Disposition of Business (Notes)

9 Months Ended

Jun. 30, 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 nine months ended June 30, 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 June 30,
	2020		2019
	Automotive		Imaging		Automotive			Total
Major line items constituting net income of discontinued operations:
Revenue	$	—	$	—	$	71,760		$	71,760
Cost of revenue	—		—		18,921			18,921
Research and development	—		—		20,524			20,524
Sales and marketing	—		—		6,898			6,898
General and administrative	—		—		587			587
Amortization of intangible assets	—		—		3,132			3,132
Acquisition-related costs, net	—		—		366			366
Restructuring and other charges, net	—		—		14,171			14,171
Other	—		—		149			149
Income from discontinued operations before income taxes	—		—		7,012			7,012
Benefit for income taxes	—		—		(2,934		)	(2,934		)
Gain on disposition	—		—		—			—
Net income from discontinued operations	$	—	$	—	$	9,946		$	9,946
Supplemental information:
Depreciation	$	—	$	—	$	1,993		$	1,993
Amortization	$	—	$	—	$	5,458		$	5,458
Stock compensation	$	—	$	—	$	5,751		$	5,751
Capital expenditures	$	—	$	—	$	(1,382	)	$	(1,382	)

	Nine Months Ended June 30,
	2020			2019
	Automotive			Imaging			Automotive			Total
Major line items constituting net income of discontinued operations:
Revenue	$	—		$	67,430		$	218,738		$	286,168
Cost of revenue	—			16,946			70,571			87,517
Research and development	—			7,557			62,076			69,633
Sales and marketing	—			28,433			22,959			51,392
General and administrative	—			1,997			1,735			3,732
Amortization of intangible assets	—			5,219			9,396			14,615
Acquisition-related costs, net	—			(386		)	783			397
Restructuring and other charges, net	7,386			13,251			34,222			47,473
Other	—			—			(101		)	(101		)
(Loss) income from discontinued operations before income taxes	(7,386		)	(5,587		)	17,097			11,510
Provision (benefit) for income taxes	1,194			(2,688		)	(4,315		)	(7,003		)
Gain on disposition	—			102,371			—			102,371
Net (loss) income from discontinued operations	$	(6,192	)	$	99,472		$	21,412		$	120,884
Supplemental information:
Depreciation	$	—		$	391		$	6,194		$	6,585
Amortization	$	—		$	6,569		$	16,490		$	23,059
Stock compensation	$	—		$	7,103		$	15,667		$	22,770
Capital expenditures	$	—		$	—		$	(3,253	)	$	(3,253	)

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