Net Income (Loss) Per Common Share
 12 Months Ended
Sep. 30, 2018
Earnings Per Share [Abstract]  
Net Income (Loss) Per Common Share
(Loss) Per Common Share
Basic earnings per share is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share reflects the potential dilution that would occur if equity awards granted under the Company's various share-based compensation plans were vested or exercised, if the Company's Convertible Notes or Call Spread Warrants were exercised, and/or if the Emergence Date Warrants were exercised, resulting in the issuance of common shares that would participate in the earnings of the Company.
The following table sets forth the calculation of net income (loss) attributable to common shareholders and the computation of basic and diluted earnings (loss) per share 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 year ended September 30,
(In millions, except per share amounts)
 
 
 
2017
 
2016
Net income (loss) per share:
 
 
 
 
 
 
 
 
Numerator
 
 
 
 
 
 
 
 
Net income (loss)
$
287

 
 
$
2,977

 
$
(182
)
 
$
(730
)
Dividends and accretion to preferred stockholders
—

 
 
(6
)
 
(31
)
 
(41
)
Undistributed earnings
287

 
 
2,971

 
(213
)
 
(771
)
Percentage allocated to common stockholders(1)
100.0
%
 
 
86.9
%
 
100.0
%
 
100.0
%
Numerator for basic and diluted earnings (loss) per common share
$
287

 
 
$
2,582

 
$
(213
)
 
$
(771
)
 
 
 
 
 
 
 
 
 
Denominator
 
 
 
 
 
 
 
 
Denominator for basic earnings (loss) per weighted average common shares
109.9

 
 
497.3

 
497.1

 
500.7

Effect of dilutive securities
 
 
 
 
 
 
 
 
Restricted stock units
1.2

 
 
—

 
—

 
—

Stock options
—

 
 
—

 
—

 
—

Convertible Notes
—

 
 
—

 
—

 
—

Call Spread Warrants
—

 
 
—

 
—

 
—

Emergence Date Warrants
—

 
 
—

 
—

 
—

Denominator for diluted earnings (loss) per weighted average common shares
111.1

 
 
497.3

 
497.1

 
500.7

 
 
 
 
 
 
 
 
 
Net income (loss) per common share
 
 
 
 
 
 
 
 
Basic
$
2.61

 
 
$
5.19

 
$
(0.43
)
 
$
(1.54
)
Diluted
$
2.58

 
 
$
5.19

 
$
(0.43
)
 
$
(1.54
)
 
 
 
 
 
 
 
 
 
(1) Basic weighted average common stock outstanding
109.9

 
 
497.3

 
497.1

 
500.7

 Basic weighted average common stock and common stock equivalents (preferred shares)
109.9

 
 
572.4

 
497.1

 
500.7

  Percentage allocated to common stock holders
100.0
%
 
 
86.9
%
 
100.0
%
 
100.0
%

The Predecessor Company’s preferred stock and unvested restricted stock units were participating securities, which required the application of the two-class method to calculate basic and diluted earnings per share. Under the two-class method, undistributed earnings are allocated to common stock and the participating securities according to their respective participating rights in undistributed earnings, as if all the earnings for the period had been distributed. Basic net income (loss) per common share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period. Net income (loss) attributable to common stockholders is increased for preferred stock dividends earned during the period. No allocation of undistributed earnings to participating securities was performed for periods with net losses as such securities do not have a contractual obligation to share in the losses of the Company.
During the period from December 16, 2017 through September 30, 2018 (Successor), the Company excluded 1.1 million stock options, 0.2 million restricted stock units and 5.6 million Emergence Date Warrants to purchase common shares from the diluted earnings per share calculation as their effect would have been anti-dilutive. The Company’s Convertible Notes and Call Spread Warrants were also excluded for the period from December 16, 2017 through September 30, 2018 (Successor) as discussed in more detail below.
For purposes of considering the Convertible Notes in determining diluted earnings per share, the Company has the ability and current intent to settle conversions of the Convertible Notes through combination settlement by repaying the principal portion in cash and any excess of the conversion value over the principal amount (the “Conversion Premium”) in shares of the Company's common stock. Therefore, only the impact of the Conversion Premium will be included in diluted weighted average shares outstanding using the treasury stock method. Since the Convertible Notes were out of the money and anti-dilutive as of September 30, 2018 (Successor), they were excluded from the diluted earnings per share calculation for the period from December 16, 2017 through September 30, 2018 (Successor). The Call Spread Warrants sold in connection with the issuance of the Convertible Notes will not be considered in calculating diluted weighted average shares outstanding until the price per share of the Company’s common stock exceeds the strike price of $37.3625 per share. When the price per share of the Company’s common stock exceeds the strike price per share of the Call Spread Warrants, the effect of the additional shares that may be issued upon exercise of the Call Spread Warrants will be included in diluted weighted average shares outstanding using the treasury stock method. The Bond Hedge purchased in connection with the issuance of the Convertible Notes is considered to be anti-dilutive and therefore does not impact the Company’s calculation of diluted earnings per share. Refer to Note 11, "Financing Arrangements,” for further discussion regarding the Convertible Notes.