,000 |
OPERATING LOSS | (181,000,000) | (1,000,000) |
Interest expense | (5,000,000) | (54,000,000) |
Other income (expense), net | (4,000,000) | 7,000,000 |
LOSS BEFORE INCOME TAXES | (190,000,000) | (48,000,000) |
Benefit from (provision for) income taxes | 26,000,000 | (18,000,000) |
NET INCOME (LOSS) | $ (164,000,000) | $ (66,000,000) |
LOSS PER SHARE | ||
Net income (loss) per common share - basic (in usd per share) | $ (1.89) | $ (0.79) |
Net income (loss) per common share - diluted (in usd per share) | $ (1.89) | $ (0.79) |
Asset Impairment Charges | $ 9,000,000 | $ 0 |
Products | ||
REVENUE | ||
Revenue | 136,000,000 | 231,000,000 |
COSTS | ||
Total Cost of Goods and Services | 70,000,000 | 111,000,000 |
Amortization of technology intangible assets | 35,000,000 | 42,000,000 |
Services | ||
REVENUE | ||
Revenue | 282,000,000 | 482,000,000 |
COSTS | ||
Total Cost of Goods and Services | $ 165,000,000 | $ 191,000,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) Statement - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Net income (loss) | $ (164,000,000) | $ (66,000,000) |
Cumulative translation adjustment | (14,000,000) | 13,000,000 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification and Tax | (80,000,000) | 28,000,000 |
Other comprehensive (loss) income | (100,000,000) | 40,000,000 |
Total comprehensive loss | (264,000,000) | (26,000,000) |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Tax and Reclassification Adjustment, Attributable to Parent | $ (6,000,000) | $ (1,000,000) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, Tax | $ (18,000,000) | $ 0 |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax | $ 0 | $ 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 |
Common stock | $ 1,000,000 | $ 1,000,000 |
Additional paid-in capital | 1,428,000,000 | 1,546,000,000 |
Accumulated deficit | (3,198,000,000) | (3,081,000,000) |
Accumulated other comprehensive loss | 132,000,000 | 232,000,000 |
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | (1,637,000,000) | (1,302,000,000) |
Liabilities | 5,350,000,000 | 5,242,000,000 |
Preferred stock | 134,000,000 | 133,000,000 |
Long-term debt | 0 | 3,032,000,000 |
Pension obligations | 434,000,000 | 410,000,000 |
Other post-retirement obligations | 111,000,000 | 109,000,000 |
Deferred income taxes, net | 42,000,000 | 43,000,000 |
Contract liabilities, non-current | 287,000,000 | 300,000,000 |
Operating Lease, Liability, Noncurrent | 66,000,000 | 72,000,000 |
Business restructuring reserve, non-current portion | 26,000,000 | 23,000,000 |
Other liabilities | 207,000,000 | 224,000,000 |
Liabilities, Noncurrent | 1,173,000,000 | 4,213,000,000 |
Short-term Debt | 3,358,000,000 | 210,000,000 |
Accounts payable | 263,000,000 | 263,000,000 |
Operating Lease, Liability, Current | 40,000,000 | 40,000,000 |
Restructuring Reserve, Current | 19,000,000 | 26,000,000 |
Payroll and benefit obligations | 105,000,000 | 108,000,000 |
Contract liabilities | 255,000,000 | 245,000,000 |
Business restructuring reserve, current portion | 19,000,000 | 26,000,000 |
Other current liabilities | 137,000,000 | 137,000,000 |
Liabilities, Current | 4,177,000,000 | 1,029,000,000 |
Liabilities and Equity | 3,847,000,000 | 4,073,000,000 |
Cash and cash equivalents | 225,000,000 | 253,000,000 |
Accounts receivable, net | 302,000,000 | 322,000,000 |
Inventory | 81,000,000 | 74,000,000 |
Contract assets | 505,000,000 | 543,000,000 |
Contract costs | 104,000,000 | 110,000,000 |
Other current assets | 113,000,000 | 116,000,000 |
Assets, Current | 1,553,000,000 | 1,640,000,000 |
Property, plant and equipment, net | 280,000,000 | 281,000,000 |
Intangible assets, net | 1,695,000,000 | 1,776,000,000 |
Operating Lease, Right-of-Use Asset | 90,000,000 | 97,000,000 |
Other assets | 229,000,000 | 279,000,000 |
Assets | $ 3,847,000,000 | $ 4,073,000,000 |
Preferred shares issued | 125,000 | 125,000 |
Common Stock, Shares, Outstanding | 86,846,958 | 86,846,958 |
Shares issued at December 15, 2017 (in shares) | 86,846,958 | 86,846,958 |
Preferred Stock, Shares Outstanding | 125,000 | 125,000 |
Preferred Stock, Shares Authorized | 55,000,000 | 55,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 550,000,000 | 550,000,000 |
Restricted Cash, Current | $ 223,000,000 | $ 222,000,000 |
Cash | 225,000,000 | 253,000,000 |
Property, Plant and Equipment, Net | 280,000,000 | 281,000,000 |
Accounts Payable, Current | 263,000,000 | 263,000,000 |
Long-term debt, net of current portion | 0 | 3,032,000,000 |
Deferred income taxes, net | 42,000,000 | 43,000,000 |
Other Liabilities, Noncurrent | 207,000,000 | 224,000,000 |
Additional Paid in Capital, Common Stock | $ 1,428,000,000 | $ 1,546,000,000 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 550,000,000 | 550,000,000 |
Common stock, shares issued | 86,846,958 | 86,846,958 |
Common stock, shares outstanding | 86,846,958 | 86,846,958 |
Preferred Stock, Shares Issued | 125,000 | 125,000 |
Series A Preferred Stock | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Beginning Balance (in shares) at Sep. 30, 2021 | 84,100,000 | ||||
Beginning Balance at Sep. 30, 2021 | $ 392,000,000 | $ 1,000,000 | $ 1,467,000,000 | $ (985,000,000) | $ (91,000,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock, net of shares redeemed and canceled, under employee stock option plan (in shares) | 900,000 | ||||
Issuance of common stock, net of shares redeemed and canceled, under employee stock option plan | 5,000,000 | 5,000,000 | |||
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation | 300,000 | ||||
Amortization of share-based compensation | 14,000,000 | 14,000,000 | |||
Dividends, Preferred Stock, Paid-in-kind | 1,000,000 | 1,000,000 | |||
Net income (loss) | (66,000,000) | ||||
Other comprehensive income (loss) | 40,000,000 | ||||
Shares repurchased and retired for tax withholding on vesting of restricted stock units | (7,000,000) | (7,000,000) | |||
Ending Balance at Dec. 31, 2021 | 380,000,000 | $ 1,000,000 | 1,481,000,000 | (1,051,000,000) | (51,000,000) |
Ending Balance (in shares) at Dec. 31, 2021 | 84,900,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 200,000 | ||||
Stock Issued During Period, Value, Employee Stock Purchase Plan | 3,000,000 | 3,000,000 | |||
Accumulated deficit | (3,081,000,000) | ||||
Beginning Balance (in shares) at Sep. 30, 2022 | 86,800,000 | ||||
Beginning Balance at Sep. 30, 2022 | (1,302,000,000) | $ 1,000,000 | 1,546,000,000 | (3,081,000,000) | 232,000,000 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Amortization of share-based compensation | 1,000,000 | 1,000,000 | |||
Dividends, Preferred Stock, Cash | 1,000,000 | 1,000,000 | |||
Net income (loss) | (164,000,000) | ||||
Other comprehensive income (loss) | (100,000,000) | ||||
Ending Balance at Dec. 31, 2022 | (1,637,000,000) | $ 1,000,000 | $ 1,428,000,000 | $ (3,198,000,000) | $ 132,000,000 |
Ending Balance (in shares) at Dec. 31, 2022 | 86,800,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Accumulated deficit | $ (3,198,000,000) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Adjustments to reconcile loss from continuing operations to net cash provided by operating activities: | ||
Depreciation and amortization | $ 99,000,000 | $ 104,000,000 |
Share-based compensation | 1,000,000 | 14,000,000 |
Amortization of Debt Issuance Costs and Discounts | 5,000,000 | 7,000,000 |
Deferred income taxes, net | (19,000,000) | (4,000,000) |
Asset Impairment Charges | 9,000,000 | 0 |
Change in fair value of emergence date warrants | 0 | (1,000,000) |
Unrealized Gain (Loss) on Derivatives | 13,000,000 | 0 |
Interest Rate Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net | (62,000,000) | 0 |
Unrealized gain on foreign currency transactions | 10,000,000 | (2,000,000) |
Other non-cash charges, net | 1,000,000 | 2,000,000 |
Change in Accounts receivable | 22,000,000 | (44,000,000) |
Changes in operating assets and liabilities: | ||
Inventory | (9,000,000) | 1,000,000 |
Contract assets | 48,000,000 | (57,000,000) |
Contract costs | 13,000,000 | (1,000,000) |
Accounts payable | (4,000,000) | 46,000,000 |
Payroll and benefit obligations | (12,000,000) | (70,000,000) |
Business restructuring reserve | (8,000,000) | (3,000,000) |
Contract liabilities | (9,000,000) | (28,000,000) |
Other assets and liabilities | 17,000,000 | (9,000,000) |
Net cash used for operating activities | (65,000,000) | (111,000,000) |
INVESTING ACTIVITIES: | ||
Capital expenditures | (17,000,000) | (27,000,000) |
Net cash used for investing activities | (17,000,000) | (27,000,000) |
FINANCING ACTIVITIES: | ||
Repayment of debtor-in-possession financing | (34,000,000) | 0 |
Proceeds from Lines of Credit | 90,000,000 | 0 |
NET CASH USED FOR FINANCING ACTIVITIES | 54,000,000 | (5,000,000) |
Effect of exchange rate changes on cash and cash equivalents | 2,000,000 | (1,000,000) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (26,000,000) | (144,000,000) |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 452,000,000 | 358,000,000 |
Net income (loss) | (164,000,000) | (66,000,000) |
Finance Lease, Principal Payments | (2,000,000) | (2,000,000) |
Proceeds from Stock Plans | 0 | 4,000,000 |
Proceeds from Stock Options Exercised | 0 | 1,000,000 |
Payments of Ordinary Dividends, Preferred Stock and Preference Stock | 0 | (1,000,000) |
Payment, Tax Withholding, Share-based Payment Arrangement | 0 | (7,000,000) |
Change in fair value of debt-related embedded derivatives | (16,000,000) | $ 0 |
ABL Credit Agreement | ||
FINANCING ACTIVITIES: | ||
Repayment of debtor-in-possession financing | (34,000,000) | |
Proceeds from Lines of Credit | $ 90,000,000 |
Background and Basis of Present
Background and Basis of Presentation | 3 Months Ended |
Dec. 31, 2022 | |
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 global leader in digital communications products, solutions and services for businesses of all sizes delivering its technology predominantly through software and services. Avaya builds innovative open, converged software solutions to enhance and simplify communications and collaboration in the cloud, on-premise or a hybrid of both. The Company's global team of professionals delivers services from initial planning and design, to implementation and integration, to ongoing managed operations, optimization, training and support. The Company manages its business operations in two segments: Products & Solutions and Services. The Company sells directly to customers 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 its direct wholly-owned subsidiary Avaya Inc. and its subsidiaries. The accompanying unaudited interim Condensed Consolidated Financial Statements 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. The unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and other financial information for the fiscal year ended September 30, 2022, included in the Company's Annual Report on Form 10-K filed with the SEC on September 8, 2023. In management's opinion, these unaudited interim Condensed Consolidated Financial Statements reflect all adjustments, consisting of normal and recurring adjustments, necessary to fairly state the results of operations, financial position and cash flows for the periods indicated. The unaudited 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. The Company uses estimates to assess expected credit losses on its financial assets, sales returns and allowances, the use and recoverability of inventory, the realization of deferred tax assets, annual effective tax rate, the recoverability of long-lived assets, useful lives and impairment of tangible and intangible assets including goodwill, business restructuring reserves, pension and post-retirement benefit costs, the fair value of assets and liabilities in business combinations and the amount of exposure from potential loss contingencies, among others. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the Condensed Consolidated Financial Statements in the period they are determined to be necessary. Actual results could differ from these estimates. The ongoing military conflict between Russia and Ukraine, including the sanctions and export controls that have been imposed by the U.S. and other countries in response to the conflict, severely limits commercial activities in Russia and impacts other markets where we do business. This global issue, among others, have resulted in elevated levels of inflation throughout the world, increased raw material costs and other supply chain issues all of which may affect management's estimates and assumptions, in particular those that require a projection of our financial results, our cash flows or broader economic conditions. Board and Audit Committee Investigations In February 2023, the Company announced a delay in the filing of its Quarterly Report on Form 10-Q (this "Quarterly Report") for the quarter ended December 31, 2022, due to, among other things, the commencement of an investigation by the audit committee (the "Audit Committee", and such investigation, the "Financial Results Investigation") of the Company's board of directors (the "Board") related to the circumstances surrounding the Company's financial results for the third quarter of fiscal 2022, which were significantly lower than the Company's expectations and previously issued guidance. This investigation also addressed the information provided by the Company to the lenders of the Tranche B-3 Term Loans and the 8.00% Exchangeable Senior Secured Notes due 2027 which was funded in July 2022 as discussed in Note 7, "Financing Arrangements." The Company also announced the Audit Committee had commenced a separate internal investigation to review matters related to a whistleblower letter (the "Whistleblower Letter Investigation"). The Company engaged outside counsel, which reported to the Audit Committee, to assist in these investigations and notified the SEC and the Company's external auditor, PricewaterhouseCoopers LLP, about the investigations at that time. The Company also announced in August 2022 that it was reviewing matters related to the maintenance of its whistleblower log and the proper dissemination of related information and materials. The review related to an email received by a Board member prior to the filing of the Company's Annual Report on Form 10-K for fiscal year ended September 30, 2021 (the "2021 Form 10-K"). Upon receipt of the email, the Board determined to undertake an investigation, assisted by outside counsel (the “Whistleblower Email Investigation” and together with the Financial Results Investigation and the Whistleblower Letter Investigation, the "Investigations"). Upon conclusion of the Whistleblower Email Investigation, it was determined that the claims included were unsubstantiated (see Note 18, "Commitments and Contingencies"). Avaya notified the SEC of the Investigations and the SEC initiated an investigation to review, among other things, the circumstances surrounding Avaya's financial results for the quarter ended June 30, 2022. On February 10, 2023, the Company filed a Form 12b-25 announcing a delay in the filing of its Quarterly Report on Form 10-Q for the three months ended December 31, 2022. As a result of the activities noted above, the Company required additional time to complete its review of its financial statements and other disclosures as of December 31, 2022, and to complete its quarterly closing processes and controls, and was unable to file its Quarterly Report on Form 10-Q on or prior to the prescribed due date of February 9, 2023. The Audit Committee has completed its planned procedures with respect to its Investigations and continues to cooperate with the SEC's on-going investigation, which could require additional procedures to be performed. The Audit Committee identified several contributing factors for the significant differences between the Company's forecasts and actual financial results for the third quarter of fiscal 2022, including: • Inappropriate tone at the top among certain members of senior management, which resulted in a corporate culture characterized by significant pressure to meet aggressive sales projections and a failure to foster an environment of appropriate and open communication of significant matters throughout the organization and with others outside of the organization; • A declining pipeline of existing legacy customers (with expiring maintenance contracts) eligible for migration to the Company's subscription model; • A business model in which a significant portion of quarterly revenue is generated at the end of each quarter, making it difficult to accurately forecast revenue; • Adverse market conditions, as well as concerns that arose during the third quarter about the Company's financial health, which negatively influenced customer sentiment; and • The ineffective control environment with respect to tone at the top noted above contributed to additional material weaknesses, that the Company did not design and maintain effective controls over the information and communication component of the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") framework which led to an additional material weakness with respect to the ethics and compliance program. The Company did not maintain a complete and accurate whistleblower log and did not inform certain members of senior management and its external auditor about an investigation undertaken by a committee of the Board of Directors. In addition, the investigation identified revenue of $3 million that was recognized for product shipments during the three months ended March 31, 2022 that had rights of return and, accordingly, should not have been recognized as revenue. The Company corrected this error during the three months ended June 30, 2022. This out-of-period correction was not material to any interim period and had no impact on the financial results for the year ended September 30, 2022. The SEC is investigating the matters underlying the Audit Committee's investigation and may be subject to additional regulatory or legal proceedings. These investigations and legal proceedings may result in adverse findings, damages, the imposition of fines or other penalties, increased costs and expenses as well as the diversion of management's time and resources. Chapter 11 Filing On February 14, 2023 (the "Petition Date"), Avaya Holdings and certain of its direct and indirect subsidiaries (collectively, the "Debtors") commenced voluntary cases (the "Chapter 11 Cases") under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of Texas. The Chapter 11 Cases were jointly administered under the caption In re Avaya Inc., et al. , case number 23-90088. On the Petition Date, the Company entered into a Restructuring Support Agreement (the "RSA") with certain of its creditors (the "Consenting Stakeholders") and RingCentral, Inc. ("RingCentral"). The RSA contemplated a prepackaged joint plan of reorganization (the "Plan"). The Plan provided for (i) the commencement of the Chapter 11 Cases, (ii) debtor-in-possession financing facilities in the aggregate amount of approximately $628 million that were subsequently converted into exit financing facilities upon the Company's Emergence (as defined below), (iii) a fully backstopped $150 million rights offering, (iv) payment in full of all trade liabilities, (v) the repayment of approximately $225 million escrowed cash to certain senior lenders and (vi) entry into amended and restated agreements with RingCentral (the "Amended and Restated RingCentral Agreements") that collectively govern the Company's commercial relationship with RingCentral upon Emergence (which agreements were entered into immediately prior to, and in connection with, the execution of the RSA). The RSA and the Plan did not contemplate any recovery for holders of the Company's existing common stock, par value $0.01 per share (the "Common Stock") or Series A Convertible Preferred Stock, par value $0.01 per share (the "Series A Preferred Stock"). On February 15, 2023, trading in the Company's Common Stock on the New York Stock Exchange ("NYSE") was permanently suspended and the Common Stock was delisted from the NYSE effective February 25, 2023. To ensure their ability to continue operating in the ordinary course of business, the Debtors filed a variety of motions seeking "first day" relief, including the authority to continue using their cash management system, pay employee wages and benefits and pay vendors in the ordinary course of business. As of March 22, 2023, all "first day" relief had been granted by the Bankruptcy Court on a final basis. The commencement of the Chapter 11 Cases constituted an event of default that accelerated and, as applicable, increased certain obligations under each of the Term Loan and ABL Credit Agreements and the indentures governing the Senior Notes, the Convertible Notes and the Exchangeable Notes (each as defined below) (collectively the "Pre-Petition Debt Instruments") and agreements described in Note 7, "Financing Arrangements," other than the DIP Term Loan (as defined below) and the DIP ABL Loan (as defined below). At December 31, 2022, all debt was classified as a current liability based on the Company's violation of certain covenants in December 2022. The Pre-Petition Debt Instruments provided that, as a result of the Chapter 11 Cases, the principal and interest and certain other amounts (to the extent applicable) due thereunder were immediately due and payable. Any efforts to enforce such payment obligations under the Pre-Petition Debt Instruments against the Debtors were automatically stayed as a result of the Chapter 11 Cases, and the creditors' rights of enforcement in respect of the Pre-Petition Debt Instruments were subject to the applicable provisions of the Bankruptcy Code. Under the Plan, holders of pre-petition claims were not required to file proofs of claim and all filed proofs of claim were automatically considered objected and disputed, and all other claims (other than cure disputes/rejection claims) were deemed withdrawn and expunged as of May 1, 2023 (the "Emergence Date"). On the Emergence Date, the Company reviewed claims that had been filed and updated the claims register to reflect whether claims had been withdrawn, expunged or satisfied, as applicable, as of the Emergence Date and did not identify any adjustments to its consolidated financial statements. Subject to certain specific exceptions under the Bankruptcy Code, the Chapter 11 Cases automatically stayed most judicial or administrative actions against the Debtors and efforts by creditors to collect on or otherwise exercise rights or remedies with respect to pre-petition claims. The Debtors operated as debtors-in-possession in accordance with the applicable provisions of the Bankruptcy Code and entered into (a) a $500 million priming superpriority senior secured debtors-in-possession term loan facility (the "DIP Term Loan," and such facility, the "DIP Term Loan Facility") and (b) an approximately $128 million priming superpriority senior secured debtors-in-possession asset-based loan facility (the "DIP ABL Loan," and such facility, the "DIP ABL Facility"). The DIP Term Loan and DIP ABL Loan converted into exit financing upon Avaya's Emergence. See Note 7, "Financing Arrangements". Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code The Bankruptcy Court confirmed the Plan on March 22, 2023, and the Debtors satisfied all conditions required for Plan effectiveness and emerged from the Chapter 11 Cases ("Emergence") on May 1, 2023. On or following the Emergence Date and pursuant to the terms of the Plan, the following occurred or became effective: ▪ Debtors' Equity and Indebtedness . All of the Debtors' pre-petition equity and debt facilities as well as the Debtors' securities were canceled. ▪ Reorganized Company Equity . The Company's certificate of incorporation was amended and restated to authorize the issuance of 80 million shares of the Company's common stock, par value $0.01 per share (the "New Common Stock"), of which 36 million shares were issued on the Emergence Date. The Company's certificate of incorporation was also amended and restated to authorize the issuance of 20 million shares of the Company's preferred stock, par value $0.01 per share (the "New Preferred Stock"), of which no shares were issued on the Emergence Date. ▪ Exit Financing . The DIP Term Loan converted into an Exit Term Loan (as defined herein) and the Company incurred an additional $310 million under the Exit Term Loan Facility (including amounts incurred pursuant to a rights offering and amounts deemed incurred pursuant to the Plan by creditors under the Pre-Petition Debt Instruments) for an aggregate principal amount of $810 million, and the DIP ABL Loan converted into an Exit ABL Loan (as defined herein) in the amount of approximately $128 million. As contemplated in the bankruptcy court proceedings and approved by the court, the imputed enterprise value of the Company upon Emergence was approximately $1,426 million. ▪ Contracts with Customers and Suppliers . Suppliers and customers were paid or will be paid in full in respect of pre-petition amounts owed by the Company, and the Company assumed the Amended and Restated RingCentral Agreements (as defined within Note 18, "Commitments and Contingencies") (which agreements were entered into immediately prior to, and in connection with, the execution of the RSA). ▪ PBGC Settlement . The Company entered into a settlement with the Pension Benefit Guaranty Corporation (the "PBGC") providing for the assumption of the hourly pension plan and the consensual termination of the settlement with the PBGC entered into as part of the Company's 2017 plan of reorganization, including the excess contribution obligations thereunder. ▪ Settlements . The Company entered into a number of other settlements, including, inter alia , those with the Consenting Stakeholders and an ad hoc group of holders of the Convertible Notes, and all of these settlements became effective on the Emergence Date. Adoption of Accounting Standards Codification ("ASC") Topic 852 On the Emergence Date, the Company may qualify for and adopt fresh start accounting in accordance with Financial Accounting Standards Board Codification Topic 852, Reorganizations ("ASC 852"), which specifies the accounting and financial reporting requirements for entities reorganizing through Chapter 11 bankruptcy proceedings. The application of fresh start accounting would result in a new basis of accounting and the Company would become a new entity for financial reporting purposes. As a result of the implementation of the Plan and the potential application of fresh start accounting, the Consolidated Financial Statements after the Emergence Date would not be comparable to the Consolidated Financial Statements before that date, and the historical financial statements on or before the Emergence Date would not be a reliable indicator of its financial condition and results of operations for any period after the Company's adoption of fresh start accounting. Liquidity and Going Concern The accompanying unaudited Condensed Consolidated Financial Statements of the Company have been prepared assuming the Company will continue as a going concern and in accordance with GAAP. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these Condensed Consolidated Financial Statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. During the fiscal year ended September 30, 2022, the Company experienced a significant slowdown in its operations and had operating cash outflows of $312 million. Additionally, prior to the Chapter 11 Cases, the Company had been involved in discussions with its lenders relating to the financing transactions it completed in July 2022 (as described further in Note 7, "Financing Arrangements") and the scheduled June 2023 maturity of the Convertible Notes. In its Form 12b-25 in respect of the Quarterly Report on Form 10-Q for the period ended June 30, 2022 filed with the SEC on August 9, 2022, the Company indicated that in light of the Convertible Notes being characterized as a current liability and the related engagement with advisors to address the Convertible Notes, coupled with the decline in revenues during the third quarter, which represented substantially lower revenues than previous Company expectations, and the negative impact of significant operating losses on the Company's cash balance, the Company determined that there was substantial doubt about the Company's ability to continue as a going concern. The Company has completed certain restructuring actions and is working to complete its remaining restructuring plan as its operating cash flows are expected to remain negative through at least fiscal 2023. The Company may take additional actions, as needed. The Company’s plans are designed to reduce its operating expenses and improve cash flows in line with its forecasted revenues. On the Emergence Date, the Company had approximately $585 million of cash and cash equivalents, and its post-Emergence debt profile was significantly improved (an aggregate principal amount of $810 million compared to $3,420 million at December 31, 2022), reducing its annual interest expense and extending the earliest maturity of its non-revolving long-term debt to 2028. This post-Emergence capital structure, coupled with restructuring actions that the Company executed to reduce its on-going operating expenses, have provided the Company with sufficient working capital to meet its operating cash flow requirements for at least one year from the issuance of these financial statements. Accordingly, as a result of the successful Emergence, the Company has alleviated the substantial doubt that had previously existed regarding the Company's ability to continue as a going concern. The Company's longer term liquidity profile will depend on successfully implementing its strategic plan which includes enhancing its product offerings, successfully partnering with alliance companies and executing on remaining cost reductions. |
Contract Balances
Contract Balances | 3 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Contracts with Customers Disaggregation of Revenue The following tables provide the Company's disaggregated revenue for the periods presented: Three months ended (In millions) 2022 2021 Revenue: Products & Solutions $ 136 $ 231 Services 282 482 Total Revenue $ 418 $ 713 Three months ended December 31, 2022 Three months ended December 31, 2021 (In millions) Products & Solutions Services Total Products & Solutions Services Total Revenue: U.S. $ 62 $ 146 $ 208 $ 114 $ 261 $ 375 International: Europe, Middle East and Africa 38 71 109 65 127 192 Asia Pacific 19 37 56 32 49 81 Americas International - Canada and Latin America 17 28 45 20 45 65 Total International 74 136 210 117 221 338 Total Revenue $ 136 $ 282 $ 418 $ 231 $ 482 $ 713 Transaction Price Allocated to the Remaining Performance Obligations The transaction price allocated to remaining performance obligations that were wholly or partially unsatisfied as of December 31, 2022 was $1,920 million, of which 52% and 26% is expected to be recognized within 12 months and 13-24 months, respectively, with the remaining balance expected to be recognized thereafter. This excludes amounts for remaining performance obligations that are (1) for contracts recognized over time using the "right to invoice" practical expedient, (2) related to sales or usage based royalties promised in exchange for a license of intellectual property and (3) related to variable consideration allocated entirely to a wholly unsatisfied performance obligation. Contract Balances The following table provides information about accounts receivable, contract assets, contract costs and contract liabilities for the periods presented: (In millions) December 31, 2022 September 30, 2022 Increase (Decrease) Accounts receivable, net $ 302 $ 322 $ (20) Contract assets, net: Current $ 505 $ 543 $ (38) Non-current (Other assets) 127 134 (7) $ 632 $ 677 $ (45) Cost of obtaining a contract: Current (Contract costs) $ 78 $ 81 $ (3) Non-current (Other assets) 40 46 (6) $ 118 $ 127 $ (9) Cost to fulfill a contract: Current (Contract costs) $ 26 $ 29 $ (3) Contract liabilities: Current $ 255 $ 245 $ 10 Non-current 287 300 (13) $ 542 $ 545 $ (3) The decrease in Contract assets was mainly driven by billings which outpaced bookings in the Company's subscription offerings during the quarter. The decrease in contract costs was driven by lower sales and continued shift to subscription offerings. The decrease in Contract liabilities was mainly driven by anticipated declines in hardware maintenance and software support services as customers continue to transition to the Company's subscription hybrid offering. The decrease was also driven by lower revenue earned from the consideration advance received in connection with the strategic partnership with RingCentral, Inc.. During the three months ended December 31, 2022 and 2021, the Company did not record any asset impairment charges related to contract assets. During the three months ended December 31, 2022 and 2021, the Company recognized revenue of $109 million and $162 million that had been previously recorded as a Contract liability as of October 1, 2022 and October 1, 2021, respectively. During the three months ended December 31, 2022 and 2021, the Company recognized a decrease in revenue of $4 million and $2 million, respectively, for performance obligations that were satisfied, or partially satisfied, in prior periods. As disclosed in Note 19, "Subsequent Events,” the Company and RingCentral agreed to amend their agreement. Contract Costs The following table provides information regarding the location and amount for amortization of costs to obtain and costs to fulfill customer contracts recognized in the Company's Condensed Consolidated Statements of Operations for the periods presented: Three months ended (In millions) 2022 2021 Costs to obtain customer contracts: Selling, general and administrative $ 37 $ 44 Revenue 2 4 Total Amortization $ 39 $ 48 Costs to fulfill customer contracts: Costs $ 3 $ 8 Allowance for Credit Losses The following table presents the change in the allowance for credit losses by portfolio segment for the period indicated: (In millions) Accounts Receivable (1) Short-term Contract Assets (2) Long-term Contract Assets (3) Total Allowance for credit loss as of September 30, 2022 $ 5 $ 1 $ 2 $ 8 Adjustment to credit loss provision — — (1) (1) Write-offs, net of recoveries — — — — Allowance for credit loss as of December 31, 2022 $ 5 $ 1 $ 1 $ 7 (1) Recorded within Accounts receivable, net on the Condensed Consolidated Balance Sheets. (2) Recorded within Contract assets, net on the Condensed Consolidated Balance Sheets. |
Supplementary Financial Informa
Supplementary Financial Information | 3 Months Ended |
Dec. 31, 2022 | |
Supplementary Financial Information [Abstract] | |
Additional Financial Information Disclosure | Supplementary Financial Information The following table presents a summary of other (expense) income, net for the periods indicated: Three months ended (In millions) 2022 2021 OTHER (EXPENSE) INCOME, NET Interest income $ 4 $ — Foreign currency losses, net (10) — Other pension and post-retirement benefit credits, net 2 6 Change in fair value of 2017 Emergence Date Warrants — 1 Total other (expense) income, net $ (4) $ 7 The following table presents supplemental cash flow information for the periods presented: Three months ended (In millions) 2022 2021 OTHER PAYMENTS Interest payments (excluding lease related interest) $ 55 $ 33 Income tax payments 5 7 NON-CASH INVESTING ACTIVITIES Increase (decrease) in Accounts payable for Capital expenditures $ 1 $ (2) Acquisition of equipment under operating leases 1 7 During the three months ended December 31, 2022 and 2021, the Company made payments for operating lease liabilities of $12 million and $15 million, respectively, and made payments for finance lease liabilities of $3 million and $3 million, respectively. The following table presents a reconciliation of cash, cash equivalents, and restricted cash that sum to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows for the periods presented: (In millions) December 31, 2022 September 30, 2022 December 31, 2021 September 30, 2021 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH Cash and cash equivalents $ 225 $ 253 $ 354 $ 498 Restricted cash 223 222 — — Restricted cash included in other assets 4 3 4 4 Total cash, cash equivalents, and restricted cash $ 452 $ 478 $ 358 $ 502 |
Business Restructuring Reserves
Business Restructuring Reserves and Programs | 3 Months Ended |
Dec. 31, 2022 | |
Restructuring Reserve [Abstract] | |
Business Restructuring Reserves and Programs | Business Restructuring Reserves and Programs The following table summarizes the restructuring charges by activity for the periods presented: Three months ended (In millions) 2022 2021 Employee separation costs $ 8 $ 2 Facility exit costs 2 5 Total restructuring charges $ 10 $ 7 The Company's employee separation costs generally consist of severance charges which include, but are not limited to, termination payments, pension fund payments, health care and unemployment insurance costs to be paid to, or on behalf of, the affected employees and other associated costs. Facility exit costs primarily consist of lease obligation charges for exited facilities, including the impact of accelerated lease expense for right-of-use assets and accelerated depreciation expense for leasehold improvements with reductions in their estimated useful lives due to exited facilities. The restructuring charges include changes in estimates for increases and decreases in costs or changes in the timing of payments related to the restructuring programs of prior fiscal years. The Company does not allocate restructuring reserves to its operating segments. The following table summarizes the activity for employee separation costs recognized under the Company's restructuring programs for the three months ended December 31, 2022: (In millions) Fiscal 2023 Restructuring Program (1) Fiscal 2022 Restructuring Program (1) Fiscal 2021 and prior Restructuring Programs (2) Total Accrual balance as of September 30, 2022 $ — $ 26 $ 23 $ 49 Restructuring charges 8 — — 8 Cash payments (2) (11) (3) (16) Impact of foreign currency fluctuations — 2 2 4 Accrual balance as of December 31, 2022 $ 6 $ 17 $ 22 $ 45 (1) Payments related to the fiscal 2023 and fiscal 2022 restructuring programs are expected to be completed in fiscal 2028. (2) Payments related to the fiscal 2021 and prior restructuring programs are expected to be completed in fiscal 2027. |
Financing Arrangements
Financing Arrangements | 3 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | Financing Arrangements The following table reflects principal amounts of debt and debt net of discounts and issuance costs for the periods presented: December 31, 2022 September 30, 2022 (In millions) Principal amount Net of discounts and issuance costs Principal amount Net of discounts and issuance costs Senior 6.125% Notes due September 15, 2028 $ 1,000 $ 988 $ 1,000 $ 988 Tranche B-1 Term Loans due December 15, 2027 800 784 800 783 Tranche B-2 Term Loans due December 15, 2027 743 738 743 738 Tranche B-3 Term Loans due December 15, 2027 350 285 350 282 Exchangeable 8.00% Senior Notes due December 15, 2027 250 231 250 169 Convertible 2.25% Senior Notes due June 15, 2023 221 220 221 210 ABL Credit Agreement due September 25, 2025 56 56 — — Total debt $ 3,420 $ 3,302 $ 3,364 $ 3,170 Embedded derivatives liabilities 56 56 72 72 Debt maturing within one year (3,476) (3,358) (221) (210) Long-term debt, net of current portion and derivatives $ — $ — $ 3,215 $ 3,032 Term Loan and ABL Credit Agreements As of December 31, 2022 and September 30, 2022, the Company maintained (i) its 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 (the "Term Loan Credit Agreement") and (ii) its ABL Credit Agreement, 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 $200 million subject to borrowing base availability (the "ABL Credit Agreement"). The ABL Credit Agreement matures on September 25, 2025. Prior to July 12, 2022, the Term Loan Credit Agreement matured in two tranches, with principal amounts of $800 million (the "Tranche B-1 Term Loans") and $743 million (the "Tranche B-2 Term Loans") maturing on December 15, 2027. On July 12, 2022, the Company amended the Term Loan Credit Agreement ("Amendment No. 4"), pursuant to which the Company incurred incremental term loans in an aggregate principal amount of $350 million (the "Tranche B-3 Term Loans"). The Tranche B-3 Term Loans bear interest (a) in the case of alternative base rate ("ABR") Loans at rate per annum equal to 9.00% 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 greater of (x) the adjusted Secured Overnight Financing Rate ("SOFR") Rate for an interest period of one month plus 1.00% and (y) 2.00% and (b) in the case of SOFR Loans, bear interest at a rate per annum equal to 10.00% plus the applicable SOFR rate, subject to a 1.00% floor. Amendment No. 4 also made certain other changes to the Term Loan Credit Agreement solely for the benefit of the lenders providing the Tranche B-3 Term Loans, including reducing flexibility for the Company to incur additional debt and liens or make restricted payments or investments under certain of the negative covenants. The Company placed $221 million of the net proceeds of the Tranche B-3 Term Loans in escrow. Filing of the Chapter 11 Cases triggered an event of default under the Term Loan Credit Agreement causing the automatic acceleration of all obligations thereunder, including the Tranche B-3 Term Loans. The Company evaluated Amendment No. 4 in accordance with ASC 815, Derivatives and Hedging, and determined that there are embedded features in the amendment that are not clearly and closely related to the underlying debt instrument and did not qualify for any scope exceptions set forth in the accounting standards. Accordingly, these embedded features are required to be bifurcated from their host instrument and accounted for separately as an embedded derivative liability. As a result, the Company recorded the fair value of the embedded derivatives as of the issuance date as a $30 million reduction of the initial carrying amount of the Tranche B-3 Term Loans (as part of the debt discount). The discount is amortized to interest expense using the effective interest method over the life of the Tranche B-3 Term Loans. The embedded derivatives will be adjusted to fair value each reported period with changes in fair value subsequent to the issuance date recognized within Interest Expense in the Condensed Consolidated Statements of Operations. See Note 8, "Derivative Instruments and Hedging Activities," for further information regarding the valuation of the embedded derivatives. The aggregate fair value of the embedded derivatives is reflected within Long-term debt in the Condensed Consolidated Balance Sheets. For the three months ended December 31, 2022 and 2021, the Company recognized interest expense of $30 million and $18 million, respectively, related to the Term Loan Credit Agreement, including the amortization of the underwriting discount and issuance costs. The three months ended December 31, 2022 includes $(17) million of interest expense related to the change in the fair value of the Tranche B-3 Term Loans embedded derivatives during the period. As of December 31, 2022, the Company had an outstanding balance of $56 million under the ABL Credit Agreement, which includes borrowings of $90 million and repayments of $34 million made during the first quarter of fiscal 2023. The borrowing matures monthly and is renewable at the Company's election in accordance with the terms and conditions of the ABL Credit Agreement. As of December 31, 2022, the Company has the ability and intent to repay the ABL Credit Agreement balance within one year and has classified the balance as current. Under the terms of the ABL Credit Agreement, the Company can issue letters of credit up to $150 million. At December 31, 2022, the Company had issued and outstanding letters of credit and guarantees of $38 million under the ABL Credit Agreement. The aggregate additional principal amount that may be borrowed under the ABL Credit Agreement, based on the borrowing base less $38 million of outstanding borrowings, letters of credit and guarantees was $21 million at December 31, 2022. For the three months ended December 31, 2022, recognized interest expense related to the ABL Credit Agreement was $1 million. For the three months ended December 31, 2021, recognized interest expense related to the ABL Credit Agreement was not material. Senior Notes The Company’s Senior 6.125% First Lien Notes have an aggregate principal amount outstanding of $1,000 million and mature on September 15, 2028 (the "Senior Notes"). The Senior Notes were issued on September 25, 2020, pursuant to an indenture among the Company, the Company's subsidiaries that are guarantors of the Senior Notes and party thereto and Wilmington Trust, National Association, as trustee and notes collateral agent. For each of the three months ended December 31, 2022 and 2021, the Company recognized interest expense of $16 million related to the Senior Notes, including the amortization of debt issuance costs. Convertible Notes The Company's 2.25% Convertible Notes have an aggregate principal amount outstanding of $350 million (including notes issued in connection with the underwriters' exercise in full of an over-allotment option of $50 million) and mature on June 15, 2023. The Convertible Notes were issued under an indenture, by and between the Company and the Bank of New York Mellon Trust Company N.A., as trustee. On July 12, 2022, the Company repurchased approximately $129 million principal amount of the Company's $350 million Convertible Notes due June 15, 2023. The repurchase was accounted for as a loan extinguishment. Based on the application of the loan extinguishment guidance within ASC 470, the Company recorded a $5 million gain on extinguishment within Interest expense in the Consolidated Statements of Operations during fiscal 2022. In connection with the repurchase, the Company terminated a portion of the Bond Hedge and Call Spread Warrants, each representing 4.7 million of its common stock. For the three months ended December 31, 2022 and 2021, the Company recognized interest expense of $2 million and $7 million related to the Convertible Notes, which includes $0 million and $5 million of amortization of the debt discount and issuance costs, respectively. The net carrying amount of the Convertible Notes for the periods indicated was as follows: (In millions) December 31, 2022 September 30, 2022 Principal $ 221 $ 221 Less: Unamortized debt discount — (10) Unamortized issuance costs (1) (1) Net carrying amount $ 220 $ 210 The net carrying amount of the equity component of the Convertible Notes for the periods indicated was as follows: (In millions) December 31, 2022 (1) September 30, 2022 Debt discount for conversion option $ 79 $ 92 Less: Conversion option retirement — (10) Issuance costs — (3) Adoption of ASU 2020-06 (56) — Net carrying amount $ 23 $ 79 (1) Upon adoption of ASU 2020-06 on October 1, 2022, the Company recorded an adjustment to reclassify the debt discount for the conversion option and issuance costs associated with the equity component of the Convertible Notes. See Note 2, "Recent Accounting Pronouncements," for further information regarding the cumulative effect adjustment made by the Company upon adoption. The remaining equity component of the Convertible Notes is related to the $129 million of the Convertible Notes which were repurchased prior to the adoption of ASU 2020-06 as described above. Exchangeable Notes On July 12, 2022, the Company issued its 8.00% Exchangeable Senior Secured Notes due 2027 with an aggregate principal amount of $250 million (the "Exchangeable Notes"). The Exchangeable Notes were issued pursuant to an indenture by and among Avaya Inc., the guarantors party thereto and Wilmington Trust, National Association, as trustee, exchange agent and notes collateral agent. The Company evaluated the indenture governing the Exchangeable Notes in accordance with ASC 815, Derivatives and Hedging, and determined that there are embedded features in the indenture that are not clearly and closely related to the underlying debt instrument and did not qualify for any scope exceptions set forth in the accounting standards. Accordingly, these embedded features are required to be bifurcated from their host instrument and accounted for separately as an embedded derivative liability. As a result, the Company recorded the fair value of the embedded derivatives as of the issuance date as a $4 million reduction of the initial carrying amount of the Exchangeable Notes (as part of the debt discount). The discount is amortized to interest expense using the effective interest method over the life of the Exchangeable Notes. The embedded derivatives will be adjusted to fair value each reported period with changes in fair value subsequent to the issuance date recognized within Interest Expense in the Condensed Consolidated Statements of Operations. See Note 8, "Derivative Instruments and Hedging Activities," for further information regarding the valuation of the embedded derivatives. The aggregate fair value of the embedded derivatives is reflected within Long-term debt in the Condensed Consolidated Balance Sheets. For the three months ended December 31, 2022, the Company recognized interest expense of $7 million related to the Exchangeable Notes, which includes $1 million of amortization of the debt issuance costs, and $1 million related to the change in the fair value of the Exchangeable Notes embedded derivatives during the period. The net carrying amount of the Exchangeable Notes for the periods indicated was as follows: (In millions) December 31, 2022 September 30, 2022 Principal $ 250 $ 250 Less: Unamortized debt discount — (65) Unamortized issuance costs (15) (12) Unamortized debt discount - Embedded derivative liability (4) (4) Net carrying amount $ 231 $ 169 The net carrying amount of the equity component of the Exchangeable Notes for the period indicated was as follows: (In millions) December 31, 2022 (1) September 30, 2022 Debt discount for conversion option $ 62 $ 66 Less: Issuance costs — (4) Adoption of ASU 2020-06 (62) — Net carrying amount $ — $ 62 (1) Upon adoption of ASU 2020-06 on October 1, 2022, The Company recorded an adjustment to reclassify the debt discount for the conversion option and issuance costs associated with the equity component of the Exchangeable Notes. See Note 2, "Recent Accounting Pronouncements," for further information regarding the cumulative effect adjustment made by the Company upon adoption. The weighted average contractual interest rate of the Company's outstanding debt was 8.0% as of December 31, 2022 and 7.4% as of September 30, 2022, including adjustments related to the Company's interest rate swap agreements (see Note 8, "Derivative Instruments and Hedging Activities"). The effective interest rate for the Term Loan Credit Agreement was 10.7% as of December 31, 2022 and 9.0% as of September 30, 2022. The effective interest rate for the Senior Notes as of December 31, 2022 and September 30, 2022 was not materially different than its contractual interest rate. The effective interest rate for the Convertible Notes was 2.8% as of December 31, 2022, reflecting adjustment to the conversion feature in equity upon adoption of ASU 2020-06. The effective interest rate for the Convertible Notes was 9.2% as of September 30, 2022, reflecting the separation of the conversion feature in equity. The effective interest rate for the Exchangeable Notes was 9.9% as of December 31, 2022, reflecting adjustment to the conversion feature in equity upon adoption of ASU 2020-06. The effective interest rate for the Exchangeable Notes was 17.7% as of September 30, 2022, reflecting the separation of the conversion feature in equity. The effective interest rates include interest on the debt and amortization of discounts and issuance costs. On December 29, 2022, the Company provided Notices of Default to the administrative agents of the Term Loan Credit Agreement and ABL Credit Agreement; and the trustees of the Senior Notes, Convertible Notes and Exchangeable Notes due to the Company's failure to timely deliver financial statements for the nine months ended June 30, 2022 and the fiscal year ended September 30, 2022. It is not probable that the violation will be cured during the grace period and therefore, in accordance with the terms of the credit agreements, the debt is deemed callable and has been classified as a current liability on the Condensed Consolidated Balance Sheet as of December 31, 2022. As noted in Note 1, "Background and Basis of Presentation," all of the Debtors' pre-petition equity and debt facilities as well as the Debtors' securities were extinguished upon Emergence. Debtor in Possession Financing On the Petition Date, the Debtors entered into the DIP Term Loan Facility. On February 24, 2023, the Debtors entered into the DIP ABL Facility. The Bankruptcy Court provided final approval for both facilities on March 7, 2023. The filing of the Chapter 11 Cases constituted an event of default under the ABL Credit Agreement, the Term Loan Credit Agreement, the Senior Notes, the Convertible Notes and the Exchangeable Notes, that accelerated and, as applicable, increased certain obligations thereunder. Reorganized Company Financing On the Emergence Date, the DIP Term Loan converted on a dollar-for-dollar basis into a term loan under a senior secured exit term loan facility and the Company incurred an additional $310 million under the facility (including amounts incurred pursuant to a rights offering) for an aggregate principal amount of $810 million (the "Exit Term Loan", such facility, the "Exit Term Loan Facility", and the agreement providing for such facility, the "Exit Term Loan Credit Agreement") and the DIP ABL Facility converted on a dollar-for-dollar basis into a senior secured exit asset-based revolving loan facility (the "Exit ABL Loan", such facility, the "Exit ABL Loan Facility", and the agreement providing for such facility, the "Exit ABL Credit Agreement"). The Exit Term Loan bears interest at a rate equal to (1) Term SOFR plus (i) 7.50% to the extent interest is paid |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Dec. 31, 2022 | |
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 FASB ASC Topic 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 outstanding variable rate loans. On May 16, 2018, the Company entered into interest rate swap agreements with six counterparties, which fixed a portion of the variable interest due under its Term Loan Credit Agreement (the "Original Swap Agreements"). Under the terms of the Original Swap Agreements, which matured on December 15, 2022, the Company paid a fixed rate of 2.935% and received a variable rate of interest based on one-month LIBOR. Through September 23, 2020, the total $1,800 million notional amount of the Original Swap Agreements were designated as cash flow hedges and deemed highly effective as defined under ASC 815. On September 23, 2020, the Company entered into an interest rate swap agreement for a notional amount of $257 million (the “Offsetting Swap Agreement”). Under the terms of the Offsetting Swap Agreement, which matured on December 15, 2022, the Company paid a variable rate of interest based on one-month LIBOR and received a fixed rate of 0.1745%. The Company entered into the Offsetting Swap Agreement to maintain a net notional amount less than the amount of the Company’s variable rate loans outstanding. The Offsetting Swap Agreement was not designated for hedge accounting treatment. On September 23, 2020, Original Swap Agreements with a notional amount of $257 million were also de-designated from hedge accounting treatment. Through June 30, 2022, Original Swap Agreements with a notional amount of $1,543 million were designated as cash flow hedges and deemed highly effective as defined under ASC 815. On June 30, 2022, the Company determined that the hedged transactions were no longer highly probable of occurring as forecasted, and as such, the Company de-designated the remaining Original Swap Agreements from hedge accounting treatment. On July 1, 2020, the Company entered into interest rate swap agreements with four counterparties, which fixed a portion of the variable interest due under its Term Loan Credit Agreement (the "Forward Swap Agreements") from December 15, 2022 (the maturity date of the Original Swap Agreements) through December 15, 2024. Under the terms of the Forward Swap Agreements, the Company would pay a fixed rate of 0.7047% and receive a variable rate of interest based on one-month LIBOR. The total notional amount of the Forward Swap Agreements was $1,400 million. Through March 23, 2022, the Forward Swap Agreements were designated as cash flow hedges and deemed highly effective as defined by ASC 815. On March 23, 2022, the Company terminated the Forward Swap Agreements and simultaneously entered into new interest rate swap agreements with four counterparties (the "New Forward Swap Agreements"), which resulted in the receipt of $52 million cash proceeds. The New Forward Swap Agreements fixed a portion of the variable interest due under the Company's Term Loan Credit Agreement from December 15, 2022 through June 15, 2027. Under the terms of the New Forward Swap Agreements, the Company paid a fixed rate of 2.5480% and received a variable rate of interest based on one-month SOFR. The total notional amount of the New Forward Swap Agreements is $1,000 million. Through June 30, 2022, the New Forward Swap Agreements were designated as cash flow hedges and deemed highly effective as defined by ASC 815. On June 30, 2022, the Company determined that the hedged transactions were no longer highly probable of occurring as forecasted, and as such, the Company de-designated the New Forward Swap Agreements from hedge accounting treatment. The Company records changes in the fair value of interest rate swap agreements designated as cash flow hedges initially within Accumulated other comprehensive income (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 cash flow hedge is reclassified from Accumulated other comprehensive income (loss) to Interest expense in the Condensed Consolidated Statements of Operations. The Company records changes in the fair value of interest rate swap agreements not designated for hedge accounting within Interest expense. On September 23, 2020, the Company froze a $15 million deferred loss within Accumulated other comprehensive income (loss) related to the de-designated Original Swap Agreements, which was reclassified to Interest expense over the term of the Original Swap Agreements. On March 23, 2022, the Company froze a $52 million deferred gain within Accumulated other comprehensive income (loss) related to the termination of the Forward Swap Agreements, which was reclassified to Interest expense over the term of the original Forward Swap Agreements. On June 30, 2022, the Company froze a $9 million deferred gain within Accumulated other comprehensive income (loss) related to the de-designation of the Original Swap Agreements and New Forward Swap Agreements, which was reclassified to Interest expense over the term of the respective swap agreements. In December 2022, the Company concluded that the hedged forecasted transactions related to the interest rate swap agreements are probable of not occurring as a result of the Company's inability to reach an out of court solution regarding potential financings, refinancings, recapitalizations, reorganizations, restructurings or investment transactions involving the Company and certain debt holders. As a result, frozen deferred gains of $63 million related to the Company's interest rate swap agreements were reclassified to Interest expense during the first quarter of fiscal 2023. The Company later terminated its New Forward Swap Agreements resulting in the receipt of $40 million of net cash proceeds which is reflected within cash used for operating activities in the Condensed Consolidated Statements of Cash Flows for the three months ended December 31, 2022. It is management's intention that the net notional amount of interest rate swap agreements be less than or equal to the variable rate loans outstanding during the life of the derivatives. Debt-Related Embedded Derivatives The Company's Tranche B-3 Term Loans and Exchangeable Notes contain embedded features that, in certain scenarios, could modify the cash flows of their respective debt instruments. These embedded features (the "Debt-related embedded derivatives") are required to be bifurcated from their host contracts and accounted for as an embedded derivative. The Debt-related embedded derivatives are recorded at fair value with changes in fair value subsequent to the issuance date recorded in Interest expense in the Condensed Consolidated Statements of Operations. On July 12, 2022, the issuance date, the aggregate fair value of the Debt-related embedded derivatives was $34 million, which was recorded as a debt discount (contra liability) and a derivative liability within Long-term debt on the Consolidated Balance Sheets. As of December 31, 2022 and September 30, 2022, the aggregate fair value of the Debt-related embedded derivatives was $56 million and $72 million, respectively. The fair value of the derivatives is determined using the with-and-without model which compares the estimated fair value of the underlying debt instrument with the embedded features to the estimated fair value of the underlying debt instrument without the embedded features, with the difference representing the estimated fair value of the embedded derivative features. The with-and-without model includes significant unobservable estimates, including estimated market yield, an estimation of the Company’s probability of default and creditor recovery rates, and the probability of the occurrence of a change of control event or asset sale. The fair value of the derivatives as of December 31, 2022 was determined using the market assumptions summarized below: December 31, 2022 Tranche B-3 Term Loans due December 15, 2027 Credit Spread 31.03 % Risk-free interest rates 3.99 % Exchangeable 8.00% Senior Secured Notes due 2027 Credit Spread 31.03 % Risk-free interest rates 3.99 % Implied volatility 273.31 % Price per share of common stock $0.20 Foreign Currency Forward Contracts The Company, from time to time, utilizes foreign currency forward contracts primarily to hedge fluctuations associated with certain monetary assets and liabilities including receivables, payables and certain intercompany balances. These foreign currency forward contracts are not designated for hedge accounting treatment. As a result, changes in the fair value of these contracts are recorded as a component of Other income, net to offset the change in the value of the hedged assets and liabilities. As of December 31, 2022, the Company had no open foreign currency forward contracts. As of September 30, 2022, the Company maintained open foreign currency forward contracts with a total notional value of $12 million, hedging the Czech Koruna. 2017 Emergence Date Warrants In accordance with the bankruptcy plan of reorganization adopted in connection with the Company's emergence from bankruptcy on December 15, 2017 (the "2017 Plan of Reorganization"), the Company issued warrants to purchase 5,645,200 shares of the Company's common stock to the holders of the second lien obligations extinguished pursuant to the 2017 Plan of Reorganization (the "2017 Emergence Date Warrants"). Each 2017 Emergence Date Warrant had an exercise price of $25.55 per share and expired on December 15, 2022. The 2017 Emergence Date Warrants contained certain derivative features that required them to be classified as a liability and for changes in the fair value of the liability to be recognized in earnings each reporting period. On November 14, 2018, the Company's Board approved a warrant repurchase program, authorizing the Company to repurchase up to $15 million worth of the 2017 Emergence Date Warrants. None of the 2017 Emergence Date Warrants were exercised or repurchased. The fair value of the 2017 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 2017 Emergence Date Warrants as of September 30, 2022 was determined using the input assumptions summarized below: September 30, 2022 (1) Expected volatility 113.93 % Risk-free interest rates 2.36 % Contractual remaining life (in years) 0.46 Price per share of common stock $2.24 (1) The Company qualitatively determined the fair value of the 2017 Emergence Date Warrants as of September 30, 2022 to be negligible as a result of the decline in Company's stock price since the most recent quantitative analysis (June 30, 2022) and the remaining contractual term of 0.21 years as of September 30, 2022. The amounts presented represent the input assumptions as of June 30, 2022. In determining the fair value of the 2017 Emergence Date Warrants, the dividend yield was assumed to be zero as the Company did not anticipate paying dividends on its common stock throughout the term of the warrants. Financial Statement Information Related to Derivative Instruments The following table summarizes the fair value of the Company's derivatives on a gross basis, including accrued interest: December 31, 2022 September 30, 2022 (In millions) Balance Sheet Caption Asset Liability Asset Liability Derivatives Not Designated as Hedging Instruments: Interest rate contracts Other current assets $ — $ — $ 15 $ — Interest rate contracts Other assets — — 40 — Interest rate contracts Other current liabilities — — — 2 Debt-related embedded derivatives Debt maturing within one year — 56 — — Debt-related embedded derivatives Long-term debt — — — 72 — 56 55 74 Total derivatives fair value $ — $ 56 $ 55 $ 74 The following table provides information regarding the location and amount of pre-tax gains (losses) for interest rate contracts designated as cash flow hedges: Three months ended 2022 2021 (In millions) Interest Expense Other Comprehensive Loss Interest Expense Other Comprehensive Income Financial Statement Line Item in which Cash Flow Hedges are Recorded $ (5) $ (100) $ (54) $ 40 Impact of cash flow hedging relationships: Gain recognized in AOCI on interest rate swaps — — — 15 Interest expense reclassified from AOCI (62) 62 (13) 13 The following table provides information regarding the pre-tax (losses) gains for derivatives not designated as hedging instruments on the Condensed Consolidated Statements of Operations: Three months ended (In millions) Location of Derivative Pre-tax (Loss) Gain 2022 2021 Interest rate contracts Interest expense $ (13) $ — Debt-related embedded derivatives Interest expense (16) — 2017 Emergence Date Warrants Other income, net — 1 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: December 31, 2022 September 30, 2022 (In millions) Asset Liability Asset Liability Gross amounts recognized in the Condensed Consolidated Balance Sheets $ — $ 56 $ 55 $ 74 Gross amount subject to offset in master netting arrangements not offset in the Condensed Consolidated Balance Sheets — — (2) (2) Net amounts $ — $ 56 $ 53 $ 72 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets | Intangible Assets, net The Company's intangible assets consist of the following for the periods indicated: (In millions) Technology Customer Trademarks and Trade Names Total Balance as of December 31, 2022 Finite-lived intangible assets: Cost $ 966 $ 2,149 $ 42 $ 3,157 Accumulated amortization (834) (781) (25) (1,640) Finite-lived intangible assets, net 132 1,368 17 1,517 Indefinite-lived intangible assets: Cost — — 333 333 Accumulated impairment — — (155) (155) Indefinite-lived intangible assets, net — — 178 178 Intangible assets, net $ 132 $ 1,368 $ 195 $ 1,695 Balance as of September 30, 2022 Finite-lived intangible assets: Cost $ 964 $ 2,146 $ 42 $ 3,152 Accumulated amortization (797) (741) (25) (1,563) Finite-lived intangible assets, net 167 1,405 17 1,589 Indefinite-lived intangible assets: Cost — — 333 333 Accumulated impairment — — (146) (146) Indefinite-lived intangible assets, net — — 187 187 Intangible assets, net $ 167 $ 1,405 $ 204 $ 1,776 Intangible assets with finite lives are amortized using the straight-line method over the estimated economic lives of the assets. 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 but are subject to impairment testing annually, on July 1 st , or more frequently if events occur or circumstances change that indicate an asset may be impaired. As announced in a Form 8-K dated December 13, 2022, the Company was unable to reach an out-of-court resolution with certain holders of the Convertible Notes, Senior Notes, Exchangeable Notes, and the Term Loans outstanding under the Term Loan Credit Agreement, regarding one or more potential financings, refinancings, recapitalizations, reorganizations, restructurings, or investment transactions involving the Company. As a result, the Company revised its outlook to reflect the increased likelihood of a solvency event. The Company concluded that a triggering event had occurred and performed an interim quantitative impairment test for its indefinite-lived intangible asset, the Avaya Trade Name, as of December 31, 2022 to compare the fair value of the Avaya Trade Name to its carrying amount. The fair value of the Avaya Trade Name was estimated using the relief-from-royalty model, a form of the income approach. Under this methodology, the fair value of the trade name was estimated by applying a royalty rate to forecasted net revenues which was then discounted using a risk-adjusted rate of return on capital. The model relies on assumptions regarding revenue growth rates, royalty rate, discount rate and terminal growth rate. Revenue growth rates inherent in the forecast were based on input from internal and external market intelligence research sources that compare factors such as growth in global economies, regional industry trends and product evolutions. The royalty rate was determined using a set of observed market royalty rates. The discount rate the Company used represents the estimated weighted average cost of capital, which reflects the overall level of inherent risk and the rate of return an outside investor would expect to earn. To estimate royalty cash flows beyond the final year of its model, the Company used a terminal value approach. Under this approach, the Company applied a perpetuity growth assumption to determine the terminal value. The Company incorporated the present value of the resulting terminal value into its estimate of fair value. The result of the interim impairment test of the Avaya Trade Name as of December 31, 2022 indicated that the carrying amount of the Avaya Trade Name exceeded its estimated fair value primarily due to the updated outlook. As a result, the Company recorded an indefinite-lived intangible asset impairment charge of $9 million within the Impairment charges line item in the Condensed Consolidated Statements of Operations, representing the amount by which the carrying |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value MeasurementsPursuant to the accounting guidance for fair value measurements, fair value is defined as 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. Considerable judgment was required in developing certain of the estimates of fair value and accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange. 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. Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and September 30, 2022 were as follows: December 31, 2022 September 30, 2022 Fair Value Measurements Using Fair Value Measurements Using (In millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Interest rate contracts $ — $ — $ — $ — $ 55 $ — $ 55 $ — Total assets $ — $ — $ — $ — $ 55 $ — $ 55 $ — Liabilities: Interest rate contracts $ — $ — $ — $ — $ 2 $ — $ 2 $ — Debt-related embedded derivatives 56 — — 56 72 — — 72 Total liabilities $ 56 $ — $ — $ 56 $ 74 $ — $ 2 $ 72 Interest rate contracts classified as Level 2 assets and liabilities are not actively traded and are valued using pricing models that use observable inputs. Debt-related Embedded Derivatives classified as Level 3 liabilities are valued using the with-and-without model which is further described in Note 8, "Derivative Instruments and Hedging Activities." The following table provides changes to those fair value measurements using Level 3 inputs for the three months ended December 31, 2022: Fair Value Measurements Using Significant Unobservable Inputs (In millions) Debt-Related Embedded Derivatives Balance as of September 30, 2022 $ 72 Change in fair value (1) (16) Balance as of December 31, 2022 $ 56 (1) The change in fair value of the debt-related embedded derivatives was recorded in Interest expense. During the three months ended December 31, 2022 and 2021, there were no transfers into or out of Level 3. Fair Value of Financial Instruments The estimated fair values of the Senior Notes, Term Loans, Exchangeable Notes and Convertible Notes as of December 31, 2022 and September 30, 2022 were as follows: December 31, 2022 September 30, 2022 (In millions) Principal amount Fair value Principal amount Fair value Senior 6.125% Notes due September 15, 2028 $ 1,000 $ 307 $ 1,000 $ 497 Tranche B-1 Term Loans due December 15, 2027 800 275 800 433 Tranche B-2 Term Loans due December 15, 2027 743 260 743 403 Tranche B-3 Term Loans due December 15, 2027 350 $ 217 350 232 Exchangeable 8.00% Senior Notes due December 15, 2027 250 $ 88 250 162 Convertible 2.25% Senior Notes due June 15, 2023 221 9 221 95 Total $ 3,364 $ 1,156 $ 3,364 $ 1,822 The estimated fair value of the Company's Senior Notes and Term Loans was determined using Level 2 inputs based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices. The estimated fair value of the Exchangeable Notes and Convertible Notes was determined based on the quoted price of the Exchangeable Notes and Convertible Notes in an inactive market on the last trading day of the reporting period and has been classified as Level 2. The fair value of the outstanding balance under ABL credit agreement approximates its carrying amount due to its short term maturities and seniority over the Company's other outstanding debt instruments. |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's effective income tax rate for the three months ended December 31, 2022 differed from the U.S. federal tax rate by 7% or $14 million principally related to deferred taxes (including losses) for which no benefit was recorded because it is more likely than not that the tax benefits would not be realized and the release of deferred taxes from Accumulated Other Comprehensive Income upon termination of interest rate swaps. The Company's effective income tax rate for the three months ended December 31, 2021 differed from the U.S. federal tax rate by 59% or $28 million principally related to deferred taxes (including losses) generated for which no benefit was recorded because it is more likely than not that the tax benefits would not be realized; and certain nondeductible expenses. |
Benefit Obligations
Benefit Obligations | 3 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Benefit Obligations | Benefit ObligationsThe 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. employees and 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. The components of the pension and post-retirement net periodic benefit (credit) cost for the periods indicated are provided in the table below: Three months ended (In millions) 2022 2021 Pension Benefits - U.S. Components of net periodic benefit credit Service cost $ 1 $ 1 Interest cost 10 5 Expected return on plan assets (12) (12) Net periodic benefit credit $ (1) $ (6) Pension Benefits - Non-U.S. Components of net periodic benefit cost Service cost $ 1 $ 2 Interest cost 3 1 Amortization of actuarial gain (3) — Net periodic benefit cost $ 1 $ 3 Post-retirement Benefits - U.S. Components of net periodic benefit cost Interest cost $ 1 $ 1 Amortization of prior service credit (1) (1) Net periodic benefit cost $ — $ — The service components of net periodic benefit (credit) cost were recorded similar to compensation expense, while all other components were recorded in Other (loss) income, 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 law and regulations, or to directly pay benefits where appropriate. In March 2021, the American Rescue Plan Act was signed into law, providing limited interest-rate relief provisions and an extended shortfall amortization period for pension funding and retirement plan distributions. As a result, the Company did not make any contributions to the U.S. pension plans during the three months ended December 31, 2022 and does not expect to make any contributions to the U.S. pension plans during the remainder of fiscal 2023. Contributions to the non-U.S. pension plans were $5 million for the three months ended December 31, 2022. For the remainder of fiscal 2023, the Company estimates that it will make contributions totaling $19 million for non-U.S. plans. Most post-retirement medical benefits are not pre-funded. Consequently, the Company makes payments directly to the claims administrator as retiree medical benefit claims are disbursed. These payments are funded by the Company up to the maximum contribution amounts specified in the plan documents and contracts with the Communications Workers of America and the International Brotherhood of Electrical Workers, and contributions from the participants, if required. During the three months ended December 31, 2022, the Company made payments for retiree medical and dental benefits of $2 million and received reimbursements from the represented employees' post-retirement health trust of $2 million related to payments in prior periods. The Company estimates it will make payments for retiree medical and dental benefits totaling $8 million for the remainder of fiscal 2023. |
Share-based Compensation
Share-based Compensation | 3 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement | Share-based Compensation The Company maintains share-based compensation plans under which non-employee directors, employees of the Company or any of its affiliates, and certain consultants and advisors may be granted stock options, restricted stock, restricted stock units ("RSUs"), performance awards ("PRSUs") and other forms of awards granted or denominated in shares of the Company's common stock, as well as certain cash-based awards. Pre-tax share-based compensation expense for the three months ended December 31, 2022 and 2021 was $1 million and $14 million, respectively. The decrease in pre-tax share-based compensation is primarily due to forfeitures of RSUs and PRSUs which have occurred since the first quarter of fiscal 2022. The forfeitures were driven in part by restructuring activities initiated by the Company beginning in the fourth quarter of fiscal 2022. During the fourth quarter of fiscal 2022, the Company suspended distribution of shares under the 2019 Equity Incentive Plan (the "2019 Plan") and suspended purchases of shares under the Employee Stock Purchase Plan until the Company's registration statements are reinstated. Existing awards issued under the 2019 Plan will continue to vest in accordance with the terms of the respective award agreements. As of December 31, 2022, there were 890,042 RSUs that vested but were unissued under the 2019 Plan. All awards and the shares reserved under the 2019 Plan were canceled upon Emergence. Restricted Stock Units During the three months ended December 31, 2022, there were 639,065 RSUs that vested with a weighted average grant date fair value of $18.79 per RSU. The Company did not grant any RSUs during the three months ended December 31, 2022. Stock Bonus Program In fiscal 2021, the Company adopted the Avaya Holdings Corp. Stock Bonus Program ("Stock Bonus Program") under which certain employees can elect to receive a specified percentage of their annual incentive bonus in the form of fully vested shares of the Company’s common stock in lieu of cash. Annually, the Company's Board approved the maximum number of shares that could be issued under the Stock Bonus Program. For fiscal 2023, the Company's Board did not approve any shares for issuance under the Stock Bonus Program. Upon implementation of the Plan, all share-based awards were canceled. |
Preferred Stock
Preferred Stock | 3 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Capital Stock | Preferred Stock There were 125,000 shares of the Company's 3% Series A Convertible Preferred Stock, par value $0.01 per share ("Series A Preferred Stock"), issued and outstanding as of December 31, 2022. Upon implementation of the Plan pursuant to the RSA, the Series A Preferred Stock was canceled upon Emergence and the attendant board designation rights described below were eliminated. The Series A Preferred Stock was convertible into shares of the Company's common stock at an initial conversion price of $16.00 per share, which represented an approximately 9% interest in the Company's common stock on an as-converted basis as of December 31, 2022, assuming no holders of options, warrants, convertible notes or similar instruments exercised their exercise or conversion rights. As of December 31, 2022, the carrying value of the Series A Preferred Stock was $134 million, which included $9 million of accreted dividends paid in kind. During the three months ended December 31, 2022, the carrying value of the Series A Preferred Stock increased $1 million due to accreted dividends paid in kind. In connection with the issuance of the Series A Preferred Stock, the Company granted RingCentral certain customary consent rights with respect to certain actions by the Company, including amending the Company's organizational documents in a manner that would have an adverse effect on the Series A Preferred Stock and issuing securities that are senior to, or equal in priority with, the Series A Preferred Stock. In addition, pursuant to an investor rights agreement, until such time when RingCentral and its affiliates hold or beneficially own less than 4,759,339 shares of the Company's common stock (on an as-converted basis), RingCentral has the right to nominate one person for election to the Company's Board. The director designated by RingCentral has the option (i) to serve on the Company's Audit and Nominating and Corporate Governance Committees or (ii) to attend (but not vote at) a ll of the Company's Board's committee meetings. On November 6, 2020, Robert Theis was elected to join the Company's Board as RingCentral's designee. On October 20, 2022, Robert Theis provided notice of his intent to resign from the Board effective October 31, 2022, in order to focus on his other commitments as General Partner of World Innovation Lab and Lead Independent Director of RingCentral. Mr. Theis's resignation was not due to any disagreement between Mr. Theis and the Company on any matter relating to the Company’s operations, policies, or practices. Subsequent to Mr. Theis's departure, RingCentral nominated Jill K. Frizzley for election to the Company's Board. On December 13, 2022, Ms. Frizzley was elected to join the Board. On the Emergence Date, all members of the Board resigned and the New Board was appointed pursuant to the Plan. |
Net Income (Loss) Per Common Sh
Net Income (Loss) Per Common Share | 3 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Common Share | Loss Per Common Share The following table sets forth the calculation of net loss attributable to common stockholders and the computation of basic and diluted loss per share for the periods indicated: Three months ended (In millions, except per share amounts) 2022 2021 Loss per share: Numerator Net loss $ (164) $ (66) Dividends to preferred stockholders (1) (1) Undistributed loss (165) (67) Percentage allocated to common stockholders (1) 100.0 % 100.0 % Numerator for basic and diluted loss per common share $ (165) $ (67) Denominator for basic and diluted loss per common share 87.5 84.7 Loss per common share Basic $ (1.89) $ (0.79) Diluted $ (1.89) $ (0.79) (1) Basic weighted average common stock outstanding 87.5 84.7 Basic weighted average common stock and common stock equivalents (preferred shares) 87.5 84.7 Percentage allocated to common stockholders 100.0 % 100.0 % For the three months ended December 31, 2022, the Company excluded 3.2 million RSUs, 0.3 million stock options, 58.1 million shares underlying the Exchangeable Notes, 7.9 million shares underlying the Convertible Notes and Call Spread Warrants, 22.1 million shares underlying the outstanding consideration advance received in connection with the Company's strategic partnership with RingCentral and 0.1 million shares of Series A Preferred Stock from the diluted loss per share calculation as their effect would have been anti-dilutive. The Company also excluded 3.8 million PRSUs from the diluted loss per share calculation as either their performance metrics have not yet been attained or their effect would have been anti-dilutive. For the three months ended December 31, 2021, the Company excluded 4.6 million RSUs, 0.3 million stock options, 0.2 million shares issuable under the ESPP, 5.6 million 2017 Emergence Date Warrants, 12.6 million shares underlying the Convertible Notes and Call Spread Warrants and 0.1 million shares of Series A Preferred Stock from the diluted loss per share calculation as their effect would have been anti-dilutive. The Company also excluded 2.1 million PRSUs and 0.3 million shares authorized under the Company's Stock Bonus Program from the diluted loss per share calculation as either their performance metrics had not yet been attained or their effect would have been anti-dilutive. With the adoption of ASU 2020-06 on October 1, 2022, the Company is required to calculate the potential dilutive effect of its convertible instruments under the if-converted method. As disclosed in our fiscal 2022 Form 10-K filed on September 8, 2023, the Company has been using the if-converted method to calculate the dilutive impact of its convertible instruments since the third quarter of fiscal 2022. The use of the if-converted method in the current period does not impact the comparability of diluted earnings per share for the three months ended December 31, 2022 and 2021 as the Company's convertible instruments would have been anti-dilutive under both the treasury stock and if-converted methodologies. |
Operating Segments
Operating Segments | 3 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Operating Segments | Operating SegmentsThe Products & Solutions segment primarily develops, markets, and sells unified communications and collaboration and contact center solutions, offered on-premise, in the cloud, or as a hybrid solution. These integrate multiple forms of communications, including telephony, email, instant messaging and video. The Services 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. Revenue from customers who upgrade and acquire new technology through the Company's subscription offerings is reported within the Services segment. 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, and impairment charges 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: Three months ended (In millions) 2022 2021 REVENUE Products & Solutions $ 136 $ 231 Services 282 482 418 713 GROSS PROFIT Products & Solutions 66 120 Services 117 291 Unallocated Amounts (1) (35) (42) 148 369 OPERATING EXPENSES Selling, general and administrative 221 262 Research and development 50 61 Amortization of intangible assets 39 40 Impairment charges 9 — Restructuring charges, net 10 7 329 370 OPERATING LOSS (181) (1) INTEREST EXPENSE AND OTHER (EXPENSE) INCOME, NET (9) (47) LOSS BEFORE INCOME TAXES $ (190) $ (48) |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 3 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive Income (Loss) The components of Accumulated other comprehensive income (loss) for the periods indicated were as follows: (In millions) Pension, Post-retirement and Post-employment Benefit-related Items Foreign Currency Translation Unrealized Gain on Interest Rate Swaps Accumulated Other Comprehensive Income Balance as of September 30, 2022 $ 151 $ 1 $ 80 $ 232 Other comprehensive loss before reclassifications — (14) — (14) Amounts reclassified to earnings (6) — (62) (68) Provision for income taxes — — (18) (18) Balance as of December 31, 2022 $ 145 $ (13) $ — $ 132 (In millions) Pension, Post-retirement and Post-employment Benefit-related Items Foreign Currency Translation Unrealized Loss on Interest Rate Swaps Accumulated Other Comprehensive Loss Balance as of September 30, 2021 $ (20) $ (37) $ (34) $ (91) Other comprehensive income before reclassifications — 13 15 28 Amounts reclassified to earnings (1) — 13 12 Balance as of December 31, 2021 $ (21) $ (24) $ (6) $ (51) Reclassifications from Accumulated other comprehensive income (loss) related to changes in unamortized pension, post-retirement and post-employment benefit-related items are recorded in Other (expense) income, net. Reclassifications from Accumulated other comprehensive income (loss) related to the unrealized gain (loss) on interest rate swap agreements are recorded in Interest expense. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions As of December 31, 2022, the Board was comprised of eight directors, including the Company's Chief Executive Officer and seven non-employee directors. On October 20, 2022, Robert Theis, who was elected to join the Board as RingCentral's designee on November 6, 2020, provided notice of his intent to resign from the Board effective October 31, 2022. On December 13, 2022, Jill K. Frizzley was appointed to the Board in Mr. Theis' place pursuant to the Company's strategic partnership with RingCentral. See Note 13, "Preferred Stock," to our unaudited interim Condensed Consolidated Financial Statements for additional information. On February 1, 2023, the Board increased the size of the Board by one director, from eight to nine members, and appointed Carrie W. Teffner to fill the vacancy resulting from the increase. Specific Arrangements Involving the Company's Directors and Executive Officers Stephan Scholl, a Director of the Company who resigned in connection with Emergence, is the Chief Executive Officer of Alight Solutions LLC ("Alight"), a provider of integrated benefits, payroll and cloud solutions, and he also serves on Alight's board of directors. During each of the three months ended December 31, 2022 and 2021, the Company purchased goods and services from subsidiaries of Alight of $1 million. As of December 31, 2022 outstanding accounts payable due to Alight was immaterial. As of September 30, 2022, outstanding accounts payable due to Alight was $1 million. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings In the ordinary course of business, the Company is involved in litigation, claims, government inquiries, investigations and proceedings including, but not limited to, those relating to intellectual property, commercial, employment, environmental indemnity and regulatory matters. The Company records accruals for legal contingencies to the extent that it has concluded that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. When a material loss contingency is reasonably possible but not probable, the Company does not record a liability, but instead discloses the nature and the amount of the claim, and an estimate of the loss or range of loss, if such an estimate can be made. Other than as described below, in the opinion of the Company's management, the likely results of these matters 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. However, an unfavorable resolution could have a material adverse effect on the Company's financial position, results of operations or cash flows in the periods in which the matters are ultimately resolved, or in the periods in which more information is obtained that changes management's opinion of the ultimate disposition. On January 14, 2020, Solaborate Inc. and Solaborate LLC (collectively, "Solaborate") filed suit against the Company in California Superior Court in San Bernardino County. The dispute concerned activities related to the Company's development of the CU360 collaboration unit. Solaborate alleged breach of contract, trade secret misappropriation and unfair business practices, among other causes of action. During the third quarter of fiscal 2022, the Company accrued an expense representing its best estimate of the probable loss which was not material. On February 3, 2023, the Company reached an agreement to settle the lawsuit with Solaborate and agreed to pay an amount consistent with the expense it accrued as of December 31, 2022. The Company enters into indemnification agreements with each of the Company's directors and officers. These agreements require the Company to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to the Company, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. Subject in all respects to applicable law, these agreements generally survive a director's or officer's resignation and/or termination and generally require the Company to indemnify such individuals unless the conduct that is the subject of a claim constitutes a breach of their duty of loyalty to the Company or to the Company ' s stockholders, or is an act or omission not taken in good faith, or which involves intentional misconduct or a knowing violation of the law. In connection with the investigations, the Company has received requests under such indemnification agreements to provide funds for legal fees and other expenses and expects additional requests in connection with the Investigations and related litigation. The Company has not recorded a liability for expected future expenses as of December 31, 2022 for these matters as it cannot estimate the ultimate outcome at this time but has expensed payments made through December 31, 2022. The Company maintains a directors and officers insurance policy under which a portion of the indemnification expenses may be recoverable to mitigate its exposure to potential indemnification obligations. As of December 31, 2022, the Company has not reached its insurance deductible and has not recorded a receivable related to the indemnification claims. We are unable to make a reliable estimate of the eventual cash flows by period related to the indemnification agreements and related insurance recoveries. Avaya notified the SEC of the Audit Committee Investigations and the SEC initiated an investigation to review, among other things, the circumstances surrounding Avaya's financial results for the quarter ended June 30, 2022. Avaya has been cooperating with the SEC's investigation, which is on-going. At this time, the Company is not able to predict the outcome or consequences of the SEC's investigation, however, an adverse outcome could have a material adverse effect on the Company's financial position, results of operations or cash flows. On January 3, 2023, Jeffrey A. Fletcher, et al., filed a putative securities class action complaint (Civil Action No. 1:23-cv-00003) in the United States District Court Middle District of North Carolina, naming Avaya Holdings Corp. and certain of our current and former officers as defendants. The complaint alleged violations of the Exchange Act, based on allegedly false or misleading statements related to the Company’s internal control over financial reporting, the effectiveness of our internal controls over our whistleblower policies and ethics and compliance program and our financial condition. The plaintiffs sought awards of compensatory damages, among other relief and their costs and attorneys’ and experts’ fees. On February 28, 2023, the plaintiff voluntarily filed for dismissal of the action without prejudice, as to all defendants. At this time, the Company is not able to predict the ultimate outcome of this matter, however, an adverse outcome could have a material adverse effect on the Company's financial position, results of operations or cash flows. On February 1, 2023, A6 Capital Management LP, et al., filed a summons with notice (Index No. 650626/2023) in the Supreme Court of the State of New York, New York County, naming certain of our former directors and officers as defendants. The plaintiffs were current or former investors in certain unsecured convertible notes issued by the Company in 2018 and due 2023 (the “Convertible Notes”) and certain plaintiffs invested in the Company’s secured term loan issued in July 2022. The complaint alleged fraud as a result of allegedly false statements regarding the Company’s finances and management, which the plaintiffs relied upon in holding or purchasing the Company’s Convertible Notes. The plaintiffs sought awards of compensatory damages, among other relief. On May 3, 2023, the plaintiffs voluntarily filed an amended notice of discontinuance with prejudice, as to all parties. On February 14, 2023, Oliver Jiang, et al., filed a putative class action complaint (Civil Action No. 1:23-cv-1258) in the United States District Court for the Southern District of New York against Avaya Holdings Corp., and certain of our former officers as defendants (collectively, "Jiang Suit Defendants"). The complaint alleged the purported inclusion of false statements and material omissions in securities filings, and press releases filed with the SEC or issued, as applicable, between October 3, 2019 and November 29, 2022, regarding Avaya’s Q3 2022 earnings guidance and results and the Company’s relationship with RingCentral (the "Jiang Securities Lawsuit"). The lawsuit alleges that the Jiang Suit Defendants exploited Avaya’s insufficient reporting controls and procedures, which resulted in inaccurate budgeting and reporting, to inflate Avaya’s stock price, at which point the Jiang Suit Defendants sold shares and secured financing on improper terms, all in violation of Section 10(b) of the Exchange Act and Rule 10b-5, as well as for derivative “control person” liability, which was pled against Mr. Chirico, our former CEO, and Mr. McGrath, our former Chief Financial Officer, for Avaya’s actions, and, vice versa, against the Company—pursuant to Section 20(a). This case was filed after the Company filed its petition for Chapter 11 proceedings and therefore the plaintiff voluntarily dismissed the case against the Company. The Plaintiff’s claims against Mr. Chirico and Mr. McGrath remain and are subject to the indemnification agreements described above. 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 both December 31, 2022 and September 30, 2022, the amount reserved for product warranties was $1 million. 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 December 31, 2022, the maximum potential payment obligation with regards to letters of credit, guarantees and surety bonds was $64 million. The outstanding letters of credit are deemed to have been issued under the DIP ABL Facility, other than with respect to letters of credit issued by Goldman Sachs, which are cash collateralized. The cash collateral of $4 million is characterized as restricted cash and included in Other assets on the Condensed Consolidated Balance Sheets as of December 31, 2022. 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, 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 quality control standards. The Company maintains a reseller agreement with an equipment vendor to procure, build and store IT equipment on behalf of the Company based upon letters of intent or other order forms provided by the Company. The Company either purchases the equipment or leases the equipment through a third party vendor for use in its data centers, predominantly to support its cloud customers. Under the agreement, the Company’s right to use the equipment commences upon delivery of the equipment. The Company's maximum obligation under these arrangements based on equipment held by the vendor as of December 31, 2022 was $6 million. The Company is entitled to return the equipment subject to certain conditions. From time to time, the Company also enters into cloud services agreements to support the delivery of the Company’s Avaya cloud solutions to its customers. These contracts range from three During fiscal 2022, the Company entered into an agreement to acquire third-party software licenses to enhance its product portfolio serving large and complex contact center environments. The consideration for the licenses is sales-based and includes a minimum commitment which is payable to the extent that the sales-based consideration does not meet specified thresholds within the agreement. As of December 31, 2022, the Company's remaining minimum commitment under the agreement is $8 million for each of fiscal 2023, 2024 and 2025. On February 14, 2023, the Company and RingCentral amended the terms of the First Amended and Restated Framework Agreement, dated February 10, 2020, and the related partnership documents executed in connection therewith, by entering into the Second Amended and Restated Framework Agreement and the related partnership documents executed in connection therewith (the "Amended and Restated RingCentral Agreements"). Among other things, the Amended and Restated RingCentral Agreements, contemplate (i) the Company continuing to serve as the exclusive sales agent for Avaya Cloud Office by RingCentral ("Avaya Cloud Office" or "ACO"); (ii) expanded go-to-market constructs that will enable the Company to directly sell ACO seats into its installed base; (iii) cash compensation to the Company as ACO seats are sold along with the elimination or modification of certain other financial obligations of the Company under the original agreements, including the waiver of the remaining balance of the consideration advance paid by RingCentral to the Company; and (iv) the Company's agreement to purchase seats of ACO in the event certain volumes of ACO sales, which increase over the time period, are not met. The Company's volume commitments are based on cumulative ACO sales that are measured quarterly during the term of the Amended and Restated RingCentral Agreements, subject to the terms and conditions of such agreements. In the event that the cumulative number of ACO seats sold as of the end of each calendar quarter is lower than the agreed upon threshold established for such quarter, the Company will be required to purchase a number of ACO seats equal to such shortfall from RingCentral. Any such ACO seats are subject to certain limitations and must be purchased for a two-year paid term with payments made monthly and pricing that is variable based on sales volumes by jurisdiction, contract size and product tier. The Company may resell such ACO seats to end customers or maintain them for internal use. Transactions with Nokia Pursuant to the Contribution and Distribution Agreement effective October 1, 2000 (the "Contribution and Distribution Agreement"), Nokia Corporation ("Nokia", formerly known as Lucent Technologies, Inc. ("Lucent")) contributed to the Company substantially all of the assets, liabilities and operations associated with its enterprise networking businesses (the "Contributed 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 Contributed Businesses and all contingent liabilities primarily relating to the Contributed 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 effective October 1, 2000 (the "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. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Chapter 11 See Note 1, "Background and Basis of Presentation," Note 7, "Financing Arrangements," and Note 18, "Commitments and Contingencies," to our Condensed Consolidated Financial Statements for information related to the following, all of which occurred subsequent to December 31, 2022. ▪ the Board and Audit Committee Investigations; ▪ the Chapter 11 Filing; ▪ the Plan; ▪ the Debtor in Possession Financing and Exit Financing; ▪ the NYSE Delisting; and ▪ the Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code. ABL Credit Agreements During the second quarter of fiscal 2023, the Company repaid the remainder of the ABL Credit Agreement. Director Appointment On February 1, 2023, the Board increased the size of the Board by one director, from eight to nine members and appointed Carrie W. Teffner to fill the vacancy resulting from the increase in the size of the Board. Fiscal 2023 Restructuring Program During the second quarter of fiscal 2023, the Company authorized a reduction in force with respect to its global employees in connection with the Company’s cost-reduction actions. The reduction in force is aimed at aligning the size of Avaya’s workforce with its operational strategy and cost structure. The Company estimates that it will incur approximately $57 million to $65 million in pre-tax restructuring charges in connection with this reduction in force, all of which are expected to be in the form of cash-based expenditures and substantially all of which are expected to be related to employee severance and other termination benefits. The Company expects to complete the most recently authorized reduction in force and recognize substantially all of these pre-tax restructuring charges during fiscal 2023. As the Company continues to evaluate opportunities to streamline its operations, it may identify additional cost reduction actions that will include workforce reductions and other incremental cost reduction actions. Amended and Restated RingCentral Contracts On February 14, 2023, the Company and RingCentral entered into the Amended and Restated RingCentral Agreements. Among other things, the Amended and Restated RingCentral Agreements contemplate (i) the Company continuing to serve as the exclusive sales agent for ACO; (ii) expanded go-to-market constructs that will enable the Company to directly sell ACO seats into its installed base; (iii) cash compensation to the Company as ACO seats are sold along with the elimination or modification of certain other financial obligations of the Company under the original agreements, including the waiver of the remaining balance of the consideration advance paid by RingCentral to Avaya Inc; and (iv) the Company's agreement to purchase seats of ACO in the event certain volumes of cumulative ACO sales are not met (see Note 18, "Commitments and Contingencies"). Post-Emergence Board of Directors Upon Emergence, all members of our Board resigned. Alan B. Masarek, our Chief Executive Officer, was appointed to the new Board, together with the following individuals: Patrick J. Bartels Jr., Patrick J. Dennis, Robert Kalsow-Ramos, Marylou Maco, Aaron Miller, Donald E. Morgan III, Thomas T. Nielsen and Jacqueline D. Woods. Conversion of Avaya Inc. into a Delaware Limited Liability Company |
Contract Balances (Tables)
Contract Balances (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following tables provide the Company's disaggregated revenue for the periods presented: Three months ended (In millions) 2022 2021 Revenue: Products & Solutions $ 136 $ 231 Services 282 482 Total Revenue $ 418 $ 713 Three months ended December 31, 2022 Three months ended December 31, 2021 (In millions) Products & Solutions Services Total Products & Solutions Services Total Revenue: U.S. $ 62 $ 146 $ 208 $ 114 $ 261 $ 375 International: Europe, Middle East and Africa 38 71 109 65 127 192 Asia Pacific 19 37 56 32 49 81 Americas International - Canada and Latin America 17 28 45 20 45 65 Total International 74 136 210 117 221 338 Total Revenue $ 136 $ 282 $ 418 $ 231 $ 482 $ 713 |
Contract with Customer, Asset and Liability | The following table provides information about accounts receivable, contract assets, contract costs and contract liabilities for the periods presented: (In millions) December 31, 2022 September 30, 2022 Increase (Decrease) Accounts receivable, net $ 302 $ 322 $ (20) Contract assets, net: Current $ 505 $ 543 $ (38) Non-current (Other assets) 127 134 (7) $ 632 $ 677 $ (45) Cost of obtaining a contract: Current (Contract costs) $ 78 $ 81 $ (3) Non-current (Other assets) 40 46 (6) $ 118 $ 127 $ (9) Cost to fulfill a contract: Current (Contract costs) $ 26 $ 29 $ (3) Contract liabilities: Current $ 255 $ 245 $ 10 Non-current 287 300 (13) $ 542 $ 545 $ (3) |
Allowance for Credit Losses | The following table presents the change in the allowance for credit losses by portfolio segment for the period indicated: (In millions) Accounts Receivable (1) Short-term Contract Assets (2) Long-term Contract Assets (3) Total Allowance for credit loss as of September 30, 2022 $ 5 $ 1 $ 2 $ 8 Adjustment to credit loss provision — — (1) (1) Write-offs, net of recoveries — — — — Allowance for credit loss as of December 31, 2022 $ 5 $ 1 $ 1 $ 7 (1) Recorded within Accounts receivable, net on the Condensed Consolidated Balance Sheets. (2) Recorded within Contract assets, net on the Condensed Consolidated Balance Sheets. |
Capitalized Contract Cost | The following table provides information regarding the location and amount for amortization of costs to obtain and costs to fulfill customer contracts recognized in the Company's Condensed Consolidated Statements of Operations for the periods presented: Three months ended (In millions) 2022 2021 Costs to obtain customer contracts: Selling, general and administrative $ 37 $ 44 Revenue 2 4 Total Amortization $ 39 $ 48 Costs to fulfill customer contracts: Costs $ 3 $ 8 |
Supplementary Financial Infor_2
Supplementary Financial Information (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Supplementary Financial Information [Abstract] | |
Consolidated Statements of Operations Information | The following table presents a summary of other (expense) income, net for the periods indicated: Three months ended (In millions) 2022 2021 OTHER (EXPENSE) INCOME, NET Interest income $ 4 $ — Foreign currency losses, net (10) — Other pension and post-retirement benefit credits, net 2 6 Change in fair value of 2017 Emergence Date Warrants — 1 Total other (expense) income, net $ (4) $ 7 |
Supplemental Cash Flow Information | The following table presents supplemental cash flow information for the periods presented: Three months ended (In millions) 2022 2021 OTHER PAYMENTS Interest payments (excluding lease related interest) $ 55 $ 33 Income tax payments 5 7 NON-CASH INVESTING ACTIVITIES Increase (decrease) in Accounts payable for Capital expenditures $ 1 $ (2) Acquisition of equipment under operating leases 1 7 During the three months ended December 31, 2022 and 2021, the Company made payments for operating lease liabilities of $12 million and $15 million, respectively, and made payments for finance lease liabilities of $3 million and $3 million, respectively. The following table presents a reconciliation of cash, cash equivalents, and restricted cash that sum to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows for the periods presented: (In millions) December 31, 2022 September 30, 2022 December 31, 2021 September 30, 2021 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH Cash and cash equivalents $ 225 $ 253 $ 354 $ 498 Restricted cash 223 222 — — Restricted cash included in other assets 4 3 4 4 Total cash, cash equivalents, and restricted cash $ 452 $ 478 $ 358 $ 502 |
Business Restructuring Reserv_2
Business Restructuring Reserves and Programs (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Restructuring Reserve [Abstract] | |
Schedule of Restructuring and Related Costs | The following table summarizes the activity for employee separation costs recognized under the Company's restructuring programs for the three months ended December 31, 2022: (In millions) Fiscal 2023 Restructuring Program (1) Fiscal 2022 Restructuring Program (1) Fiscal 2021 and prior Restructuring Programs (2) Total Accrual balance as of September 30, 2022 $ — $ 26 $ 23 $ 49 Restructuring charges 8 — — 8 Cash payments (2) (11) (3) (16) Impact of foreign currency fluctuations — 2 2 4 Accrual balance as of December 31, 2022 $ 6 $ 17 $ 22 $ 45 (1) Payments related to the fiscal 2023 and fiscal 2022 restructuring programs are expected to be completed in fiscal 2028. (2) Payments related to the fiscal 2021 and prior restructuring programs are expected to be completed in fiscal 2027. |
Restructuring Charges by Activity | The following table summarizes the restructuring charges by activity for the periods presented: Three months ended (In millions) 2022 2021 Employee separation costs $ 8 $ 2 Facility exit costs 2 5 Total restructuring charges $ 10 $ 7 |
Financing Arrangements (Tables)
Financing Arrangements (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
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 for the periods presented: December 31, 2022 September 30, 2022 (In millions) Principal amount Net of discounts and issuance costs Principal amount Net of discounts and issuance costs Senior 6.125% Notes due September 15, 2028 $ 1,000 $ 988 $ 1,000 $ 988 Tranche B-1 Term Loans due December 15, 2027 800 784 800 783 Tranche B-2 Term Loans due December 15, 2027 743 738 743 738 Tranche B-3 Term Loans due December 15, 2027 350 285 350 282 Exchangeable 8.00% Senior Notes due December 15, 2027 250 231 250 169 Convertible 2.25% Senior Notes due June 15, 2023 221 220 221 210 ABL Credit Agreement due September 25, 2025 56 56 — — Total debt $ 3,420 $ 3,302 $ 3,364 $ 3,170 Embedded derivatives liabilities 56 56 72 72 Debt maturing within one year (3,476) (3,358) (221) (210) Long-term debt, net of current portion and derivatives $ — $ — $ 3,215 $ 3,032 |
Convertible Debt | The net carrying amount of the Convertible Notes for the periods indicated was as follows: (In millions) December 31, 2022 September 30, 2022 Principal $ 221 $ 221 Less: Unamortized debt discount — (10) Unamortized issuance costs (1) (1) Net carrying amount $ 220 $ 210 |
Convertible Debt, Equity Component | The net carrying amount of the equity component of the Convertible Notes for the periods indicated was as follows: (In millions) December 31, 2022 (1) September 30, 2022 Debt discount for conversion option $ 79 $ 92 Less: Conversion option retirement — (10) Issuance costs — (3) Adoption of ASU 2020-06 (56) — Net carrying amount $ 23 $ 79 |
Exchangeable Debt | The net carrying amount of the Exchangeable Notes for the periods indicated was as follows: (In millions) December 31, 2022 September 30, 2022 Principal $ 250 $ 250 Less: Unamortized debt discount — (65) Unamortized issuance costs (15) (12) Unamortized debt discount - Embedded derivative liability (4) (4) Net carrying amount $ 231 $ 169 |
Exchangeable Debt, Equity Component | The net carrying amount of the equity component of the Exchangeable Notes for the period indicated was as follows: (In millions) December 31, 2022 (1) September 30, 2022 Debt discount for conversion option $ 62 $ 66 Less: Issuance costs — (4) Adoption of ASU 2020-06 (62) — Net carrying amount $ — $ 62 (1) Upon adoption of ASU 2020-06 on October 1, 2022, The Company recorded an adjustment to reclassify the debt discount for the conversion option and issuance costs associated with the equity component of the Exchangeable Notes. See Note 2, "Recent Accounting Pronouncements," for further information regarding the cumulative effect adjustment made by the Company upon adoption. |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Balance Sheet | The following table summarizes the fair value of the Company's derivatives on a gross basis, including accrued interest: December 31, 2022 September 30, 2022 (In millions) Balance Sheet Caption Asset Liability Asset Liability Derivatives Not Designated as Hedging Instruments: Interest rate contracts Other current assets $ — $ — $ 15 $ — Interest rate contracts Other assets — — 40 — Interest rate contracts Other current liabilities — — — 2 Debt-related embedded derivatives Debt maturing within one year — 56 — — Debt-related embedded derivatives Long-term debt — — — 72 — 56 55 74 Total derivatives fair value $ — $ 56 $ 55 $ 74 |
Derivatives Designated as Cash Flow Hedges | The following table provides information regarding the pre-tax (losses) gains for derivatives not designated as hedging instruments on the Condensed Consolidated Statements of Operations: Three months ended (In millions) Location of Derivative Pre-tax (Loss) Gain 2022 2021 Interest rate contracts Interest expense $ (13) $ — Debt-related embedded derivatives Interest expense (16) — 2017 Emergence Date Warrants Other income, net — 1 |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The following table provides information regarding the location and amount of pre-tax gains (losses) for interest rate contracts designated as cash flow hedges: Three months ended 2022 2021 (In millions) Interest Expense Other Comprehensive Loss Interest Expense Other Comprehensive Income Financial Statement Line Item in which Cash Flow Hedges are Recorded $ (5) $ (100) $ (54) $ 40 Impact of cash flow hedging relationships: Gain recognized in AOCI on interest rate swaps — — — 15 Interest expense reclassified from AOCI (62) 62 (13) 13 |
Offsetting Assets and Liabilities | 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: December 31, 2022 September 30, 2022 (In millions) Asset Liability Asset Liability Gross amounts recognized in the Condensed Consolidated Balance Sheets $ — $ 56 $ 55 $ 74 Gross amount subject to offset in master netting arrangements not offset in the Condensed Consolidated Balance Sheets — — (2) (2) Net amounts $ — $ 56 $ 53 $ 72 |
Fair Value Measurement Inputs and Valuation Techniques | The fair value of the derivatives as of December 31, 2022 was determined using the market assumptions summarized below: December 31, 2022 Tranche B-3 Term Loans due December 15, 2027 Credit Spread 31.03 % Risk-free interest rates 3.99 % Exchangeable 8.00% Senior Secured Notes due 2027 Credit Spread 31.03 % Risk-free interest rates 3.99 % Implied volatility 273.31 % Price per share of common stock $0.20 |
Fair Value Measurement Inputs and Valuation Techniques | The fair value of the 2017 Emergence Date Warrants as of September 30, 2022 was determined using the input assumptions summarized below: September 30, 2022 (1) Expected volatility 113.93 % Risk-free interest rates 2.36 % Contractual remaining life (in years) 0.46 Price per share of common stock $2.24 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class | The Company's intangible assets consist of the following for the periods indicated: (In millions) Technology Customer Trademarks and Trade Names Total Balance as of December 31, 2022 Finite-lived intangible assets: Cost $ 966 $ 2,149 $ 42 $ 3,157 Accumulated amortization (834) (781) (25) (1,640) Finite-lived intangible assets, net 132 1,368 17 1,517 Indefinite-lived intangible assets: Cost — — 333 333 Accumulated impairment — — (155) (155) Indefinite-lived intangible assets, net — — 178 178 Intangible assets, net $ 132 $ 1,368 $ 195 $ 1,695 Balance as of September 30, 2022 Finite-lived intangible assets: Cost $ 964 $ 2,146 $ 42 $ 3,152 Accumulated amortization (797) (741) (25) (1,563) Finite-lived intangible assets, net 167 1,405 17 1,589 Indefinite-lived intangible assets: Cost — — 333 333 Accumulated impairment — — (146) (146) Indefinite-lived intangible assets, net — — 187 187 Intangible assets, net $ 167 $ 1,405 $ 204 $ 1,776 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and September 30, 2022 were as follows: December 31, 2022 September 30, 2022 Fair Value Measurements Using Fair Value Measurements Using (In millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets: Interest rate contracts $ — $ — $ — $ — $ 55 $ — $ 55 $ — Total assets $ — $ — $ — $ — $ 55 $ — $ 55 $ — Liabilities: Interest rate contracts $ — $ — $ — $ — $ 2 $ — $ 2 $ — Debt-related embedded derivatives 56 — — 56 72 — — 72 Total liabilities $ 56 $ — $ — $ 56 $ 74 $ — $ 2 $ 72 |
Fair Value, by Balance Sheet Grouping | The estimated fair values of the Senior Notes, Term Loans, Exchangeable Notes and Convertible Notes as of December 31, 2022 and September 30, 2022 were as follows: December 31, 2022 September 30, 2022 (In millions) Principal amount Fair value Principal amount Fair value Senior 6.125% Notes due September 15, 2028 $ 1,000 $ 307 $ 1,000 $ 497 Tranche B-1 Term Loans due December 15, 2027 800 275 800 433 Tranche B-2 Term Loans due December 15, 2027 743 260 743 403 Tranche B-3 Term Loans due December 15, 2027 350 $ 217 350 232 Exchangeable 8.00% Senior Notes due December 15, 2027 250 $ 88 250 162 Convertible 2.25% Senior Notes due June 15, 2023 221 9 221 95 Total $ 3,364 $ 1,156 $ 3,364 $ 1,822 |
Schedule of Fair Value, Changes in Level 3 Inputs | The following table provides changes to those fair value measurements using Level 3 inputs for the three months ended December 31, 2022: Fair Value Measurements Using Significant Unobservable Inputs (In millions) Debt-Related Embedded Derivatives Balance as of September 30, 2022 $ 72 Change in fair value (1) (16) Balance as of December 31, 2022 $ 56 (1) The change in fair value of the debt-related embedded derivatives was recorded in Interest expense. |
Benefit Obligations (Tables)
Benefit Obligations (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
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 table below: Three months ended (In millions) 2022 2021 Pension Benefits - U.S. Components of net periodic benefit credit Service cost $ 1 $ 1 Interest cost 10 5 Expected return on plan assets (12) (12) Net periodic benefit credit $ (1) $ (6) Pension Benefits - Non-U.S. Components of net periodic benefit cost Service cost $ 1 $ 2 Interest cost 3 1 Amortization of actuarial gain (3) — Net periodic benefit cost $ 1 $ 3 Post-retirement Benefits - U.S. Components of net periodic benefit cost Interest cost $ 1 $ 1 Amortization of prior service credit (1) (1) Net periodic benefit cost $ — $ — |
Net Income (Loss) Per Common _2
Net Income (Loss) Per Common Share (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings (Loss) Per Share | The following table sets forth the calculation of net loss attributable to common stockholders and the computation of basic and diluted loss per share for the periods indicated: Three months ended (In millions, except per share amounts) 2022 2021 Loss per share: Numerator Net loss $ (164) $ (66) Dividends to preferred stockholders (1) (1) Undistributed loss (165) (67) Percentage allocated to common stockholders (1) 100.0 % 100.0 % Numerator for basic and diluted loss per common share $ (165) $ (67) Denominator for basic and diluted loss per common share 87.5 84.7 Loss per common share Basic $ (1.89) $ (0.79) Diluted $ (1.89) $ (0.79) (1) Basic weighted average common stock outstanding 87.5 84.7 Basic weighted average common stock and common stock equivalents (preferred shares) 87.5 84.7 Percentage allocated to common stockholders 100.0 % 100.0 % |
Operating Segments (Tables)
Operating Segments (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Summarized Financial Information of Operating Segments | Summarized financial information relating to the Company's operating segments is shown in the following table for the periods indicated: Three months ended (In millions) 2022 2021 REVENUE Products & Solutions $ 136 $ 231 Services 282 482 418 713 GROSS PROFIT Products & Solutions 66 120 Services 117 291 Unallocated Amounts (1) (35) (42) 148 369 OPERATING EXPENSES Selling, general and administrative 221 262 Research and development 50 61 Amortization of intangible assets 39 40 Impairment charges 9 — Restructuring charges, net 10 7 329 370 OPERATING LOSS (181) (1) INTEREST EXPENSE AND OTHER (EXPENSE) INCOME, NET (9) (47) LOSS BEFORE INCOME TAXES $ (190) $ (48) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive (Loss) Income (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of Accumulated other comprehensive income (loss) for the periods indicated were as follows: (In millions) Pension, Post-retirement and Post-employment Benefit-related Items Foreign Currency Translation Unrealized Gain on Interest Rate Swaps Accumulated Other Comprehensive Income Balance as of September 30, 2022 $ 151 $ 1 $ 80 $ 232 Other comprehensive loss before reclassifications — (14) — (14) Amounts reclassified to earnings (6) — (62) (68) Provision for income taxes — — (18) (18) Balance as of December 31, 2022 $ 145 $ (13) $ — $ 132 (In millions) Pension, Post-retirement and Post-employment Benefit-related Items Foreign Currency Translation Unrealized Loss on Interest Rate Swaps Accumulated Other Comprehensive Loss Balance as of September 30, 2021 $ (20) $ (37) $ (34) $ (91) Other comprehensive income before reclassifications — 13 15 28 Amounts reclassified to earnings (1) — 13 12 Balance as of December 31, 2021 $ (21) $ (24) $ (6) $ (51) |
Background and Basis of Prese_2
Background and Basis of Presentation - Narrative (Details) | 3 Months Ended | 12 Months Ended | |||||||
Mar. 22, 2023 | Feb. 14, 2023 USD ($) | Dec. 31, 2022 USD ($) segment $ / shares shares | Jun. 30, 2022 | Dec. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) $ / shares shares | May 01, 2023 USD ($) $ / shares shares | Feb. 24, 2023 USD ($) | Sep. 30, 2021 USD ($) | |
Benefit from (provision for) income taxes | $ (26,000,000) | $ 18,000,000 | |||||||
Deferred income taxes, net | 42,000,000 | $ 43,000,000 | |||||||
Long-term Debt, Gross | 3,420,000,000 | 3,364,000,000 | |||||||
Net cash used for operating activities | $ (65,000,000) | (111,000,000) | $ 312,000,000 | ||||||
Immaterial Error Correction | 3 million | ||||||||
Common Stock, Shares Authorized | shares | 550,000,000 | 550,000,000 | |||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.01 | $ 0.01 | |||||||
Shares issued at December 15, 2017 (in shares) | shares | 86,846,958 | 86,846,958 | |||||||
Preferred Stock, Shares Authorized | shares | 55,000,000 | 55,000,000 | |||||||
Preferred shares issued | shares | 125,000 | 125,000 | |||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 452,000,000 | 358,000,000 | $ 478,000,000 | $ 502,000,000 | |||||
Number of segments | segment | 2 | ||||||||
Quantifying Misstatement in Current Year Financial Statements, Amount | $ (164,000,000) | $ (66,000,000) | |||||||
Subsequent Event | |||||||||
Bankruptcy Proceedings, Date Petition for Bankruptcy Filed | Feb. 14, 2023 | ||||||||
Bankruptcy Proceedings, Court Where Petition Was Filed | United States Bankruptcy Court for the Southern District of Texas | ||||||||
Debtor-in-Possession Financing, Amount Arranged | $ 628,000,000 | ||||||||
Plan of Reorganization, Date Plan Confirmed | Mar. 22, 2023 | ||||||||
Common Stock, Shares Authorized | shares | 80,000,000 | ||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.01 | ||||||||
Shares issued at December 15, 2017 (in shares) | shares | 36,000,000 | ||||||||
Preferred Stock, Shares Authorized | shares | 20,000,000 | ||||||||
Preferred stock, par value (in usd per share) | $ / shares | $ 0.01 | ||||||||
Preferred shares issued | shares | 0 | ||||||||
Enterprise Value upon Emergence from Bankruptcy | $ 1,426,000,000 | ||||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 585,000,000 | ||||||||
Restructuring Agreement, Debt Rights Offering | 150,000,000 | ||||||||
Repayment of Escrowed Cash | 225,000,000 | ||||||||
Subsequent Event | DIP Term Loan | |||||||||
Debtor-in-Possession Financing, Amount Arranged | $ 500,000,000 | ||||||||
Debtor-in-Possession Financing, Additional Borrowings Incurred | 310,000,000 | ||||||||
Debtor-in-Possession Financing, Borrowings Outstanding | 810,000,000 | ||||||||
Subsequent Event | DIP ABL Loan | |||||||||
Debtor-in-Possession Financing, Amount Arranged | $ 128,000,000 | ||||||||
Debtor-in-Possession Financing, Borrowings Outstanding | $ 128,000,000 | ||||||||
Convertible Notes | |||||||||
Long-term Debt, Gross | $ 221,000,000 | $ 221,000,000 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements - Narrative (Details) - USD ($) | 3 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Oct. 01, 2022 | Sep. 30, 2022 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating Lease, Right-of-Use Asset | $ 90,000,000 | $ 97,000,000 | ||
Operating Lease, Liability, Current | 40,000,000 | 40,000,000 | ||
Restructuring Reserve, Current | 19,000,000 | 26,000,000 | ||
Increase of net cash used in investing activities | (17,000,000) | $ (27,000,000) | ||
Accounts receivable, net | 302,000,000 | 322,000,000 | ||
Inventory | 81,000,000 | 74,000,000 | ||
Contract assets | 505,000,000 | 543,000,000 | ||
Contract costs | 104,000,000 | 110,000,000 | ||
Other current assets | 113,000,000 | 116,000,000 | ||
Intangible assets, net | 1,695,000,000 | 1,776,000,000 | ||
Operating Lease, Liability, Noncurrent | 66,000,000 | 72,000,000 | ||
Restructuring Reserve, Noncurrent | 26,000,000 | 23,000,000 | ||
Property, Plant and Equipment, Net | 280,000,000 | 281,000,000 | ||
Other assets | 229,000,000 | 279,000,000 | ||
Contract liabilities | 255,000,000 | 245,000,000 | ||
Other current liabilities | 137,000,000 | 137,000,000 | ||
Deferred income taxes, net | 42,000,000 | 43,000,000 | ||
Other Liabilities, Noncurrent | 207,000,000 | 224,000,000 | ||
Retained Earnings (Accumulated Deficit) | (3,198,000,000) | (3,081,000,000) | ||
Debt, Current | 3,358,000,000 | 210,000,000 | ||
Long-term debt, net of current portion | $ 0 | $ 3,032,000,000 | ||
Accounting Standards Update 2020-06 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Retained Earnings (Accumulated Deficit) | $ 47,000,000 | |||
Additional paid-in capital | 118,000,000 | |||
Debt, Current | 10,000,000 | |||
Long-term debt, net of current portion | 61,000,000 | |||
Accumulated Deficit | Accounting Standards Update 2020-06 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Retained Earnings (Accumulated Deficit) | $ 47,000,000 |
Contract Balances - Impact of A
Contract Balances - Impact of Adoption (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | |
ASSETS | |||
Accounts receivable, net | $ 302,000,000 | $ 322,000,000 | |
Inventory | 81,000,000 | 74,000,000 | |
Contract assets | 505,000,000 | 543,000,000 | |
Contract costs | 104,000,000 | 110,000,000 | |
Other current assets | 113,000,000 | 116,000,000 | |
Property, plant and equipment, net | 280,000,000 | 281,000,000 | |
Other assets | 229,000,000 | 279,000,000 | |
Accounts Payable, Current | 263,000,000 | 263,000,000 | |
LIABILITIES | |||
Contract liabilities | 255,000,000 | 245,000,000 | |
Other current liabilities | 137,000,000 | 137,000,000 | |
Deferred income taxes, net | 42,000,000 | 43,000,000 | |
Other liabilities | 207,000,000 | 224,000,000 | |
STOCKHOLDERS' EQUITY | |||
Retained Earnings (Accumulated Deficit) | (3,198,000,000) | $ (3,081,000,000) | |
REVENUE | |||
Revenue | (418,000,000) | $ (713,000,000) | |
Contract with Customer, Liability, Revenue Recognized | 109,000,000 | 162,000,000 | |
COSTS | |||
Cost of Revenue | 270,000,000 | 344,000,000 | |
GROSS PROFIT | (148,000,000) | (369,000,000) | |
Operating Income (Loss) [Abstract] | |||
OPERATING LOSS | 181,000,000 | 1,000,000 | |
Interest expense | (5,000,000) | (54,000,000) | |
Other income (expense), net | 4,000,000 | (7,000,000) | |
LOSS BEFORE INCOME TAXES | (190,000,000) | (48,000,000) | |
(Provision for) benefit from income taxes | (26,000,000) | 18,000,000 | |
Net income (loss) | (164,000,000) | (66,000,000) | |
Products | |||
REVENUE | |||
Revenue | (136,000,000) | (231,000,000) | |
COSTS | |||
Total Cost of Goods and Services | (70,000,000) | (111,000,000) | |
Amortization of technology intangible assets | (35,000,000) | (42,000,000) | |
Services | |||
REVENUE | |||
Revenue | (282,000,000) | (482,000,000) | |
COSTS | |||
Total Cost of Goods and Services | $ (165,000,000) | $ (191,000,000) |
Contract Balances - Narrative (
Contract Balances - Narrative (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue recognized that was previously recorded as a contract liability | $ 109,000,000 | $ 162,000,000 |
Revenue, Remaining Performance Obligation, Amount | 1,920,000,000 | |
Contract with Customer, Performance Obligation Satisfied in Previous Period | 4,000,000 | 2,000,000 |
Asset Impairment Charges | $ 9,000,000 | $ 0 |
Contract Balances - Disaggregat
Contract Balances - Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 418,000,000 | $ 713,000,000 | ||
Common Stock | ||||
Disaggregation of Revenue [Line Items] | ||||
Shares, Outstanding | 86,800,000 | 84,900,000 | 86,800,000 | 84,100,000 |
U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 208,000,000 | $ 375,000,000 | ||
Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 56,000,000 | 81,000,000 | ||
Americas International - Canada and Latin America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 45,000,000 | 65,000,000 | ||
EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 109,000,000 | 192,000,000 | ||
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 210,000,000 | 338,000,000 | ||
Operating Segments | Products & Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 136,000,000 | 231,000,000 | ||
Operating Segments | Products & Solutions | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 62,000,000 | 114,000,000 | ||
Operating Segments | Products & Solutions | Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 19,000,000 | 32,000,000 | ||
Operating Segments | Products & Solutions | Americas International - Canada and Latin America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 17,000,000 | 20,000,000 | ||
Operating Segments | Products & Solutions | EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 38,000,000 | 65,000,000 | ||
Operating Segments | Products & Solutions | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 74,000,000 | 117,000,000 | ||
Operating Segments | Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 282,000,000 | 482,000,000 | ||
Operating Segments | Services | U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 146,000,000 | 261,000,000 | ||
Operating Segments | Services | Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 37,000,000 | 49,000,000 | ||
Operating Segments | Services | Americas International - Canada and Latin America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 28,000,000 | 45,000,000 | ||
Operating Segments | Services | EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 71,000,000 | 127,000,000 | ||
Operating Segments | Services | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 136,000,000 | $ 221,000,000 |
Contract Balances - Transaction
Contract Balances - Transaction Price Allocated to the Remaining Performance Obligations (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation, amount | $ 1,920,000,000 | |
Contract with Customer, Performance Obligation Satisfied in Previous Period | $ 4,000,000 | $ 2,000,000 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 | ||
Revenue from Contract with Customer [Abstract] | ||
Revenue, Remaining Performance Obligation, Percentage | 52% | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation, expected timing of satisfaction, period | 12 months | |
Revenue, Remaining Performance Obligation, Percentage | 52% | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | ||
Revenue from Contract with Customer [Abstract] | ||
Revenue, Remaining Performance Obligation, Percentage | 26% | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Percentage | 26% | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | Minimum [Member] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation, expected timing of satisfaction, period | 13 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | Maximum | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation, expected timing of satisfaction, period | 24 months |
Contract Balances - Contract As
Contract Balances - Contract Assets and Liabilities (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | |||
Document Period End Date | Dec. 31, 2022 | ||
Contract with Customer, Liability, Revenue Recognized | $ 109,000,000 | $ 162,000,000 | |
Contract with Customer, Performance Obligation Satisfied in Previous Period | 4,000,000 | 2,000,000 | |
Increase (Decrease) in Accounts receivable, net | (20,000,000) | ||
Increase (decrease) in contract assets, non-current | (7,000,000) | ||
Accounts receivable, net | |||
Accounts receivable, net | 302,000,000 | $ 322,000,000 | |
Increase (decrease) in contract assets, current | (38,000,000) | ||
Increase (decrease) in accounts receivable, net | (22,000,000) | 44,000,000 | |
Contract assets, net: | |||
Contract assets, current | 505,000,000 | 543,000,000 | |
Contract assets, non-current | 127,000,000 | 134,000,000 | |
Increase (decrease) in contract assets, non-current | (7,000,000) | ||
Increase (decrease) in total contract assets | (45,000,000) | ||
Total contract assets | 632,000,000 | 677,000,000 | |
Cost of obtaining a contract: | |||
Total cost of obtaining a contract | 104,000,000 | 110,000,000 | |
Cost to fulfill a contract: | |||
Contract costs | 13,000,000 | (1,000,000) | |
Contract liabilities: | |||
Contract liabilities, current | 255,000,000 | 245,000,000 | |
Increase (decrease) in contract liabilities, current | 10,000,000 | ||
Contract liabilities, non-current | 287,000,000 | 300,000,000 | |
Increase (decrease) in contract liabilities, non-current | (13,000,000) | ||
Contract liabilities | (3,000,000) | ||
Total contract liabilities | 542,000,000 | 545,000,000 | |
Capitalized Contract Cost [Line Items] | |||
Contract costs | 104,000,000 | 110,000,000 | |
Contract costs | 13,000,000 | (1,000,000) | |
Asset Impairment Charges | 9,000,000 | $ 0 | |
Costs to Fulfill | |||
Disaggregation of Revenue [Line Items] | |||
Increase (decrease) in cost of obtaining a contract, current | (3,000,000) | ||
Cost of obtaining a contract: | |||
Total cost of obtaining a contract | 26,000,000 | 29,000,000 | |
Capitalized Contract Cost [Line Items] | |||
Contract costs | 26,000,000 | 29,000,000 | |
Increase (decrease) in cost of obtaining a contract, current | (3,000,000) | ||
Costs to Obtain | |||
Disaggregation of Revenue [Line Items] | |||
Capitalized Contract Cost, Net | 118,000,000 | 127,000,000 | |
Increase (decrease) in cost of obtaining a contract, current | (3,000,000) | ||
Cost of obtaining a contract: | |||
Total cost of obtaining a contract | 78,000,000 | 81,000,000 | |
Cost to fulfill a contract: | |||
Contract costs | (9,000,000) | ||
Capitalized Contract Cost [Line Items] | |||
Contract costs | 78,000,000 | 81,000,000 | |
Capitalized Contract Cost, Net, Noncurrent | 40,000,000 | 46,000,000 | |
Increase (decrease) in cost of obtaining a contract, non-current | (6,000,000) | ||
Contract costs | (9,000,000) | ||
Increase (decrease) in cost of obtaining a contract, current | (3,000,000) | ||
Capitalized Contract Cost, Net | $ 118,000,000 | $ 127,000,000 |
Contract Balances - Allowance f
Contract Balances - Allowance for Credit Losses (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Sep. 30, 2022 | |
Allowance for Credit Loss | $ 7,000,000 | $ 8,000,000 |
Credit Loss Expense (Reversal) | (1,000,000) | |
Allowance for Credit Loss, Write-offs | 0 | |
Contract assets, net | ||
Contract with Customer, Asset, Credit Loss Expense (Reversal) | 0 | |
Contract with Customer, Asset, Allowance for Credit Loss | (1,000,000) | (1,000,000) |
Contract with Customer, Asset, Allowance for Credit Loss | 1,000,000 | 1,000,000 |
Contract with Customer, Asset, Allowance for Credit Loss, Writeoff | 0 | |
Other assets | ||
Contract with Customer, Asset, Credit Loss Expense (Reversal) | (1,000,000) | |
Contract with Customer, Asset, Allowance for Credit Loss | (1,000,000) | (2,000,000) |
Contract with Customer, Asset, Allowance for Credit Loss | 1,000,000 | 2,000,000 |
Contract with Customer, Asset, Allowance for Credit Loss, Writeoff | 0 | |
Accounts Receivable | ||
Accounts Receivable, Allowance for Credit Loss | 5,000,000 | $ 5,000,000 |
Provision for Other Credit Losses | 0 | |
Accounts Receivable, Allowance for Credit Loss, Writeoff | $ 0 |
Contract Costs (Details)
Contract Costs (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Capitalized Contract Cost [Line Items] | ||
Capitalized Contract Cost, Amortization | $ 39,000,000 | $ 48,000,000 |
Selling, General and Administrative Expenses [Member] | ||
Capitalized Contract Cost [Line Items] | ||
Capitalized Contract Cost, Amortization | 37,000,000 | 44,000,000 |
Cost of Sales [Member] | ||
Capitalized Contract Cost [Line Items] | ||
Capitalized Contract Cost, Amortization | 3,000,000 | 8,000,000 |
Sales [Member] | ||
Capitalized Contract Cost [Line Items] | ||
Capitalized Contract Cost, Amortization | 2,000,000 | $ 4,000,000 |
Costs to Obtain | ||
Capitalized Contract Cost [Line Items] | ||
Increase (decrease) in cost of obtaining a contract, non-current | (6,000,000) | |
Increase (decrease) in cost of obtaining a contract, current | (3,000,000) | |
Costs to Fulfill | ||
Capitalized Contract Cost [Line Items] | ||
Increase (decrease) in cost of obtaining a contract, current | $ (3,000,000) |
Goodwill - Schedule of Goodwill
Goodwill - Schedule of Goodwill (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2022 | Sep. 30, 2022 | |
Goodwill [Line Items] | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) | $ 333,000,000 | $ 333,000,000 |
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 155,000,000 | 146,000,000 |
Indefinite-Lived Intangible Assets (Excluding Goodwill), Net | 178,000,000 | 187,000,000 |
Goodwill [Roll Forward] | ||
Intangible assets, net | 1,695,000,000 | 1,776,000,000 |
Acquired Technology and Patents [Member] | ||
Goodwill [Line Items] | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) | 0 | 0 |
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 0 | 0 |
Indefinite-Lived Intangible Assets (Excluding Goodwill), Net | 0 | 0 |
Customer relationships and other intangibles | ||
Goodwill [Line Items] | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) | 0 | 0 |
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 0 | 0 |
Indefinite-Lived Intangible Assets (Excluding Goodwill), Net | 0 | 0 |
Trademarks and Trade Names [Member] | ||
Goodwill [Line Items] | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) | 333,000,000 | 333,000,000 |
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 155,000,000 | 146,000,000 |
Indefinite-Lived Intangible Assets (Excluding Goodwill), Net | 178,000,000 | 187,000,000 |
Trademarks and Trade Names [Member] | ||
Goodwill [Roll Forward] | ||
Intangible assets, net | 195,000,000 | 204,000,000 |
Customer relationships and other intangibles | ||
Goodwill [Roll Forward] | ||
Intangible assets, net | 1,368,000,000 | 1,405,000,000 |
Acquired Technology and Patents [Member] | ||
Goodwill [Roll Forward] | ||
Intangible assets, net | $ 132,000,000 | $ 167,000,000 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 |
Goodwill [Line Items] | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) | $ 333,000,000 | $ 333,000,000 |
Trademarks and trade names | ||
Goodwill [Line Items] | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) | $ 333,000,000 | $ 333,000,000 |
Supplementary Financial Infor_3
Supplementary Financial Information - Consolidated Statements of Operations Information (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
OTHER INCOME (EXPENSE), NET | ||
Interest income | $ 4,000,000 | $ 0 |
Foreign currency losses, net | (10,000,000) | 0 |
Net Periodic Defined Benefits Expense (Reversal of Expense), Excluding Service Cost Component | 2,000,000 | 6,000,000 |
Change in fair value of emergence date warrants | 0 | 1,000,000 |
Total other income (expense), net | (4,000,000) | 7,000,000 |
Other income (expense), net | (4,000,000) | 7,000,000 |
Net Periodic Defined Benefits Expense (Reversal of Expense), Excluding Service Cost Component | (2,000,000) | (6,000,000) |
Change in fair value of emergence date warrants | $ 0 | $ (1,000,000) |
Supplementary Financial Infor_4
Supplementary Financial Information - Supplementary Cash Flow Information (Details) - USD ($) | 3 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Other Significant Noncash Transactions [Line Items] | ||||
Operating Lease, Payments | $ 12,000,000 | $ 15,000,000 | ||
Restricted Cash, Noncurrent | 4,000,000 | 4,000,000 | $ 3,000,000 | $ 4,000,000 |
Cash | 225,000,000 | 354,000,000 | 253,000,000 | 498,000,000 |
Restricted Cash, Current | 223,000,000 | 0 | 222,000,000 | 0 |
OTHER PAYMENTS | ||||
Interest payments | 55,000,000 | 33,000,000 | ||
Income tax payments | 5,000,000 | 7,000,000 | ||
NON-CASH INVESTING ACTIVITIES | ||||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 1,000,000 | 7,000,000 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 452,000,000 | 358,000,000 | $ 478,000,000 | $ 502,000,000 |
Increase (decrease) in Accounts payable for Capital expenditures | 1,000,000 | (2,000,000) | ||
Finance Lease, Payments | $ 3,000,000 | $ 3,000,000 |
Business Restructuring Reserv_3
Business Restructuring Reserves and Programs (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | $ 10,000,000 | $ 7,000,000 |
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, beginning balance | 49,000,000 | |
Cash payments | (16,000,000) | |
Impact of foreign currency fluctuations | 4,000,000 | |
Restructuring Reserve, ending balance | 45,000,000 | |
Fiscal 2019 Restructuring Program [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 0 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, beginning balance | 26,000,000 | |
Cash payments | (11,000,000) | |
Impact of foreign currency fluctuations | 2,000,000 | |
Restructuring Reserve, ending balance | 17,000,000 | |
Fiscal 2008-2018 Restructuring Program [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 0 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, beginning balance | 23,000,000 | |
Cash payments | (3,000,000) | |
Impact of foreign currency fluctuations | 2,000,000 | |
Restructuring Reserve, ending balance | 22,000,000 | |
Fiscal 2023 Restructuring Program | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 8,000,000 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, beginning balance | 0 | |
Cash payments | (2,000,000) | |
Impact of foreign currency fluctuations | 0 | |
Restructuring Reserve, ending balance | 6,000,000 | |
Employee Separation Costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 8,000,000 | 2,000,000 |
Facility Exit Costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 2,000,000 | $ 5,000,000 |
Restructuring Charges | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | $ 8,000,000 |
Financing Arrangements - Schedu
Financing Arrangements - Schedule of Debt (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | |
Debt Instrument [Line Items] | |||
Document Period End Date | Dec. 31, 2022 | ||
Principal | $ 0 | $ 3,215,000,000 | |
Short-term Debt | 3,358,000,000 | 210,000,000 | |
Debt maturing within one year | (3,476,000,000) | 221,000,000 | |
Long-term debt, net of current portion | 0 | 3,032,000,000 | |
Interest Expense | 5,000,000 | $ 54,000,000 | |
Amortization of Debt Issuance Costs and Discounts | 5,000,000 | 7,000,000 | |
Long-term Debt, Gross | 3,420,000,000 | 3,364,000,000 | |
Long-Term Debt, Current Maturities | (3,358,000,000) | (210,000,000) | |
Long-term Debt | 3,302,000,000 | 3,170,000,000 | |
Current portion of debt and embedded derivatives | 56,000,000 | 72,000,000 | |
ABL Credit Agreement | |||
Debt Instrument [Line Items] | |||
Short-term Debt | 56,000,000 | 0 | |
Convertible Debt [Member] | |||
Debt Instrument [Line Items] | |||
Interest Expense | 2,000,000 | 7,000,000 | |
Amortization of Debt Issuance Costs and Discounts | 0 | 5,000,000 | |
Long-term Debt, Gross | 221,000,000 | 221,000,000 | |
Long-term Debt | 220,000,000 | 210,000,000 | |
Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Interest Expense | 16,000,000 | $ 16,000,000 | |
Long-term Debt, Gross | 1,000,000,000 | 1,000,000,000 | |
Long-term Debt | 988,000,000 | 988,000,000 | |
Term Loan Credit Agreement 2027 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Gross | 800,000,000 | 800,000,000 | |
Long-term Debt | 784,000,000 | 783,000,000 | |
Term Loan Credit Agreement, Tranche B-2, 2027 | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Gross | 743,000,000 | 743,000,000 | |
Long-term Debt | 738,000,000 | 738,000,000 | |
Incremental Loans | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Gross | 350,000,000 | 350,000,000 | |
Long-term Debt | 285,000,000 | 282,000,000 | |
Exchangeable Debt | |||
Debt Instrument [Line Items] | |||
Interest Expense | 7,000,000 | ||
Amortization of Debt Issuance Costs and Discounts | 1,000,000 | ||
Long-term Debt, Gross | 250,000,000 | 250,000,000 | |
Long-term Debt | $ 231,000,000 | $ 169,000,000 |
Financing Arrangements - Narrat
Financing Arrangements - Narrative (Details) - USD ($) shares in Thousands | 3 Months Ended | 12 Months Ended | |||||||
Mar. 07, 2023 | Jul. 12, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | May 01, 2023 | Sep. 25, 2020 | Jun. 11, 2018 | Dec. 15, 2017 | |
Debt Instrument [Line Items] | |||||||||
Document Period End Date | Dec. 31, 2022 | ||||||||
Letters of credit, maximum amount | $ 150,000,000 | ||||||||
Letters of credit outstanding | 38,000,000 | ||||||||
Letter of credit, remaining borrowing capacity | $ 21,000,000 | ||||||||
Weighted average contractual interest rate of debt | 8% | 7.40% | |||||||
Interest Expense | $ 5,000,000 | $ 54,000,000 | |||||||
Amortization of Debt Issuance Costs and Discounts | 5,000,000 | 7,000,000 | |||||||
Long-term Debt, Gross | 3,420,000,000 | $ 3,364,000,000 | |||||||
Debt Instrument, Convertible, Carrying Amount of Equity Component | 23,000,000 | 79,000,000 | |||||||
Repayment of debtor-in-possession financing | 34,000,000 | 0 | |||||||
Short-term Debt | 3,358,000,000 | 210,000,000 | |||||||
Unrealized Gain (Loss) on Derivatives | (13,000,000) | 0 | |||||||
Debt Discount, Equity Component of Convertible Debt | 62,000,000 | 66,000,000 | |||||||
Debt Issuance Costs, Equity Component of Exchangeable Debt | 0 | (4,000,000) | |||||||
Debt Instrument, Exchangeable, Carrying Amount of Equity Component | 0 | 62,000,000 | |||||||
Accumulated other comprehensive loss | 132,000,000 | 232,000,000 | |||||||
Bond Hedge, Shares Terminated | 4,700 | ||||||||
Debt Discount, Equity Component of Convertible Debt | 79,000,000 | 92,000,000 | |||||||
Adjustments to Additional Paid in Capital, Equity Component of Convertible Debt, Subsequent Adjustments | 0 | (10,000,000) | |||||||
Debt Issuance Costs, Equity Component of Convertible Debt | 0 | (3,000,000) | |||||||
Recurring | |||||||||
Debt Instrument [Line Items] | |||||||||
Liabilities | 56,000,000 | 74,000,000 | |||||||
Recurring | Embedded Derivative Financial Instruments | |||||||||
Debt Instrument [Line Items] | |||||||||
Liabilities | 56,000,000 | 72,000,000 | |||||||
Level 3 | Recurring | |||||||||
Debt Instrument [Line Items] | |||||||||
Liabilities | 56,000,000 | 72,000,000 | |||||||
Level 3 | Recurring | Embedded Derivative Financial Instruments | |||||||||
Debt Instrument [Line Items] | |||||||||
Liabilities | $ 34,000,000 | 56,000,000 | 72,000,000 | ||||||
Subsequent Event | |||||||||
Debt Instrument [Line Items] | |||||||||
Debtor-in-Possession Financing, Date Arrangement Approved by Bankruptcy Court | Mar. 07, 2023 | ||||||||
ABL Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayment of debtor-in-possession financing | 34,000,000 | ||||||||
Short-term Debt | 56,000,000 | 0 | |||||||
Revolving Credit Facility | ABL Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, current borrowing capacity | $ 200,000,000 | ||||||||
Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt face amount | $ 350,000,000 | $ 221,000,000 | |||||||
Interest rate, stated percentage | 2.25% | ||||||||
Effective interest rate | 2.80% | 9.20% | |||||||
Interest Expense | $ 2,000,000 | 7,000,000 | |||||||
Amortization of Debt Issuance Costs and Discounts | 0 | 5,000,000 | |||||||
Long-term Debt, Gross | 221,000,000 | $ 221,000,000 | |||||||
Unamortized debt discount | 0 | (10,000,000) | |||||||
Unamortized issuance costs | (1,000,000) | (1,000,000) | |||||||
Escrow Deposit, Proceeds from Debt Repurchase | 221,000,000 | ||||||||
Debt Instrument, Repurchase Amount | 129,000,000 | ||||||||
Gain (Loss) on Extinguishment of Debt | 5,000,000 | ||||||||
Convertible Notes | Accounting Standards Update 2020-06 | |||||||||
Debt Instrument [Line Items] | |||||||||
Accumulated other comprehensive loss | (56,000,000) | 0 | |||||||
Senior Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate, stated percentage | 6.125% | ||||||||
Interest Expense | 16,000,000 | 16,000,000 | |||||||
Long-term Debt, Gross | 1,000,000,000 | 1,000,000,000 | |||||||
Term Loan Credit Agreement, Tranche B-2, 2027 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term Debt, Gross | 743,000,000 | $ 743,000,000 | |||||||
Term Loan Credit Agreement due December 15, 2024 | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest expense on debt | $ 30,000,000 | $ 18,000,000 | |||||||
Effective interest rate | 10.70% | 9% | |||||||
Term Loan Credit Agreement 2027 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term Debt, Gross | $ 800,000,000 | $ 800,000,000 | |||||||
Incremental Loans | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term Debt, Gross | 350,000,000 | $ 350,000,000 | |||||||
Incremental Loans | Level 3 | Recurring | |||||||||
Debt Instrument [Line Items] | |||||||||
Liabilities | $ 30,000,000 | ||||||||
Incremental Loans | Alternative Base Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate, stated percentage | 9% | ||||||||
Incremental Loans | Fed Funds Effective Rate Overnight Index Swap Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||||||||
Incremental Loans | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate, stated percentage | 10% | ||||||||
Debt Instrument, Interest Rate, Floor | 1% | ||||||||
Incremental Loans | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Basis Spread on Variable Rate | 1% | ||||||||
Incremental Loans | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Basis Spread on Variable Rate | 2% | ||||||||
Incremental Loans | Embedded Derivative Financial Instruments | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest Expense | (17,000,000) | ||||||||
ABL Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest expense on debt | $ 1,000,000 | ||||||||
Exchangeable Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate, stated percentage | 8% | ||||||||
Effective interest rate | 9.90% | 17.70% | |||||||
Interest Expense | $ 7,000,000 | ||||||||
Amortization of Debt Issuance Costs and Discounts | 1,000,000 | ||||||||
Long-term Debt, Gross | 250,000,000 | $ 250,000,000 | |||||||
Unamortized debt discount | 0 | (65,000,000) | |||||||
Debt Instrument, Convertible, Carrying Amount of Equity Component | 231,000,000 | 169,000,000 | |||||||
Unamortized issuance costs | (15,000,000) | (12,000,000) | |||||||
Exchangeable Debt | Embedded Derivative Financial Instruments | |||||||||
Debt Instrument [Line Items] | |||||||||
Unrealized Gain (Loss) on Derivatives | 1,000,000 | ||||||||
Exchangeable Debt | Accounting Standards Update 2020-06 | |||||||||
Debt Instrument [Line Items] | |||||||||
Accumulated other comprehensive loss | (62,000,000) | 0 | |||||||
Exchangeable Debt | Level 3 | Recurring | |||||||||
Debt Instrument [Line Items] | |||||||||
Liabilities | $ 4,000,000 | ||||||||
Exchangeable Debt | Embedded Derivative Financial Instruments | |||||||||
Debt Instrument [Line Items] | |||||||||
Unamortized debt discount | $ (4,000,000) | $ (4,000,000) | |||||||
Exit Term Loan | Base Rate | Subsequent Event | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Interest Rate, Stated Percentaged, Paid in Cash | 6.50% | ||||||||
Debt Instrument, Interest Rate, Stated Percentaged, Paid in Cash and Paid in Kind | 7.50% | ||||||||
Debt Instrument, Interest Rate, Stated Percentaged, For Portion Paid in Cash | 1% | ||||||||
Debt Instrument, Interest Rate, Stated Percentaged, For Portion Paid in Kind | 6.50% | ||||||||
Exit Term Loan | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Interest Rate, Floor | 1% | ||||||||
Exit Term Loan | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Subsequent Event | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Interest Rate, Stated Percentaged, Paid in Cash | 7.50% | ||||||||
Debt Instrument, Interest Rate, Stated Percentaged, Paid in Cash and Paid in Kind | 8.50% | ||||||||
Debt Instrument, Interest Rate, Stated Percentaged, For Portion Paid in Cash | 1.50% | ||||||||
Debt Instrument, Interest Rate, Stated Percentaged, For Portion Paid in Kind | 7% | ||||||||
Exit ABL Loan | Base Rate | Subsequent Event | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate, stated percentage | 2% | ||||||||
Exit ABL Loan | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Subsequent Event | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate, stated percentage | 3% | ||||||||
Over-Allotment Option | Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt face amount | $ 50,000,000 |
Financing Arrangements - Carryi
Financing Arrangements - Carrying Amount of Convertible Debt (Details) - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 |
Less: | ||
Long-term Debt | $ 3,302,000,000 | $ 3,170,000,000 |
Weighted average contractual interest rate of debt | 8% | 7.40% |
Convertible Notes | ||
Debt Instrument [Line Items] | ||
Principal | $ 350,000,000 | $ 221,000,000 |
Less: | ||
Unamortized debt discount | 0 | (10,000,000) |
Unamortized issuance costs | (1,000,000) | (1,000,000) |
Long-term Debt | $ 220,000,000 | $ 210,000,000 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Narrative (Details) | 3 Months Ended | |||||||||
Mar. 23, 2022 USD ($) counterparty | Jul. 01, 2020 USD ($) counterparty | May 16, 2018 counterparty | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Sep. 23, 2020 USD ($) | Nov. 14, 2018 USD ($) | Dec. 15, 2017 $ / shares shares | |
Derivative [Line Items] | ||||||||||
Number of counterparties | counterparty | 6 | |||||||||
Class of warrant or right, number of securities called by each warrant or right (in shares) | shares | 5,645,200 | |||||||||
Class of warrant or right, exercise price of warrants or rights (in USD per share) | $ / shares | $ 25.55 | |||||||||
Warrant Repurchase Program, Number of Securities Called by Warrants or Rights, Authorized Amount | $ 15,000,000 | |||||||||
Deferred Loss, Frozen, To Be Reclassified to Interest Expense | $ 52,000,000 | $ 63,000,000 | $ 9,000,000 | $ 15,000,000 | ||||||
Interest expense | (5,000,000) | $ (54,000,000) | ||||||||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (100,000,000) | 40,000,000 | ||||||||
Other comprehensive income (loss) before reclassifications | (14,000,000) | 28,000,000 | ||||||||
Amounts reclassified to earnings | (68,000,000) | 12,000,000 | ||||||||
Unrealized Loss on Term Loan Interest Rate Swap | ||||||||||
Derivative [Line Items] | ||||||||||
Amounts reclassified to earnings | (62,000,000) | |||||||||
Designated as Hedging Instrument [Member] | Unrealized Loss on Term Loan Interest Rate Swap | ||||||||||
Derivative [Line Items] | ||||||||||
Amounts reclassified to earnings | 62,000,000 | 13,000,000 | ||||||||
Designated as Hedging Instrument [Member] | Interest Expense [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Interest Rate Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net | (62,000,000) | $ (13,000,000) | ||||||||
Interest rate contracts | ||||||||||
Derivative [Line Items] | ||||||||||
Derivative fixed interest rate | 2.935% | |||||||||
Derivative notional amount | $ 1,543,000,000 | $ 1,800,000,000 | ||||||||
Foreign Exchange Contract [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Derivative notional amount | $ 12,000,000 | |||||||||
Forward Interest Rate Swap [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Number of counterparties | counterparty | 4 | |||||||||
Derivative fixed interest rate | 0.7047% | |||||||||
Derivative notional amount | $ 1,400,000,000 | |||||||||
Offsetting Interest Rate Swap [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Derivative fixed interest rate | 0.1745% | |||||||||
Derivative notional amount | $ 257,000,000 | |||||||||
New Forward Interest Rate Swaps | ||||||||||
Derivative [Line Items] | ||||||||||
Number of counterparties | counterparty | 4,000,000 | |||||||||
Derivative fixed interest rate | 2.548% | |||||||||
Derivative notional amount | $ 1,000,000,000 | |||||||||
Proceeds from Operating Activities | $ 52,000,000 | $ 40,000,000 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Assumptions Used (Details) | Sep. 30, 2022 unit |
Expected volatility | |
Derivative [Line Items] | |
Warrants, measurement input | 1.1393 |
Risk-free interest rates | |
Derivative [Line Items] | |
Warrants, measurement input | 0.0236 |
Contractual remaining life (in years) | |
Derivative [Line Items] | |
Warrants, measurement input | 0.46 |
Measurement Input, Expected Dividend Rate | |
Derivative [Line Items] | |
Warrants, measurement input | 0 |
Measurement Input, Share Price | |
Derivative [Line Items] | |
Warrants, measurement input | 2.24 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Fair Value (Details) - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 |
Derivative [Line Items] | ||
Derivative Asset | $ 0 | $ 55,000,000 |
Derivative Liability | 56,000,000 | 74,000,000 |
Derivatives Not Designated as Hedging Instruments: | ||
Derivative [Line Items] | ||
Derivative Asset | 0 | 55,000,000 |
Derivative Liability | 56,000,000 | 74,000,000 |
Derivatives Not Designated as Hedging Instruments: | Other Current Liabilities [Member] | Interest rate contracts | ||
Derivative [Line Items] | ||
Derivative Asset | 0 | 0 |
Derivative Liability | 0 | 2,000,000 |
Derivatives Not Designated as Hedging Instruments: | Other Current Assets [Member] | Interest rate contracts | ||
Derivative [Line Items] | ||
Derivative Asset | 0 | 15,000,000 |
Derivative Liability | 0 | 0 |
Derivatives Not Designated as Hedging Instruments: | Other assets | Interest rate contracts | ||
Derivative [Line Items] | ||
Derivative Asset | 0 | 40,000,000 |
Derivative Liability | 0 | 0 |
Derivatives Not Designated as Hedging Instruments: | Long-Term Debt | Embedded Derivative Financial Instruments | ||
Derivative [Line Items] | ||
Derivative Asset | 0 | 0 |
Derivative Liability | 0 | 72,000,000 |
Derivatives Not Designated as Hedging Instruments: | Short-Term Debt | Embedded Derivative Financial Instruments | ||
Derivative [Line Items] | ||
Derivative Asset | 0 | 0 |
Derivative Liability | $ 56,000,000 | $ 0 |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities - Derivatives Designated as Cash Flow Hedges (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative [Line Items] | ||
Interest expense | $ (5,000,000) | $ (54,000,000) |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | $ (100,000,000) | 40,000,000 |
Derivative Instrument, Loss Reclassified from AOCI into Income, Effective Portion, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest expense | |
Other comprehensive income (loss) before reclassifications | $ (14,000,000) | 28,000,000 |
Amounts reclassified to earnings | (68,000,000) | $ 12,000,000 |
Unrealized Loss on Term Loan Interest Rate Swap | ||
Derivative [Line Items] | ||
Amounts reclassified to earnings | $ (62,000,000) | |
Designated as Hedging Instrument [Member] | ||
Derivative [Line Items] | ||
Derivative Instrument, Loss Reclassified from AOCI into Income, Effective Portion, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest expense | Interest expense |
Designated as Hedging Instrument [Member] | Unrealized Loss on Term Loan Interest Rate Swap | ||
Derivative [Line Items] | ||
Amounts reclassified to earnings | $ 62,000,000 | $ 13,000,000 |
Interest Expense [Member] | Designated as Hedging Instrument [Member] | ||
Derivative [Line Items] | ||
Interest Rate Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net | $ (62,000,000) | $ (13,000,000) |
Derivative Instruments and He_7
Derivative Instruments and Hedging Activities - Derivatives Not Designated as Hedging Instruments (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | |
Derivative [Line Items] | |||
Derivative Liability, Fair Value, Gross Liability | $ 56,000,000 | $ 74,000,000 | |
Derivatives Not Designated as Hedging Instruments: | |||
Derivative [Line Items] | |||
Derivative Liability, Fair Value, Gross Liability | $ 56,000,000 | $ 74,000,000 | |
Derivatives Not Designated as Hedging Instruments: | Emergence Date Warrants | |||
Derivative [Line Items] | |||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other income (expense), net | Other income (expense), net | |
Derivatives Not Designated as Hedging Instruments: | Interest Rate Contract | |||
Derivative [Line Items] | |||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other income (expense), net | Other income (expense), net | |
Derivatives Not Designated as Hedging Instruments: | Embedded Derivative Financial Instruments | |||
Derivative [Line Items] | |||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other income (expense), net | Other income (expense), net |
Derivative Instruments and He_8
Derivative Instruments and Hedging Activities - Presented on a Net Basis (Details) - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 |
Derivative [Line Items] | ||
Gross amounts recognized in the consolidated balance sheet, Asset | $ 0 | $ 55,000,000 |
Derivative Liability | 56,000,000 | 74,000,000 |
Gross amount subject to offset in master netting arrangements not offset in the Consolidated Balance Sheet, Liability | 0 | (2,000,000) |
Gross amount subject to offset in master netting arrangements not offset in the Consolidated Balance Sheet, Asset | 0 | (2,000,000) |
Fair value of warrant liability | 56,000,000 | 72,000,000 |
Derivative Asset | $ 0 | $ 53,000,000 |
Derivative Instruments and He_9
Derivative Instruments and Hedging Activities - Embeddeds (Details) | Dec. 31, 2022 USD ($) unit | Sep. 30, 2022 USD ($) | Jul. 12, 2022 USD ($) |
Recurring | |||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Liabilities | $ 56,000,000 | $ 74,000,000 | |
Derivative [Line Items] | |||
Liabilities | 56,000,000 | 74,000,000 | |
Level 3 | Recurring | |||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Liabilities | 56,000,000 | 72,000,000 | |
Derivative [Line Items] | |||
Liabilities | 56,000,000 | 72,000,000 | |
Embedded Derivative Financial Instruments | Recurring | |||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Liabilities | 56,000,000 | 72,000,000 | |
Derivative [Line Items] | |||
Liabilities | 56,000,000 | 72,000,000 | |
Embedded Derivative Financial Instruments | Level 3 | Recurring | |||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Liabilities | 56,000,000 | 72,000,000 | $ 34,000,000 |
Derivative [Line Items] | |||
Liabilities | $ 56,000,000 | $ 72,000,000 | $ 34,000,000 |
Incremental Loans | Measurement Input, Credit Spread | |||
Derivative [Line Items] | |||
Embedded Derivative Liability, Measurement Input | unit | 0.3103 | ||
Incremental Loans | Risk-free interest rates | |||
Derivative [Line Items] | |||
Embedded Derivative Liability, Measurement Input | unit | 0.0399 | ||
Exchangeable Debt | Measurement Input, Credit Spread | |||
Derivative [Line Items] | |||
Embedded Derivative Liability, Measurement Input | unit | 0.3103 | ||
Exchangeable Debt | Risk-free interest rates | |||
Derivative [Line Items] | |||
Embedded Derivative Liability, Measurement Input | unit | 0.0399 | ||
Exchangeable Debt | Expected volatility | |||
Derivative [Line Items] | |||
Embedded Derivative Liability, Measurement Input | unit | 2.7331 | ||
Exchangeable Debt | Measurement Input, Share Price | |||
Derivative [Line Items] | |||
Embedded Derivative Liability, Measurement Input | unit | 0.20 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 |
Finite-lived and Indefinite-lived Intangible Assets [Line Items] | ||
Cost | $ 3,157,000,000 | $ 3,152,000,000 |
Accumulated amortization | (1,640,000,000) | (1,563,000,000) |
Finite-lived intangible assets, net | 1,517,000,000 | 1,589,000,000 |
Intangible assets, net | 1,695,000,000 | 1,776,000,000 |
Acquired technology and patents | ||
Finite-lived and Indefinite-lived Intangible Assets [Line Items] | ||
Cost | 966,000,000 | 964,000,000 |
Accumulated amortization | (834,000,000) | (797,000,000) |
Finite-lived intangible assets, net | 132,000,000 | 167,000,000 |
Customer relationships and other intangibles | ||
Finite-lived and Indefinite-lived Intangible Assets [Line Items] | ||
Cost | 2,149,000,000 | 2,146,000,000 |
Accumulated amortization | (781,000,000) | (741,000,000) |
Finite-lived intangible assets, net | 1,368,000,000 | 1,405,000,000 |
Trademarks and trade names | ||
Finite-lived and Indefinite-lived Intangible Assets [Line Items] | ||
Cost | 42,000,000 | 42,000,000 |
Accumulated amortization | (25,000,000) | (25,000,000) |
Finite-lived intangible assets, net | 17,000,000 | 17,000,000 |
Trademarks and trade names | ||
Finite-lived and Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, net | 195,000,000 | 204,000,000 |
Customer relationships and other intangibles | ||
Finite-lived and Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, net | 1,368,000,000 | 1,405,000,000 |
Acquired technology and patents | ||
Finite-lived and Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, net | $ 132,000,000 | $ 167,000,000 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill), Net | $ 178,000,000 | $ 187,000,000 | |
Asset Impairment Charges | 9,000,000 | $ 0 | |
Acquired Technology and Patents [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill), Net | 0 | 0 | |
Trademarks and Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill), Net | $ 178,000,000 | $ 187,000,000 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) | 3 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | Jul. 12, 2022 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Transfers, Net | $ 0 | $ 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net | 0 | $ 0 | ||
Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets | 0 | $ 55,000,000 | ||
Liabilities | 56,000,000 | 74,000,000 | ||
Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets | 0 | 0 | ||
Liabilities | 0 | 0 | ||
Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets | 0 | 55,000,000 | ||
Liabilities | 0 | 2,000,000 | ||
Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets | 0 | 0 | ||
Liabilities | 56,000,000 | 72,000,000 | ||
Interest Rate Contract | Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets | 0 | 55,000,000 | ||
Liabilities | 0 | 2,000,000 | ||
Interest Rate Contract | Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets | 0 | 0 | ||
Liabilities | 0 | 0 | ||
Interest Rate Contract | Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets | 0 | 55,000,000 | ||
Liabilities | 0 | 2,000,000 | ||
Interest Rate Contract | Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets | 0 | 0 | ||
Liabilities | 0 | 0 | ||
Embedded Derivative Financial Instruments | Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Liabilities | 56,000,000 | 72,000,000 | ||
Embedded Derivative Financial Instruments | Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Liabilities | 0 | 0 | ||
Embedded Derivative Financial Instruments | Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Liabilities | 0 | 0 | ||
Embedded Derivative Financial Instruments | Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Liabilities | $ 56,000,000 | $ 72,000,000 | $ 34,000,000 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2022 | Sep. 30, 2022 | Jul. 12, 2022 | |
Recurring | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Liabilities | $ 56,000,000 | $ 74,000,000 | |
Embedded Derivative Financial Instruments | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings | (16,000,000) | ||
Embedded Derivative Financial Instruments | Recurring | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Liabilities | 56,000,000 | 72,000,000 | |
Level 3 | Recurring | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Liabilities | 56,000,000 | 72,000,000 | |
Level 3 | Embedded Derivative Financial Instruments | Recurring | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Liabilities | $ 56,000,000 | $ 72,000,000 | $ 34,000,000 |
Income Taxes - Income Taxes Nar
Income Taxes - Income Taxes Narrative (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue, Remaining Performance Obligation, Amount | $ 1,920,000,000 | |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | (7.00%) | 59% |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | $ 14,000,000 | $ 28,000,000 |
Benefit Obligations - Component
Benefit Obligations - Components of the Pension and Post-Retirement Net Periodic Benefit Cost (Credit) (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Non-US | ||
Components of net periodic benefit credit | ||
Contributions by employer | $ 5,000,000 | |
Pension Plan | Non-US | ||
Components of net periodic benefit credit | ||
Service cost | 1,000,000 | $ 2,000,000 |
Interest cost | 3,000,000 | 1,000,000 |
Net periodic benefit cost (credit) | 1,000,000 | 3,000,000 |
Defined Benefit Plan, Amortization of Gain (Loss) | (3,000,000) | 0 |
Pension Plan | U.S. | ||
Components of net periodic benefit credit | ||
Service cost | 1,000,000 | 1,000,000 |
Interest cost | 10,000,000 | 5,000,000 |
Expected return on plan assets | (12,000,000) | (12,000,000) |
Net periodic benefit cost (credit) | (1,000,000) | (6,000,000) |
Post-retirement Benefits | U.S. | ||
Components of net periodic benefit credit | ||
Interest cost | 1,000,000 | 1,000,000 |
Net periodic benefit cost (credit) | 0 | 0 |
Defined Benefit Plan, Amortization of Prior Service Cost (Credit) | $ (1,000,000) | $ (1,000,000) |
Share-based Compensation (Detai
Share-based Compensation (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 1,000,000 | $ 14,000,000 |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 639,065 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ 18.79 | |
Restricted Stock Units (RSUs) [Member] | 2019 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 890,042 |
Share-based Compensation - ESPP
Share-based Compensation - ESPP (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 1,000,000 | $ 14,000,000 |
Preferred Stock - Narrative (De
Preferred Stock - Narrative (Details) - USD ($) | 3 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | Nov. 14, 2018 | |
Class of Stock [Line Items] | ||||
Preferred Stock, Shares Authorized | 55,000,000 | 55,000,000 | ||
Strategic Partnership Interest on As-Converted Basis | 9% | |||
Document Period End Date | Dec. 31, 2022 | |||
Preferred Stock, Value, Outstanding | $ 134,000,000 | |||
Preferred shares issued | 125,000 | 125,000 | ||
Common stock, shares authorized | 550,000,000 | 550,000,000 | ||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 | ||
Common stock, shares issued | 86,846,958 | 86,846,958 | ||
Common stock, shares outstanding | 86,846,958 | 86,846,958 | ||
Warrant repurchase program, authorized amount | $ 15,000,000 | |||
Preferred Stock, Value, Issued | $ 134,000,000 | |||
Temporary Equity, Accretion of Dividends | $ 9,000,000 | |||
Preferred Stock, Shares Outstanding | 125,000 | 125,000 | ||
Preferred stock | $ 134,000,000 | $ 133,000,000 | ||
Dividends, Preferred Stock, Paid-in-kind | $ 1,000,000 | |||
Preferred Stock, Dividend Rate, Percentage | 3% | |||
Temporary Equity, Carrying Amount, Period Increase (Decrease) | $ 1,000,000 | |||
Strategic Partnership, Minimum Shares Required for Consent Rights | 4,759,339 | |||
Warrants | ||||
Class of Stock [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5,600,000 | |||
Series A Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 | ||
Price per share of common stock (in usd per share) | $ 16 |
Net Income (Loss) Per Common _3
Net Income (Loss) Per Common Share - Reconciliation (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator | ||
Net income (loss) | $ (164,000,000) | $ (66,000,000) |
Preferred Stock Dividends and Other Adjustments | 1,000,000 | 1,000,000 |
Undistributed Earnings (Loss) Available to Common Shareholders, Diluted | (165,000,000) | (67,000,000) |
Undistributed Earnings, Basic | $ (165,000,000) | $ (67,000,000) |
Percentage allocated to common stockholders | 100% | 100% |
Net income (loss) attributable to common stockholders | $ (165,000,000) | $ (67,000,000) |
Numerator for basic and diluted loss per common share | $ (165,000,000) | $ (67,000,000) |
Weighted average shares outstanding | ||
Denominator for basic earnings per weighted average common shares (in shares) | 87,500,000 | 84,700,000 |
LOSS PER SHARE | ||
Basic (in usd per share) | $ (1.89) | $ (0.79) |
Diluted (in usd per share) | $ (1.89) | $ (0.79) |
Weighted average number of shares - basic (in shares) | 87,500,000 | 84,700,000 |
Weighted average number of shares - diluted (in shares) | 87,500,000 | 84,700,000 |
Share-based Payment Arrangement, Option [Member] | ||
LOSS PER SHARE | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 300,000 | 300,000 |
Common Stock and Common Stock Equivalents | ||
Weighted average shares outstanding | ||
Denominator for basic earnings per weighted average common shares (in shares) | 87,500,000 | 84,700,000 |
LOSS PER SHARE | ||
Weighted average number of shares - basic (in shares) | 87,500,000 | 84,700,000 |
Weighted average number of shares - diluted (in shares) | 87,500,000 |
Net Income (Loss) Per Common _4
Net Income (Loss) Per Common Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Document Period End Date | Dec. 31, 2022 | |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0.3 | 0.3 |
Performance Shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 3.8 | 2.1 |
Restricted Stock Units (RSUs) [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 3.2 | 4.6 |
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 | |
Employee Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0.2 | |
Series A Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0.1 | 0.1 |
Convertible Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 7.9 | 12.6 |
Common Stock | Stock Bonus Program | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0.3 | |
Consideration Advance | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 22.1 | |
Exchangeable Debt | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 58.1 |
Operating Segments - Summarized
Operating Segments - Summarized Financial Information of Operating Segments (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | |
Segment Reporting Information | |||
REVENUE | $ 418,000,000 | $ 713,000,000 | |
GROSS PROFIT | 148,000,000 | 369,000,000 | |
OPERATING EXPENSES | |||
Selling, general and administrative | 221,000,000 | 262,000,000 | |
Research and development | 50,000,000 | 61,000,000 | |
Restructuring charges, net | 10,000,000 | 7,000,000 | |
TOTAL OPERATING EXPENSES | 329,000,000 | 370,000,000 | |
OPERATING LOSS | (181,000,000) | (1,000,000) | |
INTEREST EXPENSE AND OTHER (EXPENSE) INCOME, NET | (9,000,000) | (47,000,000) | |
Total Assets | 3,847,000,000 | $ 4,073,000,000 | |
LOSS BEFORE INCOME TAXES | (190,000,000) | (48,000,000) | |
Amortization of intangible assets | 39,000,000 | 40,000,000 | |
Operating Segments | Products & Solutions | |||
Segment Reporting Information | |||
REVENUE | 136,000,000 | 231,000,000 | |
GROSS PROFIT | 66,000,000 | 120,000,000 | |
Operating Segments | Services | |||
Segment Reporting Information | |||
REVENUE | 282,000,000 | 482,000,000 | |
GROSS PROFIT | 117,000,000 | 291,000,000 | |
Unallocated | |||
Segment Reporting Information | |||
GROSS PROFIT | $ (35,000,000) | $ (42,000,000) |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive (Loss) Income - Components (Details) - USD ($) | 3 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning Balance | $ (1,302,000,000) | $ 392,000,000 | ||
Other comprehensive income (loss) before reclassifications | (14,000,000) | 28,000,000 | ||
Amounts reclassified to earnings | (68,000,000) | 12,000,000 | ||
(Provision for) benefit from income taxes | 18,000,000 | |||
Ending Balance | (1,637,000,000) | 380,000,000 | ||
Cumulative translation adjustment | (14,000,000) | $ 13,000,000 | ||
Accumulated other comprehensive loss | $ 132,000,000 | $ 232,000,000 | ||
Derivative Instrument, Loss Reclassified from AOCI into Income, Effective Portion, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest Expense | |||
Designated as Hedging Instrument [Member] | ||||
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Derivative Instrument, Loss Reclassified from AOCI into Income, Effective Portion, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest Expense | Interest Expense | ||
Change in Unamortized Pension, Post-retirement and Postemployment Benefit-related Items | ||||
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Other comprehensive income (loss) before reclassifications | $ 0 | $ 0 | ||
Amounts reclassified to earnings | (6,000,000) | (1,000,000) | ||
(Provision for) benefit from income taxes | 0 | |||
Accumulated other comprehensive loss | 145,000,000 | (21,000,000) | 151,000,000 | $ (20,000,000) |
Foreign Currency Translation | ||||
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Other comprehensive income (loss) before reclassifications | (14,000,000) | 13,000,000 | ||
Amounts reclassified to earnings | 0 | 0 | ||
(Provision for) benefit from income taxes | 0 | |||
Accumulated other comprehensive loss | (13,000,000) | (24,000,000) | 1,000,000 | (37,000,000) |
Unrealized Loss on Term Loan Interest Rate Swap | ||||
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Amounts reclassified to earnings | (62,000,000) | |||
(Provision for) benefit from income taxes | 18,000,000 | |||
Accumulated other comprehensive loss | 0 | (6,000,000) | 80,000,000 | (34,000,000) |
Unrealized Loss on Term Loan Interest Rate Swap | Designated as Hedging Instrument [Member] | ||||
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Amounts reclassified to earnings | 62,000,000 | 13,000,000 | ||
Accumulated Other Comprehensive (Loss) Income | ||||
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning Balance | 232,000,000 | (91,000,000) | ||
Ending Balance | 132,000,000 | (51,000,000) | ||
Accumulated other comprehensive loss | $ 132,000,000 | $ (51,000,000) | $ 232,000,000 | $ (91,000,000) |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | |
Related Party Transaction [Line Items] | |||
Related Party Transactions | Related Party Transactions As of December 31, 2022, the Board was comprised of eight directors, including the Company's Chief Executive Officer and seven non-employee directors. On October 20, 2022, Robert Theis, who was elected to join the Board as RingCentral's designee on November 6, 2020, provided notice of his intent to resign from the Board effective October 31, 2022. On December 13, 2022, Jill K. Frizzley was appointed to the Board in Mr. Theis' place pursuant to the Company's strategic partnership with RingCentral. See Note 13, "Preferred Stock," to our unaudited interim Condensed Consolidated Financial Statements for additional information. On February 1, 2023, the Board increased the size of the Board by one director, from eight to nine members, and appointed Carrie W. Teffner to fill the vacancy resulting from the increase. Specific Arrangements Involving the Company's Directors and Executive Officers Stephan Scholl, a Director of the Company who resigned in connection with Emergence, is the Chief Executive Officer of Alight Solutions LLC ("Alight"), a provider of integrated benefits, payroll and cloud solutions, and he also serves on Alight's board of directors. During each of the three months ended December 31, 2022 and 2021, the Company purchased goods and services from subsidiaries of Alight of $1 million. As of December 31, 2022 outstanding accounts payable due to Alight was immaterial. As of September 30, 2022, outstanding accounts payable due to Alight was $1 million. | ||
Alight Solutions LLC [Member] | Director [Member] | |||
Related Party Transaction [Line Items] | |||
Cost of goods and services sold | $ 1,000,000 | $ 1,000,000 | |
Accounts Payable | $ 1,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - General (Details) - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Loss Contingencies [Line Items] | ||||
Amount reserved for product warranties | $ 1,000,000 | $ 1,000,000 | ||
Restricted Cash, Noncurrent | $ 4,000,000 | $ 3,000,000 | $ 4,000,000 | $ 4,000,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Product Warranties (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Product warranties, maximum term | 2 years | |
Amount reserved for product warranties | $ 1,000,000 | $ 1,000,000 |
Commitments and Contingencies_3
Commitments and Contingencies - Letters of Credit and Guarantees (Details) | Dec. 31, 2022 USD ($) |
Line of Credit Facility [Line Items] | |
Letters of credit, maximum amount | $ 150,000,000 |
Standby Letters of Credit | |
Line of Credit Facility [Line Items] | |
Letters of Credit, Potential Payment Obligation | $ 64,000,000 |
Commitments and Contingencies_4
Commitments and Contingencies - Transactions with Nokia (Details) | Oct. 01, 2000 USD ($) |
Indemnification Agreement | |
Loss Contingencies [Line Items] | |
Threshold amount of contribution and distribution agreement | $ 50,000,000 |
Commitments and Contingencies_5
Commitments and Contingencies - Purchase Commitments (Details) | 3 Months Ended |
Dec. 31, 2022 USD ($) | |
Purchase Commitments [Line Items] | |
Purchase Obligation, to be Paid, Year One | $ 8,000,000 |
Purchase Obligation, to be Paid, Year Two | 8,000,000 |
Technology Equipment | |
Purchase Commitments [Line Items] | |
Purchase Obligation | 6,000,000 |
Cloud & Service Agreements | |
Purchase Commitments [Line Items] | |
Purchase Obligation, to be Paid, Year Two | 11,000,000 |
Purchase Obligation, to be Paid, Year Three | 15,000,000 |
Purchase Obligation, to be Paid, Year Four | 16,000,000 |
Purchase Obligation | 184,000,000 |
Licensing Agreements | |
Purchase Commitments [Line Items] | |
Purchase Obligation, to be Paid, Year Three | $ 8,000,000 |
Minimum [Member] | Cloud & Service Agreements | |
Purchase Commitments [Line Items] | |
Long-term Purchase Commitment, Period | 3 years |
Maximum | Cloud & Service Agreements | |
Purchase Commitments [Line Items] | |
Long-term Purchase Commitment, Period | 6 years |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Jul. 12, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Nov. 14, 2018 | Jun. 11, 2018 | |
Subsequent Event [Line Items] | ||||||
Warrant repurchase program, authorized amount | $ 15,000,000 | |||||
Long-term Debt, Gross | $ 3,420,000,000 | $ 3,364,000,000 | ||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 155,000,000 | 146,000,000 | ||||
Indefinite-Lived Intangible Assets (Excluding Goodwill), Net | 178,000,000 | 187,000,000 | ||||
Incremental Loans | ||||||
Subsequent Event [Line Items] | ||||||
Long-term Debt, Gross | 350,000,000 | 350,000,000 | ||||
Incremental Loans | Alternative Base Rate | ||||||
Subsequent Event [Line Items] | ||||||
Interest rate, stated percentage | 9% | |||||
Incremental Loans | Fed Funds Effective Rate Overnight Index Swap Rate | ||||||
Subsequent Event [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | |||||
Incremental Loans | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||||
Subsequent Event [Line Items] | ||||||
Interest rate, stated percentage | 10% | |||||
Debt Instrument, Interest Rate, Floor | 1% | |||||
Incremental Loans | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 1% | |||||
Incremental Loans | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | ||||||
Subsequent Event [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 2% | |||||
Convertible Notes | ||||||
Subsequent Event [Line Items] | ||||||
Debt face amount | 350,000,000 | 221,000,000 | ||||
Interest rate, stated percentage | 2.25% | |||||
Long-term Debt, Gross | 221,000,000 | 221,000,000 | ||||
Escrow Deposit, Proceeds from Debt Repurchase | $ 221,000,000 | |||||
Exchangeable Debt | ||||||
Subsequent Event [Line Items] | ||||||
Interest rate, stated percentage | 8% | |||||
Long-term Debt, Gross | $ 250,000,000 | $ 250,000,000 | ||||
Subsequent Event | Minimum [Member] | Employee Separation Costs | ||||||
Subsequent Event [Line Items] | ||||||
Estimated Fiscal Year Restructuring Charges | $ 57,000,000 | |||||
Subsequent Event | Maximum | Employee Separation Costs | ||||||
Subsequent Event [Line Items] | ||||||
Estimated Fiscal Year Restructuring Charges | $ 65,000,000 |
Uncategorized Items - avya-2022
Label | Element | Value |
Long-Term Debt, Gross, excluding Short-Term Debt | avya_LongTermDebtGrossExcludingShortTermDebt | $ 3,364,000,000 |
Long-Term Debt, Gross, excluding Short-Term Debt | avya_LongTermDebtGrossExcludingShortTermDebt | 3,364,000,000 |
UNITED STATES | Postretirement Health Coverage [Member] | ||
Defined Benefit Plan, Expected Future Employer Contributions, Remainder of Fiscal Year | us-gaap_DefinedBenefitPlanExpectedFutureEmployerContributionsRemainderOfFiscalYear | 8,000,000 |
Defined Benefit Plan, Plan Assets, Contributions by Employer | us-gaap_DefinedBenefitPlanContributionsByEmployer | 2,000,000 |
Defined Benefit Plan, Reimbursement Of Prior Period Payments | avya_DefinedBenefitPlanReimbursementOfPriorPeriodPayments | 2,000,000 |
Foreign Plan [Member] | ||
Defined Benefit Plan, Expected Future Employer Contributions, Remainder of Fiscal Year | us-gaap_DefinedBenefitPlanExpectedFutureEmployerContributionsRemainderOfFiscalYear | 19,000,000 |
Estimate of Fair Value Measurement [Member] | ||
Debt Instrument, Fair Value Disclosure | us-gaap_DebtInstrumentFairValue | 1,822,000,000 |
Debt Instrument, Fair Value Disclosure | us-gaap_DebtInstrumentFairValue | 1,156,000,000 |
Senior Notes [Member] | Estimate of Fair Value Measurement [Member] | ||
Debt Instrument, Fair Value Disclosure | us-gaap_DebtInstrumentFairValue | 497,000,000 |
Debt Instrument, Fair Value Disclosure | us-gaap_DebtInstrumentFairValue | 307,000,000 |
Term Loan Credit Agreement, Tranche B-3 [Member] | Estimate of Fair Value Measurement [Member] | ||
Debt Instrument, Fair Value Disclosure | us-gaap_DebtInstrumentFairValue | 232,000,000 |
Debt Instrument, Fair Value Disclosure | us-gaap_DebtInstrumentFairValue | 217,000,000 |
Term Loan Credit Agreement, Tranche B-2 [Member] | Estimate of Fair Value Measurement [Member] | ||
Debt Instrument, Fair Value Disclosure | us-gaap_DebtInstrumentFairValue | 403,000,000 |
Debt Instrument, Fair Value Disclosure | us-gaap_DebtInstrumentFairValue | 260,000,000 |
Exchangeable Debt [Member] | Estimate of Fair Value Measurement [Member] | ||
Debt Instrument, Fair Value Disclosure | us-gaap_DebtInstrumentFairValue | 162,000,000 |
Debt Instrument, Fair Value Disclosure | us-gaap_DebtInstrumentFairValue | 88,000,000 |
Term Loan Credit Agreement, Tranche B-1 [Member] | Estimate of Fair Value Measurement [Member] | ||
Debt Instrument, Fair Value Disclosure | us-gaap_DebtInstrumentFairValue | 433,000,000 |
Debt Instrument, Fair Value Disclosure | us-gaap_DebtInstrumentFairValue | 275,000,000 |
Convertible Debt [Member] | Estimate of Fair Value Measurement [Member] | ||
Debt Instrument, Fair Value Disclosure | us-gaap_DebtInstrumentFairValue | 95,000,000 |
Debt Instrument, Fair Value Disclosure | us-gaap_DebtInstrumentFairValue | 9,000,000 |
Accounting Standards Update 2020-06 [Member] | ||
Elimination of Conversion Option on Converitble and Exchangeable Debt | avya_EliminationOfConversionOptionOnConveritbleAndExchangeableDebt | 71,000,000 |
Accounting Standards Update 2020-06 [Member] | Additional Paid-in Capital [Member] | ||
Additional Paid in Capital | us-gaap_AdditionalPaidInCapital | $ 118,000,000 |