| Operating Segments |
Segments The Products & Solutions segment primarily develops, markets, and sells unified communications and contact center solutions, offered on premises, in the cloud, or as a hybrid solution. These integrate multiple forms of communications, including telephony, email, instant messaging and video. The 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. The Networking segment portfolio of software and hardware products offered integrated networking products. On July 14, 2017, the Company sold its Networking business to Extreme. Prior to the sale, the Company had three separate operating segments. After the sale, the Company has two operating segments, Products & Solutions and Services. Effective September 30, 2018, the Company changed the name of its Global Communications Solutions (“GCS”) and Avaya Global Services (“AGS”) segments to "Products & Solutions" and "Services," respectively. These were name changes only and did not have an impact on the operating results of each 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, impairment charges, and merger-related costs as these costs are not core to the measurement of segment performance, but rather are controlled at the corporate level. Summarized financial information relating to the Company's operating segments is shown in the following table for the periods indicated: | | | | | | | | | | | | | | | | | | | Successor | | | Predecessor | | 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 | REVENUE | | | | | | | | | Products & Solutions | $ | 1,052 |
| | | $ | 253 |
| | $ | 1,297 |
| | $ | 1,536 |
| Avaya Networking (1) | — |
| | | — |
| | 140 |
| | 219 |
| Services | 1,401 |
| | | 351 |
| | 1,835 |
| | 1,947 |
| Unallocated Amounts (2) | (206 | ) | | | — |
| | — |
| | — |
| | $ | 2,247 |
| | | $ | 604 |
| | $ | 3,272 |
| | $ | 3,702 |
| GROSS PROFIT | | | | | | | | | Products & Solutions | $ | 696 |
| | | $ | 169 |
| | $ | 890 |
| | $ | 1,047 |
| Avaya Networking (1) | — |
| | | — |
| | 48 |
| | 80 |
| Services | 843 |
| | | 196 |
| | 1,091 |
| | 1,160 |
| Unallocated Amounts (3) | (396 | ) | | | (3 | ) | | (21 | ) | | (29 | ) | | 1,143 |
| | | 362 |
| | 2,008 |
| | 2,258 |
| OPERATING EXPENSES | | | | | | | | | Selling, general and administrative | 888 |
| | | 264 |
| | 1,261 |
| | 1,401 |
| Research and development | 172 |
| | | 38 |
| | 225 |
| | 273 |
| Amortization of intangible assets | 127 |
| | | 10 |
| | 204 |
| | 226 |
| Impairment of indefinite-lived intangible assets | — |
| | | — |
| | 65 |
| | 100 |
| Goodwill impairment | — |
| | | — |
| | 52 |
| | 442 |
| Restructuring charges, net | 81 |
| | | 14 |
| | 30 |
| | 105 |
| | 1,268 |
| | | 326 |
| | 1,837 |
| | 2,547 |
| OPERATING (LOSS) INCOME | (125 | ) | | | 36 |
| | 171 |
| | (289 | ) | INTEREST EXPENSE, OTHER INCOME (EXPENSE), NET AND REORGANIZATION ITEMS, NET | (134 | ) | | | 3,400 |
| | (369 | ) | | (430 | ) | (LOSS) INCOME BEFORE INCOME TAXES | $ | (259 | ) | | | $ | 3,436 |
| | $ | (198 | ) | | $ | (719 | ) |
| | (1) | The Networking business was sold on July 14, 2017. |
| | (2) | Unallocated amounts in Revenue represent the fair value adjustment to deferred revenue recognized upon emergence from bankruptcy and excluded from segment revenue. |
| | (3) | Unallocated amounts in Gross Profit include the fair value adjustments recognized upon emergence from bankruptcy and excluded from segment gross profit; the effect of the amortization of technology intangibles; and costs that are not core to the measurement of segment management’s performance, but rather are controlled at the corporate level. |
| | | | | | | | | | | Successor | | | Predecessor | (In millions) | September 30, 2018 | | | September 30, 2017 | ASSETS: | | | | | Products & Solutions | $ | 1,336 |
| | | $ | 1,133 |
| Services | 1,509 |
| | | 2,499 |
| Unallocated Assets (1) | 4,834 |
| | | 2,266 |
| Total | $ | 7,679 |
| | | $ | 5,898 |
|
| | (1) | Unallocated Assets consist of cash and cash equivalents, accounts receivable, deferred income tax assets, property, plant and equipment, acquired intangible assets and other assets. Unallocated Assets are managed at the corporate level and are not identified with a specific segment. |
Geographic Information Financial information relating to the Company’s revenue and long-lived assets by geographic area is as follows: | | | | | | | | | | | | | | | | | | | | | 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 | REVENUE(1): | | | | | | | | | | U.S. | | $ | 1,184 |
| | | $ | 331 |
| | $ | 1,798 |
| | $ | 2,072 |
| International: | | | | | | | | | | EMEA | | 603 |
| | | 166 |
| | 834 |
| | 880 |
| APAC—Asia Pacific | | 256 |
| | | 57 |
| | 334 |
| | 416 |
| Americas International—Canada and Latin America | | 204 |
| | | 50 |
| | 306 |
| | 334 |
| Total International | | 1,063 |
| | | 273 |
| | 1,474 |
| | 1,630 |
| Total | | $ | 2,247 |
| | | $ | 604 |
| | $ | 3,272 |
| | $ | 3,702 |
|
| | | | | | | | | | | Successor | | | Predecessor | (In millions) | September 30, 2018 | | | September 30, 2017 | LONG-LIVED ASSETS(2) | | | | | U.S. | $ | 169 |
| | | $ | 132 |
| International: | | | | | EMEA | 61 |
| | | 50 |
| APAC—Asia Pacific | 12 |
| | | 11 |
| Americas International—Canada and Latin America | 8 |
| | | 7 |
| Total International | 81 |
| | | 68 |
| Total | $ | 250 |
| | | $ | 200 |
|
| | (1) | Revenue is attributed to geographic areas based on the location of customers. |
| | (2) | Represents property, plant and equipment, net. |
|