Fresh Start Accounting (Tables)
 12 Months Ended
Sep. 30, 2018
Reorganizations [Abstract]  
Schedule of Fresh-Start Adjustments
 
As Previously Reported
(In millions)
Predecessor Company
December 15,
2017
 
Reorganization Adjustments
 
 
 
Fresh Start Adjustments
 
 
 
Successor Company
December 16,
2017
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
744

 
$
(404
)
 
(1)
 
$
—

 
 
 
$
340

Accounts receivable, net
523

 
—

 
 
 
(106
)
 
(21)
 
417

Inventory
90

 
—

 
 
 
29

 
(22)
 
119

Other current assets
374

 
(58
)
 
(2)
 
(66
)
 
(23)
 
250

TOTAL CURRENT ASSETS
1,731

 
(462
)
 
 
 
(143
)
 
 
 
1,126

Property, plant and equipment, net
194

 
—

 
 
 
116

 
(24)
 
310

Deferred income taxes, net
—

 
48

 
(3)
 
(17
)
 
(25)
 
31

Intangible assets, net
298

 
—

 
 
 
3,137

 
(26)
 
3,435

Goodwill
3,541

 
—

 
 
 
(909
)
 
(27)
 
2,632

Other assets
70

 
6

 
(4)
 
(27
)
 
(28)
 
49

TOTAL ASSETS
$
5,834

 
$
(408
)
 
 
 
$
2,157

 
 
 
$
7,583

LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Debt maturing within one year
$
725

 
$
(696
)
 
(5)
 
$
—

 
 
 
$
29

Accounts payable
325

 
(49
)
 
(6)
 
—

 
 
 
276

Payroll and benefit obligations
123

 
23

 
(7)
 
—

 
 
 
146

Deferred revenue
627

 
50

 
(8)
 
(341
)
 
(29)
 
336

Business restructuring reserve
35

 
3

 
(9)
 
—

 
 
 
38

Other current liabilities
97

 
65

 
(6,10)
 
(3
)
 
(30)
 
159

TOTAL CURRENT LIABILITIES
1,932

 
(604
)
 
 
 
(344
)
 
 
 
984

Non-current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt, net of current portion
—

 
2,771

 
(11)
 
96

 
(31)
 
2,867

Pension obligations
539

 
246

 
(12)
 
—

 
 
 
785

Other post-retirement obligations
—

 
212

 
(13)
 
—

 
 
 
212

Deferred income taxes, net
28

 
113

 
(14)
 
548

 
(32)
 
689

Business restructuring reserve
26

 
4

 
(9)
 
4

 
(33)
 
34

Other liabilities
180

 
233

 
(8,15)
 
(43
)
 
(29,34)
 
370

TOTAL NON-CURRENT LIABILITIES
773

 
3,579

 
 
 
605

 
 
 
4,957

LIABILITIES SUBJECT TO COMPROMISE
7,585

 
(7,585
)
 
(16)
 
—

 
 
 
—

TOTAL LIABILITIES
10,290

 
(4,610
)
 
 
 
261

 
 
 
5,941

Commitments and contingencies
 
 
 
 
 
 
 
 
 
 
 
Equity awards on redeemable shares
6

 
(6
)
 
(17)
 
—

 
 
 
—

Preferred stock:
 
 
 
 
 
 
 
 
 
 
 
Series B
397

 
(397
)
 
(17)
 
—

 
 
 
—

Series A
186

 
(186
)
 
(17)
 
—

 
 
 
—

STOCKHOLDERS' (DEFICIT) EQUITY
 
 
 
 
 
 
 
 
 
 
 
Common stock (Successor)
—

 
1

 
(18)
 
—

 
 
 
1

Additional paid-in capital (Successor)
—

 
1,641

 
(18)
 
—

 
 
 
1,641

Common stock (Predecessor)
—

 
—

 
 
 
—

 
 
 
—

Additional paid-in capital (Predecessor)
2,387

 
(2,387
)
 
(17)
 
—

 
 
 
—

(Accumulated deficit) retained earnings
(5,978
)
 
4,872

 
(19)
 
1,106

 
(36)
 
—

Accumulated other comprehensive (loss) income
(1,454
)
 
664

 
(20)
 
790

 
(35)
 
—

TOTAL STOCKHOLDERS' (DEFICIT) EQUITY
(5,045
)
 
4,791

 
 
 
1,896

 
 
 
1,642

TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
$
5,834

 
$
(408
)
 
 
 
$
2,157

 
 
 
$
7,583

 
Adjustments
(In millions)
Predecessor Company
December 15,
2017
 
Reorganization Adjustments
 
 
 
Fresh Start Adjustments
 
 
 
Successor Company
December 16,
2017
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
26

 
$
—

 
 
 
$
—

 
 
 
$
26

Accounts receivable, net
(26
)
 
—

 
 
 
—

 
 
 
(26
)
Inventory
—

 
—

 
 
 
—

 
 
 
—

Other current assets
—

 
—

 
 
 
—

 
 
 
—

TOTAL CURRENT ASSETS
—

 
—

 
 
 
—

 
 
 
—

Property, plant and equipment, net
—

 
—

 
 
 
—

 
 
 
—

Deferred income taxes, net
—

 
—

 
 
 
—

 
 
 
—

Intangible assets, net
—

 
—

 
 
 
—

 
 
 
—

Goodwill
—

 
—

 
 
 
26

 
(27)
 
26

Other assets
—

 
—

 
 
 
—

 
 
 
—

TOTAL ASSETS
$
—

 
$
—

 
 
 
$
26

 
 
 
$
26

LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Debt maturing within one year
$
—

 
$
—

 
 
 
$
—

 
 
 
$
—

Accounts payable
—

 
—

 
 
 
—

 
 
 
—

Payroll and benefit obligations
—

 
—

 
 
 
—

 
 
 
—

Deferred revenue
—

 
—

 
 
 
—

 
 
 
—

Business restructuring reserve
—

 
—

 
 
 
—

 
 
 
—

Other current liabilities
—

 
—

 
 
 
—

 
 
 
—

TOTAL CURRENT LIABILITIES
—

 
—

 
 
 
—

 
 
 
—

Non-current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt
—

 
—

 
 
 
—

 
 
 
—

Pension obligations
—

 
—

 
 
 
—

 
 
 
—

Other post-retirement obligations
—

 
—

 
 
 
—

 
 
 
—

Deferred income taxes, net
—

 
—

 
 
 
—

 
 
 
—

Business restructuring reserve
—

 
—

 
 
 
—

 
 
 
—

Other liabilities
—

 
—

 
 
 
—

 
 
 
—

TOTAL NON-CURRENT LIABILITIES
—

 
—

 
 
 
—

 
 
 
—

LIABILITIES SUBJECT TO COMPROMISE
—

 
—

 
 
 
—

 
 
 
—

TOTAL LIABILITIES
—

 
—

 
 
 
—

 
 
 
—

Commitments and contingencies
 
 
 
 
 
 
 
 
 
 
 
Equity awards on redeemable shares
—

 
—

 
 
 
—

 
 
 
—

Preferred stock:
 
 
 
 
 
 
 
 
 
 
 
Series B
—

 
—

 
 
 
—

 
 
 
—

Series A
—

 
—

 
 
 
—

 
 
 
—

STOCKHOLDERS' (DEFICIT) EQUITY
 
 
 
 
 
 
 
 
 
 
 
Common stock (Successor)
—

 
—

 
 
 
—

 
 
 
—

Additional paid-in capital (Successor)
—

 
26

 
(18)
 
—

 
 
 
26

Common stock (Predecessor)
—

 
—

 
 
 
—

 
 
 
—

Additional paid-in capital (Predecessor)
—

 
—

 
 
 
—

 
 
 
—

(Accumulated deficit) retained earnings
—

 
(26
)
 
(19)
 
26

 
(36)
 
—

Accumulated other comprehensive (loss) income
—

 
—

 
 
 
—

 
 
 
—

TOTAL STOCKHOLDERS' (DEFICIT) EQUITY
—

 
—

 
 
 
26

 
 
 
26

TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
$
—

 
$
—

 
 
 
$
26

 
 
 
$
26

 
Revised
(In millions)
Predecessor Company
December 15,
 2017
 
Reorganization Adjustments
 
 
 
Fresh Start Adjustments
 
 
 
Successor Company
December 16,
 2017
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
770

 
$
(404
)
 
(1)
 
$
—

 
 
 
$
366

Accounts receivable, net
497

 
—

 
 
 
(106
)
 
(21)
 
391

Inventory
90

 
—

 
 
 
29

 
(22)
 
119

Other current assets
374

 
(58
)
 
(2)
 
(66
)
 
(23)
 
250

TOTAL CURRENT ASSETS
1,731

 
(462
)
 
 
 
(143
)
 
 
 
1,126

Property, plant and equipment, net
194

 
—

 
 
 
116

 
(24)
 
310

Deferred income taxes, net
—

 
48

 
(3)
 
(17
)
 
(25)
 
31

Intangible assets, net
298

 
—

 
 
 
3,137

 
(26)
 
3,435

Goodwill
3,541

 
—

 
 
 
(883
)
 
(27)
 
2,658

Other assets
70

 
6

 
(4)
 
(27
)
 
(28)
 
49

TOTAL ASSETS
$
5,834

 
$
(408
)
 
 
 
$
2,183

 
 
 
$
7,609

LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Debt maturing within one year
$
725

 
$
(696
)
 
(5)
 
$
—

 
 
 
$
29

Accounts payable
325

 
(49
)
 
(6)
 
—

 
 
 
276

Payroll and benefit obligations
123

 
23

 
(7)
 
—

 
 
 
146

Deferred revenue
627

 
50

 
(8)
 
(341
)
 
(29)
 
336

Business restructuring reserve
35

 
3

 
(9)
 
—

 
 
 
38

Other current liabilities
97

 
65

 
(6,10)
 
(3
)
 
(30)
 
159

TOTAL CURRENT LIABILITIES
1,932

 
(604
)
 
 
 
(344
)
 
 
 
984

Non-current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Long-term debt, net of current portion
—

 
2,771

 
(11)
 
96

 
(31)
 
2,867

Pension obligations
539

 
246

 
(12)
 
—

 
 
 
785

Other post-retirement obligations
—

 
212

 
(13)
 
—

 
 
 
212

Deferred income taxes, net
28

 
113

 
(14)
 
548

 
(32)
 
689

Business restructuring reserve
26

 
4

 
(9)
 
4

 
(33)
 
34

Other liabilities
180

 
233

 
(8,15)
 
(43
)
 
(29,34)
 
370

TOTAL NON-CURRENT LIABILITIES
773

 
3,579

 
 
 
605

 
 
 
4,957

LIABILITIES SUBJECT TO COMPROMISE
7,585

 
(7,585
)
 
(16)
 
—

 
 
 
—

TOTAL LIABILITIES
10,290

 
(4,610
)
 
 
 
261

 
 
 
5,941

Commitments and contingencies
 
 
 
 
 
 
 
 
 
 
 
Equity awards on redeemable shares
6

 
(6
)
 
(17)
 
—

 
 
 
—

Preferred stock:
 
 
 
 
 
 
 
 
 
 
 
Series B
397

 
(397
)
 
(17)
 
—

 
 
 
—

Series A
186

 
(186
)
 
(17)
 
—

 
 
 
—

STOCKHOLDERS' (DEFICIT) EQUITY
 
 
 
 
 
 
 
 
 
 
 
Common stock (Successor)
—

 
1

 
(18)
 
—

 
 
 
1

Additional paid-in capital (Successor)
—

 
1,667

 
(18)
 
—

 
 
 
1,667

Common stock (Predecessor)
—

 
—

 
 
 
—

 
 
 
—

Additional paid-in capital (Predecessor)
2,387

 
(2,387
)
 
(17)
 
—

 
 
 
—

(Accumulated deficit) retained earnings
(5,978
)
 
4,846

 
(19)
 
1,132

 
(36)
 
—

Accumulated other comprehensive (loss) income
(1,454
)
 
664

 
(20)
 
790

 
(35)
 
—

TOTAL STOCKHOLDERS' (DEFICIT) EQUITY
(5,045
)
 
4,791

 
 
 
1,922

 
 
 
1,668

TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
$
5,834

 
$
(408
)
 
 
 
$
2,183

 
 
 
$
7,609



Reorganization Adjustments
In accordance with the Plan of Reorganization, the following adjustments were made:
1.Sources and Uses of Cash. The following reflects the net cash payments recorded as of the Emergence Date as a result of implementing the Plan of Reorganization:
(In millions)
 
Sources:
 
Proceeds from Term Loan Credit Agreement, net of original issue discount
$
2,896

Release of restricted cash
76

Total sources of cash
2,972

Uses:
 
Repayment of DIP Credit Agreement
(725
)
Payment of DIP Credit Agreement accrued interest
(1
)
Cash paid to Predecessor first lien debt-holders
(2,061
)
Cash paid to PBGC
(340
)
Payment for professional fees escrow account
(56
)
Funding payment for Avaya represented employee pension plan
(49
)
Payment of accrued professional and administrative fees
(27
)
Costs incurred for Term Loan Credit Agreement and ABL Credit Agreement
(59
)
Payment for general unsecured claims
(58
)
Total uses of cash
(3,376
)
Net uses of cash
$
(404
)
2.
Other Current Assets.
(In millions)
 
Release of restricted cash
$
(76
)
Reclassification of prepaid debt issuance costs related to the Term Loan Credit Agreement
(42
)
Payment of fees related to the ABL Credit Agreement
5

Restricted cash for bankruptcy related professional fees
55

Total other current assets
$
(58
)

3.
Deferred Income Taxes. The adjustment represents the release of the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of the bankruptcy reorganization.
4.
Other Assets. The adjustment represents the re-establishment of foreign prepaid taxes.
5.
Debt Maturing Within One Year. The adjustment represents the net effect of the Company’s repayment of $725 million for the DIP Credit Agreement and Term Loan Credit Agreement principal payments of $29 million due over the next year.
6.
Accounts Payable. The net decrease of $49 million includes $50 million for professional fees that were reclassified to Other current liabilities for accrued bankruptcy related professional fees that will be paid from an escrow account and a payment of $3 million of bankruptcy related professional fees, partially offset by reinstatement of $4 million contract cure costs from liabilities subject to compromise.
7.
Payroll and Benefit Obligations. The Company reinstated $23 million of liabilities subject to compromise related to the post-employment and post-retirement benefit obligations.
8.
Deferred Revenue. The reinstatement of liabilities subject to compromise was $79 million of which $50 million is included in deferred revenue and $29 million in other liabilities.
9.
Business Restructuring Reserve. The reinstatement of liabilities subject to compromise was $7 million, of which $3 million is current and $4 million is non-current.

10.Other Current Liabilities.
(In millions)
 
Reclassification of accrued bankruptcy related professional fees
$
50

Reinstatement of other current liabilities
16

Payment of accrued interest on the DIP Credit Agreement
(1
)
Total other current liabilities
$
65


11.Exit Financing. In accordance with the Plan of Reorganization, the Company entered into the Term Loan Credit Agreement with a principal amount of $2,925 million maturing seven years from the date of issuance, and the ABL Credit Agreement, which allows borrowings up to an aggregate principal amount of $300 million, subject to borrowing base availability, maturing five years from the date of issuance.
(In millions)
 
Term Loan Credit Agreement
$
2,925

Less:
 
Discount
(29
)
Upfront and underwriting fees
(54
)
Cash received upon emergence from bankruptcy
2,842

Reclassification of debt issuance costs incurred prior to emergence from bankruptcy
(42
)
Current portion of Long-term debt
(29
)
Long-term debt, net of current portion
$
2,771


12.
Pension Obligations. In accordance with the Plan of Reorganization, the Company reinstated from liabilities subject to compromise $295 million related to the Avaya Pension Plan for represented employees and also contributed $49 million to the related pension trust.
13.
Other Post-retirement Obligations. Other post-retirement benefit obligations of $212 million were reinstated from liabilities subject to compromise.
14.
Deferred Income Taxes. The adjustment represents the reinstatement of the deferred tax liability that was included in liabilities subject to compromise.
15.
Other Liabilities. The increase of $233 million primarily relates to the reinstatement of employee benefits, tax liabilities and deferred revenue from liabilities subject to compromise. Also included is the value of the Emergence Date Warrants issued to the holders of the Predecessor second lien obligations.
16.Liabilities Subject to Compromise. Liabilities subject to compromise were reinstated or settled as follows in accordance with the Plan of Reorganization:
(In millions)
 
 
 
Liabilities subject to compromise
 
 
$
7,585

Less amounts settled per the Plan of Reorganization
 
 
 
Pre-petition first lien debt
 
 
(4,281
)
Pre-petition second lien debt
 
 
(1,440
)
Avaya Pension Plan for Salaried Employees
 
 
(620
)
Amounts reinstated:
 
 
 
Accounts payable
(4
)
 
 
Payroll and benefit obligations
(23
)
 
 
Deferred revenue
(50
)
 
 
Business restructuring reserves
(7
)
 
 
Other current liabilities
(16
)
 
 
Pension obligations
(295
)
 
 
Other post-retirement obligations
(212
)
 
 
Deferred income taxes, net
(118
)
 
 
Other liabilities
(216
)
 
 
Total liabilities reinstated at emergence
 
 
(941
)
General unsecured credit claims(1)
 
 
(303
)
Liabilities subject to compromise
 
 
$
—

(1) In settlement of allowed general unsecured claims, each claimant will receive a pro-rata distribution of $58 million of the general unsecured claims account.
The following table displays the detail on the gain on settlement of liabilities subject to compromise:
(In millions)
As Previously Reported
 
Adjustments
 
Revised
Pre-petition first lien debt
$
734

 
$
(23
)
 
$
711

Pre-petition second lien debt
1,357

 
(1
)
 
1,356

Avaya pension plan for salaried employees
(514
)
 
(2
)
 
(516
)
General unsecured creditors' claims
227

 
—

 
227

Net gain on settlement of Liabilities subject to compromise
$
1,804

 
$
(26
)
 
$
1,778


17.
Cancellation of Predecessor Preferred and Common Stock. All common stock, Series A and B preferred stock and all other equity awards of the Predecessor Company were canceled on the Emergence Date without any recovery on account thereof.
18.
Issuance of Successor Common Stock and Emergence Date Warrants. In settlement of the Company's $5,721 million Predecessor first lien obligations and Predecessor second lien obligations, the holders of the Predecessor first lien obligations received a total of 99.3 million shares of common stock (fair value of $1,509 million) and $2,061 million in cash and the holders of the Predecessor second lien obligations received a total of 4.4 million shares of common stock (fair value of $67 million) and 5.6 million Emergence Date Warrants to purchase a like amount of common shares (fair value of $17 million). In addition, as part of the Plan of Reorganization, the Company completed a distressed termination of the APPSE in accordance with a stipulation settlement with the PBGC, the PBGC received $340 million in cash and 6.1 million shares of common stock (fair value of $92 million).
19.
Accumulated Deficit.
(In millions)
As Previously Reported
 
Adjustments
 
Revised
Accumulated deficit:
 
 
 
 
 
Net gain on settlement of liabilities subject to compromise
$
1,804

 
$
(26
)
 
$
1,778

Expense for certain professional fees
(26
)
 
—

 
(26
)
Benefit from income taxes
118

 
—

 
118

Cancellation of Predecessor equity awards
6

 
—

 
6

Cancellation of Predecessor Preferred stock Series B
397

 
—

 
397

Cancellation of Predecessor Preferred stock Series A
186

 
—

 
186

Cancellation of Predecessor Common stock
2,387

 
—

 
2,387

Total
$
4,872

 
$
(26
)
 
$
4,846


20.
Accumulated Comprehensive Loss. The changes to Accumulated comprehensive loss relate to the settlement of the APPSE and the Avaya Supplemental Pension Plan ("ASPP") and the associated taxes.
Fresh Start Adjustments
At the Emergence Date, the Company met the requirements under ASC 852 for the adoption of fresh start accounting. These adjustments reflect actual amounts recorded as of the Emergence Date.
21.
Accounts Receivable. This adjustment relates to a change in accounting policy for the way the Company will present uncollected deferred revenue upon emergence from bankruptcy. The Company will offset such deferred revenue against the related account receivable.
22.
Inventory. This adjustment relates to the write-up of inventory to fair value based on estimated selling prices, less costs of disposal.
23.
Other Current Assets. This adjustment reflects the write-off of certain prepaid commissions, deferred installation costs and debt issuance costs that do not meet the definition of an asset upon emergence.
24.
Property, Plant and Equipment. An adjustment of $116 million was recorded to increase the net book value of property, plant and equipment to its estimated fair value based on estimated current acquisition price, plus costs to make the property fully operational.
The following table reflects the components of property, plant and equipment, net as of December 15, 2017:
(In millions)
 
Buildings and improvements
$
82

Machinery and equipment
38

Rental equipment
85

Assets under construction
13

Internal use software
92

Total property, plant and equipment
310

Less: accumulated depreciation and amortization
—

Property, plant and equipment, net
$
310


25.
Deferred Income Tax. The adjustment represents the release of the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of future taxable income from the reversal of deferred tax liabilities that were established as part of fresh start accounting.
26.
Intangible Assets. The Company recorded an adjustment to intangible assets for $3,137 million as follows:
 
Successor
 
 
Predecessor
 
 
(In millions)
December 15, 2017 Post-emergence
 
 
December 15, 2017 Pre-emergence
 
Difference
Customer relationships and other intangible assets
$
2,155

 
 
$
96

 
$
2,059

Technology and patents
905

 
 
12

 
893

Trademarks and trade names
375

 
 
190

 
185

Total
$
3,435

 
 
$
298

 
$
3,137


The fair value of customer relationships was determined using the excess earnings method, a derivation of the income approach that calculates residual profit attributable to an asset after proper returns are paid to complementary or contributory assets.
The fair value of technology and patents and trademarks and trade names was determined using the royalty savings method, a derivation of the income approach that estimates the royalties saved through ownership of the assets.
27.Goodwill. Predecessor Company goodwill of $3,541 million was eliminated and Successor Company goodwill of $2,658 million was established based on the calculated reorganization value.
(In millions)
As Previously Reported
 
Adjustments
 
Revised
Reorganization value of Successor Company
$
7,583

 
$
26

 
$
7,609

Less: Fair value of Successor Company assets
(4,951
)
 
—

 
(4,951
)
Reorganization value of Successor Company assets in excess of fair value - Goodwill
$
2,632

 
$
26

 
$
2,658


28.
Other Assets. The $27 million decrease to other assets is related to prepaid commissions that do not meet the definition of an asset upon emergence as there is no future benefit to the Successor Company.
29.
Deferred Revenue. The fair value of deferred revenue, which principally relates to payments on annual maintenance contracts, was determined by deducting selling costs and associated profit from the Predecessor Company deferred revenue balance to arrive at the costs and profit associated with fulfilling the liability. Additionally, the decrease includes the impact of an accounting policy change whereby the Successor Company no longer recognizes deferred revenue relating to sales transactions that have been billed, but for which the related account receivable has not yet been collected.
30.
Other Current Liabilities. The decrease of $3 million to other current liabilities is related to the fair value of real estate leases determined to be above or below market using the income approach based on the difference between the contractual rental rate and the estimated market rental rate, discounted utilizing a risk-related discount rate.
31.
Long-term Debt. The fair value of the Term Loan Credit Agreement was determined based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices.
32.
Deferred Income Taxes. The adjustment represents the establishment of deferred tax liabilities related to book/tax differences created by fresh start accounting adjustments. The amount is net of the release of the valuation allowance on deferred tax assets, which management believes more likely than not will be realized as a result of future taxable income from the reversal of such deferred tax liabilities.
33.
Business Restructuring Reserve. The Company recorded an increase to its non-current business restructuring reserves based on estimated future cash flows applied to a current discount rate at emergence.
34.
Other Liabilities. A decrease in other liabilities of $43 million relates to deferred revenue and real estate leases as previously discussed.
35.
Accumulated Other Comprehensive Loss. The remaining balance in Accumulated comprehensive loss was reversed to Reorganization expenses, net.
36.
Fresh Start Adjustments. The following table reflects the cumulative impact of the fresh start adjustments as discussed above, the elimination of the Predecessor Company's accumulated other comprehensive loss and the adjustments required to eliminate accumulated deficit:
(In millions)
As Previously Reported
 
Adjustments
 
Revised
Eliminate Predecessor Intangible assets
$
(298
)
 
$
—

 
$
(298
)
Eliminate Predecessor Goodwill
(3,541
)
 
—

 
(3,541
)
Establish Successor Intangible assets
3,435

 
—

 
3,435

Establish Successor Goodwill
2,632

 
26

 
2,658

Fair value adjustment to Inventory
29

 
—

 
29

Fair value adjustment to Other current assets
(66
)
 
—

 
(66
)
Fair value adjustment to Property, plant and equipment
116

 
—

 
116

Fair value adjustment to Other assets
(27
)
 
—

 
(27
)
Fair value adjustment to Deferred revenue
235

 
—

 
235

Fair value adjustment to Business restructuring reserves
(4
)
 
—

 
(4
)
Fair value adjustment to Other current liabilities
3

 
—

 
3

Fair value adjustment to Long-term debt
(96
)
 
—

 
(96
)
Fair value adjustment to Other liabilities
43

 
—

 
43

Release Predecessor Accumulated comprehensive loss
(790
)
 
—

 
(790
)
Fresh start adjustments included in Reorganization items, net
1,671

 
26

 
1,697

Tax impact of fresh start adjustments
(565
)
 
—

 
(565
)
Gain on fresh start accounting, net
$
1,106

 
$
26

 
$
1,132

(In millions)
As Previously Reported
 
Adjustments
 
Revised
Accumulated deficit:
 
 
 
 
 
Net gain on settlement of liabilities subject to compromise
$
1,804

 
$
(26
)
 
$
1,778

Expense for certain professional fees
(26
)
 
—

 
(26
)
Benefit from income taxes
118

 
—

 
118

Cancellation of Predecessor equity awards
6

 
—

 
6

Cancellation of Predecessor Preferred stock Series B
397

 
—

 
397

Cancellation of Predecessor Preferred stock Series A
186

 
—

 
186

Cancellation of Predecessor Common stock
2,387

 
—

 
2,387

Total
$
4,872

 
$
(26
)
 
$
4,846

The following table reconciles the enterprise value to the estimated fair value of the Successor stockholders' equity as of the Emergence Date:
(In millions, except per share amount)
As Previously Reported
 
Adjustments
 
Revised
Enterprise value
$
5,721

 
$
—

 
$
5,721

Plus:
 
 
 
 
 
Cash and cash equivalents
340

 
26

 
366

Less:
 
 
 
 
 
Minimum cash required for operations
(120
)
 
—

 
(120
)
Fair value of Term Loan Credit Agreement(1)
(2,896
)
 
—

 
(2,896
)
Fair value of capitalized leases
(20
)
 
—

 
(20
)
Fair value of pension and other post-retirement obligations, net of tax(2)
(856
)
 
—

 
(856
)
Change in net deferred tax liabilities from reorganization
(510
)
 
—

 
(510
)
Fair value of Successor Emergence Date Warrants(3) 
(17
)
 
—

 
(17
)
Fair value of Successor common stock
$
1,642

 
$
26

 
$
1,668

Shares issued at December 15, 2017 upon emergence
110.0

 
—

 
110.0

Successor common stock value per share
$
14.93

 
$
0.23

 
$
15.16

(1) 
The fair value of the Term Loan Credit Agreement was determined based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices and was estimated to be 99% of par value.
(2) 
The following assumptions were used when measuring the fair value of the U.S. pension, non-U.S. pension, and post-retirement benefit plans: weighted-average return on assets of 7.75%, 3.80% and 5.90%, and weighted-average discount rate to measure plan obligations of 3.70%, 1.52% and 3.77%, respectively.
(3) 
The fair value of the Emergence Date Warrants was estimated using the Black-Scholes pricing model.
The following table reconciles the enterprise value to the estimated reorganization value as of the Emergence Date:
(In millions)
As Previously Reported
 
Adjustments
 
Revised
Enterprise value
$
5,721

 
$
—

 
$
5,721

Plus:
 
 
 
 
 
Non-debt current liabilities
955

 
—

 
955

Non-debt non-current liabilities
2,090

 
—

 
2,090

Excess cash and cash equivalents
220

 
26

 
246

Less:
 
 
 
 
 
Pension and other post-retirement obligations, net of deferred taxes
(856
)
 
—

 
(856
)
Capital lease obligations
(20
)
 
—

 
(20
)
Change in net deferred tax liabilities from reorganization
(510
)
 
—

 
(510
)
Emergence Date Warrants issued
(17
)
 
—

 
(17
)
Reorganization value of Successor assets
$
7,583

 
$
26

 
$
7,609

The following table reflects the components of property, plant and equipment, net as of December 15, 2017:
(In millions)
 
Buildings and improvements
$
82

Machinery and equipment
38

Rental equipment
85

Assets under construction
13

Internal use software
92

Total property, plant and equipment
310

Less: accumulated depreciation and amortization
—

Property, plant and equipment, net
$
310

Sources and Uses of Cash. The following reflects the net cash payments recorded as of the Emergence Date as a result of implementing the Plan of Reorganization:
(In millions)
 
Sources:
 
Proceeds from Term Loan Credit Agreement, net of original issue discount
$
2,896

Release of restricted cash
76

Total sources of cash
2,972

Uses:
 
Repayment of DIP Credit Agreement
(725
)
Payment of DIP Credit Agreement accrued interest
(1
)
Cash paid to Predecessor first lien debt-holders
(2,061
)
Cash paid to PBGC
(340
)
Payment for professional fees escrow account
(56
)
Funding payment for Avaya represented employee pension plan
(49
)
Payment of accrued professional and administrative fees
(27
)
Costs incurred for Term Loan Credit Agreement and ABL Credit Agreement
(59
)
Payment for general unsecured claims
(58
)
Total uses of cash
(3,376
)
Net uses of cash
$
(404
)
2.
Other Current Assets.
(In millions)
 
Release of restricted cash
$
(76
)
Reclassification of prepaid debt issuance costs related to the Term Loan Credit Agreement
(42
)
Payment of fees related to the ABL Credit Agreement
5

Restricted cash for bankruptcy related professional fees
55

Total other current assets
$
(58
)
(In millions)
As Previously Reported
 
Adjustments
 
Revised
Reorganization value of Successor Company
$
7,583

 
$
26

 
$
7,609

Less: Fair value of Successor Company assets
(4,951
)
 
—

 
(4,951
)
Reorganization value of Successor Company assets in excess of fair value - Goodwill
$
2,632

 
$
26

 
$
2,658

(In millions)
 
Term Loan Credit Agreement
$
2,925

Less:
 
Discount
(29
)
Upfront and underwriting fees
(54
)
Cash received upon emergence from bankruptcy
2,842

Reclassification of debt issuance costs incurred prior to emergence from bankruptcy
(42
)
Current portion of Long-term debt
(29
)
Long-term debt, net of current portion
$
2,771

Liabilities Subject to Compromise. Liabilities subject to compromise were reinstated or settled as follows in accordance with the Plan of Reorganization:
(In millions)
 
 
 
Liabilities subject to compromise
 
 
$
7,585

Less amounts settled per the Plan of Reorganization
 
 
 
Pre-petition first lien debt
 
 
(4,281
)
Pre-petition second lien debt
 
 
(1,440
)
Avaya Pension Plan for Salaried Employees
 
 
(620
)
Amounts reinstated:
 
 
 
Accounts payable
(4
)
 
 
Payroll and benefit obligations
(23
)
 
 
Deferred revenue
(50
)
 
 
Business restructuring reserves
(7
)
 
 
Other current liabilities
(16
)
 
 
Pension obligations
(295
)
 
 
Other post-retirement obligations
(212
)
 
 
Deferred income taxes, net
(118
)
 
 
Other liabilities
(216
)
 
 
Total liabilities reinstated at emergence
 
 
(941
)
General unsecured credit claims(1)
 
 
(303
)
Liabilities subject to compromise
 
 
$
—

(1) In settlement of allowed general unsecured claims, each claimant will receive a pro-rata distribution of $58 million of the general unsecured claims account.
The following table displays the detail on the gain on settlement of liabilities subject to compromise:
(In millions)
As Previously Reported
 
Adjustments
 
Revised
Pre-petition first lien debt
$
734

 
$
(23
)
 
$
711

Pre-petition second lien debt
1,357

 
(1
)
 
1,356

Avaya pension plan for salaried employees
(514
)
 
(2
)
 
(516
)
General unsecured creditors' claims
227

 
—

 
227

Net gain on settlement of Liabilities subject to compromise
$
1,804

 
$
(26
)
 
$
1,778

Other Current Liabilities.
(In millions)
 
Reclassification of accrued bankruptcy related professional fees
$
50

Reinstatement of other current liabilities
16

Payment of accrued interest on the DIP Credit Agreement
(1
)
Total other current liabilities
$
65

The following table reflects the cumulative impact of the fresh start adjustments as discussed above, the elimination of the Predecessor Company's accumulated other comprehensive loss and the adjustments required to eliminate accumulated deficit:
(In millions)
As Previously Reported
 
Adjustments
 
Revised
Eliminate Predecessor Intangible assets
$
(298
)
 
$
—

 
$
(298
)
Eliminate Predecessor Goodwill
(3,541
)
 
—

 
(3,541
)
Establish Successor Intangible assets
3,435

 
—

 
3,435

Establish Successor Goodwill
2,632

 
26

 
2,658

Fair value adjustment to Inventory
29

 
—

 
29

Fair value adjustment to Other current assets
(66
)
 
—

 
(66
)
Fair value adjustment to Property, plant and equipment
116

 
—

 
116

Fair value adjustment to Other assets
(27
)
 
—

 
(27
)
Fair value adjustment to Deferred revenue
235

 
—

 
235

Fair value adjustment to Business restructuring reserves
(4
)
 
—

 
(4
)
Fair value adjustment to Other current liabilities
3

 
—

 
3

Fair value adjustment to Long-term debt
(96
)
 
—

 
(96
)
Fair value adjustment to Other liabilities
43

 
—

 
43

Release Predecessor Accumulated comprehensive loss
(790
)
 
—

 
(790
)
Fresh start adjustments included in Reorganization items, net
1,671

 
26

 
1,697

Tax impact of fresh start adjustments
(565
)
 
—

 
(565
)
Gain on fresh start accounting, net
$
1,106

 
$
26

 
$
1,132

The Company recorded an adjustment to intangible assets for $3,137 million as follows:
 
Successor
 
 
Predecessor
 
 
(In millions)
December 15, 2017 Post-emergence
 
 
December 15, 2017 Pre-emergence
 
Difference
Customer relationships and other intangible assets
$
2,155

 
 
$
96

 
$
2,059

Technology and patents
905

 
 
12

 
893

Trademarks and trade names
375

 
 
190

 
185

Total
$
3,435

 
 
$
298

 
$
3,137