Delaware | 94-3156479 | |
(State or Other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
1 Wayside Road Burlington, Massachusetts | 01803 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ý | Accelerated filer | ¨ | Emerging growth company | ¨ |
Non-accelerated filer | ¨ | (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Page | ||||
Item 1. | Condensed Consolidated Financial Statements: | |||
Consolidated Statements of Operations for the three and nine months ended June 30, 2018 and 2017 | ||||
Consolidated Statements of Comprehensive Loss for the three and nine months ended June 30, 2018 and 2017 | ||||
Consolidated Balance Sheets at June 30, 2018 and September 30, 2017 | ||||
Consolidated Statements of Cash Flows for the nine months ended June 30, 2018 and 2017 | ||||
Item 2. | ||||
Item 3. | ||||
Item 4. | ||||
Item 1. | ||||
Item 1A. | ||||
Item 2. | ||||
Item 3. | ||||
Item 4. | ||||
Item 5. | ||||
Item 6. | ||||
Certifications |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Unaudited) (In thousands, except per share amounts) | |||||||||||||||
Revenues: | |||||||||||||||
Professional services and hosting | $ | 254,478 | $ | 251,488 | $ | 788,079 | $ | 763,595 | |||||||
Product and licensing | 168,682 | 154,228 | 491,776 | 465,238 | |||||||||||
Maintenance and support | 79,727 | 80,505 | 238,901 | 244,619 | |||||||||||
Total revenues | 502,887 | 486,221 | 1,518,756 | 1,473,452 | |||||||||||
Cost of revenues: | |||||||||||||||
Professional services and hosting | 166,280 | 169,439 | 519,859 | 498,501 | |||||||||||
Product and licensing | 19,052 | 17,637 | 57,087 | 54,805 | |||||||||||
Maintenance and support | 14,346 | 13,410 | 42,778 | 40,248 | |||||||||||
Amortization of intangible assets | 13,760 | 15,727 | 43,896 | 48,487 | |||||||||||
Total cost of revenues | 213,438 | 216,213 | 663,620 | 642,041 | |||||||||||
Gross profit | 289,449 | 270,008 | 855,136 | 831,411 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 75,726 | 66,565 | 223,277 | 199,119 | |||||||||||
Sales and marketing | 96,212 | 97,011 | 292,359 | 292,201 | |||||||||||
General and administrative | 50,653 | 42,329 | 177,833 | 123,637 | |||||||||||
Amortization of intangible assets | 24,117 | 29,160 | 69,851 | 84,931 | |||||||||||
Acquisition-related costs, net | 4,916 | 7,646 | 12,837 | 22,051 | |||||||||||
Restructuring and other charges, net | 9,237 | 13,035 | 32,986 | 39,649 | |||||||||||
Impairment of goodwill | — | — | 137,907 | — | |||||||||||
Total operating expenses | 260,861 | 255,746 | 947,050 | 761,588 | |||||||||||
Income (loss) from operations | 28,588 | 14,262 | (91,914 | ) | 69,823 | ||||||||||
Other (expense) income: | |||||||||||||||
Interest income | 2,482 | 1,952 | 6,910 | 4,255 | |||||||||||
Interest expense | (33,849 | ) | (40,422 | ) | (103,785 | ) | (116,296 | ) | |||||||
Other expense, net | (685 | ) | (1,019 | ) | (1,477 | ) | (21,251 | ) | |||||||
Loss before income taxes | (3,464 | ) | (25,227 | ) | (190,266 | ) | (63,469 | ) | |||||||
Provision (benefit) for income taxes | 10,573 | 2,609 | (65,404 | ) | 22,103 | ||||||||||
Net loss | $ | (14,037 | ) | $ | (27,836 | ) | $ | (124,862 | ) | $ | (85,572 | ) | |||
Net loss per share: | |||||||||||||||
Basic | $ | (0.05 | ) | $ | (0.10 | ) | $ | (0.43 | ) | $ | (0.30 | ) | |||
Diluted | $ | (0.05 | ) | $ | (0.10 | ) | $ | (0.43 | ) | $ | (0.30 | ) | |||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 292,663 | 287,856 | 292,703 | 289,269 | |||||||||||
Diluted | 292,663 | 287,856 | 292,703 | 289,269 |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Unaudited) | |||||||||||||||
(In thousands) | |||||||||||||||
Net loss | $ | (14,037 | ) | $ | (27,836 | ) | $ | (124,862 | ) | $ | (85,572 | ) | |||
Other comprehensive (loss) income: | |||||||||||||||
Foreign currency translation adjustment | (25,985 | ) | 13,185 | (20,374 | ) | 566 | |||||||||
Pension adjustments | 432 | (250 | ) | 548 | (14 | ) | |||||||||
Unrealized gain (loss) on marketable securities | 126 | (15 | ) | (222 | ) | (19 | ) | ||||||||
Total other comprehensive (loss) income, net | (25,427 | ) | 12,920 | (20,048 | ) | 533 | |||||||||
Comprehensive loss | $ | (39,464 | ) | $ | (14,916 | ) | $ | (144,910 | ) | $ | (85,039 | ) |
June 30, 2018 | September 30, 2017 | ||||||
(Unaudited) | |||||||
(In thousands, except per share amounts) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 331,259 | $ | 592,299 | |||
Marketable securities | 154,085 | 251,981 | |||||
Accounts receivable, less allowances for doubtful accounts of $12,319 and $14,333 | 396,766 | 395,392 | |||||
Prepaid expenses and other current assets | 104,157 | 88,269 | |||||
Total current assets | 986,267 | 1,327,941 | |||||
Marketable securities | 23,801 | 29,844 | |||||
Land, building and equipment, net | 172,596 | 176,548 | |||||
Goodwill | 3,510,454 | 3,590,608 | |||||
Intangible assets, net | 612,913 | 664,474 | |||||
Other assets | 140,060 | 142,508 | |||||
Total assets | $ | 5,446,091 | $ | 5,931,923 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | — | $ | 376,121 | |||
Contingent and deferred acquisition payments | 22,259 | 28,860 | |||||
Accounts payable | 95,109 | 94,604 | |||||
Accrued expenses and other current liabilities | 224,432 | 245,901 | |||||
Deferred revenue | 389,032 | 366,042 | |||||
Total current liabilities | 730,832 | 1,111,528 | |||||
Long-term debt | 2,323,516 | 2,241,283 | |||||
Deferred revenue, net of current portion | 482,834 | 423,929 | |||||
Deferred tax liabilities | 53,547 | 131,320 | |||||
Other liabilities | 97,447 | 92,481 | |||||
Total liabilities | 3,688,176 | 4,000,541 | |||||
Commitments and contingencies (Note 15) | |||||||
Stockholders’ equity: | |||||||
Common stock, $0.001 par value per share; 560,000 shares authorized; 291,142 and 293,938 shares issued and 287,392 and 290,187 shares outstanding, respectively | 291 | 294 | |||||
Additional paid-in capital | 2,601,573 | 2,629,245 | |||||
Treasury stock, at cost (3,751 shares) | (16,788 | ) | (16,788 | ) | |||
Accumulated other comprehensive loss | (121,390 | ) | (101,342 | ) | |||
Accumulated deficit | (705,771 | ) | (580,027 | ) | |||
Total stockholders’ equity | 1,757,915 | 1,931,382 | |||||
Total liabilities and stockholders’ equity | $ | 5,446,091 | $ | 5,931,923 |
Nine Months Ended June 30, | |||||||
2018 | 2017 | ||||||
(Unaudited) (In thousands) | |||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (124,862 | ) | $ | (85,572 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and amortization | 161,167 | 174,955 | |||||
Stock-based compensation | 106,937 | 121,809 | |||||
Non-cash interest expense | 37,091 | 42,912 | |||||
Deferred tax (benefit) provision | (91,118 | ) | 6,762 | ||||
Loss on extinguishment of debt | — | 18,565 | |||||
Impairment of goodwill | 137,907 | — | |||||
Impairment of fixed asset | 1,780 | 16,351 | |||||
Other | 894 | 4,259 | |||||
Changes in operating assets and liabilities, excluding effects of acquisitions: | |||||||
Accounts receivable | 2,007 | 28,132 | |||||
Prepaid expenses and other assets | (18,695 | ) | (14,531 | ) | |||
Accounts payable | (4,011 | ) | 12,209 | ||||
Accrued expenses and other liabilities | 1,671 | (4,040 | ) | ||||
Deferred revenue | 84,255 | 60,552 | |||||
Net cash provided by operating activities | 295,023 | 382,363 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (38,965 | ) | (34,033 | ) | |||
Payments for business and asset acquisitions, net of cash acquired (including cash payments of $5.0 million to a related party for fiscal 2018, see Note 16) | (109,225 | ) | (110,220 | ) | |||
Purchases of marketable securities and other investments | (158,645 | ) | (192,062 | ) | |||
Proceeds from sales and maturities of marketable securities and other investments | 259,677 | 106,444 | |||||
Net cash used in investing activities | (47,158 | ) | (229,871 | ) | |||
Cash flows from financing activities: | |||||||
Repayment and redemption of debt | (331,172 | ) | (634,055 | ) | |||
Proceeds from issuance of long-term debt, net of issuance costs | — | 838,081 | |||||
Payments for repurchase of common stock | (111,979 | ) | (99,077 | ) | |||
Acquisition payments with extended payment terms | (20,769 | ) | — | ||||
Proceeds from issuance of common stock from employee stock plans | 9,361 | 8,682 | |||||
Payments for taxes related to net share settlement of equity awards | (51,852 | ) | (52,523 | ) | |||
Other financing activities | (1,075 | ) | (424 | ) | |||
Net cash (used in) provided by financing activities | (507,486 | ) | 60,684 | ||||
Effects of exchange rate changes on cash and cash equivalents | (1,419 | ) | (1,202 | ) | |||
Net (decrease) increase in cash and cash equivalents | (261,040 | ) | 211,974 | ||||
Cash and cash equivalents at beginning of period | 592,299 | 481,620 | |||||
Cash and cash equivalents at end of period | $ | 331,259 | $ | 693,594 |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Transition and integration costs | $ | 5,370 | $ | 3,722 | $ | 12,799 | $ | 11,044 | |||||||
Professional service fees | 1,254 | 3,905 | 2,705 | 11,896 | |||||||||||
Acquisition-related adjustments | (1,708 | ) | 19 | (2,667 | ) | (889 | ) | ||||||||
Total | $ | 4,916 | $ | 7,646 | $ | 12,837 | $ | 22,051 |
Healthcare | Enterprise | Imaging | Mobile | Automotive | Other | Total | |||||||||||||||||||||
Balance as of September 30, 2017 | $ | 1,418,334 | $ | 673,472 | $ | 257,792 | $ | 1,241,010 | $ | — | $ | — | $ | 3,590,608 | |||||||||||||
Acquisitions | 14,936 | — | — | — | 50,193 | — | 65,129 | ||||||||||||||||||||
Purchase accounting adjustments | (1,457 | ) | — | — | 2,697 | — | — | 1,240 | |||||||||||||||||||
Effect of foreign currency translation | (2,437 | ) | (2,143 | ) | (343 | ) | 5,344 | (7,577 | ) | (1,460 | ) | (8,616 | ) | ||||||||||||||
Reorganization (Note 17) | — | 11,991 | — | (1,249,051 | ) | 1,080,453 | 156,607 | — | |||||||||||||||||||
Impairment charge (a) | — | — | — | — | — | (137,907 | ) | (137,907 | ) | ||||||||||||||||||
Balance as of June 30, 2018 | $ | 1,429,376 | $ | 683,320 | $ | 257,449 | $ | — | $ | 1,123,069 | $ | 17,240 | $ | 3,510,454 |
Intangible Assets | |||
Balance at September 30, 2017 | $ | 664,474 | |
Acquisitions | 61,421 | ||
Acquisition from a related party (Note 16) | 5,000 | ||
Amortization | (113,747 | ) | |
Effect of foreign currency translation | (4,235 | ) | |
Balance as of June 30, 2018 | $ | 612,913 |
Derivatives Not Designated as Hedges | Balance Sheet Classification | Fair Value | ||||||||
June 30, 2018 | September 30, 2017 | |||||||||
Foreign currency forward contracts | Prepaid expenses and other current assets | $ | 169 | $ | 220 | |||||
Foreign currency forward contracts | Accrued expenses and other current liabilities | (353 | ) | (373 | ) |
Income Statement Classification | Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||
Derivatives Not Designated as Hedges | Income (loss) recognized | 2018 | 2017 | 2018 | 2017 | |||||||||||||
Foreign currency forward contracts | Other expense, net | $ | (1,597 | ) | $ | 175 | $ | (2,381 | ) | $ | (7,885 | ) |
• | Level 1: Quoted prices for identical assets or liabilities in active markets. |
• | Level 2: Observable inputs other than those described as Level 1. |
• | Level 3: Unobservable inputs that are supportable by little or no market activities and are based on significant assumptions and estimates. |
June 30, 2018 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | |||||||||||||||
Money market funds(a) | $ | 212,545 | $ | — | $ | — | $ | 212,545 | |||||||
Time deposits(b) | — | 103,995 | — | 103,995 | |||||||||||
Commercial paper, $60,903 at cost(b) | — | 61,214 | — | 61,214 | |||||||||||
Corporate notes and bonds, $58,088 at cost(b) | — | 57,914 | — | 57,914 | |||||||||||
Foreign currency exchange contracts(b) | — | 169 | — | 169 | |||||||||||
Total assets at fair value | $ | 212,545 | $ | 223,292 | $ | — | $ | 435,837 | |||||||
Liabilities: | |||||||||||||||
Foreign currency exchange contracts(b) | $ | — | $ | (353 | ) | $ | — | $ | (353 | ) | |||||
Contingent acquisition payments(c) | — | — | (8,035 | ) | (8,035 | ) | |||||||||
Total liabilities at fair value | $ | — | $ | (353 | ) | $ | (8,035 | ) | $ | (8,388 | ) |
September 30, 2017 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | |||||||||||||||
Money market funds(a) | $ | 381,899 | $ | — | $ | — | $ | 381,899 | |||||||
Time deposits(b) | — | 85,570 | — | 85,570 | |||||||||||
Commercial paper, $41,805 at cost(b) | — | 41,968 | — | 41,968 | |||||||||||
Corporate notes and bonds, $74,150 at cost(b) | — | 74,067 | — | 74,067 | |||||||||||
Foreign currency exchange contracts(b) | — | 220 | — | 220 | |||||||||||
Total assets at fair value | $ | 381,899 | $ | 201,825 | $ | — | $ | 583,724 | |||||||
Liabilities: | |||||||||||||||
Foreign currency exchange contracts(b) | $ | — | $ | (373 | ) | $ | — | $ | (373 | ) | |||||
Contingent acquisition payments(c) | — | — | (8,648 | ) | (8,648 | ) | |||||||||
Total liabilities at fair value | $ | — | $ | (373 | ) | $ | (8,648 | ) | $ | (9,021 | ) |
(a) | Money market funds and time deposits with original maturity of 90 days or less are included within cash and cash equivalents in the consolidated balance sheets and are valued at quoted market prices in active markets. |
(b) | Time deposits, commercial paper, corporate notes and bonds, and foreign currency exchange contracts are recorded at fair market values, which are determined based on the most recent observable inputs for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active or are directly or indirectly observable. Time deposits are generally for terms of one year or less. Commercial paper and corporate notes and bonds generally mature within three years and had a weighted average maturity of 0.61 years as of June 30, 2018 and 0.72 years as of September 30, 2017. |
(c) | The fair values of our contingent consideration arrangements were determined using either the option pricing model with Monte Carlo simulation or the probability-weighted discounted cash flow method. |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Balance at beginning of period | $ | 11,752 | $ | 6,377 | $ | 8,648 | $ | 8,240 | |||||||
Earn-out liabilities established at time of acquisition | 1,500 | 5,000 | 2,000 | 8,253 | |||||||||||
Payments and foreign currency translation | (4,557 | ) | (26 | ) | (4,652 | ) | (4,283 | ) | |||||||
Adjustments to fair value included in acquisition-related costs, net | (660 | ) | — | 2,039 | (859 | ) | |||||||||
Balance at end of period | $ | 8,035 | $ | 11,351 | $ | 8,035 | $ | 11,351 |
June 30, 2018 | September 30, 2017 | ||||||
Compensation | $ | 133,997 | $ | 159,951 | |||
Cost of revenue related liabilities | 25,620 | 20,124 | |||||
Accrued interest payable | 21,735 | 26,285 | |||||
Consulting and professional fees | 15,851 | 12,649 | |||||
Facility-related liabilities | 6,692 | 7,158 | |||||
Sales and other taxes payable | 6,453 | 3,125 | |||||
Sales and marketing incentives | 4,003 | 3,655 | |||||
Other | 10,081 | 12,954 | |||||
Total | $ | 224,432 | $ | 245,901 |
June 30, 2018 | September 30, 2017 | ||||||
Current liabilities: | |||||||
Deferred maintenance revenue | $ | 161,505 | $ | 162,958 | |||
Unearned revenue | 227,527 | 203,084 | |||||
Total current deferred revenue | $ | 389,032 | $ | 366,042 | |||
Long-term liabilities: | |||||||
Deferred maintenance revenue | $ | 61,736 | $ | 60,298 | |||
Unearned revenue | 421,098 | 363,631 | |||||
Total long-term deferred revenue | $ | 482,834 | $ | 423,929 |
Personnel | Facilities | Total | |||||||||
Balance at September 30, 2017 | $ | 1,546 | $ | 9,159 | $ | 10,705 | |||||
Restructuring charges, net | 17,718 | 4,933 | 22,651 | ||||||||
Non-cash adjustment | (998 | ) | (998 | ) | |||||||
Cash payments | (14,460 | ) | (4,600 | ) | (19,060 | ) | |||||
Balance at June 30, 2018 | $ | 4,804 | $ | 8,494 | $ | 13,298 |
Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||||||||||||||||||
Personnel | Facilities | Total Restructuring | Other Charges | Total | Personnel | Facilities | Total Restructuring | Other Charges | Total | ||||||||||||||||||||||||||||||
Healthcare | $ | 377 | $ | — | $ | 377 | $ | — | $ | 377 | $ | 993 | $ | — | $ | 993 | $ | 4,065 | $ | 5,058 | |||||||||||||||||||
Enterprise | 3,412 | (197 | ) | 3,215 | — | 3,215 | 1,910 | 2,040 | 3,950 | — | 3,950 | ||||||||||||||||||||||||||||
Automotive | 1,233 | — | 1,233 | — | 1,233 | 377 | — | 377 | — | 377 | |||||||||||||||||||||||||||||
Imaging | 2,725 | 1,170 | 3,895 | — | 3,895 | 43 | — | 43 | — | 43 | |||||||||||||||||||||||||||||
Other | 154 | 54 | 208 | — | 208 | 489 | (511 | ) | (22 | ) | — | (22 | ) | ||||||||||||||||||||||||||
Corporate | 1,148 | 893 | 2,041 | (1,732 | ) | 309 | 241 | 25 | 266 | 3,363 | 3,629 | ||||||||||||||||||||||||||||
Total | $ | 9,049 | $ | 1,920 | $ | 10,969 | $ | (1,732 | ) | $ | 9,237 | $ | 4,053 | $ | 1,554 | $ | 5,607 | $ | 7,428 | $ | 13,035 |
Nine Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||||||||||||||||||
Personnel | Facilities | Total Restructuring | Other Charges | Total | Personnel | Facilities | Total Restructuring | Other Charges | Total | ||||||||||||||||||||||||||||||
Healthcare | $ | 3,678 | $ | 25 | $ | 3,703 | $ | — | $ | 3,703 | $ | 3,554 | $ | 870 | $ | 4,424 | $ | 4,065 | $ | 8,489 | |||||||||||||||||||
Enterprise | 3,939 | 2,170 | 6,109 | — | 6,109 | 2,722 | 2,904 | 5,626 | — | 5,626 | |||||||||||||||||||||||||||||
Automotive | 2,233 | — | 2,233 | — | 2,233 | 1,792 | — | 1,792 | — | 1,792 | |||||||||||||||||||||||||||||
Imaging | 4,031 | 1,163 | 5,194 | — | 5,194 | 629 | 387 | 1,016 | — | 1,016 | |||||||||||||||||||||||||||||
Other | 1,498 | 624 | 2,122 | — | 2,122 | 2,341 | (460 | ) | 1,881 | 10,773 | 12,654 | ||||||||||||||||||||||||||||
Corporate | 2,339 | 951 | 3,290 | 10,335 | 13,625 | 1,241 | 2,007 | 3,248 | 6,824 | 10,072 | |||||||||||||||||||||||||||||
Total | $ | 17,718 | $ | 4,933 | $ | 22,651 | $ | 10,335 | $ | 32,986 | $ | 12,279 | $ | 5,708 | $ | 17,987 | $ | 21,662 | $ | 39,649 |
June 30, 2018 | September 30, 2017 | ||||||
5.625% Senior Notes due 2026, net of deferred issuance costs of $5.2 million and $5.7 million, respectively. Effective interest rate 5.625%. | $ | 494,755 | $ | 494,298 | |||
5.375% Senior Notes due 2020, net of unamortized premium of $0.7 million and $1.0 million, respectively, and deferred issuance costs of $1.7 million and $2.3 million, respectively. Effective interest rate 5.375%. | 448,989 | 448,630 | |||||
6.000% Senior Notes due 2024, net of deferred issuance costs of $1.8 million and $2.1 million, respectively. Effective interest rate 6.000%. | 298,143 | 297,910 | |||||
1.00% Convertible Debentures due 2035, net of unamortized discount of $123.0 million and $140.9 million, respectively, and deferred issuance costs of $5.9 million and $6.9 million, respectively. Effective interest rate 5.622%. | 547,526 | 528,690 | |||||
2.75% Convertible Debentures due 2031, net of unamortized discount of $1.5 million and deferred issuance costs of $0.1 million as of September 30, 2017. Effective interest rate 7.432%. | 46,568 | 376,121 | |||||
1.25% Convertible Debentures due 2025, net of unamortized discount of $85.0 million and $92.7 million, respectively, and deferred issuance costs of $3.8 million and $4.3 million, respectively. Effective interest rate 5.578%. | 261,106 | 253,054 | |||||
1.50% Convertible Debentures due 2035, net of unamortized discount of $35.3 million and $42.5 million, respectively, and deferred issuance costs of $1.2 million and $1.5 million, respectively. Effective interest rate 5.394%. | 227,355 | 219,875 | |||||
Deferred issuance costs related to our Revolving Credit Facility | (926 | ) | (1,174 | ) | |||
Total debt | 2,323,516 | 2,617,404 | |||||
Less: current portion | — | 376,121 | |||||
Total long-term debt | $ | 2,323,516 | $ | 2,241,283 |
Fiscal Year | Convertible Debentures(1) | Senior Notes | Total | |||||||||
2018 | $ | — | $ | — | $ | — | ||||||
2019 | — | — | — | |||||||||
2020 | — | 450,000 | 450,000 | |||||||||
2021 | — | — | — | |||||||||
2022 | 310,463 | — | 310,463 | |||||||||
Thereafter | 1,026,488 | 800,000 | 1,826,488 | |||||||||
Total before unamortized discount | 1,336,951 | 1,250,000 | 2,586,951 | |||||||||
Less: unamortized discount and issuance costs | (254,396 | ) | (9,039 | ) | (263,435 | ) | ||||||
Total long-term debt | $ | 1,082,555 | $ | 1,240,961 | $ | 2,323,516 |
(1) | Pursuant to the terms of each convertible instrument, holders have the right to redeem the debt on specific dates prior to maturity. The repayment schedule above assumes that payment is due on the next redemption date after June 30, 2018. |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Numerator: | |||||||||||||||
Net loss | $ | (14,037 | ) | $ | (27,836 | ) | $ | (124,862 | ) | $ | (85,572 | ) | |||
Denominator: | |||||||||||||||
Weighted average common shares outstanding — Basic | 292,663 | 287,856 | 292,703 | 289,269 | |||||||||||
Dilutive effect of employee stock compensation plans (a) | — | — | — | — | |||||||||||
Weighted average common shares outstanding — Diluted | 292,663 | 287,856 | 292,703 | 289,269 | |||||||||||
Net loss per share: | |||||||||||||||
Basic | $ | (0.05 | ) | $ | (0.10 | ) | $ | (0.43 | ) | $ | (0.30 | ) | |||
Diluted | $ | (0.05 | ) | $ | (0.10 | ) | $ | (0.43 | ) | $ | (0.30 | ) | |||
Anti-dilutive equity instruments excluded from the calculation | 4,408 | 2,797 | 3,838 | 3,792 | |||||||||||
Contingently issuable awards excluded from the calculation (b) | 1,975 | 4,687 | 1,801 | 3,856 |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Cost of professional services and hosting | $ | 6,861 | $ | 8,385 | $ | 20,590 | $ | 24,875 | |||||||
Cost of product and licensing | 114 | 104 | 492 | 298 | |||||||||||
Cost of maintenance and support | 952 | 1,130 | 3,041 | 3,117 | |||||||||||
Research and development | 8,224 | 9,610 | 26,316 | 26,498 | |||||||||||
Sales and marketing | 9,491 | 11,981 | 28,533 | 34,968 | |||||||||||
General and administrative | 9,560 | 11,121 | 27,965 | 32,053 | |||||||||||
Total | $ | 35,202 | $ | 42,331 | $ | 106,937 | $ | 121,809 |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value(a) | |||||||||
Outstanding at September 30, 2017 | 23,807 | $ | 15.39 | |||||||||
Exercised | (2,963 | ) | $ | 2.61 | ||||||||
Expired | (340 | ) | $ | 19.86 | ||||||||
Outstanding at June 30, 2018 | 20,504 | $ | 17.16 | 2.5 years | $ | 0.1 | million | |||||
Exercisable at June 30, 2018 | 20,504 | $ | 17.16 | 2.5 years | $ | 0.1 | million | |||||
Exercisable at June 30, 2017 | 25,936 | $ | 15.78 | 2.8 years | $ | 0.1 | million |
(a) | The aggregate intrinsic value in this table represents any excess of the closing market price of our common stock as of June 30, 2018 ($13.89) over the exercise price of the underlying options. |
Number of Shares Underlying Restricted Units — Contingent Awards | Number of Shares Underlying Restricted Units — Time-Based Awards | ||||
Outstanding at September 30, 2017 | 5,043,931 | 6,477,164 | |||
Granted | 2,125,737 | 6,577,172 | |||
Earned/released | (2,092,862 | ) | (5,221,720 | ) | |
Forfeited | (1,541,975 | ) | (737,603 | ) | |
Outstanding at June 30, 2018 | 3,534,831 | 7,095,013 | |||
Weighted average remaining recognition period of outstanding restricted units | 1.2 years | 1.8 years | |||
Unrecognized stock-based compensation expense of outstanding restricted units | $36.6 million | $75.6 million | |||
Aggregate intrinsic value of outstanding restricted units(a) | $49.1 million | $98.6 million |
(a) | The aggregate intrinsic value in this table represents any excess of the closing market price of our common stock as of June 30, 2018 ($13.89) over the purchase price of the underlying restricted units. |
Nine Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Weighted-average grant-date fair value per share | $ | 15.76 | $ | 16.10 | |||
Total intrinsic value of shares vested (in millions) | $ | 115.3 | $ | 119.2 |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Domestic | $ | (40,764 | ) | $ | (58,871 | ) | $ | (160,716 | ) | $ | (148,257 | ) | |||
Foreign | 37,300 | 33,644 | (29,550 | ) | 84,788 | ||||||||||
Loss before income taxes | $ | (3,464 | ) | $ | (25,227 | ) | $ | (190,266 | ) | $ | (63,469 | ) |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Domestic | $ | 206 | $ | (3,029 | ) | $ | (75,463 | ) | $ | 5,952 | |||||
Foreign | 10,367 | 5,638 | 10,059 | 16,151 | |||||||||||
Provision (benefit) for income taxes | $ | 10,573 | $ | 2,609 | $ | (65,404 | ) | $ | 22,103 | ||||||
Effective tax rate | (305.2 | )% | (10.3 | )% | 34.4 | % | (34.8 | )% |
• | The Healthcare segment is primarily engaged in providing clinical speech and clinical language understanding solutions that improve the clinical documentation process, from capturing the complete patient record to improving clinical documentation and quality measures for reimbursement. |
• | The Enterprise segment is primarily engaged in using speech, natural language understanding, and artificial intelligence to provide automated customer solutions and services for voice, mobile, web and messaging channels. |
• | The Automotive segment is primarily engaged in providing automotive manufacturers and their suppliers branded and personalized virtual assistants and connected car services built on our voice recognition and natural language understanding technologies. |
• | The Imaging segment is primarily engaged in software solutions and expertise that help professionals and organizations to gain optimal control of their document and information processes through scanning and print management. |
• | The Other segment includes our SRS business and our Devices business. Our SRS business provides value-added services to mobile operators in emerging markets, primarily in India and Brazil. Our Devices business provides speech recognition solutions and predictive text technologies to handset devices. |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Segment revenues: | |||||||||||||||
Healthcare | $ | 236,195 | $ | 232,641 | $ | 742,970 | $ | 710,315 | |||||||
Enterprise | 119,596 | 114,106 | 352,862 | 351,611 | |||||||||||
Automotive | 73,754 | 63,100 | 204,202 | 183,699 | |||||||||||
Imaging | 54,245 | 49,404 | 158,808 | 154,541 | |||||||||||
Other | 22,240 | 36,373 | 74,327 | 102,574 | |||||||||||
Total segment revenues | 506,030 | 495,624 | 1,533,169 | 1,502,740 | |||||||||||
Less: acquisition-related revenues adjustments | (3,143 | ) | (9,403 | ) | (14,413 | ) | (29,288 | ) | |||||||
Total revenues | 502,887 | 486,221 | 1,518,756 | 1,473,452 | |||||||||||
Segment profit: | |||||||||||||||
Healthcare | 77,687 | 70,457 | 242,456 | 232,353 | |||||||||||
Enterprise | 33,066 | 32,420 | 96,517 | 102,686 | |||||||||||
Automotive | 28,166 | 30,748 | 80,248 | 87,690 | |||||||||||
Imaging | 18,544 | 16,943 | 46,443 | 53,029 | |||||||||||
Other | 3,086 | 12,679 | 12,591 | 33,109 | |||||||||||
Total segment profit | 160,549 | 163,247 | 478,255 | 508,867 | |||||||||||
Corporate expenses and other, net | (41,586 | ) | (31,683 | ) | (151,342 | ) | (92,829 | ) | |||||||
Acquisition-related revenues | (3,143 | ) | (9,403 | ) | (14,413 | ) | (29,288 | ) | |||||||
Stock-based compensation | (35,202 | ) | (42,331 | ) | (106,937 | ) | (121,809 | ) | |||||||
Amortization of intangible assets | (37,877 | ) | (44,887 | ) | (113,747 | ) | (133,418 | ) | |||||||
Acquisition-related costs, net | (4,916 | ) | (7,646 | ) | (12,837 | ) | (22,051 | ) | |||||||
Restructuring and other charges, net | (9,237 | ) | (13,035 | ) | (32,986 | ) | (39,649 | ) | |||||||
Impairment of goodwill | — | — | (137,907 | ) | — | ||||||||||
Other expenses, net | (32,052 | ) | (39,489 | ) | (98,352 | ) | (133,292 | ) | |||||||
Loss before income taxes | $ | (3,464 | ) | $ | (25,227 | ) | $ | (190,266 | ) | $ | (63,469 | ) |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
United States | $ | 362,796 | $ | 341,826 | $ | 1,094,695 | $ | 1,043,933 | |||||||
International | 140,091 | 144,395 | 424,061 | 429,519 | |||||||||||
Total revenues | $ | 502,887 | $ | 486,221 | $ | 1,518,756 | $ | 1,473,452 |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Interest paid | $ | 22,536 | $ | 24,481 | $ | 71,244 | $ | 70,363 | |||||||
Income taxes paid | $ | 3,139 | $ | 2,211 | $ | 11,972 | $ | 10,847 |
• | our future bookings, revenues, cost of revenues, research and development expenses, selling, general and administrative expenses, amortization of intangible assets and gross margin; |
• | our strategy relating to our segments; |
• | our programs to reduce costs and optimize processes; |
• | market trends; |
• | technological advancements; |
• | the potential of future product releases; |
• | our product development plans and the timing, amount and impact of investments in research and development; |
• | future acquisitions, and anticipated benefits from acquisitions; |
• | international operations and localized versions of our products; and |
• | the conduct, timing and outcome of legal proceedings and litigation matters. |
• | Healthcare. Customers in our healthcare segment are broadly implementing electronic medical record systems and are working to improve clinical documentation, to improve quality of care, to minimize physician burnout and to integrate quality measures and to aid reimbursement. These trends are driving a shift towards more integrated solutions that combine both Dragon Medical and transcription services, and increasingly use only Dragon Medical Services. Recently, higher demand for more integrated |
• | Enterprise. Consumer demand for 24/7, multi-channel access to customer service from the businesses they interact with is driving demand for our AI-powered omni-channel engagement solutions. We continue to enhance our technology capabilities with intelligent self-service and artificial intelligence for customer service, and to extend the market for our on-demand omni-channel enterprise solutions into international markets, expand our sales and solutions for biometrics, and expand our core products and services portfolio. |
• | Automotive. Demand for our embedded and cloud-based automotive solutions is being driven by the growth in personalized, automotive virtual assistants and connected services for cars and by auto manufacturers' desire to create a branded and personalized experience, capable of intelligently integrating users smart phone and home device preferences and technologies. |
• | Imaging. The imaging market is evolving to include more networked solutions to multi-function printing ("MFP") devices, as well as more mobile access to those networked solutions, and away from packaged software. We are investing to merge the scan and print technology platforms to improve mobile access to our solutions and technologies, expand our distribution channels and embedded relationships, and expand our language coverage for optical character recognition ("OCR") in order to drive a more comprehensive and compelling offering to our partners. |
• | Other. The Other segment includes our Subscriber Revenue Services ("SRS") business and our Devices business. Our SRS business provides value-added services to mobile operators in emerging markets, primarily in India and Brazil. Our Devices business provides speech recognition solutions and predictive text technologies to handset devices. |
• | Total revenues increased by $45.3 million to $1,518.8 million; |
• | Net loss increased by $39.3 million to $124.9 million; |
• | Gross margins decreased by 0.1 percentage points to 56.3%; |
• | Operating margins decreased by 10.8 percentage points to (6.1)%; and |
• | Cash provided by operating activities decreased by $87.3 million to $295.0 million. |
• | Total deferred revenue increased by 9.2% from $798.7 million to $871.9 million, primarily driven by the continued growth of our Automotive connected solutions and Healthcare bundled offerings. |
• | Net new bookings increased by 7.4% from one year ago to $471.1 million, primarily due to increases in our Healthcare and Enterprise segments. |
• | Recurring revenue represented 73% of total revenue for three months ended June 30, 2018 and June 30, 2017. Recurring revenue represents the sum of recurring hosting, product and licensing, and maintenance and support revenues as well as the portion of professional services revenue delivered under ongoing contracts. Recurring product and licensing revenue comprises term-based and ratable licenses as well as revenues from royalty arrangements. |
• | Annualized line run-rate in our on-demand healthcare solutions decreased by 31% from a year ago to approximately 3.0 billion lines per year. The decrease was primarily due to the continued erosion in our transcription services and the impact of the 2017 Malware Incident, as defined below. The annualized line run-rate is determined using billed equivalent line counts in a given quarter, multiplied by four. |
• | Estimated three-year value of total on-demand contracts as of June 30, 2018 increased by 1% from a year ago to approximately $2.4 billion. The increase was primarily due to growth in our Dragon Medical cloud and Automotive solutions, offset in part by the continued erosion in our transcription services and the decline in our SRS business. We determine this value as of the end of the period reported, by using our estimate of three years of anticipated future revenue streams under signed on-demand contracts then in place, whether or not they are guaranteed through a minimum commitment clause. Our estimate is based on assumptions used in evaluating the contracts and determining sales compensation, adjusted for changes in estimated launch dates, actual volumes achieved, and other factors deemed relevant. For contracts with an expiration date beyond three years, we include only the value expected within three years. For other contracts, we assume renewal consistent with historic renewal rates unless there is a known cancellation. Contracts are generally priced by volume of usage and typically have no or low minimum commitments. Actual revenue could vary from our estimates due to factors such as cancellations, non-renewals or volume fluctuations. |
Three Months Ended | Dollar Change | Percent Change | Nine Months Ended | Dollar Change | Percent Change | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
Professional services and hosting | $ | 254.5 | $ | 251.5 | $ | 3.0 | 1.2 | % | $ | 788.1 | $ | 763.6 | $ | 24.5 | 3.2 | % | |||||||||||||
Product and licensing | 168.7 | 154.2 | 14.5 | 9.4 | % | 491.8 | 465.2 | 26.6 | 5.7 | % | |||||||||||||||||||
Maintenance and support | 79.7 | 80.5 | (0.8 | ) | (1.0 | )% | 238.9 | 244.6 | (5.7 | ) | (2.3 | )% | |||||||||||||||||
Total Revenues | $ | 502.9 | $ | 486.2 | $ | 16.7 | 3.4 | % | $ | 1,518.8 | $ | 1,473.5 | $ | 45.3 | 3.1 | % | |||||||||||||
United States | $ | 362.8 | $ | 341.8 | $ | 21.0 | 6.1 | % | $ | 1,094.7 | $ | 1,043.9 | $ | 50.8 | 4.9 | % | |||||||||||||
International | 140.1 | 144.4 | (4.3 | ) | (3.0 | )% | 424.1 | 429.5 | (5.4 | ) | (1.3 | )% | |||||||||||||||||
Total Revenues | $ | 502.9 | $ | 486.2 | $ | 16.7 | 3.4 | % | $ | 1,518.8 | $ | 1,473.5 | $ | 45.3 | 3.1 | % |
Three Months Ended | Dollar Change | Percent Change | Nine Months Ended | Dollar Change | Percent Change | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
Professional services revenue | $ | 64.2 | $ | 62.1 | $ | 2.1 | 3.3 | % | $ | 218.2 | $ | 178.8 | $ | 39.5 | 22.1 | % | |||||||||||||
Hosting revenue | 190.3 | 189.4 | 0.9 | 0.5 | % | 569.9 | 584.8 | (15.0 | ) | (2.6 | )% | ||||||||||||||||||
$ | 254.5 | $ | 251.5 | $ | 3.0 | 1.2 | % | $ | 788.1 | $ | 763.6 | $ | 24.5 | 3.2 | % | ||||||||||||||
As a percentage of total revenue | 50.6 | % | 51.7 | % | 51.9 | % | 51.8 | % |
Three Months Ended | Dollar Change | Percent Change | Nine Months Ended | Dollar Change | Percent Change | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
Product and licensing revenue | $ | 168.7 | $ | 154.2 | $ | 14.5 | 9.4 | % | $ | 491.8 | $ | 465.2 | $ | 26.5 | 5.7 | % | |||||||||||||
As a percentage of total revenue | 33.5 | % | 31.7 | % | 32.4 | % | 31.6 | % |
Three Months Ended | Dollar Change | Percent Change | Nine Months Ended | Dollar Change | Percent Change | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
Maintenance and support revenue | $ | 79.7 | $ | 80.5 | $ | (0.7 | ) | (1.0 | )% | $ | 238.9 | $ | 244.6 | $ | (5.7 | ) | (2.3 | )% | |||||||||||
As a percentage of total revenue | 15.9 | % | 16.6 | % | 15.7 | % | 16.6 | % |
Three Months Ended | Dollar Change | Percent Change | Nine Months Ended | Dollar Change | Percent Change | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
Cost of professional services and hosting revenue | $ | 166.3 | $ | 169.4 | $ | (3.2 | ) | (1.9 | )% | $ | 519.9 | $ | 498.5 | $ | 21.4 | 4.3 | % | ||||||||||||
As a percentage of professional services and hosting revenue | 65.3 | % | 67.4 | % | 66.0 | % | 65.3 | % |
Three Months Ended | Dollar Change | Percent Change | Nine Months Ended | Dollar Change | Percent Change | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
Cost of product and licensing revenue | $ | 19.1 | $ | 17.6 | $ | 1.4 | 8.0 | % | $ | 57.1 | $ | 54.8 | $ | 2.2 | 4.2 | % | |||||||||||||
As a percentage of product and licensing revenue | 11.3 | % | 11.4 | % | 11.6 | % | 11.8 | % |
Three Months Ended | Dollar Change | Percent Change | Nine Months Ended | Dollar Change | Percent Change | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
Cost of maintenance and support revenue | $ | 14.3 | $ | 13.4 | $ | 0.9 | 7.0 | % | $ | 42.8 | $ | 40.2 | $ | 2.5 | 6.3 | % | |||||||||||||
As a percentage of maintenance and support revenue | 18.0 | % | 16.7 | % | 17.9 | % | 16.5 | % |
Three Months Ended | Dollar Change | Percent Change | Nine Months Ended | Dollar Change | Percent Change | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
Research and development expense | $ | 75.7 | $ | 66.6 | $ | 9.2 | 13.8 | % | $ | 223.3 | $ | 199.1 | $ | 24.2 | 12.1 | % | |||||||||||||
As a percentage of total revenue | 15.1 | % | 13.7 | % | 14.7 | % | 13.5 | % |
Three Months Ended | Dollar Change | Percent Change | Nine Months Ended | Dollar Change | Percent Change | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
Sales and marketing expense | $ | 96.2 | $ | 97.0 | $ | (0.8 | ) | (0.8 | )% | $ | 292.4 | $ | 292.2 | $ | 0.2 | 0.1 | % | ||||||||||||
As a percentage of total revenue | 19.1 | % | 20.0 | % | 19.2 | % | 19.8 | % |
Three Months Ended | Dollar Change | Percent Change | Nine Months Ended | Dollar Change | Percent Change | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
General and administrative expense | $ | 50.7 | $ | 42.3 | $ | 8.3 | 19.7 | % | $ | 177.8 | $ | 123.6 | $ | 54.2 | 43.8 | % | |||||||||||||
As a percentage of total revenue | 10.1 | % | 8.7 | % | 11.7 | % | 8.4 | % |
Three Months Ended | Dollar Change | Percent Change | Nine Months Ended | Dollar Change | Percent Change | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
Cost of revenue | $ | 13.8 | $ | 15.7 | $ | (2.0 | ) | (12.5 | )% | $ | 43.9 | $ | 48.5 | $ | (4.6 | ) | (9.5 | )% | |||||||||||
Operating expenses | 24.1 | 29.2 | (5.0 | ) | (17.3 | )% | 69.9 | 84.9 | (15.1 | ) | (17.8 | )% | |||||||||||||||||
Total amortization expense | $ | 37.9 | $ | 44.9 | $ | (7.0 | ) | (15.6 | )% | $ | 113.7 | $ | 133.4 | $ | (19.7 | ) | (14.7 | )% | |||||||||||
As a percentage of total revenue | 7.5 | % | 9.2 | % | 7.5 | % | 9.1 | % |
Three Months Ended | Dollar Change | Percent Change | Nine Months Ended | Dollar Change | Percent Change | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
Transition and integration costs | $ | 5.4 | $ | 3.7 | $ | 1.6 | 44.3 | % | $ | 12.8 | $ | 11.0 | $ | 1.8 | 15.9 | % | |||||||||||||
Professional service fees | 1.3 | 3.9 | (2.7 | ) | (67.9 | )% | 2.7 | 11.9 | (9.2 | ) | (77.3 | )% | |||||||||||||||||
Acquisition-related adjustments | (1.7 | ) | — | (1.7 | ) | (9,089.5 | )% | (2.7 | ) | (0.9 | ) | (1.8 | ) | 200.0 | % | ||||||||||||||
Total acquisition-related costs, net | $ | 4.9 | $ | 7.6 | $ | (2.7 | ) | (35.7 | )% | $ | 12.8 | $ | 22.1 | $ | (9.2 | ) | (41.8 | )% | |||||||||||
As a percentage of total revenue | 1.0 | % | 1.6 | % | 0.8 | % | 1.5 | % |
Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||||||||||||||||||
Personnel | Facilities | Total Restructuring | Other Charges | Total | Personnel | Facilities | Total Restructuring | Other Charges | Total | ||||||||||||||||||||||||||||||
Healthcare | $ | 377 | $ | — | $ | 377 | $ | — | $ | 377 | $ | 993 | $ | — | $ | 993 | $ | 4,065 | $ | 5,058 | |||||||||||||||||||
Enterprise | 3,412 | (197 | ) | 3,215 | — | 3,215 | 1,910 | 2,040 | 3,950 | — | 3,950 | ||||||||||||||||||||||||||||
Automotive | 1,233 | — | 1,233 | — | 1,233 | 377 | — | 377 | — | 377 | |||||||||||||||||||||||||||||
Imaging | 2,725 | 1,170 | 3,895 | — | 3,895 | 43 | — | 43 | — | 43 | |||||||||||||||||||||||||||||
Other | 154 | 54 | 208 | — | 208 | 489 | (511 | ) | (22 | ) | — | (22 | ) | ||||||||||||||||||||||||||
Corporate | 1,148 | 893 | 2,041 | (1,732 | ) | 309 | 241 | 25 | 266 | 3,363 | 3,629 | ||||||||||||||||||||||||||||
Total | $ | 9,049 | $ | 1,920 | $ | 10,969 | $ | (1,732 | ) | $ | 9,237 | $ | 4,053 | $ | 1,554 | $ | 5,607 | $ | 7,428 | $ | 13,035 |
Nine Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||||||||||||||||||
Personnel | Facilities | Total Restructuring | Other Charges | Total | Personnel | Facilities | Total Restructuring | Other Charges | Total | ||||||||||||||||||||||||||||||
Healthcare | $ | 3,678 | $ | 25 | $ | 3,703 | $ | — | $ | 3,703 | $ | 3,554 | $ | 870 | $ | 4,424 | $ | 4,065 | $ | 8,489 | |||||||||||||||||||
Enterprise | 3,939 | 2,170 | 6,109 | — | 6,109 | 2,722 | 2,904 | 5,626 | — | 5,626 | |||||||||||||||||||||||||||||
Automotive | 2,233 | — | 2,233 | — | 2,233 | 1,792 | — | 1,792 | — | 1,792 | |||||||||||||||||||||||||||||
Imaging | 4,031 | 1,163 | 5,194 | — | 5,194 | 629 | 387 | 1,016 | — | 1,016 | |||||||||||||||||||||||||||||
Other | 1,498 | 624 | 2,122 | — | 2,122 | 2,341 | (460 | ) | 1,881 | 10,773 | 12,654 | ||||||||||||||||||||||||||||
Corporate | 2,339 | 951 | 3,290 | 10,335 | 13,625 | 1,241 | 2,007 | 3,248 | 6,824 | 10,072 | |||||||||||||||||||||||||||||
Total | $ | 17,718 | $ | 4,933 | $ | 22,651 | $ | 10,335 | $ | 32,986 | $ | 12,279 | $ | 5,708 | $ | 17,987 | $ | 21,662 | $ | 39,649 |
Three Months Ended | Dollar Change | Percent Change | Nine Months Ended | Dollar Change | Percent Change | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
Interest income | $ | 2.5 | $ | 2.0 | $ | 0.5 | 27.2 | % | $ | 6.9 | $ | 4.3 | $ | 2.7 | 62.4 | % | |||||||||||||
Interest expense | (33.8 | ) | (40.4 | ) | 6.6 | (16.3 | )% | (103.8 | ) | (116.3 | ) | 12.5 | (10.8 | )% | |||||||||||||||
Other expense, net | (0.7 | ) | (1.0 | ) | 0.3 | (30.0 | )% | (1.5 | ) | (21.3 | ) | 19.8 | (93.0 | )% | |||||||||||||||
Total other expense, net | $ | (32.1 | ) | $ | (39.5 | ) | $ | 7.4 | (18.8 | )% | $ | (98.4 | ) | $ | (133.3 | ) | $ | 34.9 | (26.2 | )% | |||||||||
As a percentage of total revenue | 6.4 | % | 8.1 | % | 6.5 | % | 9.0 | % |
Three Months Ended | Dollar Change | Percent Change | Nine Months Ended | Dollar Change | Percent Change | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
Provision (benefit) for income taxes | $ | 10.6 | $ | 2.6 | $ | 8.0 | 305.3 | % | $ | (65.4 | ) | $ | 22.1 | $ | (87.5 | ) | (395.9 | )% | |||||||||||
Effective income tax rate | (305.2 | )% | (10.3 | )% | 34.4 | % | (34.8 | )% |
Three Months Ended | Change | Percent Change | Nine Months Ended | Change | Percent Change | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
Segment Revenues(a): | |||||||||||||||||||||||||||||
Healthcare | $ | 236.2 | $ | 232.6 | $ | 3.6 | 1.5 | % | $ | 743.0 | $ | 710.3 | $ | 32.7 | 4.6 | % | |||||||||||||
Enterprise | 119.6 | 114.1 | 5.5 | 4.8 | % | 352.9 | 351.6 | 1.3 | 0.4 | % | |||||||||||||||||||
Automotive | 73.8 | 63.1 | 10.7 | 16.9 | % | 204.2 | 183.7 | 20.5 | 11.2 | % | |||||||||||||||||||
Imaging | 54.2 | 49.4 | 4.8 | 9.8 | % | 158.8 | 154.5 | 4.3 | 2.8 | % | |||||||||||||||||||
Other | 22.2 | 36.4 | (14.2 | ) | (38.9 | )% | 74.3 | 102.6 | (28.3 | ) | (27.5 | )% | |||||||||||||||||
Total segment revenues | $ | 506.0 | $ | 495.6 | $ | 10.4 | 2.1 | % | $ | 1,533.2 | $ | 1,502.7 | $ | 30.5 | 2.0 | % | |||||||||||||
Less: acquisition related revenues adjustments | (3.1 | ) | (9.4 | ) | 6.3 | (66.6 | )% | (14.4 | ) | (29.3 | ) | 14.9 | (50.8 | )% | |||||||||||||||
Total revenues | $ | 502.9 | $ | 486.2 | $ | 16.7 | 3.4 | % | $ | 1,518.8 | $ | 1,473.5 | $ | 45.3 | 3.1 | % | |||||||||||||
Segment Profit: | |||||||||||||||||||||||||||||
Healthcare | $ | 77.7 | $ | 70.5 | $ | 7.2 | 10.3 | % | $ | 242.5 | $ | 232.4 | $ | 10.1 | 4.3 | % | |||||||||||||
Enterprise | 33.1 | 32.4 | 0.7 | 2.0 | % | 96.5 | 102.7 | (6.2 | ) | (6.0 | )% | ||||||||||||||||||
Automotive | 28.2 | 30.7 | (2.5 | ) | (8.4 | )% | 80.2 | 87.7 | (7.5 | ) | (8.5 | )% | |||||||||||||||||
Imaging | 18.5 | 16.9 | 1.6 | 9.4 | % | 46.4 | 53.0 | (6.6 | ) | (12.4 | )% | ||||||||||||||||||
Other | 3.1 | 12.7 | (9.6 | ) | (75.7 | )% | 12.6 | 33.1 | (20.5 | ) | (62.0 | )% | |||||||||||||||||
Total segment profit | $ | 160.5 | $ | 163.2 | $ | (2.7 | ) | (1.7 | )% | $ | 478.3 | $ | 508.9 | $ | (30.6 | ) | (6.0 | )% | |||||||||||
Segment Profit Margin: | |||||||||||||||||||||||||||||
Healthcare | 32.9 | % | 30.3 | % | 2.6 | 32.6 | % | 32.7 | % | (0.1 | ) | ||||||||||||||||||
Enterprise | 27.6 | % | 28.4 | % | (0.8 | ) | 27.4 | % | 29.2 | % | (1.9 | ) | |||||||||||||||||
Automotive | 38.2 | % | 48.7 | % | (10.5 | ) | 39.3 | % | 47.7 | % | (8.4 | ) | |||||||||||||||||
Imaging | 34.2 | % | 34.3 | % | (0.1 | ) | 29.2 | % | 34.3 | % | (5.1 | ) | |||||||||||||||||
Other | 13.9 | % | 34.9 | % | (21.0 | ) | 16.9 | % | 32.3 | % | (15.3 | ) | |||||||||||||||||
Total segment profit margin | 31.7 | % | 32.9 | % | (1.2 | ) | 31.2 | % | 33.9 | % | (2.7 | ) |
(a) | Segment revenues differ from reported revenues due to certain revenue adjustments related to acquisitions that would otherwise have been recognized but for the purchase accounting treatment of the business combinations. These revenues are included to allow for more complete comparisons to the financial results of historical operations and in evaluating management performance. |
• | Healthcare segment revenue increased by $3.6 million, or 1.5%, primarily due to higher revenue from Dragon Medical cloud-based solutions and EHR implementation and optimization services, offset by in part by lower revenue from our transcription services revenue due to the continued erosion. |
• | Enterprise segment revenue increased by $5.5 million, or 4.8%, primarily due to higher contact center license revenue. |
• | Automotive segment revenue increased by $10.7 million, or 16.9%, primarily due to higher royalties and revenues from our hosting solutions driven by continued growth in our speech recognition and infotainment platform services. |
• | Imaging segment revenues increased by $4.8 million, or 9.8%, primarily due to higher revenue from our Core Imaging solutions due to new product launch. |
• | Other segment revenue decreased by $14.2 million, or 38.9%, primarily due to declines in both SRS and Devices. The decline in SRS was primarily due to the recent market disruptions in India and Brazil. These markets have experienced recent and dramatic disruptions as a result of accelerated change in competition and business models for our SRS mobile operator customers, which has reduced demand for our services. The decline in our Devices business was primarily due to the ongoing consolidation of our handset manufacturer customer base, as well as continued erosion of our penetration of the remaining market. |
• | Healthcare segment revenue increased by $32.7 million, or 4.6%, primarily due to higher revenue from Dragon Medical cloud-based solutions and EHR implementation and optimization services, offset by in part by lower revenue from our transcription services revenue due to the continued erosion and the negative impact of the 2017 Malware Incident. |
• | Enterprise segment revenue increased by $1.3 million, or 0.4%, primarily due to higher contact center license and services revenue, offset in part by lower volume through our legacy inbound and outbound on-demand solutions. |
• | Automotive segment revenue increased by $20.5 million, or 11.2%, primarily due to higher royalties and revenues from our hosting solutions driven by continued growth in our speech recognition and infotainment platform services. |
• | Imaging segment revenues increased by $4.3 million, or 2.8%, primarily due to higher revenue from our Core Imaging solutions due to new product launch. |
• | Other segment revenue decreased by $28.3 million, or 27.5%, primarily due to declines in both of SRS and Devices. The decline in SRS was primarily due to the recent market disruptions in India and Brazil. These markets have experienced recent and dramatic disruptions as a result of accelerated change in competition and business models for our SRS mobile operator customers, which has reduced demand for our services. The decline in our Devices business was primarily due to the ongoing consolidation of our handset manufacturer customer base, as well as continued erosion of our penetration of the remaining market. |
• | Healthcare segment profit increased by $7.2 million, or 10.3%, primarily due to higher segment revenue and higher gross margin. The increase in gross margin was primarily due to a favorable shift in revenue mix towards higher margin Dragon Medical cloud-based offerings, offset in part by margin compression in our medical transcription services and the increase in EHR implementation and optimization services which carried lower margins. As a result, segment profit margin increased by 2.6 percentage points to 32.9%. |
• | Enterprise segment profit increased by $0.7 million, or 2.0%, primarily due to higher segment revenue, partially offset by lower gross margin and higher operating expenses. The lower gross margin was primarily due to higher infrastructure costs and increased headcount to support future growth. Operating expenses increased primarily due to higher sales and marketing expenses. As a result, segment profit margin decreased by 0.8 percentage points to 27.6%. |
• | Automotive segment profit decreased by $2.5 million, or 8.4%, primarily due to lower gross margin and higher R&D expenses, offset in part by higher revenue. The lower gross margin was primarily driven by our investment in automotive technologies |
• | Imaging segment profit increased by 1.6 million, or 9.4%, primarily due to higher segment revenue, offset in part by gross margin and higher operating expenses. Gross margin declined as a result of an unfavorable shift in revenue mix from higher margin software revenue to lower margin hardware revenue. Operating expenses increased primarily due to higher sales and marketing expenses to support new products and solutions. Segment profit margin remained essentially flat year-over-year. |
• | Other segment profit decreased by $9.6 million, or 75.7%, primarily driven by revenue and gross margin declines. Profit margin decreased by 21.0 percentage points to 13.9%, primarily due to the recent market disruptions in India and Brazil, as more fully discussed in Overview - Business Trends. |
• | Healthcare segment profit increased by $10.1 million, or 4.3%, primarily due to higher segment revenue offset in part by lower gross margin. The gross margin decline was primarily due to margin compression in our medical transcription services and the increase in EHR implementation and optimization services which carried lower margins, offset in part by a favorable shift in revenue mix towards higher margin Dragon Medical cloud-based offerings. As a result, segment profit margin remained essentially flat year-over-year. |
• | Enterprise segment profit decreased by $6.2 million, or 6.0%, primarily due to essentially flat segment revenue and lower gross margin. The lower gross margin was primarily due to higher infrastructure costs and increased headcount to support future growth.As a result, segment profit margin decreased by 1.9 percentage points to 27.4%. |
• | Automotive segment profit decreased by $7.5 million, or 8.5%, primarily due to lower gross margin and higher R&D expenses, offset in part by higher revenue. The lower gross margin was primarily driven by our investment in automotive technologies and increased professional services headcount to support future growth. The higher R&D expenses was primarily driven by our increased investment in new technologies. As a result, segment profit margin decreased by 8.4 percentage points to 39.3%. |
• | Imaging segment profit decreased by $6.6 million, or 12.4%, primarily due to higher segment revenue, offset in part by gross margin and higher operating expenses. Gross margin declined as a result of an unfavorable shift in revenue mix from higher margin software revenue to lower margin hardware revenue. Operating expenses increased primarily due to higher sales and marketing expenses to support new products and solutions. As a result, segment profit margin decreased by 5.1 percentage points to 29.2%. |
• | Other segment profit decreased by $20.5 million, or 62.0%, primarily driven by revenue and gross margin declines. Profit margin decreased by 15.3% percentage points to 16.9%, primarily due to the recent market disruptions in India and Brazil, as more fully discussed in Overview - Business Trends. |
• | A decrease of $70.2 million due to lower net income, excluding non-cash adjustments; |
• | A decrease of $40.8 million due to unfavorable changes in working capital, primarily due to the timing of billing and associated collections, as well as timing of certain payments related to Malware Incident remediation and strategic initiatives; offset in part by, |
• | An increase of $23.7 million from changes in deferred revenue. Deferred revenue had a positive effect of $84.3 million on operating cash flows for the nine months ended June 30, 2018, as compared to $60.6 million for the nine months ended June 30, 2017, primarily driven by continued growth of our Automotive connected solutions and Healthcare bundled offerings. |
• | An increase of $186.7 million in net proceeds from the sale and purchase of marketable securities and other investments; offset in part by, |
• | An increase of $4.9 million in capital expenditures. |
• | A decrease in cash inflows of $838.1 million from debt issuance. During the nine months ended June 30, 2017, the cash inflows from debt activities includes $494.6 million net proceeds from the issuance of 5.625% Senior Notes due 2026; and $344.3 million net proceeds from the issuance of our 1.25% 2025 Convertible Debentures; |
• | An increase in cash outflows of $20.8 million related to acquisition payments with extended payment terms, offset in part by, |
• | A decrease in cash outflows of $302.9 million from the redemption and repayment of debt. During the nine months ended June 30, 2018 holders of approximately $331.2 million in aggregate principal amount of the 2.75% 2031 Debentures exercised their right to require us to repurchase such debentures. During the nine months ended June 30, 2017, we made repayments of $616.7 million for the redemption of our 2020 Senior Notes and $17.9 million for the redemption of our 2031 Convertible Debentures; and |
• | An increase in cash outflows of $12.9 million related to share repurchases. During the nine months ended June 30, 2018 and 2017, we repurchased 8.1 million and 5.8 million shares of our common stock under our share repurchase program for $112.0 million and $99.1 million, respectively. |
Contractual Payments Due in Fiscal Year | ||||||||||||||||||||
Contractual Obligations | Total | 2018 | 2019 and 2020 | 2021 and 2022 | Thereafter | |||||||||||||||
Convertible debentures(1) | $ | 1,337.0 | $ | — | $ | — | $ | 310.5 | $ | 1,026.5 | ||||||||||
Senior notes | 1,250.0 | — | 450.0 | — | 800.0 | |||||||||||||||
Interest payable on long-term debt(2) | 495.8 | 21.2 | 173.2 | 122.4 | 179.0 | |||||||||||||||
Letters of credit(3) | 6.8 | 2.8 | 4.0 | — | — | |||||||||||||||
Lease obligations and other liabilities: | ||||||||||||||||||||
Operating leases | 164.6 | 10.6 | 46.9 | 31.2 | 75.9 | |||||||||||||||
Operating leases under restructuring(4) | 54.5 | 2.4 | 17.0 | 13.9 | 21.2 | |||||||||||||||
Purchase commitments(5) | 32.6 | 8.0 | 13.8 | 10.8 | — | |||||||||||||||
Total contractual cash obligations | $ | 3,341.3 | $ | 45.0 | $ | 704.9 | $ | 488.8 | $ | 2,102.6 |
(1) | Pursuant to the terms of each convertible instrument, holders have the right to redeem the debt on specific dates prior to maturity. The repayment schedule above assumes that payment is due on the next redemption date after June 30, 2018. |
(2) | Interest per annum is due and payable semi-annually and is determined based on the outstanding principal as of June 30, 2018, the stated interest rate of each debt instrument and the assumed redemption dates discussed above. |
(3) | Letters of Credit are in place primarily to secure future operating lease payments. |
(4) | Obligations include contractual lease commitments related to facilities that were part of restructuring plans. As of June 30, 2018, we have subleased certain of the facilities with total sublease income of $51.1 million through fiscal year 2025. |
(5) | Purchase commitments include non-cancelable purchase commitments for property and equipment, inventory, and services in the normal course of business. These amounts also include arrangements that require a minimum purchase commitment by us. |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
June 30, 2018 | |||||||||||||||
Fair value | Conversion value | Increase to fair value | Increase to conversion value | ||||||||||||
2.75% 2031 Debentures | $ | 45.9 | $ | 19.9 | $ | 0.3 | $ | 2.0 | |||||||
1.5% 2035 Debentures | $ | 256.0 | $ | 156.9 | $ | 6.5 | $ | 15.7 | |||||||
1.0% 2035 Debentures | $ | 607.8 | $ | 343.7 | $ | 13.9 | $ | 34.4 | |||||||
1.25% 2025 Debentures | $ | 325.6 | $ | 217.9 | $ | 14.4 | $ | 21.8 |
Item 4. | Controls and Procedures |
• | volume, timing and fulfillment of customer orders and receipt of royalty reports; |
• | fluctuating sales by our channel partners to their customers; |
• | customers delaying their purchasing decisions in anticipation of new versions of our products; |
• | contractual counterparties are unable to, or do not, meet their contractual commitments to us; |
• | introduction of new products by us or our competitors; |
• | cybersecurity or data breaches perpetrated by hackers or other third parties; |
• | seasonality in purchasing patterns of our customers; |
• | reduction in the prices of our products in response to competition, market conditions or contractual obligations; |
• | returns and allowance charges in excess of accrued amounts; |
• | timing of significant marketing and sales promotions; |
• | impairment of goodwill or intangible assets; |
• | the pace of the transition to an on-demand and transactional revenue model; |
• | delayed realization of synergies resulting from our acquisitions; |
• | accounts receivable that are not collectible and write-offs of excess or obsolete inventory; |
• | increased expenditures incurred pursuing new product or market opportunities; |
• | higher than anticipated costs related to fixed-price contracts with our customers; |
• | change in costs due to regulatory or trade restrictions; |
• | expenses incurred in litigation matters, whether initiated by us or brought by third-parties against us and even in matters where we are the prevailing party, and settlements or judgments we are required to pay in connection with disputes; and |
• | general economic trends as they affect the customer bases into which we sell. |
• | adverse political and economic conditions in the U.S. and abroad; |
• | trade protection measures, including tariffs and import/export controls, imposed by the United States and/or by other countries or regional authorities such as China, Canada or the European Union; |
• | the impact on local and global economies of the United Kingdom leaving the European Union; |
• | changes in foreign currency exchange rates or the lack of ability to hedge certain foreign currencies; |
• | changes in a specific country's or region's economic conditions; |
• | compliance with laws and regulations in many countries and any subsequent changes in such laws and regulations; |
• | geopolitical turmoil, including terrorism and war; |
• | changing and import or export licensing requirements, particularly for our voice biometrics products; |
• | changing data privacy regulations and customer requirements to locate data centers in certain jurisdictions; |
• | restrictions on cross-border investment, including enhanced oversight by the Committee on Foreign Investment in the United States (CFIUS) and substantial restrictions on investment from China; |
• | changes in applicable tax laws; |
• | difficulties in staffing and managing operations in multiple locations in many countries; |
• | longer payment cycles of foreign customers and timing of collections in foreign jurisdictions; and |
• | less effective protection of intellectual property than in the United States. |
• | loss of revenue resulting from the operational disruption; |
• | loss of revenue or increased bad debt expense due to the inability to invoice properly or to customer dissatisfaction resulting in collection issues; |
• | loss of revenue due to loss of customers; |
• | material remediation costs to restore systems; |
• | material investments in new or enhanced systems in order to enhance our information security posture; |
• | cost of incentives offered to customers to restore confidence and maintain business relationships; |
• | reputational damage resulting in the failure to retain or attract customers; |
• | costs associated with potential litigation or governmental investigations; |
• | costs associated with any required notices of a data breach; |
• | costs associated with the potential loss of critical business data; and |
• | other consequences of which we are not currently aware but will discover through the remediation process. |
• | cause our customers to lose confidence in our solutions; |
• | harm our reputation; |
• | expose us to litigation, regulatory investigations and to resulting liabilities including reimbursement of customer costs, damages penalties or fines imposed by regulatory agencies; and |
• | require us to incur significant expenses for remediation. |
• | difficulty in transitioning and integrating the operations and personnel of the acquired businesses; |
• | potential disruption of our ongoing business and distraction of management; |
• | difficulty in incorporating acquired products and technologies into our products and technologies; |
• | potential difficulties in completing projects associated with in-process research and development; |
• | unanticipated expenses and delays in completing acquired development projects and technology integration and upgrades; |
• | challenges associated with managing additional, geographically remote businesses; |
• | impairment of relationships with partners and customers; |
• | assumption of unknown material liabilities of acquired companies; |
• | the accuracy of revenue and bookings projections of acquired companies; |
• | customers delaying purchases of our products pending resolution of product integration between our existing and our newly acquired products; |
• | entering markets or types of businesses in which we have limited experience; and |
• | potential loss of key employees of the acquired business. |
• | costs incurred to combine the operations of businesses we acquire, such as transitional employee expenses and employee retention, redeployment or relocation expenses; |
• | impairment of goodwill or intangible assets; |
• | amortization of intangible assets acquired; |
• | a reduction in the useful lives of intangible assets acquired; |
• | identification of or changes to assumed contingent liabilities, both income tax and non-income tax related, after our final determination of the amounts for these contingencies or the conclusion of the measurement period (generally up to one year from the acquisition date), whichever comes first; |
• | charges to our operating results to eliminate certain duplicative pre-merger activities, to restructure our operations or to reduce our cost structure; |
• | charges to our operating results arising from expenses incurred to effect the acquisition; and |
• | charges to our operating results due to the expensing of stock awards assumed in acquisitions. |
• | significant underperformance relative to historical or projected future operating results; |
• | significant changes in the manner of or use of the acquired assets or the strategy for our overall business; |
• | significant negative industry or economic trends; |
• | significant decline in our stock price for a sustained period; |
• | changes in our organization or management reporting structure that could result in additional reporting units, which may require alternative methods of estimating fair values or greater disaggregation or aggregation in our analysis by reporting unit; and |
• | our market capitalization declining to below net book value. |
• | projected levels of taxable income; |
• | pre-tax income being lower than anticipated in countries with lower statutory rates or higher than anticipated in countries with higher statutory rates; |
• | increases or decreases to valuation allowances recorded against deferred tax assets; |
• | tax audits conducted and settled by various tax authorities; |
• | adjustments to income taxes upon finalization of income tax returns; |
• | the ability to claim foreign tax credits; |
• | the repatriation of non-U.S. earnings for which we have not previously provided for income taxes; and |
• | changes in tax laws and their interpretations in countries in which we are subject to taxation. |
• | incur additional debt or issue guarantees; |
• | create liens; |
• | make certain investments; |
• | enter into transactions with our affiliates; |
• | sell certain assets; |
• | repurchase capital stock or make other restricted payments; |
• | declare or pay dividends or make other distributions to stockholders; and |
• | merge or consolidate with any entity. |
• | require us to use a large portion of our cash flow to pay principal and interest on debt, including the convertible debentures and the credit facility, which will reduce the availability of our cash flow to fund working capital, capital expenditures, acquisitions, research and development, exploiting business opportunities, and other business activities; |
• | place us at a competitive disadvantage compared to our competitors that have less debt; and |
• | limit, along with the financial and other restrictive covenants related to our debt, our ability to borrow additional funds, dispose of assets or pay cash dividends. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program (1) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program(1) | ||||||||||
April 1, 2018 - April 30, 2018 | — | $ | — | — | $ | 193,410 | ||||||||
May 1, 2018 - May 31, 2018 | 4,188 | $ | 13.58 | 4,188 | $ | 136,529 | ||||||||
June 1, 2018 - June 30, 2018 | 3,919 | $ | 14.06 | 3,919 | $ | 81,431 | ||||||||
Total | 8,107 | 8,107 |
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Item 6. | Exhibits |
Incorporated by Reference | ||||||||||||
Exhibit Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | Filed Herewith | ||||||
3.1 | 10-Q | 0-27038 | 3.2 | 5/11/2001 | ||||||||
3.2 | 10-Q | 0-27038 | 3.1 | 8/9/2004 | ||||||||
3.3 | 8-K | 0-27038 | 3.1 | 10/19/2005 | ||||||||
3.4 | 8-K | 0-27038 | 3.1 | 6/26/2018 | ||||||||
3.5 | S-3 | 333-142182 | 3.3 | 4/18/2007 | ||||||||
10.1 | 10-Q | 0-27038 | 10.3 | 5/10/2018 | ||||||||
10.2 | X | |||||||||||
10.3 | X | |||||||||||
31.1 | X | |||||||||||
31.2 | X | |||||||||||
32.1 | X | |||||||||||
101.0 | The following materials from Nuance Communications, Inc.’s Quarterly Report on Form 10-Q for the quarter ended 6/30/2018, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Loss, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, and (v) Notes to Unaudited Condensed Consolidated Financial Statements. | X |
Nuance Communications, Inc. | |||
By: | /s/ Daniel D. Tempesta | ||
Daniel D. Tempesta | |||
Executive Vice President and Chief Financial Officer | |||
1995 Director’s Stock Plan | 2 |
1995 Director’s Stock Plan | 3 |
1995 Director’s Stock Plan | 4 |
1995 Director’s Stock Plan | 5 |
1995 Director’s Stock Plan | 6 |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Mark Benjamin | ||
Mark Benjamin | |||
Chief Executive Officer |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Daniel D. Tempesta | ||
Daniel D. Tempesta | |||
Executive Vice President and Chief Financial Officer |
By: | /s/ Mark Benjamin | ||
Mark Benjamin | |||
Chief Executive Officer |
By: | /s/ Daniel D. Tempesta | ||
Daniel D. Tempesta | |||
Executive Vice President and Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Aug. 02, 2018 |
|
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | NUAN | |
Entity Registrant Name | Nuance Communications, Inc. | |
Entity Central Index Key | 0001002517 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 286,802,911 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Document Period End Date | Jun. 30, 2018 | |||
Revenues: | ||||
Professional services and hosting | $ 254,478 | $ 251,488 | $ 788,079 | $ 763,595 |
Product and licensing | 168,682 | 154,228 | 491,776 | 465,238 |
Maintenance and support | 79,727 | 80,505 | 238,901 | 244,619 |
Total revenues | 502,887 | 486,221 | 1,518,756 | 1,473,452 |
Cost of revenues: | ||||
Professional services and hosting | 166,280 | 169,439 | 519,859 | 498,501 |
Product and licensing | 19,052 | 17,637 | 57,087 | 54,805 |
Maintenance and support | 14,346 | 13,410 | 42,778 | 40,248 |
Amortization of intangible assets | 13,760 | 15,727 | 43,896 | 48,487 |
Total cost of revenues | 213,438 | 216,213 | 663,620 | 642,041 |
Gross profit | 289,449 | 270,008 | 855,136 | 831,411 |
Operating expenses: | ||||
Research and development | 75,726 | 66,565 | 223,277 | 199,119 |
Sales and marketing | 96,212 | 97,011 | 292,359 | 292,201 |
General and administrative | 50,653 | 42,329 | 177,833 | 123,637 |
Amortization of intangible assets | 24,117 | 29,160 | 69,851 | 84,931 |
Acquisition-related costs, net | 4,916 | 7,646 | 12,837 | 22,051 |
Restructuring and other charges, net | 9,237 | 13,035 | 32,986 | 39,649 |
Asset Impairment Charges | 0 | 0 | 137,907 | 0 |
Total operating expenses | 260,861 | 255,746 | 947,050 | 761,588 |
(Loss) income from operations | 28,588 | 14,262 | (91,914) | 69,823 |
Other (expense) income: | ||||
Interest income | 2,482 | 1,952 | 6,910 | 4,255 |
Interest expense | (33,849) | (40,422) | (103,785) | (116,296) |
Other expense, net | (685) | (1,019) | (1,477) | (21,251) |
Loss before income taxes | (3,464) | (25,227) | (190,266) | (63,469) |
Provision (benefit) for income taxes | 10,573 | 2,609 | (65,404) | 22,103 |
Net loss | $ (14,037) | $ (27,836) | $ (124,862) | $ (85,572) |
Net loss per share: | ||||
Basic (in dollars per share) | $ (0.05) | $ (0.10) | $ (0.43) | $ (0.30) |
Diluted (in dollars per share) | $ (0.05) | $ (0.10) | $ (0.43) | $ (0.30) |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 292,663 | 287,856 | 292,703 | 289,269 |
Diluted (in shares) | 292,663 | 287,856 | 292,703 | 289,269 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Net loss | $ (14,037) | $ (27,836) | $ (124,862) | $ (85,572) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | (25,985) | 13,185 | (20,374) | 566 |
Pension Adjustments | 432 | (250) | 548 | (14) |
Unrealized (loss) gain on marketable securities | 126 | (15) | (222) | (19) |
Total other comprehensive income (loss), net | (25,427) | 12,920 | (20,048) | 533 |
Comprehensive loss | $ (39,464) | $ (14,916) | $ (144,910) | $ (85,039) |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands |
Jun. 30, 2018 |
Sep. 30, 2017 |
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Accounts receivable, allowances for doubtful accounts | $ 12,319 | $ 14,333 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 560,000 | 560,000 |
Common stock, shares issued | 291,142 | 293,938 |
Common stock, shares outstanding | 287,392 | 290,187 |
Treasury stock, shares | 3,751 | 3,751 |
Organization and Presentation |
9 Months Ended |
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Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Presentation | Organization and Presentation The condensed consolidated financial statements include the accounts of Nuance Communications, Inc. (“Nuance”, “we”, "our", or “the Company”) and our wholly-owned subsidiaries. We prepared the unaudited interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (the “U.S.” or the "United States") and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The condensed consolidated financial statements reflect all normal and recurring adjustments that, in our opinion, are necessary to present fairly our financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and classifications of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses during the reporting period. Although we believe the disclosures included herein are adequate to ensure that the condensed consolidated financial statements are fairly presented, certain information and footnote disclosures to the financial statements have been condensed or omitted in accordance with the rules and regulations of the SEC. Accordingly, the condensed consolidated financial statements and the footnotes included herein should be read in conjunction with the audited financial statements and the footnotes included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2017. The results of operations for the interim periods presented are not necessarily indicative of the results for the entire fiscal year or any future period. |
Summary of Significant Accounting Policies |
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Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Recently Adopted Accounting Standards In October 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-16, "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory" ("ASU 2016-16"), which requires income tax consequences of inter-company transfers of assets other than inventory to be recognized when the transfer occurs. ASU 2016-16 is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. We early adopted the guidance during the first quarter of fiscal year 2018. As a result, deferred tax liabilities of $0.9 million arising from inter-company transfers in prior years were recognized and recorded against the beginning balance of accumulated deficit in the first quarter of fiscal year 2018. The adoption of the guidance did not have a material impact on our consolidated financial statements for any period presented. Recently Issued Accounting Standards In January 2018, the FASB issued ASU 2018-02, "Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ("AOCI"), which is effective for fiscal years beginning after December 15, 2018 and interim periods therein, with early adoption permitted. The guidance gives entities the option to reclassify to retained earnings the tax effects resulting from the Tax Cuts and Jobs Act ("TCJA") related to items in AOCI. The new guidance may be applied retrospectively to each period in which the effect of the Act is recognized in the period of adoption. We do not expect the implementation to have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"), which is effective for fiscal years beginning after December 15, 2017 and the interim periods therein, with early adoption permitted. The guidance requires cash flows with multiple characteristics to be classified using a three-step process, including (i) determining whether explicit guidance is applicable, (ii) separating each identifiable source or use of cash flows, and (iii) determining the predominant source or use of cash flows when the source or use of cash flows cannot be separately identifiable. The guidance will be applied retrospectively to each period presented. We do not expect the implementation to have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, "Leases" ("ASU 2016-02"). ASU 2016-02 requires lessees to recognize on the balance sheet a right-of-use asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. The standard requires the use of a modified retrospective transition approach, which includes a number of optional practical expedients that entities may elect to apply. ASU 2016-02 is effective for us in the first quarter of fiscal year 2020, and early application is permitted. We are currently evaluating the impact of our pending adoption of ASU 2016-02 on our consolidated financial statements, and we currently expect that most of our operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon our adoption of ASU 2016-02, which will increase our total assets and total liabilities that we report relative to such amounts prior to adoption. In January 2016, the FASB issued ASU No. 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities" ("ASU 2016-01"). ASU 2016-01 amends the guidance on the classification and measurement of financial instruments. Although ASU 2016-01 retains many current requirements, it significantly revises accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. ASU 2016-01 also amends certain disclosure requirements associated with the fair value of financial instruments and is effective for us in the first quarter of fiscal year 2019. Based on the composition of our investment portfolio, we do not believe the adoption of ASU 2016-01 will have a material impact on our consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers: Topic 606" ("ASU 2014-09"), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 permits two methods of adoption: (i) retrospective to each prior reporting period presented; or (ii) retrospective with the cumulative effect of initially applying the guidance recognized at the date of initial application. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which deferred the effective date of the new revenue standard for periods beginning after December 15, 2016 to December 15, 2017, with early adoption permitted but not earlier than the original effective date. ASU 2014-09 is effective for us beginning on October 1, 2018 and we plan to adopt ASU 2014-09 using the cumulative catch-up transition method, with a cumulative adjustment to retained earnings as opposed to retrospectively adjusting prior periods. In the first quarter of fiscal 2017, we commenced a project to assess the potential impact of the new standard on our consolidated financial statements and related disclosures. This project also includes the assessment and enhancement of our internal processes, controls and systems to address the new standard. While we are continuing to assess all potential impacts of ASU 2014-09, we currently believe the most significant impact relates to our accounting for arrangements that include term-based software licenses bundled with other performance obligations including (i) maintenance and support and (ii) professional services. A significant number of our Healthcare and Imaging customer contracts include term-based software licenses bundled with other performance obligations. Under current GAAP, the revenue attributable to these software licenses is recognized ratably over the term of the arrangement because vendor-specific objective evidence ("VSOE") does not exist for the undelivered maintenance and support element as it is not sold separately. Under ASU 2014-09, the requirement to have VSOE for undelivered elements to enable the separation of revenue for the delivered software licenses is eliminated. Accordingly, under the new standard we will be required to recognize term-based software revenue as control is transferred and based upon the amount proportionally allocated to the term-based software license from the contract transaction price. We do not currently expect ASU 2014-09 to have a significant effect on the timing of revenue related to our renewal maintenance, professional services and cloud offerings. Another significant provision under ASU 2014-09 includes the capitalization and amortization of costs associated with obtaining a contract, such as sales commissions. Currently, we expense sales commissions in the period incurred. Under ASU 2014-09, direct and incremental costs to acquire a contract are capitalized and amortized over the pattern of transfer of the goods and services to which the asset relates. While we are continuing to assess the impact of this provision of ASU 2014-09, we likely will be required to capitalize a significant amount of our sales commission costs. |
Business Acquisitions |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisitions | Business Acquisitions We continue to expand our solutions and integrate our technologies in new offerings through acquisitions. A summary of our acquisition activities is as follows: Fiscal Year 2018 For the nine months ended June 30, 2018, we completed several acquisitions in our Healthcare and Automotive segments for a total cash consideration of $113.1 million, contingent payments with a fair value of $2.0 million and effective settlement of preexisting relationship with the acquiree of $12.9 million. As a result, we recognized goodwill of $65.1 million and other intangible assets of $60.8 million, with a weighted average life of 6.0 years. Such acquisitions were not significant individually or in the aggregate to our condensed consolidated financial statements. Fiscal Year 2017 For the nine months ended June 30, 2017, we completed several acquisitions in our Enterprise, Healthcare and Other segments for a total cash consideration of $73.3 million, issuance of 0.8 million shares of common stock valued at $13.4 million and contingent payments with a fair value of $8.3 million. As a result, we recognized goodwill of $62.0 million and other intangible assets of $39.1 million, with a weighted average life of 5.9 years. Such acquisitions were not significant individually or in the aggregate to our condensed consolidated financial statements. Acquisition-Related Costs, net Acquisition-related costs include costs related to business acquisitions. These costs consist of (i) transition and integration costs, including retention payments, transitional employee costs and earn-out payments, and other costs related to integration activities; (ii) professional service fees, including financial advisory, legal, accounting, and other outside services incurred in connection with acquisition activities, and disputes and regulatory matters related to acquired entities; and (iii) fair value adjustments to acquisition-related contingencies. A summary of acquisition-related costs, net is as follows (dollars in thousands):
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets The changes in the carrying amount of goodwill by reportable segment for the nine months ended June 30, 2018 are as follows (dollars in thousands): Goodwill
(a) Represents accumulated impairment charge as of June 30, 2018. Other Intangible Assets The changes in the carrying amount of intangible assets for the nine months ended June 30, 2018 are as follows (dollars in thousands):
Interim Impairment Analysis As more fully described in Note 17, effective the second quarter of fiscal year 2018, our Automotive business, which was previously included within our former Mobile segment, became a standalone operating segment. In addition, we moved our Dragon TV business from our former Mobile operating segment into our Enterprise operating segment. As a result of the reorganization, the original Mobile reporting unit was separated into three discrete lines of business comprised of Automotive, Dragon TV, and Devices. We assigned $1,080.5 million, $12.0 million, and $36.0 million of goodwill to Automotive, Dragon TV and Devices, respectively, based on their relative fair values as of March 31, 2018, and assessed the assigned goodwill for impairment by comparing each component’s fair value to its carrying amount. The fair values of Automotive and Dragon TV significantly exceeded their carrying amounts. However, the carrying value of Devices exceeded its fair value by $35.1 million. The standalone multi-year operating plan reflects the ongoing consolidation of our handset manufacturer customer base and continued erosion of our penetration of the remaining market. As a result, we recorded a $35.1 million goodwill impairment for the second quarter of fiscal 2018. After the impairment charge, the goodwill assigned to Devices as of March 31, 2018 was immaterial. The reorganization did not result in any impairment charge of other intangible assets. Also during the second quarter of fiscal 2018, our Subscriber Revenue Services ("SRS") reporting unit, originally included within our former Mobile operating segment, recorded significantly lower revenue and profitability due to recent market disruptions in certain markets that we serve. Our SRS business provides value-added services to mobile operators in emerging markets, primarily in India and Brazil. These markets have experienced recent and dramatic disruption as a result of accelerated change in competition and business models for our mobile operator customers. Specifically, the rapid shift away from a model where voice, data and text are offered separately toward unlimited bundled services at considerably lower costs has significantly reduced mobile operators’ demand for our services. This reduced demand materially impacts our future expectations for SRS revenues. As a result, executive management performed an updated strategic assessment and reduced the long-term growth rates and profitability contemplated in SRS's multi-year operating plan. We concluded that these financial results coupled with the rapid market shifts being experienced in the industry were factors that represented impairment indicators, triggering a review of goodwill and indefinite-lived intangible assets for impairment during the second quarter of fiscal 2018. Based on the result of the impairment assessment, the carrying value of SRS exceeded its fair value by $94.3 million. In addition, we recorded an $8.5 million deferred tax benefit related to SRS’s goodwill, which is amortized over time for tax purposes, and therefore increased the impairment charge by the same amount. As a result, we recorded a goodwill impairment charge of $102.8 million related to SRS for the second quarter of fiscal 2018. After the impairment charge, goodwill assigned to SRS was $17.8 million as of March 31, 2018. The assessment did not result in any impairment charge of other intangible assets. For the purpose of the goodwill impairment analysis, the carrying value of each reporting unit is determined based on the allocation of assets and liabilities to the reporting unit based on the reporting unit’s revenue and operating expenses as a percentage of our consolidated revenue and operating expenses. Certain corporate assets and liabilities that are not directly attributable to the reporting unit’s operations and would not be transferred to a hypothetical purchaser of the reporting unit are excluded from the reporting unit’s carrying amount. The fair value of a reporting unit is generally determined using a combination of the income approach and the market approach, where the income approach is weighted 50% and the market approach 50%. The fair values of Devices and Dragon TV, however, were determined solely based upon the income approach due to the lack of comparable public companies or comparable acquisitions. For the income approach, fair value is determined based on the present value of estimated future after-tax cash flows, discounted at an appropriate risk-adjusted rate. We use our internal forecasts to estimate future after-tax cash flows and estimate the long-term growth rates based on our most recent views of the long-term outlook for each reporting unit. Actual results may differ from those assumed in our forecasts. We derive our discount rates using a capital asset pricing model and analyzing published rates for industries relevant to our reporting units to estimate the weighted average cost of capital. We use discount rates that are commensurate with the risks and uncertainty inherent in the respective businesses and in our internally developed forecasts. For the market approach, we use a valuation technique in which values are derived based on valuation multiples of comparable publicly traded companies. We assess each valuation methodology based upon the relevance and availability of the data at the time we perform the valuation and weight the methodologies appropriately. Determining the fair value of a reporting unit involves the use of significant estimates and assumptions, all of which we believe are reasonable but nevertheless inherently uncertain. These estimates and assumptions include revenue growth rates and operating margins used to estimate future cash flows, risk-adjusted discount rates, future economic and market conditions, and the use of market comparables. Additionally, if we continue to experience lower-than-expected growth in a reporting unit or fail to sustain our profitability due to changing market dynamics, competition or technological obsolescence, it could adversely impact the long-term assumptions used in our goodwill impairment analysis. Such changes in assumptions and estimates may result in additional impairment of our goodwill and/or other long-lived assets, which could materially impact our future results of operations and financial conditions. Finally, as we continue to identify and assess other initiatives to better align our segment reporting structure with our long-term strategies, any additional changes in our organizational and segment reporting structure may result in additional impairment charges of goodwill and other intangible assets. |
Financial Instruments and Hedging Activities |
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Financial Instruments and Hedging Activities | Financial Instruments and Hedging Activities Derivatives Not Designated as Hedges Forward Currency Contracts We utilize foreign currency forward contracts to mitigate the risks associated with changes in foreign currency exchange rates. Generally, we enter into such contracts for less than 90 days and have no cash requirements until maturity. At June 30, 2018 and September 30, 2017, we had outstanding contracts with a total notional value of $90.8 million and $69.0 million, respectively. We did not designate any forward contracts as hedging instruments for the nine months ended June 30, 2018 or 2017. Therefore, changes in fair value of foreign currency forward contracts were recognized within other expense, net in our condensed consolidated statements of operations. The cash flows related to the settlement of forward contracts not designated as hedging instruments are included in cash flows from investing activities within our condensed consolidated statement of cash flows. A summary of the derivative instruments is as follows (dollars in thousands):
A summary of loss related to the derivative instruments for the nine months ended June 30, 2018 and 2017 is as follows (dollars in thousands):
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Fair Value Measures |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measures | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. Valuation techniques must maximize the use of observable inputs and minimize the use of unobservable inputs. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. The determination of the applicable level within the hierarchy of a particular financial asset or liability depends on the lowest level of inputs that are significant to the fair value measurement as of the measurement date as follows:
Assets and liabilities measured at fair value on a recurring basis at June 30, 2018 and September 30, 2017 consisted of the following (dollars in thousands):
As of September 30, 2017, $80.2 million of debt securities included within marketable securities were designated as held-to-maturity investments, which had a weighted average maturity of 0.27 years and an estimated fair value of $80.4 million based on Level 2 measurements. No debt securities were designated as held-to-maturity investments as of June 30, 2018. The estimated fair value of our long-term debt approximated $2,488.9 million (face value $2,587.0 million) as of June 30, 2018 and $2,930.9 million (face value $2,918.1 million) as of September 30, 2017 based on Level 2 measurements. The fair value of each borrowing was estimated using the average of the bid and ask trading quotes at each respective reporting date. There was no balance outstanding under our revolving credit agreement as of June 30, 2018 or September 30, 2017. Additionally, contingent acquisition payments are recorded at fair values upon the acquisition, and remeasured in subsequent reporting periods with the changes in fair values recorded within acquisition-related costs, net. Such payments are contingent upon the achievement of specified performance targets and are valued using the option pricing model with Monte Carlo simulation or the probability-weighted discounted cash flow model. The following table provides a summary of changes in the aggregate fair value of the contingent acquisition payments for all periods presented (dollars in thousands):
Contingent acquisition payments are to be made in periods through fiscal year 2021. As of June 30, 2018, the maximum amount payable based on the agreements was $17.5 million if the specified performance targets are achieved. |
Accrued Expenses and Other Current Liabilities |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (dollars in thousands):
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Deferred Revenue |
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Deferred Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Revenue | Deferred Revenue Deferred maintenance revenue consists of prepaid fees received for post-contract customer support for our products, including telephone support and the right to receive unspecified upgrades/updates on a when-and-if-available basis. Unearned revenue includes fees for up-front setup of the service environment; fees charged for on-demand service; certain software arrangements for which we do not have fair value of post-contract customer support, resulting in ratable revenue recognition for the entire arrangement on a straight-line basis; and fees in excess of estimated earnings on percentage-of-completion service contracts. Deferred revenue consisted of the following (dollars in thousands):
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Restructuring and Other Charges, net |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities Disclosure [Text Block] | Restructuring and Other Charges, net Restructuring and other charges, net include restructuring expenses together with other charges that are unusual in nature, are the result of unplanned events, or arise outside of the ordinary course of our business. The following table sets forth accrual activity relating to restructuring reserves for the nine months ended June 30, 2018 (dollars in thousands):
While restructuring and other charges, net are excluded from our calculation of segment profit, the table below presents the restructuring and other charges, net associated with each segment (dollars in thousands):
Fiscal Year 2018 For the nine months ended June 30, 2018, we recorded restructuring charges of $22.7 million, which included $17.7 million related to the termination of approximately 160 employees and $4.9 million related to certain excess facilities. Of these amounts, $11.0 million was recorded for the three months ended June 30, 2018, which included $9.0 million related to employee termination and $1.9 million related to certain excess facilities. These actions were part of our strategic initiatives focused on investment rationalization, process optimization and cost reduction. We expect the remaining outstanding severance of $4.8 million to be substantially paid during fiscal year 2018, and the remaining balance of $8.5 million related to excess facilities to be paid through fiscal year 2025, in accordance with the terms of the applicable leases. Additionally, for the nine months ended June 30, 2018, we recorded a $5.7 million expense related to the transition agreement of our former CEO and a $7.2 million expense related to our remediation and restoration efforts after the malware incident that occurred in the third quarter of fiscal year 2017 (the "2017 Malware Incident"), offset in part by a $2.5 million income related to cash receipt from insurance claims related to the 2017 Malware Incident. For the three months ended June 30, 2018, we recorded a $2.5 million income related to cash receipt from insurance claims related to the 2017 Malware Incident and a $1.1 million expense related to the CEO transition. The cash payments associated with the CEO transition agreement are expected to be made through fiscal year 2020. Fiscal Year 2017 For the nine months ended June 30, 2017, we recorded restructuring charges of $18.0 million, which included $12.3 million related to the termination of approximately 300 employees and $5.7 million related to certain excess facilities. Of these amounts, $5.6 million was recorded for the three months ended June 30, 2017, which included $4.1 million related to employee termination and $1.6 million related to certain excess facilities. These actions were part of our strategic initiatives focused on process optimization and cost reduction. Additionally, for the nine months ended June 30, 2017, we recorded $5.8 million related to the transition agreement of our former CEO, $10.8 million of non-cash impairment charge related to an internally developed software, and $5.2 million professional services fees and fixed asset impairment related to the 2017 Malware Incident. Of these amounts, $2.3 million related to the CEO transition and $5.2 million professional services fees and fixed asset impairment related to the 2017 Malware Incident were recorded for the three months ended June 30, 2017. |
Debt and Credit Facilities |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Credit Facilities | Debt As of June 30, 2018 and September 30, 2017, we had the following borrowing obligations (dollars in thousands):
The following table summarizes the maturities of our borrowing obligations as of June 30, 2018 (dollars in thousands):
5.625% Senior Notes due 2026 In December 2016, we issued $500.0 million aggregate principal amount of 5.625% Senior Notes due on December 15, 2026 (the "2026 Senior Notes") in a private placement. The proceeds from the 2026 Senior Notes were approximately $495.0 million, net of issuance costs, and we used the proceeds to repurchase a portion of our 2020 Senior Notes. The 2026 Senior Notes bear interest at 5.625% per year, payable in cash semi-annually in arrears, beginning on June 15, 2017. The 2026 Senior Notes are unsecured senior obligations and are guaranteed on an unsecured senior basis by certain of our domestic subsidiaries ("Subsidiary Guarantors"). The 2026 Senior Notes and the guarantees rank equally in right of payment with all of our and the Subsidiary Guarantors’ existing and future unsecured senior debt and rank senior in right of payment to all of our and the Subsidiary Guarantors’ future unsecured subordinated debt. The 2026 Senior Notes and guarantees effectively rank junior to all our secured debt and that of the Subsidiary Guarantors to the extent of the value of the collateral securing such debt and to all liabilities, including trade payables, of our subsidiaries that have not guaranteed the 2026 Senior Notes. At any time before December 15, 2021, we may redeem all or a portion of the 2026 Senior Notes at a redemption price equal to 100% of the aggregate principal amount of the 2026 Senior Notes to be redeemed, plus a “make-whole” premium and accrued and unpaid interest to, but excluding, the redemption date. At any time on or after December 15, 2021, we may redeem all or a portion of the 2026 Senior Notes at certain redemption prices expressed as percentages of the principal amount, plus accrued and unpaid interest to, but excluding, the redemption date. 5.375% Senior Notes due 2020 In August 2012, we issued $700.0 million aggregate principal amount of 5.375% Senior Notes due on August 15, 2020 in a private placement. In October 2012, we issued an additional $350.0 million aggregate principal amount of our 5.375% Senior Notes (collectively the “2020 Senior Notes”). The 2020 Senior Notes bear interest at 5.375% per year, payable in cash semi-annually in arrears. The 2020 Senior Notes are our unsecured senior obligations and are guaranteed on an unsecured senior basis by certain of our domestic subsidiaries, ("the Subsidiary Guarantors"). The 2020 Senior Notes and guarantees rank equally in right of payment with all of our and the Subsidiary Guarantors' existing and future unsecured senior debt and rank senior in right of payment to all of our and the Subsidiary Guarantors' future unsecured subordinated debt. The 2020 Senior Notes and guarantees effectively rank junior to all secured debt of our and the Subsidiary Guarantors to the extent of the value of the collateral securing such debt and to all liabilities, including trade payables, of our subsidiaries that have not guaranteed the 2020 Senior Notes. In January 2017, we repurchased $600.0 million in aggregate principal amount of our 2020 Senior Notes using cash and cash equivalents and the net proceeds from our 2026 Senior Notes issued in December 2016. In January 2017, we recorded an extinguishment loss of $18.6 million. In accordance with the authoritative guidance for debt instruments, a loss on extinguishment is equal to the difference between the reacquisition price and the net carrying amount of the extinguished debt, including any unamortized debt discount or issuance costs. Following this activity, $450.0 million in aggregate principal amount of our 2020 Senior Notes remains outstanding. At any time on or after August 15, 2018, we may redeem any or all or a portion of the 2020 Senior Notes at a redemption price equal to 100% of the aggregate principal amount, plus any accrued and unpaid interest to, but excluding, the redemption date. On August 1, 2018, our Board of Directors authorized the repayment of $150 million of our 2020 Senior Notes, which is expected to be made in September 2018. 6.0% Senior Notes due 2024 In June 2016, we issued $300.0 million aggregate principal amount of 6.0% Senior Notes due on July 1, 2024 (the "2024 Senior Notes") in a private placement. The proceeds from the 2024 Senior Notes were approximately $297.5 million, net of issuance costs. The 2024 Senior Notes bear interest at 6.0% per year, payable in cash semi-annually in arrears. The 2024 Senior Notes are unsecured senior obligations and are guaranteed on an unsecured senior basis by our Subsidiary Guarantors. The 2024 Senior Notes and the guarantees rank equally in right of payment with all of our and the Subsidiary Guarantors’ existing and future unsecured senior debt, and rank senior in right of payment to all of our and the Subsidiary Guarantors’ future unsecured subordinated debt. The 2024 Senior Notes and guarantees effectively rank junior to all our secured debt and that of the Subsidiary Guarantors to the extent of the value of the collateral securing such debt and to all liabilities, including trade payables, of our subsidiaries that have not guaranteed the 2024 Senior Notes. At any time before July 1, 2019, we may redeem all or a portion of the 2024 Senior Notes at a redemption price equal to100% of the aggregate principal amount of the 2024 Senior Notes to be redeemed, plus a “make-whole” premium and accrued and unpaid interest to, but excluding, the redemption date. At any time on or after July 1, 2019, we may redeem all or a portion of the 2024 Senior Notes at certain redemption prices expressed as percentages of the principal amount, plus accrued and unpaid interest to, but excluding, the redemption date. 1.0% Convertible Debentures due 2035 In December 2015, we issued $676.5 million in aggregate principal amount of 1.0% Senior Convertible Debentures due in 2035 (the “1.0% 2035 Debentures”) in a private placement. We used a portion of the proceeds to repurchase $38.3 million in aggregate principal on our 2.75% Senior Convertible Debentures due in 2031 and to repay the aggregate principal balance of $472.5 million on the term loan. Upon the repurchase and repayment of debts in December 2015, we recorded an extinguishment loss of $4.9 million in other expense, net, in the accompanying consolidated statements of operations. The 1.0% 2035 Debentures bear interest at 1.0% per year, payable in cash semi-annually in arrears. The 1.0% 2035 Debentures mature on December 15, 2035, subject to the right of the holders to require us to redeem the 1.0% 2035 Debentures on December 15, 2022, 2027, or 2032. The 1.0% 2035 Debentures are general senior unsecured obligations and rank equally in right of payment with all of our existing and future unsecured, unsubordinated indebtedness and senior in right of payment to any indebtedness that is contractually subordinated to the 1.0% 2035 Debentures. The 1.0% 2035 Debentures will be effectively subordinated to indebtedness and other liabilities of our subsidiaries. The initial conversion price is approximately $27.22 per share. At issuance, we allocated $495.4 million to long-term debt, and $181.1 million has been recorded as additional paid-in capital, which is being amortized to interest expense using the effective interest rate method through December 2022. As of June 30, 2018, none of the conversion criteria were met for the 1.0% 2035 Debentures. If the conversion criteria were met, we could be required to repay all or some of the aggregate principal amount in cash prior to the maturity date. 2.75% Convertible Debentures due 2031 In October 2011, we issued $690.0 million in aggregate principal amount of 2.75% Senior Convertible Debentures due in 2031 (the “2031 Debentures”) in a private placement. The 2031 Debentures bear interest at 2.75% per year, payable in cash semi-annually in arrears. The 2031 Debentures mature on November 1, 2031, subject to the right of the holders to require us to redeem the 2031 Debentures on November 1, 2017, 2021, and 2026. The 2031 Debentures are general senior unsecured obligations and rank equally in right of payment with all of our existing and future unsecured, unsubordinated indebtedness and senior in right of payment to any indebtedness that is contractually subordinated to the 2031 Debentures. The 2031 Debentures will be effectively subordinated to indebtedness and other liabilities of our subsidiaries. The initial conversion price is approximately $32.30 per share. At issuance, we allocated $533.6 million to long-term debt, and $156.4 million has been recorded as additional paid-in capital, which is being amortized to interest expense using the effective interest rate method through November 2017. In June 2015, we entered into separate privately negotiated agreements with certain holders of our 2031 Debentures to exchange, in a private placement, $256.2 million in aggregate principal amount of our 2031 Debentures for approximately $263.9 million in aggregate principal amount of our 1.5% 2035 Debentures. In December 2015, we entered into separate privately negotiated agreements with certain holders of our 2031 Debentures to repurchase $38.3 million in aggregate principal with proceeds received from the issuance of our 1.0% 2035 Debentures. In March 2017, we entered into separate privately negotiated agreements with certain holders of our 2031 Debentures to repurchase $17.8 million in aggregate principal with proceeds received from the issuance of our 1.25% Senior Convertible Debentures issued in March 2017. Following these activities, $377.7 million in aggregate principal amount of our 2031 Debentures remained outstanding as of September 30, 2017, which was included within the total current liabilities. In November 2017, holders of approximately $331.2 million in aggregate principal amount of the outstanding 2031 Debentures exercised their right to require us to repurchase such debentures. Following the repurchase, $46.6 million in aggregate principal amount of the 2031 Debentures remains outstanding. On or after November 6, 2017, we have the right to call for redemption of some or all of the remaining outstanding 2031 Debentures. 1.25% Convertible Debentures due 2025 In March 2017, we issued $350.0 million in aggregate principal amount of 1.25% Senior Convertible Debentures due in 2025 (the “1.25% 2025 Debentures”) in a private placement. The proceeds were approximately $343.6 million, net of issuance costs. We used a portion of the proceeds to repurchase 5.8 million shares of our common stock for $99.1 million and $17.8 million in aggregate principal on our 2031 Debentures. We used the remaining net proceeds, together with cash on hand to redeem and retire $331.2 million of our outstanding 2031 Debentures in November 2017. The 1.25% 2025 Debentures bear interest at 1.25% per year, payable in cash semi-annually in arrears, beginning on October 1, 2017. The 1.25% 2025 Debentures mature on April 1, 2025. The 1.25% 2025 Debentures are general senior unsecured obligations and rank equally in right of payment with all of our existing and future unsecured, unsubordinated indebtedness and senior in right of payment to any indebtedness that is contractually subordinated to the 1.25% 2025 Debentures. The 1.25% 2025 Debentures will be effectively subordinated to indebtedness and other liabilities of our subsidiaries. We account separately for the liability and equity components of the 1.25% 2025 Debentures in accordance with authoritative guidance for convertible debt instruments that may be settled in cash upon conversion. The guidance requires the carrying amount of the liability component to be estimated by measuring the fair value of a similar liability that does not have an associated conversion feature and record the remainder in stockholders’ equity. At issuance, we allocated $252.1 million to long-term debt, and $97.9 million has been recorded as additional paid-in capital, which is being amortized to interest expense using the effective interest rate method through April 1, 2025. If converted, the principal amount of the 1.25% 2025 Debentures is payable in cash and any amounts payable in excess of the principal amount will (based on an initial conversion rate, which represents an initial conversion price of approximately $22.22 per share, subject to adjustment under certain circumstances) be paid in cash or shares of our common stock, at our election, only in the following circumstances and to the following extent: (i) prior to October 1, 2024, on any date during any fiscal quarter beginning after June 30, 2017 (and only during such fiscal quarter) if the closing sale price of our common stock was more than 130% of the then current conversion price for at least 20 trading days in the period of the 30 consecutive trading days ending on the last trading day of the previous fiscal quarter; (ii) at any time on or after October 1, 2024, (iii) during the five consecutive business-day period immediately following any five consecutive trading-day period in which the trading price for $1,000 principal amount of the 1.25% 2025 Debentures for each day during such five trading-day period was less than 98% of the closing sale price of our common stock multiplied by the then current conversion rate; or (iv) upon the occurrence of specified corporate transactions, as described in the indenture for the 1.25% 2025 Debentures. We may not redeem the 1.25% 2025 Debentures prior to the maturity date. If we undergo a fundamental change or non-stock change of control (as described in the indenture for the 1.25% 2025 Debentures) prior to maturity, holders will have the option to require us to repurchase all or any portion of their debentures for cash at a price equal to 100% of the principal amount of the 1.25% 2025 Debentures to be purchased plus any accrued and unpaid interest, including any additional interest to, but excluding, the repurchase date. As of June 30, 2018, none of the conversion criteria were met for the 1.25% 2025 Debentures. If the conversion criteria were met, we could be required to repay all or some of the aggregate principal amount in cash prior to the maturity date. 1.50% Convertible Debentures due 2035 In June 2015, we issued $263.9 million in aggregate principal amount of 1.50% Senior Convertible Debentures due in 2035 (the “1.5% 2035 Debentures”) in exchange for $256.2 million in aggregate principal amount of our 2031 Debentures. The 1.5% 2035 Debentures were issued at 97.09% of the principal amount, which resulted in a discount of $7.7 million. The 1.5% 2035 Debentures bear interest at 1.50% per year, payable in cash semi-annually in arrears. The 1.5% 2035 Debentures mature on November 1, 2035, subject to the right of the holders to require us to redeem the 1.5% 2035 Debentures on November 1, 2021, 2026, or 2031. The 1.5% 2035 Debentures are general senior unsecured obligations and rank equally in right of payment with all of our existing and future unsecured, unsubordinated indebtedness and senior in right of payment to any indebtedness that is contractually subordinated to the 1.5% 2035 Debentures. The 1.5% 2035 Debentures will be effectively subordinated to indebtedness and other liabilities of our subsidiaries. The initial conversion price is approximately $23.26 per share. At issuance, we allocated $208.6 million to long-term debt, and $55.3 million has been recorded as additional paid-in capital, which is being amortized to interest expense using the effective interest rate method through November 2021. As of June 30, 2018, none of the conversion criteria were met for the 1.5% 2035 Debentures. If the conversion criteria were met, we could be required to repay all or some of the aggregate principal amount in cash prior to the maturity date. Revolving Credit Facility Our revolving credit agreement (the “Revolving Credit Facility”), which expires on April 15, 2021, provides for aggregate borrowing commitments of $242.5 million, including the revolving facility loans, the swingline loans and issuance of letters of credit. As of June 30, 2018, after taking into account the outstanding letters of credit of $6.8 million, we had $235.7 million available for borrowing under the Revolving Credit Facility. The borrowing outstanding under the Revolving Credit Facility bears interest at either (i) LIBOR plus an applicable margin of 1.50% or 1.75%, or (ii) the alternative base rate plus an applicable margin of 0.50% or 0.75%. The Revolving Credit Facility is secured by substantially all our assets. The Revolving Credit Facility contains customary affirmative and negative covenants and conditions to borrowing, as well as customary events of default. As of June 30, 2018, we are in compliance with all the debt covenants. |
Stockholders' Equity Stockholders' Equity (Notes) |
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Stockholders' Equity Attributable to Parent [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Stockholders' Equity Share Repurchases On April 29, 2013, our Board of Directors approved a share repurchase program for up to $500.0 million, which was increased by $500.0 million on April 29, 2015. Under the terms of the share repurchase program, we have the ability to repurchase shares through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades, accelerated stock repurchase transactions, or any combination of such methods. The share repurchase program does not require us to acquire any specific number of shares and may be modified, suspended, extended or terminated by us at any time without prior notice. The timing and the amount of any purchases will be determined by management based on an evaluation of market conditions, capital allocation alternatives, and other factors. For the three and nine months ended June 30, 2018, we repurchased 8.1 million shares of our common stock for $112.0 million under the program. For the nine months ended June 30, 2017, we repurchased 5.8 million shares of our common stock for $99.1 million under the program. Since the commencement of the program, we have repurchased an aggregate of 54.6 million shares for $918.6 million. The amount paid in excess of par value is recognized in additional paid in capital. Shares were retired upon repurchase. As of June 30, 2018, approximately $81.4 million remained available for future repurchases under the program. On August 1, 2018, our Board of Directors approved an additional $500.0 million under our share repurchase program. Since the beginning of the fourth quarter of fiscal year 2018, we have repurchased approximately 1.1 million shares of our common stock for approximately $16.0 million. |
Net Income (Loss) Per Share |
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Earnings Per Share, Basic and Diluted [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net (Loss) Income Per Share | Net Loss Per Share The following table sets forth the computation for basic and diluted net loss per share (dollars in thousands, except per share amounts):
(a) For all periods presented, there is no dilutive effect of equity instruments as the impact of these items is anti-dilutive due to the net loss incurred. (b) Contingently issuable awards were excluded from the determination of dilutive net income per share as the conditions were not met at the end of the reporting period. |
Stock-Based Compensation |
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Share-based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation On February 28, 2018, our shareholders approved amendments to the Company’s amended and restated 2000 Stock Plan (the “Amended and Restated 2000 Stock Plan”). The Amended and Restated 2000 Stock Plan (i) increases the number of shares issuable by 6,400,000 to 82,250,000 shares; (ii) prohibits the payment of dividends relating to unvested awards unless and until such awards become vested; and (iii) prohibits shares that are withheld for taxes or to pay the exercise price of options or stock appreciation rights, or that are reacquired on the open market or otherwise using cash from option exercises, from becoming available for future grant under the Amended and Restated 2000 Stock Plan. As of June 30, 2018, we had 13.4 million shares available for future grants under the Amended and Restated 2000 Stock Plan. We recognize stock-based compensation expenses over the requisite service periods. Our share-based awards are classified within equity. The amounts included in the condensed consolidated statements of operations related to stock-based compensation are as follows (dollars in thousands):
Stock Options The table below summarizes activities related to stock options for the nine months ended June 30, 2018:
The aggregate intrinsic value of stock options exercised during the nine months ended June 30, 2018 and 2017 was $0.04 million and $3.6 million, respectively. Restricted Units Restricted units are not included in issued and outstanding common stock until the shares are vested and released. The purchase price for vested restricted units is $0.001 per share. The table below summarizes activities relating to restricted units for the nine months ended June 30, 2018:
A summary of the weighted-average grant-date fair value of restricted units granted, and the aggregate intrinsic value of restricted units vested during the periods noted is as follows:
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The components of loss before income taxes are as follows (dollars in thousands):
The components of provision (benefit) for income taxes are as follows (dollars in thousands):
On December 22, 2017, the Tax Cuts and Jobs Act ("TCJA") was signed into law. The TCJA significantly revises the U.S. corporate income tax by, among other things, lowering corporate income tax rates, implementing a hybrid territorial tax system, and imposing a mandatory one-time repatriation tax on foreign cash and earnings. As a result of the TCJA, we remeasured certain deferred tax assets and liabilities at the lower rates and recorded approximately $87.0 million of tax benefits for the nine months ended June 30, 2018, which also reflected a benefit of $0.5 million for the three months ended June 30, 2018 as we revised our estimates of the timing and amounts of the temporary differences. Additionally, we recorded a $2.0 million provision for the deemed repatriation of foreign cash and earnings for the nine months ended June 30, 2018. The provisional amounts above were based upon the estimates of (i) temporary differences at the end of the upcoming tax year, (ii) the timing the temporary differences are expected to reverse, (iii) foreign earnings and profits, and (iv) foreign income taxes. The assessment is incomplete as of June 30, 2018. As our assessment is ongoing, these amounts may materially change as we revise our assumptions and estimates based on new information available to us, changes in our interpretations, additional guidance to be issued, and actions we may take as a result of the TCJA. We are still evaluating the full impact of other provisions of the TCJA, which may materially increase or decrease our income tax provision. The assessment is expected to be completed no later than the first quarter of fiscal year 2019. In addition, as more fully described in Note 4, in connection with the impairment charge of SRS's goodwill, we recognized a tax benefit of $8.5 million related to the portion of deductible goodwill in Brazil for the three and nine months ended June 30, 2018. The effective tax rate for the nine months ended June 30, 2018 reflects the impact of the TCJA discussed above. For other periods presented, the effective income tax rates differ from the U.S. federal statutory rate of 25% for fiscal year 2018 and 35% for fiscal year 2017 primarily due to current period losses in the United States that require an additional valuation allowance and accordingly provide no benefit to the provision as well as an increase to indefinite lived deferred tax liabilities. This is partially offset by our earnings in foreign operations that are subject to a significantly lower tax rate than the U.S. statutory tax rate, driven primarily by our subsidiaries in Ireland. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation and Other Claims Similar to many companies in the software industry, we are involved in a variety of claims, demands, suits, investigations and proceedings that arise from time to time relating to matters incidental to the ordinary course of our business, including at times actions with respect to contracts, intellectual property, employment, benefits and securities matters. At each balance sheet date we evaluate contingent liabilities associated with these matters in accordance with ASC 450 “Contingencies.” If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss. Significant judgments are required for the determination of probability and the range of the outcomes, and estimates are based only on the best information available at the time. Due to the inherent uncertainties involved in claims and legal proceedings and in estimating losses that may arise, actual outcomes may differ from our estimates. Contingencies deemed not probable or for which losses were not estimable in one period may become probable, or losses may become estimable in later periods, which may have a material impact on our results of operations and financial position. As of June 30, 2018, accrued losses were not material to our condensed consolidated financial statements, and we do not expect any pending matter to have a material impact on our condensed consolidated financial statements. Guarantees and Other We include indemnification provisions in the contracts we enter with customers and business partners. Generally, these provisions require us to defend claims arising out of our products’ infringement of third-party intellectual property rights, breach of contractual obligations and/or unlawful or otherwise culpable conduct. The indemnity obligations generally cover damages, costs and attorneys’ fees arising out of such claims. In most, but not all cases, our total liability under such provisions is limited to either the value of the contract or a specified, agreed upon amount. In some cases, our total liability under such provisions is unlimited. In many, but not all cases, the term of the indemnity provision is perpetual. While the maximum potential amount of future payments we could be required to make under all the indemnification provisions is unlimited, we believe the estimated fair value of these provisions is minimal due to the low frequency with which these provisions have been triggered. We indemnify our directors and officers to the fullest extent permitted by Delaware law, which provides among other things, indemnification to directors and officers for expenses, judgments, fines, penalties and settlement amounts incurred by such persons in their capacity as a director or officer of the company, regardless of whether the individual is serving in any such capacity at the time the liability or expense is incurred. Additionally, in connection with certain acquisitions, we agreed to indemnify the former officers and members of the boards of directors of those companies, on similar terms as described above, for a period of six years from the acquisition date. In certain cases, we purchase director and officer insurance policies related to these obligations, which fully cover the six-year period. To the extent that we do not purchase a director and officer insurance policy for the full period of any contractual indemnification, and such directors and officers do not have coverage under separate insurance policies, we would be required to pay for costs incurred, if any, as described above. |
Segment and Geographic Information and Significant Customers |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Geographic Information and Significant Customers | Segment and Geographic Information During the first quarter of fiscal year 2018, we commenced a reorganization of our segment reporting structure to allow our Chief Operating Decision Maker ("CODM") greater focus on implementing strategic initiatives and identifying future investment opportunities. During the second quarter of fiscal year 2018, we established our Automotive business as a separate operating segment. Additionally, we moved our Dragon TV business from our former Mobile operating segment into our Enterprise operating segment to consolidate our telecommunications market resources. Finally, our SRS business and our Devices business, originally included within our former Mobile operating segment, are now presented within our Other segment. As a result, segment information for the three and nine months ended June 30, 2018 and 2017 has been recast to reflect the new segment reporting structure. Our CODM regularly reviews segment revenues and segment profits for performance evaluation and resources allocation. Segment revenues include certain acquisition-related adjustments for revenues that would otherwise have been recognized without the acquisition. Segment profits reflect controllable costs directly related to each segment and the allocation of certain corporate expenses such as, corporate sales and marketing expenses and research and development project costs that benefit multiple segments. Certain items such as stock-based compensation, amortization of intangible assets, acquisition-related costs, net, restructuring and other charges, net, other expenses, net and certain unallocated corporate expenses are excluded from segment profits, which allow for more meaningful comparisons to the financial results of the historical operations for performance evaluation and resources allocation by our CODM.
We do not track our assets by segment. Consequently, it is not practical to show assets or depreciation by segment. The following table presents segment results along with a reconciliation of segment profit to loss before income taxes (dollars in thousands):
No country outside of the United States provided greater than 10% of our total revenues. Revenues, classified by the major geographic areas in which our customers are located, were as follows (dollars in thousands):
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Supplemental Cash Flow (Notes) |
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Supplemental Cash Flow [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Flow, Supplemental Disclosures [Text Block] | 18. Supplemental Cash Flow Information Cash paid for Interest and Income Taxes:
Non-Cash Investing and Financing Activities: From time to time, we issue shares of our common stock in connection with our business and asset acquisitions, including shares issued as payment for acquisitions, shares initially held in escrow, and shares issued as payment for contingent consideration, as more fully described in Note 3. |
Related Party Transaction (Notes) |
9 Months Ended |
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Jun. 30, 2018 | |
Related Party Transaction [Line Items] | |
Related Party Transactions Disclosure [Text Block] | 16. Related Party Transaction In January 2018, we entered into a software and license agreement (the "License Agreement") with Magnet Systems, Inc. ("Magnet"). A member of the Magnet board of directors also served on our board of directors at the time of the transaction. Pursuant to the License Agreement, Magnet granted Nuance a perpetual software license to certain technology for a one-time payment of $5.0 million in cash, with $3.5 million paid immediately upon the effective date of the License Agreement and $1.5 million payable upon the earlier of (i) the 120-day period following the effective date of the License Agreement or (ii) signature of a statement of work for the engineering services described below. Additionally, we entered into a service agreement (the "Service Agreement") with Magnet, pursuant to which, Magnet will provide engineering services to assist in integrating the licensed technology into certain of our Enterprise solutions. Based upon the statement of work signed on April 19, 2018, total fees under the Service Agreement should not exceed $2.0 million and are payable within thirty days after receipt of each invoice for services performed and accepted in accordance with the terms of the Service Agreement. |
Summary of Significant Accounting Policies Recently Issued Accounting Pronouncements (Tables) |
9 Months Ended |
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Jun. 30, 2018 | |
Recently Issued Accounting Pronouncements [Abstract] | |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Standards In January 2018, the FASB issued ASU 2018-02, "Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ("AOCI"), which is effective for fiscal years beginning after December 15, 2018 and interim periods therein, with early adoption permitted. The guidance gives entities the option to reclassify to retained earnings the tax effects resulting from the Tax Cuts and Jobs Act ("TCJA") related to items in AOCI. The new guidance may be applied retrospectively to each period in which the effect of the Act is recognized in the period of adoption. We do not expect the implementation to have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"), which is effective for fiscal years beginning after December 15, 2017 and the interim periods therein, with early adoption permitted. The guidance requires cash flows with multiple characteristics to be classified using a three-step process, including (i) determining whether explicit guidance is applicable, (ii) separating each identifiable source or use of cash flows, and (iii) determining the predominant source or use of cash flows when the source or use of cash flows cannot be separately identifiable. The guidance will be applied retrospectively to each period presented. We do not expect the implementation to have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, "Leases" ("ASU 2016-02"). ASU 2016-02 requires lessees to recognize on the balance sheet a right-of-use asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. The standard requires the use of a modified retrospective transition approach, which includes a number of optional practical expedients that entities may elect to apply. ASU 2016-02 is effective for us in the first quarter of fiscal year 2020, and early application is permitted. We are currently evaluating the impact of our pending adoption of ASU 2016-02 on our consolidated financial statements, and we currently expect that most of our operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon our adoption of ASU 2016-02, which will increase our total assets and total liabilities that we report relative to such amounts prior to adoption. In January 2016, the FASB issued ASU No. 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities" ("ASU 2016-01"). ASU 2016-01 amends the guidance on the classification and measurement of financial instruments. Although ASU 2016-01 retains many current requirements, it significantly revises accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. ASU 2016-01 also amends certain disclosure requirements associated with the fair value of financial instruments and is effective for us in the first quarter of fiscal year 2019. Based on the composition of our investment portfolio, we do not believe the adoption of ASU 2016-01 will have a material impact on our consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers: Topic 606" ("ASU 2014-09"), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 permits two methods of adoption: (i) retrospective to each prior reporting period presented; or (ii) retrospective with the cumulative effect of initially applying the guidance recognized at the date of initial application. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which deferred the effective date of the new revenue standard for periods beginning after December 15, 2016 to December 15, 2017, with early adoption permitted but not earlier than the original effective date. ASU 2014-09 is effective for us beginning on October 1, 2018 and we plan to adopt ASU 2014-09 using the cumulative catch-up transition method, with a cumulative adjustment to retained earnings as opposed to retrospectively adjusting prior periods. In the first quarter of fiscal 2017, we commenced a project to assess the potential impact of the new standard on our consolidated financial statements and related disclosures. This project also includes the assessment and enhancement of our internal processes, controls and systems to address the new standard. While we are continuing to assess all potential impacts of ASU 2014-09, we currently believe the most significant impact relates to our accounting for arrangements that include term-based software licenses bundled with other performance obligations including (i) maintenance and support and (ii) professional services. A significant number of our Healthcare and Imaging customer contracts include term-based software licenses bundled with other performance obligations. Under current GAAP, the revenue attributable to these software licenses is recognized ratably over the term of the arrangement because vendor-specific objective evidence ("VSOE") does not exist for the undelivered maintenance and support element as it is not sold separately. Under ASU 2014-09, the requirement to have VSOE for undelivered elements to enable the separation of revenue for the delivered software licenses is eliminated. Accordingly, under the new standard we will be required to recognize term-based software revenue as control is transferred and based upon the amount proportionally allocated to the term-based software license from the contract transaction price. We do not currently expect ASU 2014-09 to have a significant effect on the timing of revenue related to our renewal maintenance, professional services and cloud offerings. Another significant provision under ASU 2014-09 includes the capitalization and amortization of costs associated with obtaining a contract, such as sales commissions. Currently, we expense sales commissions in the period incurred. Under ASU 2014-09, direct and incremental costs to acquire a contract are capitalized and amortized over the pattern of transfer of the goods and services to which the asset relates. While we are continuing to assess the impact of this provision of ASU 2014-09, we likely will be required to capitalize a significant amount of our sales commission costs. |
Goodwill and Intangible Assets (Tables) |
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Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill and Intangible Assets | The changes in the carrying amount of goodwill by reportable segment for the nine months ended June 30, 2018 are as follows (dollars in thousands): |
Financial Instruments and Hedging Activities (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quantitative Summary of Fair Value of Derivative Instruments | A summary of the derivative instruments is as follows (dollars in thousands):
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Summarized Activity of Derivative Instruments | A summary of loss related to the derivative instruments for the nine months ended June 30, 2018 and 2017 is as follows (dollars in thousands):
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Fair Value Measures (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis at June 30, 2018 and September 30, 2017 consisted of the following (dollars in thousands):
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Changes in Fair Value of Contingent Earn-Out Liabilities | The following table provides a summary of changes in the aggregate fair value of the contingent acquisition payments for all periods presented (dollars in thousands):
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Accrued Expenses and Other Current Liabilities (Tables) |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following (dollars in thousands):
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Deferred Revenue (Tables) |
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Deferred Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Revenue | Deferred revenue consisted of the following (dollars in thousands):
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Restructuring and Other Charges, net (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrual Activity Relating to Restructuring and Other Charges | The following table sets forth accrual activity relating to restructuring reserves for the nine months ended June 30, 2018 (dollars in thousands):
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Restructuring and Other Charges, Net by Segment |
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Debt and Credit Facilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Maturities of Long-term Debt [Table Text Block] | The following table summarizes the maturities of our borrowing obligations as of June 30, 2018 (dollars in thousands):
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Borrowing Obligations and Applicable Margin for Borrowings | As of June 30, 2018 and September 30, 2017, we had the following borrowing obligations (dollars in thousands):
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Net Income (Loss) Per Share (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income (Loss) per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table sets forth the computation for basic and diluted net loss per share (dollars in thousands, except per share amounts):
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Stock-Based Compensation (Tables) |
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Share-based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Based Compensation Included in Consolidated Statements of Operations | The amounts included in the condensed consolidated statements of operations related to stock-based compensation are as follows (dollars in thousands):
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Summary of Stock Options Activity | The table below summarizes activities related to stock options for the nine months ended June 30, 2018:
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Summary of Activity Relating to Restricted Units and Restricted Stock Awards | he table below summarizes activities relating to restricted units for the nine months ended June 30, 2018:
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Summary of Weighted-Average Grant-Date Fair Value and Intrinsic Value of Restricted Units and Restricted Stock Awards Vested | A summary of the weighted-average grant-date fair value of restricted units granted, and the aggregate intrinsic value of restricted units vested during the periods noted is as follows:
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Income Taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Benefit from Income Taxes | The components of loss before income taxes are as follows (dollars in thousands):
The components of provision (benefit) for income taxes are as follows (dollars in thousands):
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Segment and Geographic Information and Significant Customers (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Results Along with Reconciliation of Segment Profit to Income Before Income Taxes | The following table presents segment results along with a reconciliation of segment profit to loss before income taxes (dollars in thousands):
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Classification of Revenue By Major Geographic Areas | Revenues, classified by the major geographic areas in which our customers are located, were as follows (dollars in thousands):
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Supplemental Cash Flow (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | Cash paid for Interest and Income Taxes:
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Summary of Significant Accounting Policies Recently Adopted Accounting Standards (Details) $ in Millions |
9 Months Ended |
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Jun. 30, 2018
USD ($)
| |
Accounting Policies [Abstract] | |
Other Comprehensive Income (Loss), Tax | $ 0.9 |
Business Acquisitions (Components of Acquisition-Related Costs, Net) (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Business Acquisition [Line Items] | ||||
Document Period End Date | Jun. 30, 2018 | |||
Transition and integration costs | $ 5,370 | $ 3,722 | $ 12,799 | $ 11,044 |
Professional service fees | 1,254 | 3,905 | 2,705 | 11,896 |
Acquisition-related adjustments | (1,708) | 19 | (2,667) | (889) |
Total | $ 4,916 | $ 7,646 | $ 12,837 | $ 22,051 |
Financial Instruments and Hedging Activities (Additional Information) (Detail) - Derivatives Not Designated as Hedges - USD ($) $ in Millions |
9 Months Ended | |
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Jun. 30, 2018 |
Sep. 30, 2017 |
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Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||
Derivative, Notional Amount | $ 90.8 | $ 69.0 |
Maximum | ||
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||
Term of foreign currency forward contracts | 90 days |
Financial Instruments and Hedging Activities (Quantitative Summary of Fair Value of Derivative Instruments) (Detail) - USD ($) $ in Thousands |
9 Months Ended | |
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Jun. 30, 2018 |
Sep. 30, 2017 |
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Derivatives, Fair Value [Line Items] | ||
Document Period End Date | Jun. 30, 2018 | |
Foreign currency forward contracts | Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | $ 169 | $ 220 |
Foreign currency forward contracts | Accrued Expenses And Other Current Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | $ 353 | $ 373 |
Financial Instruments and Hedging Activities (Summarized Activity of Derivative Instruments) (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Derivative Instruments, Gain (Loss) [Line Items] | ||||
Document Period End Date | Jun. 30, 2018 | |||
Derivatives Not Designated as Hedges | Foreign currency forward contracts | Other expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | $ (1,597) | $ 175 | $ (2,381) | $ (7,885) |
Fair Value Measures Fair Value Measures - Additional Debt Details (Details) - USD ($) $ in Millions |
12 Months Ended | |
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Sep. 30, 2017 |
Jun. 30, 2018 |
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held-to-maturity securities, weighted average maturity | 3 months 9 days | |
Held-to-maturity Securities, Fair Value | $ 80.4 | |
Long-term Debt, Fair Value | 2,930.9 | $ 2,488.9 |
Debt Instrument, Face Amount | 2,918.1 | $ 2,587.0 |
Corporate Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Held-to-maturity Securities | $ 80.2 |
Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Sep. 30, 2017 |
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Payables and Accruals [Abstract] | ||
Compensation | $ 133,997 | $ 159,951 |
Cost of revenue related liabilities | 25,620 | 20,124 |
Consulting and professional fees | 15,851 | 12,649 |
Accrued interest payable | 21,735 | 26,285 |
Facility-related liabilities | 6,692 | 7,158 |
Sales and marketing incentives | 4,003 | 3,655 |
Sales and other taxes payable | 6,453 | 3,125 |
Other | 10,081 | 12,954 |
Total | $ 224,432 | $ 245,901 |
Deferred Revenue (Detail) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Sep. 30, 2017 |
---|---|---|
Total current deferred revenue | $ 389,032 | $ 366,042 |
Total long-term deferred revenue | 482,834 | 423,929 |
Deferred maintenance revenue | ||
Total current deferred revenue | 161,505 | 162,958 |
Total long-term deferred revenue | 61,736 | 60,298 |
Unearned revenue | ||
Total current deferred revenue | 227,527 | 203,084 |
Total long-term deferred revenue | $ 421,098 | $ 363,631 |
Restructuring and Other Charges, net (Accrual Activity Relating to Restructuring and Other Charges) (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Restructuring [Roll Forward] | ||||
Balance at September 30, 2017 | $ 10,705 | |||
Restructuring charges | $ 10,969 | $ 5,607 | 22,651 | $ 17,987 |
Restructuring Reserve, Accrual Adjustment | (998) | |||
Cash payments | (19,060) | |||
Balance at March 31, 2018 | 13,298 | 13,298 | ||
Personnel | ||||
Restructuring [Roll Forward] | ||||
Balance at September 30, 2017 | 1,546 | |||
Restructuring charges | 9,049 | 17,718 | ||
Restructuring Reserve, Accrual Adjustment | ||||
Cash payments | (14,460) | |||
Balance at March 31, 2018 | 4,804 | 4,804 | ||
Facilities | ||||
Restructuring [Roll Forward] | ||||
Balance at September 30, 2017 | 9,159 | |||
Restructuring charges | 1,920 | 4,933 | ||
Restructuring Reserve, Accrual Adjustment | (998) | |||
Cash payments | (4,600) | |||
Balance at March 31, 2018 | $ 8,494 | $ 8,494 |
Debt and Credit Facilities Borrowing Obligations Detail (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Sep. 30, 2017 |
---|---|---|
Borrowing Obligations Detail [Abstract] | ||
Long-term Debt, Fair Value | $ 2,488.9 | $ 2,930.9 |
Debt Instrument, Face Amount | $ 2,587.0 | $ 2,918.1 |
Debt and Credit Facilities 5.375% Senior Notes due 2020 (Details) - USD ($) $ in Thousands |
1 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jan. 31, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Sep. 30, 2017 |
Jan. 09, 2017 |
Oct. 22, 2012 |
Aug. 14, 2012 |
|
Debt Instrument [Line Items] | |||||||
Debt Instrument, Face Amount | $ 2,587,000 | $ 2,918,100 | |||||
Document Period End Date | Jun. 30, 2018 | ||||||
Loss on extinguishment of debt | $ 0 | $ 18,565 | |||||
5.375% Senior Notes due August 15, 2020 | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Face Amount | $ 450,000 | ||||||
Senior Notes, Noncurrent | $ 448,989 | $ 448,630 | $ 350,000 | $ 700,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 5.375% | 5.375% | 5.375% | ||||
Unamortized Debt Issuance Expense | $ 1,700 | $ 7,300 | |||||
Repayments of Debt | $ 600,000 | ||||||
Loss on extinguishment of debt | $ (18,600) |
Debt and Credit Facilities 6.0% Senior Notes due 2024 (Details) - USD ($) $ in Thousands |
1 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Sep. 30, 2017 |
Dec. 22, 2016 |
Jun. 21, 2016 |
|
Debt Instrument [Line Items] | ||||||
Proceeds from Issuance of Long-term Debt | $ 0 | $ 838,081 | ||||
5.625% Senior Notes due 2026 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Senior Notes, Noncurrent | $ 494,755 | $ 494,298 | $ 500,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 5.625% | 5.625% | ||||
Unamortized Debt Issuance Expense | $ 5,200 | |||||
6.0% Senior Notes due 2024 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Senior Notes, Noncurrent | $ 298,143 | $ 297,910 | $ 300,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | 6.00% | 6.00% | |||
Proceeds from Issuance of Long-term Debt | $ 297,500 | |||||
Unamortized Debt Issuance Expense | $ 1,900 |
Debt and Credit Facilities 1.5% Convertible Debentures due 2035 (Details) - USD ($) $ / shares in Units, $ in Thousands |
Jun. 30, 2018 |
Sep. 30, 2017 |
Jun. 01, 2015 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 2,587,000 | $ 2,918,100 | |
Debt Issuance Costs, Noncurrent, Net | $ 926 | $ 1,174 | |
Convertible Debentures One Point Five Percent Due November One Twenty Thirty Five [Member] [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 263,900 | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.50% | 1.50% | |
Debt Instrument, Convertible, Conversion Price | $ 23.26 | ||
Debt issuance Percentage of Principal Amount | 97.09% | ||
Debt Instrument, Unamortized Discount (Premium), Net | $ 7,700 | ||
Debt Instrument, Unamortized Discount | $ 35,300 | ||
Convertible Debt, Noncurrent | 208,600 | ||
Debt Instrument, Convertible, Carrying Amount of Equity Component | $ 55,300 |
Debt and Credit Facilities Credit Facility (Details) - USD ($) $ in Thousands |
1 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2015 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Sep. 30, 2017 |
Apr. 15, 2016 |
|
Line of Credit Facility [Line Items] | |||||
Debt Issuance Costs, Noncurrent, Net | $ 926 | $ 1,174 | |||
Loss on extinguishment of debt | 0 | $ (18,565) | |||
Revolving Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | 235,700 | $ 242,500 | |||
Letters of Credit Outstanding, Amount | $ 6,800 | ||||
Term Loan Facility Due August Seventh Twenty Ninteen [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Repayments of Debt | $ 472,500 | ||||
Loss on extinguishment of debt | $ (4,900) |
Debt and Credit Facilities 5.625% Senior Notes due December 2026 (Details) - USD ($) $ in Thousands |
1 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Jun. 30, 2018 |
Sep. 30, 2017 |
Dec. 22, 2016 |
|
Debt Instrument [Line Items] | ||||
Document Period End Date | Jun. 30, 2018 | |||
5.625% Senior Notes due 2026 [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior Notes, Noncurrent | $ 494,755 | $ 494,298 | $ 500,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 5.625% | 5.625% | ||
Proceeds from Issuance of Senior Long-term Debt | $ 495,000 | |||
Before December 15, 2021 [Member] | 5.625% Senior Notes due 2026 [Member] | ||||
Debt Instrument [Line Items] | ||||
Aggregate Principal Amount of Senior Notes, Redemption Price, Percentage | 100.00% |
Net Income (Loss) Per Share (Additional Information) (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net loss | $ (14,037) | $ (27,836) | $ (124,862) | $ (85,572) |
Weighted Average Number of Shares Outstanding, Basic | 292,663 | 287,856 | 292,703 | 289,269 |
Dilutive Securities, Effect on Basic Earnings Per Share | 0 | 0 | 0 | 0 |
Weighted Average Number of Shares Outstanding, Diluted | 292,663 | 287,856 | 292,703 | 289,269 |
Earnings Per Share, Basic | $ (0.05) | $ (0.10) | $ (0.43) | $ (0.30) |
Weighted Average Number of Shares, Contingently Issuable | 1,975 | 4,687 | 1,801 | 3,856 |
Anti-dilutive common equivalent shares excluded from computation of diluted net income (loss) per share | 4,408 | 2,797 | 3,838 | 3,792 |
Stock-Based Compensation (Summary of Weighted-Average Grant-Date Fair Value and Intrinsic Value of Restricted Units Vested) (Detail) - USD ($) $ / shares in Units, $ in Millions |
9 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Document Period End Date | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 0.0 | $ 3.6 |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average grant-date fair value per share | $ 15.76 | $ 16.10 |
Total intrinsic value of shares vested (in millions) | $ 115.3 | $ 119.2 |
Stock-Based Compensation Stock Incentive Plan (Details) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Jun. 30, 2018 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 6,400,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 82,250,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 13,400,000 |
Income Taxes Components of Income (Loss) Before Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Components of Income (Loss) before Income Taxes [Abstract] | ||||
Document Period End Date | Jun. 30, 2018 | |||
Domestic | $ (40,764) | $ (58,871) | $ (160,716) | $ (148,257) |
Foreign | 37,300 | 33,644 | (29,550) | 84,788 |
Loss before income taxes | $ (3,464) | $ (25,227) | $ (190,266) | $ (63,469) |
Income Taxes (Components of Benefit from Income Taxes) (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Income Tax Disclosure [Abstract] | ||||
Gross Income Tax Benefit from New Tax Legislation | $ 87,000 | |||
Current Income Tax Expense (Benefit) | 500 | |||
Domestic | $ 206 | $ (3,029) | (75,463) | $ 5,952 |
Foreign | 10,367 | 5,638 | 10,059 | 16,151 |
Provision (benefit) for income taxes | $ 10,573 | $ 2,609 | $ (65,404) | $ 22,103 |
Effective tax rate | (305.20%) | (10.30%) | 34.40% | (34.80%) |
One-Time Repatriation Tax | $ 2,000 | |||
Current Foreign Tax Expense (Benefit) | $ 12,000 |
Income Taxes (Additional Information) (Detail) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2018 |
|
Business Acquisition [Line Items] | ||
Current Foreign Tax Expense (Benefit) | $ (12.0) | |
Current Income Tax Expense (Benefit) | $ 0.5 | |
Subscriber Revenue Services [Member] | ||
Business Acquisition [Line Items] | ||
Goodwill, Subsequent Recognition of Deferred Tax Asset | $ 8.5 |
Commitments and Contingencies (Details) |
9 Months Ended |
---|---|
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Indemnification term for former officers and directors | 6 years |
Segment and Geographic Information and Significant Customers (Segment Results Along with Reconciliation of Segment Profit to Income Before Income Taxes) (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Segment Reporting Information [Line Items] | ||||
Segment Revenues | $ 506,030 | $ 495,624 | $ 1,533,169 | $ 1,502,740 |
Revenues | 502,887 | 486,221 | 1,518,756 | 1,473,452 |
Segment profit | 160,549 | 163,247 | 478,255 | 508,867 |
Corporate expenses and other, net | (41,586) | (31,683) | (151,342) | (92,829) |
Acquisition-related revenues | (3,143) | (9,403) | (14,413) | (29,288) |
Stock-based compensation | (35,202) | (42,331) | (106,937) | (121,809) |
Amortization of intangible assets | (37,877) | (44,887) | (113,747) | (133,418) |
Acquisition-related costs, net | (4,916) | (7,646) | (12,837) | (22,051) |
Restructuring and other charges, net | (9,237) | (13,035) | (32,986) | (39,649) |
Goodwill, Impairment Loss | 0 | 0 | 137,907 | 0 |
Other expenses, net | (32,052) | (39,489) | (98,352) | (133,292) |
Loss before income taxes | (3,464) | (25,227) | (190,266) | (63,469) |
Healthcare | ||||
Segment Reporting Information [Line Items] | ||||
Segment Revenues | 236,195 | 232,641 | 742,970 | 710,315 |
Segment profit | 77,687 | 70,457 | 242,456 | 232,353 |
Restructuring and other charges, net | (377) | (5,058) | (3,703) | (8,489) |
Goodwill, Impairment Loss | 0 | |||
Mobile And Consumer Segment | ||||
Segment Reporting Information [Line Items] | ||||
Goodwill, Impairment Loss | 0 | |||
Enterprise | ||||
Segment Reporting Information [Line Items] | ||||
Segment Revenues | 119,596 | 114,106 | 352,862 | 351,611 |
Segment profit | 33,066 | 32,420 | 96,517 | 102,686 |
Restructuring and other charges, net | (3,215) | (3,950) | (6,109) | (5,626) |
Goodwill, Impairment Loss | 0 | |||
Automotive | ||||
Segment Reporting Information [Line Items] | ||||
Segment Revenues | 73,754 | 63,100 | 204,202 | 183,699 |
Segment profit | 28,166 | 30,748 | 80,248 | 87,690 |
Restructuring and other charges, net | (1,233) | (377) | (2,233) | (1,792) |
Goodwill, Impairment Loss | 0 | |||
Imaging | ||||
Segment Reporting Information [Line Items] | ||||
Segment Revenues | 54,245 | 49,404 | 158,808 | 154,541 |
Segment profit | 18,544 | 16,943 | 46,443 | 53,029 |
Goodwill, Impairment Loss | 0 | |||
Other | ||||
Segment Reporting Information [Line Items] | ||||
Segment Revenues | 22,240 | 36,373 | 74,327 | 102,574 |
Segment profit | 3,086 | 12,679 | 12,591 | 33,109 |
Restructuring and other charges, net | (208) | 22 | (2,122) | (12,654) |
Goodwill, Impairment Loss | 137,907 | |||
Less: acquisition-related revenues adjustments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 3,143 | $ 9,403 | $ 14,413 | $ 29,288 |
Segment and Geographic Information and Significant Customers (Classification of Revenue by Major Geographic Areas) (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Document Period End Date | Jun. 30, 2018 | |||
Segment Revenues | $ 506,030 | $ 495,624 | $ 1,533,169 | $ 1,502,740 |
Total revenues | 502,887 | 486,221 | 1,518,756 | 1,473,452 |
UNITED STATES | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Segment Revenues | 362,796 | 341,826 | 1,094,695 | 1,043,933 |
International [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Segment Revenues | $ 140,091 | $ 144,395 | $ 424,061 | $ 429,519 |
Supplemental Cash Flow Supplemental Cash Flow (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Supplemental Cash Flow Elements [Abstract] | ||||
Interest Paid | $ 22,536 | $ 24,481 | $ 71,244 | $ 70,363 |
Income Taxes Paid | $ 3,139 | $ 2,211 | $ 11,972 | $ 10,847 |
Related Party Transaction (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Sep. 30, 2017 |
|
Related Party Transaction [Line Items] | ||
Document Period End Date | Jun. 30, 2018 | |
Contingent And Deferred Acquisition Payments | $ 22,259 | $ 28,860 |
Magnet [Member] | ||
Related Party Transaction [Line Items] | ||
Payments to Acquire Other Productive Assets | 5,000 | |
Technology Services Costs | 2,000 | |
Contingent And Deferred Acquisition Payments | 1,500 | |
Cash Distribution [Member] | Magnet [Member] | ||
Related Party Transaction [Line Items] | ||
Payments to Acquire Other Productive Assets | 3,500 | |
Liability [Member] | Magnet [Member] | ||
Related Party Transaction [Line Items] | ||
Payments to Acquire Other Productive Assets | $ 1,500 |
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