Disposition of Business (Notes)

6 Months Ended

Mar. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Spin-off of Automotive

On October 1, 2019, we completed the spin-off of our Automotive business as an independent public company, Cerence, and a pro rata and tax-free distribution to our stockholders of all of the outstanding shares of Cerence owned by Nuance on October 1, 2019. The distribution was made in the amount of one share of Cerence common stock for every eight shares of Nuance common stock owned by Nuance’s stockholders of record as of 5:00 p.m. Eastern Time on September 17, 2019.

In connection with the spin-off, on September 30, 2019, we sold 1.8% of our equity interest in Cerence to a non-affiliated third party for a total cash consideration of $9.8 million. The difference between the consideration received and the carrying amount of the non-controlling interest was recognized in additional paid-in capital, which was subsequently derecognized as part of the spin-off transaction. Effective as of October 1, 2019, for all periods presented, the results of operations of our former Automotive business have been included within discontinued operations.

For the six months ended March 31, 2020, we incurred cash payments of $13.3 million related to the separation and spin-off of our Automotive business, which have been presented as operating cash flows from discontinued operations.

Sale of Imaging

On February 1, 2019, we completed the sale of our Imaging business and received approximately $404.0 million in cash, after estimated transaction expenses. As a result, we recorded a gain of approximately $102.4 million, which has been included within Net income from discontinued operations.

The historical results of operations for Imaging and Automotive have been included within discontinued operations in our condensed consolidated financial statements. The following table summarizes the results of the discontinued operations (dollars in thousands):

	Three Months Ended March 31,
	2020		2019
	Automotive		Imaging			Automotive			Total
Major line items constituting net income of discontinued operations:
Revenue	$	—	$	15,435		$	72,999		$	88,434
Cost of revenue	—		4,942			22,332			27,274
Research and development	—		2,041			20,090			22,131
Sales and marketing	—		10,243			8,072			18,315
General and administrative	—		766			565			1,331
Amortization of intangible assets	—		1,305			3,132			4,437
Acquisition-related costs, net	—		—			182			182
Restructuring and other charges, net	—		4,791			11,611			16,402
Other	—		—			(266		)	(266		)
(Loss) income from discontinued operations before income taxes	—		(8,653		)	7,281			(1,372		)
(Benefit) for income taxes	—		(4,363		)	(367		)	(4,730		)
Gain on disposition	—		102,371			—			102,371
Net income from discontinued operations	$	—	$	98,081		$	7,648		$	105,729
Supplemental information:
Depreciation	$	—	$	97		$	2,065		$	2,162
Amortization	$	—	$	1,643		$	5,499		$	7,142
Stock compensation	$	—	$	5,001		$	5,073		$	10,074
Capital expenditures	$	—	$	—		$	(1,091	)	$	(1,091	)

	Six Months Ended March 31,
	2020			2019
	Automotive			Imaging			Automotive			Total
Major line items constituting net income of discontinued operations:
Revenue	$	—		$	67,430		$	146,978		$	214,408
Cost of revenue	—			16,946			51,650			68,596
Research and development	—			7,557			41,552			49,109
Sales and marketing	—			28,433			16,061			44,494
General and administrative	—			1,997			1,148			3,145
Amortization of intangible assets	—			5,219			6,264			11,483
Acquisition-related costs, net	—			(386		)	417			31
Restructuring and other charges, net	7,386			13,251			20,051			33,302
Other	—			—			(250		)	(250		)
(Loss) income from discontinued operations before income taxes	(7,386		)	(5,587		)	10,085			4,498
Provision (benefit) for income taxes	1,194			(2,688		)	(1,381		)	(4,069		)
Gain on disposition	—			102,371			—			102,371
Net (loss) income from discontinued operations	$	(6,192	)	$	99,472		$	11,466		$	110,938
Supplemental information:
Depreciation	$	—		$	391		$	4,201		$	4,592
Amortization	$	—		$	6,569		$	11,033		$	17,602
Stock compensation	$	—		$	7,103		$	9,916		$	17,019
Capital expenditures	$	—		$	—		$	(1,871	)	$	(1,871	)

The following table summarizes the assets and liabilities included within discontinued operations (dollars in thousands):

	September 30, 2019
Major classes of assets of discontinued operations:
Accounts receivable, net	$	67,928
Prepaid expenses and other current assets	23,930
Land, building and equipment, net	20,113
Goodwill	1,115,568
Intangible assets, net	65,561
Other assets	35,366
Total assets	$	1,328,466
Major classes of liabilities of discontinued operations:
Accounts payable	$	14,039
Accrued expenses and other current liabilities	27,429
Deferred revenue	353,700
Other liabilities	21,603
Total liabilities	$	416,771