Supplementary Financial Information
 12 Months Ended
Sep. 30, 2018
Supplementary Financial Information [Abstract]  
Supplementary Financial Information
Supplementary Financial Information
Consolidated Statements of Operations Information
The following table presents a summary of depreciation and amortization and Other income (expense), net for the periods indicated:
 
 
Successor
 
 
Predecessor
 
 
Period from December 16, 2017
through
September 30, 2018
 
 
Period from
October 1, 2017
through
December 15, 2017
 
Fiscal years ended September 30,
(In millions)
 
 
 
 
2017
 
2016
DEPRECIATION AND AMORTIZATION
 
 
 
 
 
 
 
 
 
Amortization of software development costs (included in Costs)
 
$
—

 
 
$
—

 
$
1

 
$
1

Amortization of intangible assets (included in Costs and Operating expenses)
 
262

 
 
13

 
224

 
256

Depreciation and amortization of property, plant and equipment and internal use software (included in Costs and Operating expenses)
 
122

 
 
18

 
101

 
117

Total depreciation and amortization
 
$
384

 
 
$
31

 
$
326

 
$
374

 
 
 
 
 
 
 
 
 
 
OTHER INCOME (EXPENSE), NET
 
 
 
 
 
 
 
 
 
Interest income
 
$
5

 
 
$
2

 
$
4

 
$
1

Foreign currency gains, net
 
28

 
 
—

 
2

 
10

Income from TSA, net
 
5

 
 
3

 
3

 
—

Gain on sale of Networking business
 
—

 
 
—

 
2

 
—

Loss on investment
 
—

 
 
—

 
—

 
(11
)
Change in fair value of Preferred B embedded derivative
 
—

 
 
—

 
—

 
73

Other pension and post-retirement benefit credits (costs), net
 
13

 
 
(8
)
 
(34
)
 
(27
)
Change in fair value of Emergence Date Warrants
 
(17
)
 
 
—

 
—

 
—

Gain on sale of long-lived assets
 
1

 
 
—

 
—

 
—

Other, net
 
—

 
 
1

 
(2
)
 
(5
)
Total other income (expense), net
 
$
35

 
 
$
(2
)
 
$
(25
)
 
$
41


As discussed in Note 3, “Recent Accounting Pronouncements - Recently Adopted Accounting Pronouncements,” the adoption of ASU 2017-07 resulted in the recognition of Other pension and post-retirement benefit credits (costs), net (including the interest cost, expected return on plan assets, amortization and curtailments and settlements) in Other income (expense), net. Prior period amounts have been reclassified to conform to the current period presentation.
The Foreign currency gains, net for the period from December 16, 2017 through September 30, 2018 (Successor) was principally due to the strengthening of the U.S. dollar compared to certain foreign exchange rates on U.S. dollar denominated receivables maintained in non-U.S. locations, mainly Argentina, India and Mexico. As of July 1, 2018, we concluded that Argentina represents a hyperinflationary economy as its projected three-year cumulative inflation rate exceeds 100%. As a result, we changed the local functional currency for our Argentinian operations from the Argentine Peso to the U.S. Dollar effective July 1, 2018 and remeasured the financial statements for those operations to the U.S. Dollar as of July 1, 2018 in accordance with ASC 830 “Foreign Currency Matters.” Although the remeasurement on July 1, 2018 did not have an impact on our Consolidated Financial Statements, foreign exchange transaction gains and losses recognized on or after July 1, 2018 will be based on Argentina’s new U.S. dollar functional currency.
A summary of Reorganization items, net for the periods indicated is presented in the following table:
 
 
Successor
 
 
Predecessor
 
 
Period from December 16, 2017
through
September 30, 2018
 
 
As Previously Reported
 
Adjustments
 
Revised
 
 
 
 
 
 
Period from
October 1, 2017
through
December 15, 2017
 
Period from
October 1, 2017
through
December 15, 2017
 
Period from
October 1, 2017
through
December 15, 2017
 
Fiscal years ended September 30,
(In millions)
 
 
 
 
 
 
2017
 
2016
REORGANIZATION ITEMS, NET
 
 
 
 
 
 
 
 
 
 
 
 
 
Net gain on settlement of Liabilities subject to compromise
 
$
—

 
 
$
1,804

 
$
(26
)
 
$
1,778

 
$
—

 
$
—

Net gain on fresh start adjustments
 
—

 
 
1,671

 
26

 
1,697

 
—

 
—

Bankruptcy-related professional fees
 
—

 
 
(56
)
 
—

 
(56
)
 
(66
)
 
—

Contract rejection fees / lease terminations
 
—

 
 
—

 
—

 
—

 
(18
)
 
—

DIP Credit Agreement financing costs
 
—

 
 
—

 
—

 
—

 
(14
)
 
—

Other items, net
 
—

 
 
(3
)
 
—

 
(3
)
 
—

 
—

Reorganization items, net
 
$
—

 
 
$
3,416

 
$
—

 
$
3,416

 
$
(98
)
 
$
—

Cash payments for reorganization items
 
$
1

 
 
$
2,524

 
$
—

 
$
2,524

 
$
47

 
$
—


Costs directly attributable to the implementation of the Plan of Reorganization were reported as Reorganization items, net. The cash payments for reorganization items for the period from October 1, 2017 through December 15, 2017 (Predecessor) included $2,468 million of claims paid related to Liabilities subject to compromise and $56 million for bankruptcy-related professional fees, including emergence and success fees paid on the Emergence Date.
As discussed in Note 1, "Background and Basis of Presentation - Revision of Prior Period Amounts," prior period amounts have been revised, where applicable.
Consolidated Balance Sheet Information
 
 
Successor
 
 
Predecessor
 
 
Period from December 16, 2017
through
September 30, 2018
 
 
Period from
October 1, 2017
through
December 15, 2017
 
Fiscal years ended September 30,
(In millions)
 
 
 
 
2017
 
2016
VALUATION AND QUALIFYING ACCOUNTS
 
 
 
 
 
 
 
 
 
Allowance for Doubtful Accounts Receivable:
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
—

 
 
$
13

 
$
16

 
$
15

Increase (decrease) in expense
 
2

 
 
1

 
(3
)
 
1

Reductions
 
—

 
 
(1
)
 
—

 
—

Impact of fresh start accounting
 
—

 
 
(13
)
 
—

 
—

Balance at end of period
 
$
2

 
 
$
—

 
$
13

 
$
16

Deferred Tax Asset Valuation Allowance:
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
836

 
 
$
2,152

 
$
2,256

 
$
1,976

Increase (decrease) in expense
 
105

 
 
(452
)
 
(65
)
 
203

(Reductions) additions
 
(22
)
 
 
(393
)
 
(39
)
 
77

Impact of fresh start accounting
 
—

 
 
(471
)
 
—

 
—

Balance at end of period
 
$
919

 
 
$
836

 
$
2,152

 
$
2,256


  
 
Successor
 
 
Predecessor
(In millions)
 
As of September 30, 2018
 
 
As of September 30, 2017
PROPERTY, PLANT AND EQUIPMENT, NET
 
 
 
 
 
Leasehold improvements
 
$
105

 
 
$
142

Machinery and equipment
 
65

 
 
173

Rental equipment
 
125

 
 
241

Assets under construction
 
14

 
 
13

Internal use software
 
112

 
 
240

Total property, plant and equipment
 
421

 
 
809

Less: Accumulated depreciation and amortization
 
(171
)
 
 
(609
)
Property, plant and equipment, net
 
$
250

 
 
$
200


As of September 30, 2018, Machinery and equipment, Rental equipment and Accumulated depreciation and amortization include $4 million, $19 million and $(10) million, respectively, for assets acquired under capital leases. As of September 30, 2017, Machinery and equipment, Rental equipment and Accumulated depreciation and amortization include $6 million, $38 million and $(35) million, respectively, for assets acquired under capital leases.
The decrease in the gross Property, plant and equipment cost and Accumulated depreciation and amortization amounts mainly reflect the impact of the Company applying fresh start accounting on the Emergence Date. See Note 5, "Fresh Start Accounting," for additional information.
 
 
Successor
 
 
Predecessor
(In millions)
 
As of September 30, 2018
 
 
As of September 30, 2017
LIABILITIES SUBJECT TO COMPROMISE
 
 
 
 
 
Accounts payable
 
$
—

 
 
$
40

Debt subject to compromise including accrued interest(1)
 
—

 
 
5,832

Pension obligations
 
—

 
 
1,012

Payroll and benefit obligations
 
—

 
 
45

Other post-retirement obligations
 
—

 
 
211

Deferred revenue
 
—

 
 
95

Deferred income taxes
 
—

 
 
113

Other liabilities
 
—

 
 
357

Consolidated Liabilities subject to compromise
 
—

 
 
7,705

Payables to non-debtor subsidiaries
 
—

 
 
100

Debtors’ Liabilities subject to compromise
 
$
—

 
 
$
7,805

(1) Reduced by adequate protection payments.
During the Chapter 11 proceedings, all expenses, gains and losses directly associated with the reorganization proceedings were reported as Reorganization items, net in the accompanying Consolidated Statements of Operations. In addition, Liabilities subject to compromise during Chapter 11 proceedings were distinguished from liabilities of the non-debtors and from post-petition liabilities in the accompanying Consolidated Balance Sheets. The Company's other subsidiaries that were not part of the Bankruptcy Filing ("non-debtors") continued to operate in the ordinary course of business.
Supplemental Cash Flow Information
 
 
Successor
 
 
Predecessor
  
 
Period from December 16, 2017
through
September 30, 2018
 
 
Period from
October 1, 2017
through
December 15, 2017
 
Fiscal years ended September 30,
(In millions)
 
 
 
 
2017
 
2016
OTHER PAYMENTS
 
 
 
 
 
 
 
 
 
Interest payments
 
$
149

 
 
$
15

 
$
138

 
$
425

Income tax payments
 
$
22

 
 
$
7

 
$
33

 
$
51

 
 
 
 
 
 
 
 
 
 
NON-CASH INVESTING ACTIVITIES
 
 
 
 
 
 
 
 
 
Acquisition of equipment under capital lease
 
$
2

 
 
$
—

 
$
—

 
$
4

Increase (decrease) in Accounts payable for Capital expenditures
 
$
1

 
 
$
—

 
$
(1
)
 
$
(4
)