10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________ 

FORM 10-Q

________________________________________________ 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number 001-15951

________________________________________________ 

AVAYA INC.

(Exact name of registrant as specified in its charter)

________________________________________________ 

Delaware	22-3713430
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
4655 Great America Parkway Santa Clara, California	95054
(Address of principal executive offices)	(Zip Code)

(908) 953-6000

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ¨ No  x

*See Explanatory Note in Part II, Item 5

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ¨	Accelerated filer  ¨	Non-accelerated filer  x	Smaller Reporting Company  ¨
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ¨ No  x

As of May 10, 2013, 100 shares of Common Stock, $.01 par value, of the registrant were outstanding.

TABLE OF CONTENTS

Item	Description	Page
	PART I—FINANCIAL INFORMATION
1.	Financial Statements	1
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
3.	Quantitative and Qualitative Disclosures About Market Risk	61
4.	Controls and Procedures	61
	PART II—OTHER INFORMATION
1.	Legal Proceedings	62
1A.	Risk Factors	62
2.	Unregistered Sales of Equity Securities and Use of Proceeds	62
3.	Defaults Upon Senior Securities	62
4.	Mine Safety Disclosures	62
5.	Other Information	62
6.	Exhibits	63
	Signatures	64

This Quarterly Report on Form 10-Q contains trademarks, service marks and registered marks of Avaya Inc. and its subsidiaries and other companies, as indicated. Unless otherwise provided in this Quarterly Report on Form 10-Q, trademarks identified by ^® and ^TM are registered trademarks or trademarks, respectively of Avaya Inc. or its subsidiaries. All other trademarks are the properties of their respective owners.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Avaya Inc.

Consolidated Statements of Operations (Unaudited)

(In millions)

	Three months ended March 31,						Six months ended March 31,
	2013			2012			2013			2012
REVENUE
Products	$	529		$	637		$	1,160		$	1,386
Services	589			620			1,198			1,258
	1,118			1,257			2,358			2,644
COSTS
Products:
Costs (exclusive of amortization of technology intangible assets)	236			280			497			591
Amortization of technology intangible assets	14			49			36			99
Services	282			315			573			637
	532			644			1,106			1,327
GROSS PROFIT	586			613			1,252			1,317
OPERATING EXPENSES
Selling, general and administrative	381			414			765			847
Research and development	113			117			231			228
Amortization of intangible assets	57			56			114			112
Goodwill impairment	89			—			89			—
Restructuring and impairment charges, net	18			90			102			111
Acquisition-related costs	—			2			—			3
	658			679			1,301			1,301
OPERATING (LOSS) INCOME	(72		)	(66		)	(49		)	16
Interest expense	(116		)	(108		)	(224		)	(217		)
Loss on extinguishment of debt	(3		)	—			(6		)	—
Other income (expense), net	2			(12		)	(4		)	(13		)
LOSS BEFORE INCOME TAXES	(189		)	(186		)	(283		)	(214		)
(Provision for) benefit from income taxes	(3		)	24			6			26
NET LOSS	$	(192	)	$	(162	)	$	(277	)	$	(188	)

The accompanying notes to consolidated financial statements are an integral part of these statements.

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Avaya Inc.

Consolidated Statements of Comprehensive (Loss) Income (Unaudited)

(In millions)

	Three months ended March 31,						Six months ended March 31,
	2013			2012			2013			2012
Net loss	$	(192	)	$	(162	)	$	(277	)	$	(188	)
Other comprehensive income (loss):
Pension, postretirement and postemployment benefit-related items, net of tax of $9 and $18 for the three and six months ended March 31, 2013 and 2012, respectively	14			14			28			28
Cumulative translation adjustment	(7		)	2			(19		)	15
Change in interest rate swaps, net of tax of $1 and $3 for the three and six months ended March 31, 2013 and $0 and $4 for the three and six months ended March 31, 2012, respectively	3			—			5			6
Income tax benefit reclassified into earnings upon the expiration of certain interest rate swaps	—			—			(17		)	—
Unrealized loss on investments reclassified into earnings, net of tax of $1 and $2 for the three and six months ended March 31, 2012, respectively	—			1			—			3
Net gain on investments reclassified into earnings	—			(1		)	—			—
Other comprehensive income (loss)	10			16			(3		)	52
Comprehensive loss	$	(182	)	$	(146	)	$	(280	)	$	(136	)

The accompanying notes to consolidated financial statements are an integral part of these statements.

2

Avaya Inc.

Consolidated Balance Sheets (Unaudited)

(In millions, except per share and shares amounts)

	March 31, 2013			September 30, 2012
ASSETS
Current assets:
Cash and cash equivalents	$	302		$	337
Accounts receivable, net	681			782
Inventory	255			255
Deferred income taxes, net	21			18
Other current assets	280			252
TOTAL CURRENT ASSETS	1,539			1,644
Property, plant and equipment, net	353			364
Deferred income taxes, net	44			43
Intangible assets, net	1,625			1,775
Goodwill	4,093			4,188
Other assets	196			180
TOTAL ASSETS	$	7,850		$	8,194
LIABILITIES
Current liabilities:
Debt maturing within one year	$	35		$	37
Accounts payable	409			438
Payroll and benefit obligations	247			262
Deferred revenue	689			616
Business restructuring reserve, current portion	103			84
Other current liabilities	253			302
TOTAL CURRENT LIABILITIES	1,736			1,739
Long-term debt	6,068			6,084
Pension obligations	1,708			1,763
Other postretirement obligations	343			360
Deferred income taxes, net	209			204
Business restructuring reserve, non-current portion	56			51
Other liabilities	443			429
TOTAL NON-CURRENT LIABILITIES	8,827			8,891
Commitments and contingencies
DEFICIENCY
Common stock, par value $.01 per share; 100 shares authorized, issued and outstanding	—			—
Additional paid-in capital	2,929			2,926
Accumulated deficit	(4,513		)	(4,236		)
Accumulated other comprehensive loss	(1,129		)	(1,126		)
TOTAL DEFICIENCY	(2,713		)	(2,436		)
TOTAL LIABILITIES AND DEFICIENCY	$	7,850		$	8,194

The accompanying notes to consolidated financial statements are an integral part of these statements.

3

Avaya Inc.

Consolidated Statements of Cash Flows (Unaudited)

(In millions)

	Six months ended March 31,
	2013			2012
OPERATING ACTIVITIES:
Net loss	$	(277	)	$	(188	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	221			286
Share-based compensation	3			5
Amortization of debt issuance costs	10			11
Accretion of debt discount	2			1
Non-cash charge for debt issuance costs upon redemption of term loans	5			—
Third-party fees expensed in connection with the debt modification	18			—
Premium on issuance of senior secured term B-5 loans	3			—
Provision for uncollectible receivables	1			2
Deferred income taxes, net	(17		)	5
Loss on sale of investments and long-lived assets, net	—			3
Goodwill impairment	89			—
Unrealized (gain) loss on foreign currency exchange	(27		)	11
Changes in operating assets and liabilities:
Accounts receivable	103			25
Inventory	—			8
Accounts payable	(28		)	5
Payroll and benefit obligations	(35		)	(69		)
Business restructuring reserve	32			4
Deferred revenue	83			(8		)
Other assets and liabilities	(98		)	(70		)
NET CASH PROVIDED BY OPERATING ACTIVITIES	88			31
INVESTING ACTIVITIES:
Capital expenditures	(47		)	(38		)
Capitalized software development costs	(10		)	(19		)
Acquisition of businesses, net of cash acquired	(1		)	(4		)
Proceeds from sale of long-lived assets	9			2
Proceeds from sale of investments	1			6
Advance to Parent	(10		)	(8		)
Other investing activities, net	(1		)	(2		)
NET CASH USED FOR INVESTING ACTIVITIES	(59		)	(63		)
FINANCING ACTIVITIES:
Proceeds from 9% senior secured notes	290			—
Repayment of term B-5 loans	(284		)	—
Proceeds from term B-5 loans	589			—
Repayment of term B-1 loans	(584		)	—
Debt issuance and third-party debt modification costs	(49		)	—
Repayment of long-term debt	(19		)	(19		)
Other financing activities, net	(2		)	(1		)
NET CASH USED FOR FINANCING ACTIVITIES	(59		)	(20		)
Effect of exchange rate changes on cash and cash equivalents	(5		)	7
NET DECREASE IN CASH AND CASH EQUIVALENTS	(35		)	(45		)
Cash and cash equivalents at beginning of period	337			400
Cash and cash equivalents at end of period	$	302		$	355

The accompanying notes to consolidated financial statements are an integral part of these statements.

4

AVAYA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Background, Merger and Basis of Presentation

Background

Avaya Inc. together with its consolidated subsidiaries (collectively, the “Company” or “Avaya”) is a leading global provider of business collaboration and communications solutions. The Company’s solutions are designed to enable business users to work together more effectively as a team internally or with their customers and suppliers, increasing innovation, improving productivity and accelerating decision-making and business outcomes.

Avaya conducts its business operations in three segments. Two of those segments, Global Communications Solutions and Avaya Networking, make up Avaya's Enterprise Collaboration Solutions product portfolio. The third segment contains Avaya’s services portfolio and is called Avaya Global Services.

The Company's solutions and services are aimed at large enterprises, small- and mid-sized businesses and government organizations. Avaya's solutions are in three key business collaboration and communications categories:

• Real-Time Collaboration, Video and Unified Communications Software, Infrastructure and Endpoints for an increasingly mobile workforce;

• Customer Experience Interaction Management, including Contact Center applications; and

• Networking.

These three categories are supported by Avaya's portfolio of services including product support, integration, and professional and managed services that enable customers to optimize and manage their communications networks worldwide and achieve enhanced business results.

Avaya sells solutions directly and through its worldwide sales force and through its global network of channel partners. As of March 31, 2013, Avaya had approximately 10,800 channel partners worldwide, including system integrators, service providers, value-added resellers and business partners that provide sales and service support.

Merger

On June 4, 2007, Avaya entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Avaya Holdings Corp. (formerly Sierra Holdings Corp.), a Delaware corporation (“Parent”), and Sierra Merger Corp., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub was merged with and into the Company, with the Company continuing as the surviving corporation and a wholly owned subsidiary of Parent (the “Merger”). Parent was formed by affiliates of two private equity firms, Silver Lake Partners (“Silver Lake”) and TPG Capital (“TPG”) (collectively, the “Sponsors”), solely for the purpose of entering into the Merger Agreement and consummating the Merger. The Merger Agreement provided for a purchase price of $8.4 billion for Avaya’s common stock and was completed on October 26, 2007 pursuant to the terms of the Merger Agreement.

Acquisition of the Enterprise Solutions Business of Nortel Networks Corporation

On December 18, 2009, Avaya acquired certain assets and assumed certain liabilities of the enterprise solutions business (“NES”) of Nortel Networks Corporation (“Nortel”), including all the shares of Nortel Government Solutions Incorporated, for $943 million in cash consideration. The Company and Nortel were required to determine the final purchase price post-closing based upon the various purchase price adjustments included in the acquisition agreements. During the first quarter of fiscal 2011, the Company and Nortel agreed on a final purchase price of $933 million. The terms of the acquisition did not include any significant contingent consideration arrangements.

Acquisition of RADVISION Ltd.

On June 5, 2012, Avaya acquired RADVISION Ltd. (“Radvision”) for $230 million in cash. Radvision is a global provider of videoconferencing and telepresence technologies over internet protocol (“IP”) and wireless networks. These unaudited consolidated financial statements include the operating results of Radvision since June 5, 2012.

Basis of Presentation

The consolidated financial statements include the accounts of Avaya Inc. and its subsidiaries. The accompanying unaudited interim consolidated financial statements as of March 31, 2013 and for the three and six months endedMarch 31, 2013 and 2012 have been prepared in accordance with accounting principles generally accepted in the United States of America

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(“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial statements, and should be read in conjunction with the consolidated financial statements and other financial information for the fiscal year ended September 30, 2012, which were included in the Company’s Annual Report on Form 10-K filed with the SEC on December 12, 2012. The consolidated balance sheet as of September 30, 2012 was derived from the Company’s audited financial statements. The significant accounting policies used in preparing these unaudited interim consolidated financial statements are the same as those described in Note 2 to those audited consolidated financial statements except for recently adopted accounting guidance as discussed in Note 2 “Recent Accounting Pronouncements” of these unaudited interim consolidated financial statements. In management’s opinion, these unaudited interim consolidated financial statements reflect all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the financial condition, results of operations and cash flows for the periods indicated.

Certain prior period amounts have been reclassified to conform to the current period’s presentation. The consolidated results of operations for the interim periods reported are not necessarily indicative of the results to be experienced for the entire fiscal year.

2. Recent Accounting Pronouncements

New Accounting Guidance Recently Adopted

Presentation of Comprehensive Income

In the first quarter of fiscal 2013, the Company adopted new guidance on the presentation of comprehensive income and its components in the financial statements. This guidance eliminated the option to report other comprehensive income and its components in the statement of changes in equity and instead requires presentation either in a single continuous statement or in two separate, but consecutive statements. The relevant presentation and disclosures have been applied retrospectively for all periods presented.

Goodwill Impairment Test

In September 2011, the Financial Accounting Standards Board ("FASB") issued revised guidance intended to simplify how an entity tests goodwill for impairment. As a result of the guidance, an entity will be allowed to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. An entity will not be required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The accounting guidance became effective for the Company beginning in fiscal year 2013 and did not have an impact on the consolidated financial statements or financial statement disclosures.

Indefinite-lived Intangible Asset Impairment Test

In July 2012, the FASB issued revised guidance intended to simplify how an entity tests indefinite-lived intangible assets other than goodwill for impairment. As a result of the guidance, an entity will be allowed to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. An entity will not be required to perform the quantitative impairment test unless the entity determines, based on a qualitative assessment, that it is more likely than not that the indefinite-lived asset is impaired. The accounting guidance became effective for the Company beginning in fiscal year 2013 and did not have an impact on the consolidated financial statements or financial statement disclosures.

Recent Accounting Guidance Not Yet Effective

On February 5, 2013, the FASB issued Accounting Standards Update No. 2013-02 "Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income".  The standard requires that companies present, either in a single note or parenthetically on the face of the financial statements, the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and the income statement line items affected by the reclassification.  This accounting guidance is effective for the Company beginning in the first quarter of fiscal 2014 and is only expected to impact the presentation of the Company's consolidated financial statements and related notes.

3. Business Combinations

RADVISION Ltd.

On June 5, 2012, Avaya acquired Radvision for $230 million in cash. The purchase price was funded with (i) a capital contribution to Avaya from Parent in the amount of $196 million from the Parent's issuance of Series B preferred stock and warrants to purchase common stock of Parent, and (ii) approximately $34 million of Avaya's cash. The acquisition of Radvision has been accounted for under the acquisition method, which requires an allocation of the purchase price of the acquired entity

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to the assets acquired and liabilities assumed based on their estimated fair values from a market-participant perspective at the date of acquisition.

Other Acquisitions

During the six months ended March 31, 2013 and 2012, the Company completed other acquisitions primarily to enhance the Company’s technology portfolio. The aggregate purchase price of acquisitions completed by the Company and Parent was $1 million and $36 million during the six months ended March 31, 2013 and 2012, respectively. The other acquisitions have been accounted for under the acquisition method. The acquired technologies and other intangible assets associated with these acquisitions were not material.

These unaudited consolidated financial statements include the operating results of the acquired entities since their respective acquisition dates. The revenues and expenses specific to these businesses and their pro forma results are not material to these unaudited consolidated financial statements.

4. Goodwill and Intangible Assets

Goodwill

Goodwill is not amortized but is subject to periodic testing for impairment in accordance with GAAP at the reporting unit level which is one level below the Company’s operating segments. The test for impairment is conducted annually each September 30th or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

March 31, 2013

During the three months ended March 31, 2013 the Company's IT professional services ("ITPS") reporting unit, which provides specialized information technology services exclusively to government customers in the U.S., experienced a decline in revenues as a result of reduced government spending in anticipation of sequestration and budget cuts. Additionally, there is uncertainty regarding how the sequestration cuts will be implemented and the impact they will have on contractors supporting the government. As a result of these events, the Company determined that an interim impairment test of the reporting unit's goodwill should be performed.

The impairment test for goodwill is a two-step process. Step one consists of a comparison of the fair value of the reporting unit with its carrying amount, including the goodwill allocated to that reporting unit. The Company estimated the fair value of the ITPS reporting unit using an income approach which values the unit based on the future cash flows expected from that reporting unit. Future cash flows are based on forward-looking information regarding market share and costs for the reporting unit and are discounted using an appropriate discount rate. Future discounted cash flows can be affected by changes in industry or market conditions or the rate and extent to which cost savings are realized. In step one of the test, a market approach was considered but was not used in the final determination of fair value.

The discounted cash flows model used in the Company’s income approach relies on assumptions regarding revenue growth rates, gross margin, projected working capital needs, selling, general and administrative expenses, research and development expenses, business restructuring costs, capital expenditures, income tax rates, discount rates and terminal growth rates. To estimate fair value, the Company discounts the expected cash flows of the reporting unit. The discount rate Avaya uses represents the estimated weighted average cost of capital, which reflects the overall level of inherent risk involved in the reporting unit's operations and the rate of return an outside investor would expect to earn. To estimate cash flows beyond the final year of its model, Avaya uses a terminal value approach. Under this approach, Avaya uses the estimated cash flows in the final year of its model, applies a perpetuity growth assumption and discounts by a perpetuity discount factor to determine the terminal value. Avaya incorporates the present value of the resulting terminal value into its estimate of fair value.

The Company forecasted cash flows for the ITPS reporting unit and took into consideration current economic conditions and trends, estimated future operating results, Avaya’s view of growth rates and anticipated future economic conditions applicable to the ITPS reporting unit. Revenue growth rates inherent in this forecast are based on input from internal and external market intelligence research sources. Macro economic factors such as changes in economies, product evolutions, industry consolidations and other changes beyond Avaya’s control could have a positive or negative impact on ITPS achieving its targets.

The results of step one of the goodwill impairment test indicated that the estimated fair value of the ITPS reporting unit was less than the respective carrying value of its net assets (including goodwill) and as such, the Company performed step two of the impairment test. The second step of the impairment test compares the implied fair value of the reporting unit's goodwill with the carrying value of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is

7

allocated to all of the assets and liabilities of that unit as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. This allocation is performed only for purposes of assessing goodwill for impairment; accordingly Avaya did not adjust the net book value of the assets and liabilities on its Consolidated Balance Sheets other than goodwill as a result of this process.

As a result of the application of step two of the goodwill impairment test, the Company estimated the implied fair value of the goodwill to be $44 million as compared with a carrying value of $133 million and recorded an impairment to goodwill of $89 million associated with the ITPS reporting unit within the Avaya Global Services segment. This fair value measurement is considered a nonrecurring level 3 measurement pursuant to the accounting guidance for fair value measurements.

The impairment was primarily the result of the continued budgetary constraints, sequestration and uncertainty regarding spending on the part of the U.S. government. The reduced valuation of the reporting unit reflects additional market risks and lower sales forecasts for the reporting unit, which is consistent with economic trends at that time.

The Company determined that no events occurred or circumstances changed during the six months ended March 31, 2013 that would more likely than not reduce the fair value of its other reporting units below their respective carrying amounts. However, if market conditions deteriorate, it may be necessary to record impairment charges in the future.

March 31, 2012

During the six months ended March 31, 2012, the Company experienced a decline in revenue as compared to the same period of the prior year and sequential quarters. This revenue decline impacted the Company's forecasts for the remainder of fiscal 2012. As a result of these events, the Company determined that an interim impairment test of its long-lived assets and goodwill should be performed.

The estimated fair value of each reporting unit at March 31, 2012 reflected the additional market risks, lower discount rates and the updated sales forecasts for the Company’s reporting units based off recent results. Using the revised valuations at March 31, 2012 the results of step one of the goodwill impairment test indicated that although the estimated fair values of each reporting unit were lower at March 31, 2012 when compared to September 30, 2011, their respective book values did not exceed their estimated fair values and therefore no impairment existed.

Intangible Assets

Intangible assets include acquired technology, customer relationships, trademarks and trade-names and other intangibles. Intangible assets with finite lives are amortized using the straight-line method over the estimated economic lives of the assets, which range from five years to fifteen years.

Acquired technology and patents do not include capitalized software development costs. Unamortized capitalized software developments costs of $45 million at March 31, 2013 and $51 million at September 30, 2012 are included in other assets in the Company's Consolidated Balance Sheet.

Long-lived assets, including intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Intangible assets determined to have indefinite useful lives are not amortized but are tested for impairment annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired.

Certain of the Company’s trademarks and trade names are expected to generate cash flow indefinitely. Consequently, these assets are classified as indefinite-lived intangibles.

March 31, 2013

Prior to the goodwill testing discussed above, the Company tested the intangible assets and other long-lived assets of the ITPS reporting unit for impairment during the six months ended March 31, 2013 and no impairment was identified. The Company determined that no events had occurred or circumstances changed during the six months ended March 31, 2013 that would indicate that the intangible assets and long-lived assets of its other reporting units may not be recoverable.

March 31, 2012

Prior to the goodwill testing discussed above, the Company tested its intangible assets with indefinite lives and other long-lived assets as of March 31, 2012. Using the revised forecasts as of March 31, 2012, the Company performed step one of the impairment test of long-lived assets with finite lives and determined that the carrying amount of these assets was recoverable and, therefore, no impairment was identified. GAAP requires that the fair value of intangible assets with indefinite lives be compared to the carrying value of those assets. In situations where the carrying value exceeds the fair value of the intangible asset, an impairment loss equal to the difference is recognized. The Company estimates the fair value of its indefinite-lived intangible assets using an income approach; specifically, based on discounted cash flows. Although the estimated fair values of

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the Company’s tradenames and trademarks were lower at March 31, 2012 when compared to September 30, 2011, their respective book values did not exceed their estimated fair values and therefore no impairment existed.

5. Supplementary Financial Information

Consolidated Statements of Operations Information

	Three months ended March 31,						Six months ended March 31,
In millions	2013			2012			2013			2012
OTHER INCOME (EXPENSE), NET
Interest income	$	—		$	1		$	1		$	2
Gain (loss) on foreign currency transactions	17			(11		)	15			(12		)
Third party fees incurred in connection with debt modifications	(14		)	—			(18		)	—
Venezuela hyperinflationary and devaluation charges	(1		)	—			(1		)	—
Other, net	—			(2		)	(1		)	(3		)
Total other income (expense), net	$	2		$	(12	)	$	(4	)	$	(13	)

6. Business Restructuring Reserve and Programs

Fiscal 2013 Restructuring Program

The Company continued to identify opportunities to streamline operations and generate cost savings which included exiting facilities and eliminating employee positions. During the six months ended March 31, 2013, the Company recognized restructuring charges of $102 million, net. These charges included employee separation costs of $80 million primarily associated with employee severance actions in Europe, the Middle East and Africa (“EMEA”) and the U.S. The EMEA approved plan provides for the elimination of 234 positions and resulted in a charge of $47 million. The elimination of employee positions identified in this action and the related payments are expected to be completed in fiscal 2015. The separation charges include, but are not limited to, social pension fund payments and health care and unemployment insurance costs to be paid to or on behalf of the impacted employees. A voluntary program offered to certain management employees in the U.S. resulted in the elimination of 195 positions and resulted in a charge of $9 million, for which the related payments are expected to be completed in fiscal 2013.

Restructuring charges also include $17 million of lease obligations primarily related to the Company's Maidenhead, United Kingdom and Highlands Ranch, Colorado facilities. The future rental payments, net of estimated sublease income, related to operating lease obligations for unused space in connection with the closing or consolidation of facilities during fiscal 2013 are expected to continue through fiscal 2021.

As the Company continues to evaluate and identify additional operational synergies, additional cost saving opportunities may be identified.

The following table summarizes the components of the fiscal 2013 restructuring program during the six months ended March 31, 2013:

In millions	Employee Separation Costs			Lease Obligations			Total
2013 restructuring charges	$	80		$	17		$	97
Cash payments	(23		)	(1		)	(24		)
Impact of foreign currency fluctuations	(1		)	(1		)	(2		)
Balance as of March 31, 2013	$	56		$	15		$	71

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Fiscal 2012 Restructuring Program

During fiscal 2012, the Company identified opportunities to streamline operations and generate cost savings which include exiting facilities and eliminating employee positions. Restructuring charges associated with these initiatives include employee separation costs primarily associated with employee severance actions in Germany, as well as the US, EMEA excluding Germany, and Canada. Employee separation charges included $70 million related to an agreement reached with the works council representing employees of certain of Avaya's German subsidiaries for the elimination of 327 positions. The headcount reductions identified in this action are expected to be completed in fiscal 2013 with the related payments to be completed in fiscal 2014. The payments include, but are not limited to, social pension fund payments and health care and unemployment insurance costs to be paid to or on behalf of the affected employees. The payments related to the headcount reductions for the other actions taken, globally, excluding Germany, are expected to be completed in fiscal 2014.

The Company initiated a plan to dispose of a Company owned facility in Munich, Germany and relocate to a new facility.  Accordingly, the Company wrote the value of this asset down to its net realizable value of $3 million and had reclassified this asset as held for sale.  During the first quarter of fiscal 2013, the Company sold this facility for its net realizable value.

The following table summarizes the components of the fiscal 2012 restructuring program during the six months ended March 31, 2013:

In millions	Employee Separation Costs			Lease Obligations			Total
Balance as of October 1, 2012	$	58		$	12		$	70
Cash payments	(30		)	(2		)	(32		)
Adjustments (1)	(1		)	2			1
Balance as of March 31, 2013	$	27		$	12		$	39

⁽¹⁾  Included in adjustments are changes in estimates, whereby all increases and decreases in costs related to the fiscal 2012 restructuring programs are recorded to the restructuring charges line item in operating expenses in the period of the adjustment.

Fiscal 2008 through 2011 Restructuring Programs

During fiscal years 2008 through 2011, the Company identified opportunities to streamline operations and generate cost savings which included exiting facilities and eliminating employee positions. The payments related to the headcount reductions identified in those programs are expected to be completed in fiscal 2018. Future rental payments, net of estimated sublease income, related to operating lease obligations for unused space in connection with the closing or consolidation of facilities are expected to continue through fiscal 2021.

The following table aggregates the remaining components of the fiscal 2008 through 2011 restructuring programs during the six months ended March 31, 2013:

In millions	Employee Separation Costs			Lease Obligations			Total
Balance as of October 1, 2012	$	13		$	52		$	65
Cash payments	(7		)	(7		)	(14		)
Adjustments (1)	(1		)	—			(1		)
Impact of foreign currency fluctuations	—			(1		)	(1		)
Balance as of March 31, 2013	$	5		$	44		$	49

⁽¹⁾  Included in adjustments are changes in estimates, whereby all increases and decreases in costs related to the fiscal 2009 through 2011 restructuring programs are recorded to the restructuring charges line item in operating expenses in the period of the adjustment. Included in adjustments are changes in estimates whereby all increases in costs related to the fiscal 2008 restructuring reserve are recorded in the restructuring charges line item in operating expenses in the period of the adjustments and decreases in costs are recorded as adjustments to goodwill.

7. Financing Arrangements

In connection with the Merger, on October 26, 2007, the Company entered into financing arrangements consisting of a senior secured credit facility, a senior unsecured credit facility, which later became senior unsecured notes, and a senior secured multi-

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currency asset-based revolving credit facility, certain of which arrangements were amended on December 18, 2009 in connection with the acquisition of NES and amended on February 11, 2011 in connection with a debt refinancing. During the six months ended March 31, 2013, the Company completed a series of transactions which allowed the Company to refinance term loans under its senior secured credit facility that originally matured October 26, 2014 and to refinance $1,384 million of senior unsecured notes that originally matured on November 1, 2015.

During the three months ended December 31, 2012, the Company completed three transactions to refinance $848 million of term loans under its senior secured credit facility, which were (1) an amendment and restatement of the senior secured credit facility and the senior secured multi-currency asset-based revolving credit facility on October 29, 2012 along with the extension of the maturity date of $135 million aggregate principal amount of senior secured term B-1 loans (the "term B-1 loans") by converting such loans into a new tranche of senior secured term B-4 loans (the "term B-4 loans"), (2) an amendment and restatement of the senior secured credit facility on December 21, 2012 along with the extension of the maturity date of $713 million aggregate principal amount of term B-1 loans and $134 million aggregate principal amount of term B-4 loans, in each case, by converting such loans into a new tranche of senior secured term B-5 loans (the "term B-5 loans") and (3) the issuance on December 21, 2012 of $290 million of 9% senior secured notes due April 2019, the net proceeds of which were used to repay $284 million of term B-5 loans.

During the three months ended March 31, 2013, the Company refinanced the remaining $584 million of term B-1 loans outstanding under its senior secured credit facility with cash proceeds from the issuance of $589 million aggregate principal amount of term B-5 loans under the senior secured credit facility.

Additionally, during the three months ended March 31, 2013, the Company refinanced $1,384 million of senior unsecured notes, through (1) amendments to the senior secured credit facility and the senior secured multi-currency asset-based revolving credit facility permitting the refinancing of the 9.75% senior unsecured notes due 2015 and 10.125%/10.875% senior unsecured paid-in-kind ("PIK") toggle notes due 2015 (collectively, the “Old Notes”) with indebtedness secured by a lien on certain collateral on a junior-priority basis and (2) the exchange of $1,384 million of Old Notes for $1,384 million of 10.50% senior secured notes due 2021.

Long-term debt consists of the following:

In millions	March 31, 2013			September 30, 2012
Senior secured term B-1 loans	$	—		$	1,434
Senior secured term B-3 loans	2,139			2,152
Senior secured term B-4 loans	1			—
Senior secured term B-5 loans	1,148			—
7% senior secured notes	1,009			1,009
9% senior secured notes	290			—
10.50% senior secured notes	1,384			—
9.75% senior unsecured cash pay notes due 2015	58			700
10.125%/10.875% senior unsecured PIK toggle notes due 2015	92			834
Unaccreted discount	(18		)	(8		)
	6,103			6,121
Debt maturing within one year	(35		)	(37		)
Long-term debt	$	6,068		$	6,084

Senior Secured Credit Facility

Prior to the fiscal 2013 refinancing transactions, the senior secured credit facility consisted of (a) a senior secured multi-currency revolver allowing for borrowings of up to $200 million, (b) term B-1 loans with an outstanding principal amount as of September 30, 2012 of $1,434 million, and (c) senior secured term B-3 loans (the "term B-3 loans") with an outstanding principal amount as of September 30, 2012 of $2,152 million.

On October 29, 2012, Avaya Inc., Citibank, N.A. and the lenders party thereto entered into Amendment No. 4 to Credit Agreement pursuant to which the senior secured credit facility was amended and restated in its entirety (as so amended and restated, the "Cash Flow Credit Agreement"). The modified terms of the Cash Flow Credit Agreement included (1) an amendment which allowed the Company to extend the maturity of a portion of the term B-1 loans representing outstanding principal amounts of $135 million from October 26, 2014 to October 26, 2017 (potentially springing to July 26, 2015, under the

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circumstances described below) by converting such loans into a new tranche of term B-4 loans, (2) permission to issue Incremental Replacement Secured Notes and Junior Secured Debt as described below under the heading “Senior Secured Asset-Based Credit Facility” (except, pursuant to the Cash Flow Credit Agreement, such Incremental Replacement Secured Notes and Junior Secured Debt must be secured by a lien on the Collateral (as defined in the Cash Flow Credit Agreement) ranking junior to the lien securing the obligations under the Cash Flow Credit Agreement) and (3) permission to issue indebtedness to refinance a portion of the term loans outstanding under the Cash Flow Credit Agreement and to secure such indebtedness by a lien on the Collateral (as defined in the Cash Flow Credit Agreement) ranking junior to the lien securing the obligations under the Cash Flow Credit Agreement, subject to certain other conditions and limitations set forth in the Cash Flow Credit Agreement.

On December 21, 2012, Avaya Inc., Citibank, N.A. and the lenders party thereto entered into Amendment No. 5 to Credit Agreement, pursuant to which the Cash Flow Credit Agreement was amended and restated in its entirety. The modified terms of the Cash Flow Credit Agreement included (1) an amendment which allowed the Company to extend the maturity of $713 million aggregate principal amount of the outstanding term B-1 loans from October 26, 2014 to March 31, 2018 (potentially springing to July 26, 2015, under the circumstances described below) and $134 million aggregate principal amount of the outstanding term B-4 loans from October 26, 2017 to March 31, 2018 (potentially springing to July 26, 2015, under the circumstances described below), in each case, by converting such loans into a new tranche of term B-5 loans; and (2) permission to apply net proceeds from Credit Agreement Refinancing Indebtedness (as defined in the Cash Flow Credit Agreement) incurred or issued on December 21, 2012 to refinance, at the Company's election, any class or classes of senior secured term loans, including the new term B-5 loans.

Additionally, as discussed more fully below, on December 21, 2012, the Company completed a private placement of $290 million of senior secured notes, the net proceeds of which were used to repay $284 million of term B-5 loans outstanding under the Cash Flow Credit Agreement. Funds affiliated with TPG were holders of $22 million of term B-5 loans repaid with the proceeds of the senior secured notes.

On February 13, 2013, Avaya Inc. and Citibank, N.A. and the lenders party thereto entered into Amendment No. 6 to Credit Agreement pursuant to which the Cash Flow Credit Agreement was amended. The modified terms of the Cash Flow Credit Agreement permitted the Company to refinance all of the Company's outstanding Old Notes with indebtedness secured by a lien on the Collateral (as defined in the Cash Flow Credit Agreement) ranking junior to the lien on the Collateral securing the obligations under the Cash Flow Credit Agreement, subject to certain other conditions and limitations set forth in the Cash Flow Credit Agreement.

On March 12, 2013, Avaya Inc., Citibank, N.A. and the lenders party thereto entered into Amendment No. 7 to Credit Agreement pursuant to which the Cash Flow Credit Agreement was amended. Pursuant to the amendment, the Company refinanced in full all the outstanding term B-1 loans with the cash proceeds from the issuance of $589 million aggregate principal amount of term B-5 loans under the Cash Flow Credit Agreement.

Subsequent to the fiscal 2013 refinancing transactions, the Cash Flow Credit Agreement consists of (a) a senior secured multi-currency revolver allowing for borrowings of up to $200 million, (b) term B-3 loans with an outstanding principal amount as of March 31, 2013 of $2,139 million, (c) term B-4 loans with an outstanding principal amount as of March 31, 2013 of $1 million million, and (d) term B-5 loans with an outstanding principal amount as of March 31, 2013 of $1,148 million.

The term B-3 loans, term B-4 loans, and term B-5 loans each bear interest at a rate per annum equal to either a base rate (subject to a floor of 2.25% in the case of the term B-4 loans and term B-5 loans) or a LIBOR rate (subject to a floor of 1.25% in the case of the term B-4 loans and term B-5 loans), in each case plus an applicable margin. Subject to the floor described in the immediately preceding sentence the base rate is determined by reference to the higher of (1) the prime rate of Citibank, N.A. and (2) the federal funds effective rate plus 1/2 of 1%. The applicable margin for borrowings of term B-3 loans, term B-4 loans, and term B-5 loans is 3.50%, 5.25%, and 5.75%, respectively per annum with respect to base rate borrowings and 4.50%, 6.25%, and 6.75%, respectively per annum with respect to LIBOR borrowings. The applicable margin on the term B-4 loans and term B-5 loans is subject to increase pursuant to the Cash Flow Credit Agreement in connection with the making of certain refinancing, extended or replacement term loans under the Cash Flow Credit Agreement with an Effective Yield (as defined in the Cash Flow Credit Agreement) greater than the applicable Effective Yield payable in respect of the applicable loans at such time plus 50 basis points.

Under the terms of the Cash Flow Credit Agreement the term B-3 loans, term B-4 loans, and term B-5 loans, would automatically have become due on July 26, 2015 unless (i) the total net leverage ratio as tested on that date based upon the most recent financial statements provided to the lenders under the Cash Flow Credit Agreement was no greater than 5.0 to 1.0 or (ii) on or prior to such date, either (x) an initial public offering of Parent shall have occurred or (y) at least $750 million in aggregate principal amount of the Company’s senior unsecured cash-pay notes and/or senior unsecured PIK toggle notes had been repaid or refinanced or their maturity had been extended to a date no earlier than 91 days after October 26, 2017. As discussed more fully below, the Company completed an exchange offer in which $642 million of senior unsecured cash pay

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notes and $742 million of senior unsecured PIK toggle notes were exchanged for 10.50% senior secured notes due in 2021 thereby preventing the maturity date of the term B-3 loans, term B-4 loans and term B-5 loans from being accelerated under the terms of this provision.

The October 29, 2012, December 21, 2012, and February 13, 2013 amendments and restatements of the Cash Flow Credit Agreement represent debt modifications for accounting purposes. Accordingly, third party expenses of $6 million incurred in connection with the transactions were expensed as incurred and included in other income, net during the six months ended March 31, 2013. Avaya’s financing sources that held term B-1 loans, term B-3 loans, term B-5 loans and/or revolving credit commitments under the Cash Flow Credit Agreement and consented to each amendment and restatement of the Cash Flow Credit Agreement received in aggregate a consent fee of $15 million. Fees paid to or on behalf of the holders of term loans in connection with the modification were recorded as a discount to the face value of the respective debt and are being accreted over the term of the debt as interest expense. Fees paid to or on behalf of the holders of the revolving credit commitments in connection with the modification were recorded as deferred debt issuance costs and are being amortized over the term of the debt as interest expense.

The March 12, 2013 amendment and restatement of the Cash Flow Credit Agreement was accounted for as a modification of debt to the extent the existing term B-1 loans were refinanced with term B-5 loans issued to the same creditor and an extinguishment of debt to the extent refinanced with term B-5 loans issued to a different creditor. Accordingly, for the portion accounted for as a debt extinguishment the difference between the reacquisition price and the carrying value of the term B-1 loans (including any unamortized discount and debt issue costs) of $3 million was recognized as a loss upon debt extinguishment during fiscal 2013. Third party expenses of $5 million associated with the issuance of the new term B-5 loans were capitalized and are being amortized over the term of the term B-5 loans. Third party expenses of $3 million associated with the modification of debt were expensed as incurred and included in other income, net.

The senior secured multi-currency revolver allows for borrowings of up to $200 million. The senior secured multi-currency revolver includes capacity available for letters of credit and for short-term borrowings, and is available in euros in addition to dollars. Borrowings are guaranteed by Parent and substantially all of the Company’s U.S. subsidiaries. The Cash Flow Credit Agreement, consisting of the term loans and the senior secured multi-currency revolver, is secured by substantially all assets of Parent, the Company and the subsidiary guarantors.

As of March 31, 2013 affiliates of Silver Lake held $106 million and $45 million in outstanding principal amounts of term B-3 loans and term B-5 loans, respectively. As of September 30, 2012 affiliates of Silver Lake held $45 million and $122 million in outstanding principal amounts of term B-1 loans and term B-3 loans, respectively.

As of March 31, 2013 affiliates of TPG held no outstanding principal amounts of term loans under the Cash Flow Credit Agreement. As of September 30, 2012 affiliates of TPG held $44 million in outstanding principal amounts of term B-1 loans.

Senior Unsecured Notes

The Company has issued senior unsecured cash-pay notes and senior unsecured PIK toggle notes, each due November 1, 2015. The interest rate for the cash-pay notes is fixed at 9.75% and the interest rates for the cash interest and PIK interest portions of the PIK-toggle notes are fixed at 10.125% and 10.875%, respectively. The Company may prepay the senior unsecured notes at 102.4375% of the cash-pay note and 102.5313% of the PIK-toggle note principal amount redeemed on November 1, 2012 which decreases to 100% of each on or after November 1, 2013. Upon the occurrence of specific kinds of changes of control, the Company will be required to make an offer to purchase the senior unsecured notes at 101% of their principal amount. If the Company or any of its restricted subsidiaries engages in certain asset sales, under certain circumstances the Company will be required to use the net proceeds to make an offer to purchase the senior unsecured notes at 100% of their principal amount. Substantially all of the Company’s U.S. 100%-owned subsidiaries are guarantors of the senior unsecured notes. Prior to March 7, 2013, the Company had $700 million and $750 million of cash-pay and PIK-toggle notes, respectively.

For the periods May 1, 2009 through October 31, 2009 and November 1, 2009 through April 30, 2010, the Company elected to pay interest in kind on its senior unsecured PIK toggle notes. PIK interest of $41 million and $43 million was added, for these periods, respectively, to the principal amount of the senior unsecured notes effective November 1, 2009 and May 1, 2010, respectively. For the periods from May 1, 2010 to October 31, 2011 the Company elected to make such payments in cash interest. Under the terms of these notes, after November 1, 2011 the Company is required to make all interest payments on the senior unsecured PIK toggle notes entirely in cash.

As discussed more fully below, on March 7, 2013, the Company completed an exchange offer (the “Exchange Offer”) in which $1,384 million of Old Notes (including $642 million of senior unsecured cash-pay notes and $742 million of senior unsecured PIK toggle notes) were exchanged for 10.50% senior secured notes due 2021. The Exchange Offer represents a debt modification for accounting purposes. Accordingly, third party expenses of $9 million incurred in connection with the transaction were expensed as incurred and included in other income, net during the six months ended March 31, 2013. Avaya's financing sources that held the Old Notes that elected to exchange received a consent fee in aggregate of $4 million. Fees paid

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to or on behalf of the holders of the Old Notes in connection with the modification were recorded as a discount to the face value of the 10.50% senior secured notes due 2021 and are being accreted over the term of the debt as interest expense.

Senior Secured Asset-Based Credit Facility

The Company’s senior secured multi-currency asset-based revolving credit facility allows for borrowings of up to $335 million, subject to availability under a borrowing base, of which $150 million may be in the form of letters of credit. The borrowing base at any time equals the sum of 85% of eligible accounts receivable plus 85% of the net orderly liquidation value of eligible inventory, subject to certain reserves and other adjustments. The Company and substantially all of its U.S. subsidiaries are borrowers under this facility, and borrowings are guaranteed by Parent, the Company and substantially all of the Company’s U.S. subsidiaries. The facility is secured by substantially all assets of Parent, the Company and the subsidiary guarantors. The senior secured multi-currency asset-based revolving credit facility also provides the Company with the right to request up to $100 million of additional commitments under this facility.

On October 29, 2012 Avaya Inc., the several subsidiary borrowers (the “Subsidiary Borrowers”) party thereto, Citicorp USA, Inc. and the lenders party thereto entered into Amendment No. 2 to Credit Agreement, pursuant to which the senior secured multi-currency asset-based revolving credit facility was amended and restated in its entirety (as so amended and restated, the “ABL Credit Agreement”).

The modified terms of the ABL Credit Agreement include permission to issue or incur, as applicable, secured indebtedness in the form of (1) one or more series of secured notes in lieu of any Revolving Commitment Increases (as defined in the ABL Credit Agreement) in an aggregate principal amount not to exceed $100 million, plus the amount by which unused Commitments (as defined in the ABL Credit Agreement) have been previously reduced pursuant to the ABL Credit Agreement, less the amount of all Revolving Commitment Increases effected at or prior to the time of issuance of such notes (“Incremental Replacement Secured Notes”), and (2) one or more series of secured notes or secured loans in an aggregate principal amount not to exceed $750 million (“Junior Secured Debt”). Any such Incremental Replacement Secured Notes or Junior Secured Debt (a) must be (x) issued or incurred, as applicable, in connection with a modification, refinancing, refunding, renewal, replacement, exchange or extension of senior unsecured indebtedness and (y) secured by a lien on the Collateral (as defined in the ABL Credit Agreement) ranking junior to the lien securing the obligations under the ABL Credit Agreement and (b) will be subject to certain other conditions and limitations set forth in the ABL Credit Agreement.

On February 13, 2013, Avaya Inc., the Subsidiary Borrowers, Citicorp USA, Inc. and the lenders party thereto entered into Amendment No. 3 to Credit Agreement pursuant to which the ABL Credit Agreement was amended. The modified terms of the ABL Credit Agreement permitted the Company to refinance all of the Company's outstanding Old Notes with indebtedness secured by a lien on the Collateral (as defined in the ABL Credit Agreement) ranking junior to the lien on the Collateral securing the obligations under the ABL Credit Agreement, subject to certain other conditions and limitations set forth in the ABL Credit Agreement. Further, the terms of the amendment permit certain other obligations of the Company and certain of its subsidiaries to be secured by the ABL Priority Collateral (as defined in the ABL Credit Agreement) on a junior-priority basis.

Borrowings under the ABL Credit Agreement bear interest at a rate per annum equal to, at the Company's option, either (a) a LIBOR rate plus a margin of 1.50% or (b) a base rate plus a margin of 0.50%.

At March 31, 2013 and September 30, 2012, there were no borrowings under this facility. At March 31, 2013 and September 30, 2012 there were $76 million and $77 million, respectively, of letters of credit issued in the ordinary course of business under the ABL Credit Agreement resulting in remaining availability of $218 million and $258 million, respectively.

7% Senior Secured Notes

On February 11, 2011, the Company completed a private placement of $1,009 million of senior secured notes (the "7% Senior Secured Notes"). The 7% Senior Secured Notes bear interest at a rate of 7% per annum, mature on April 1, 2019 and were sold at par through a private placement to qualified institutional buyers pursuant to Rule 144A (and outside the United States in reliance on Regulation S) under the Securities Act of 1933, as amended (the “Securities Act”) and have not been, and will not be, registered under the Securities Act or applicable state securities laws.

The Company may redeem the 7% Senior Secured Notes commencing April 1, 2015 at 103.5% of the principal amount redeemed, which decreases to 101.75% on April 1, 2016 and to 100% on or after April 1, 2017. The Company may redeem all or part of the notes at any time prior to April 1, 2015 at 100% of the principal amount redeemed plus a “make-whole” premium. In addition, the Company may redeem up to 35% of the original aggregate principal balance of the 7% Senior Secured Notes at any time prior to April 1, 2014 with the net proceeds of certain equity offerings at 107% of the aggregate principal amount of 7% Senior Secured Notes redeemed. Upon the occurrence of specific kinds of changes of control, the Company will be required to make an offer to purchase the 7% Senior Secured Notes at 101% of their principal amount. If the Company or any of its restricted subsidiaries engages in certain asset sales, under certain circumstances the Company will be required to use the net proceeds to make an offer to purchase the 7% Senior Secured Notes at 100% of their principal amount.

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Substantially all of the Company’s U.S. 100%-owned subsidiaries are guarantors of the 7% Senior Secured Notes. The 7% Senior Secured Notes are secured by substantially all of the assets of the Company and the subsidiary guarantors (other than with respect to real estate). The notes and the guarantees are secured equally and ratably with the Cash Flow Credit Agreement and any future first lien obligations by (i) a first-priority lien on substantially all of the Company’s and the guarantors’ assets, other than (x) any real estate and (y) collateral that secures the ABL Credit Agreement on a first-priority basis (the “ABL Priority Collateral”), and (ii) a second-priority lien on the ABL Priority Collateral, in each case, subject to certain customary exceptions.

9% Senior Secured Notes

On December 21, 2012, the Company completed a private placement of $290 million of senior secured notes (the "9% Senior Secured Notes"). The 9% Senior Secured Notes bear interest at a rate of 9% per annum, mature on April 1, 2019, and were sold at par through a private placement to qualified institutional buyers pursuant to Rule 144A (and outside the United States in reliance on Regulation S) under the Securities Act. The 9% Senior Secured Notes have not been, and will not be, registered under the Securities Act or applicable state securities laws and may not be offered or sold absent registration under the Securities Act or applicable state securities laws or applicable exemptions from registration requirements.

The 9% Senior Secured Notes are redeemable commencing April 1, 2015 at 104.5% of the principal amount redeemed, which decreases to 102.25% on April 1, 2016 and to 100% on or after April 1, 2017. The Company may redeem all or part of the notes at any time prior to April 1, 2015 at 100% of the principal amount redeemed plus a “make-whole” premium, as defined in the indenture governing the 9% Senior Secured Notes. In addition, the Company may redeem up to 35% of the original aggregate principal balance of the 9% Senior Secured Notes at any time prior to April 1, 2015 with the net proceeds of certain equity offerings at 109% of the aggregate principal amount redeemed. Upon the occurrence of specific kinds of changes of control, the Company will be required to make an offer to purchase the 9% Senior Secured Notes at 101% of their principal amount. If the Company or any of its restricted subsidiaries engages in certain asset sales, under certain circumstances the Company will be required to use the net proceeds to make an offer to purchase the 9% Senior Secured Notes at 100% of their principal amount.

The 9% Senior Secured Notes are secured by substantially all of the assets of the Company and substantially all of the Company’s U.S. 100%-owned subsidiaries (other than with respect to real estate). The notes and the guarantees are secured equally and ratably with the Cash Flow Credit Agreement, the 7% Senior Secured Notes due 2019 and any future first lien obligations by (i) a first-priority lien on substantially all of the Company’s and the guarantors’ assets, other than (x) any real estate and (y) collateral that secures the ABL Credit Agreement on a first-priority basis (the “ABL Priority Collateral”), and (ii) a second-priority lien on the ABL Priority Collateral, in each case, subject to certain customary exceptions.

The proceeds from the 9% Senior Secured Notes were used to repay $284 million aggregate principal amount of term B-5 loans and to pay related fees and expenses. In connection with the issuance of the 9% Senior Secured Notes, the Company capitalized financing costs of $7 million during fiscal 2013 and is amortizing these costs over the term of the 9% Senior Secured Notes.

The repayment of the term B-5 loans was accounted for as an extinguishment of debt. Accordingly the difference between the reacquisition price and the carrying value of the term B-5 loans (including unamortized debt issue costs) of $3 million was recognized as a loss upon debt extinguishment during fiscal 2013.

10.50% Senior Secured Notes

On March 7, 2013, the Company completed an Exchange Offer in which $1,384 million of Old Notes were exchanged for $1,384 million of senior secured notes due 2021 (the “10.50% Senior Secured Notes”). The 10.50% Senior Secured Notes were issued at par, bear interest at a rate of 10.50% per annum and mature on March 1, 2021. The 10.50% Senior Secured Notes have not been, and will not be, registered under the Securities Act or applicable state securities laws and may not be offered or sold absent registration under the Securities Act or applicable state securities laws or applicable exemptions from registration requirements.

The 10.50% Senior Secured Notes are redeemable commencing March 1, 2017 at 107.875% of the principal amount redeemed, which decreases to 105.250% on March 1, 2018, to 102.625% on March 1, 2019 and to 100% on or after March 1, 2020. The Company may redeem all or part of the notes at any time prior to March 1, 2017 at 100% of the principal amount redeemed plus a “make-whole” premium. In addition, the Company may redeem up to 35% of the original aggregate principal balance of the notes at any time prior to March 1, 2016 with the net proceeds of certain equity offerings at 110.50% of the aggregate principal amount redeemed. Upon the occurrence of specific kinds of changes of control, the Company will be required to make an offer to purchase the 10.50% Senior Secured Notes at 101% of their principal amount. If the Company or any of its restricted subsidiaries engages in certain asset sales, under certain circumstances the Company will be required to use the net proceeds to make an offer to purchase the 10.50% Senior Secured Notes at 100% of their principal amount.

The 10.50% Senior Secured Notes are secured by substantially all of the assets of the Company and substantially all of the Company's U.S. 100%-owned subsidiaries (other than with respect to real estate). The notes and the corresponding guarantees

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are secured on a junior priority basis to the Company's ABL Credit Agreement, the Company's Cash Flow Credit Agreement, the Company's existing 7% Senior Secured Notes due 2019, the Company's existing 9% Senior Secured Notes due 2019 and any future senior obligations by a junior priority lien on substantially all of the Company's and the guarantors' assets, other than any real estate.

The Company’s Cash Flow Credit Agreement, ABL Credit Agreement, and indentures governing its notes contain a number of covenants that, among other things and subject to certain exceptions, restrict the Company’s ability and the ability of certain of its subsidiaries to: (a) incur or guarantee additional debt and issue or sell certain preferred stock; (b) pay dividends on, redeem or repurchase capital stock; (c) make certain acquisitions or investments; (d) incur or assume certain liens; (e) enter into transactions with affiliates; (f) merge or consolidate with another company; (g) transfer or otherwise dispose of assets; (h) redeem subordinated debt; (i) incur obligations that restrict the ability of the Company’s subsidiaries to make dividends or other payments to the Company or Parent; and (j) create or designate unrestricted subsidiaries. They also contain customary affirmative covenants and events of default. As of March 31, 2013 and September 30, 2012, the Company was not in default under any of these agreements.

The weighted average interest rate of the Company’s outstanding debt as of March 31, 2013 was 7.4% excluding the impact of the interest rate swaps described in Note 8, “Derivatives and Other Financial Instruments."

Annual maturities of long-term debt for the next five years ending September 30 and thereafter consist of:

In millions
Remainder of fiscal 2013	$	19
2014	38
2015	53
2016	174
2017	38
2018 and thereafter	5,799
Total	$	6,121

Capital Lease Obligations

Included in other liabilities at March 31, 2013 is $23 million of capital lease obligations, primarily associated with an office facility.

8. Derivatives and Other Financial Instruments

Interest Rate Swaps

The Company uses interest rate swaps to manage the amount of its floating rate debt in order to reduce its exposure to variable rate interest payments associated with certain borrowings under the Cash Flow Credit Agreement. The interest rate swaps presented below are designated as cash flow hedges. The fair value of each interest rate swap is reflected as an asset or liability in the Consolidated Balance Sheets, reported as a component of other comprehensive loss and reclassified to earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on derivative instruments representing hedge ineffectiveness are recognized in current earnings. The fair value of each interest rate swap is estimated as the net present value of their projected cash flows at the balance sheet date.

The details of these swaps are as follows:

In millions	Effective Date	Maturity Date	Notional Amount		Floating Rate Received by Avaya	Fixed Rate Paid by Avaya
3-year swap	August 26, 2010	August 26, 2013	$	750	3-month LIBOR	1.160	%
3-year swap	August 26, 2010	August 26, 2013	750		3-month LIBOR	1.135	%
Notional amount—Total			$	1,500

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The following table summarizes the (gains) and losses of the interest rate contracts qualifying and designated as cash flow hedging instruments:

	Three months ended March 31,					Six months ended March 31,
In millions	2013			2012		2013			2012
(Gain) Loss on interest rate swaps
Recognized in other comprehensive loss	$	(3	)	$	—	$	(7	)	$	(10	)
Reclassified from accumulated other comprehensive loss into interest expense	$	3		$	5	$	8		$	13
Recognized in operations (ineffective portion)	$	—		$	—	$	—		$	—

The Company expects to reclassify approximately $5 million from accumulated other comprehensive loss into expense in the next twelve months related to the Company’s interest rate swaps based on the projected borrowing rates as of March 31, 2013.

Foreign Currency Forward Contracts

The Company utilizes foreign currency forward contracts primarily to manage short-term exchange rate exposures on certain receivables, payables and intercompany loans residing on foreign subsidiaries’ books, which are denominated in currencies other than the subsidiary’s functional currency. When those items are revalued into the subsidiaries’ functional currencies at the month-end exchange rates, the fluctuations in the exchange rates are recognized in the Consolidated Statements of Operations as other income (expense), net. Changes in the fair value of the Company’s foreign currency forward contracts used to offset these exposed items are also recognized in the Consolidated Statements of Operations as other income (expense), net in the period in which the exchange rates change.

The gains and (losses) of the foreign currency forward contracts included in other income (expense), net were $(4) million and less than $1 million for the three months ended March 31, 2013 and 2012, respectively, and $(7) million and $(5) million for the six months ended March 31, 2013 and 2012, respectively.

The following table summarizes the estimated fair value of derivatives:

In millions	March 31, 2013									September 30, 2012
Balance Sheet Location	Total			Foreign Currency Forward Contracts			Interest Rate Swaps			Total			Foreign Currency Forward Contracts		Interest Rate Swaps
Other current assets	$	1		$	1		$	—		$	2		$	2	$	—
Other current liabilities	(7		)	(1		)	(6		)	(15		)	—		(15		)
Net Liability	$	(6	)	$	—		$	(6	)	$	(13	)	$	2	$	(15	)

9. Fair Value Measures

Pursuant to the accounting guidance for fair value measurements and its subsequent updates, fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

Fair Value Hierarchy

The accounting guidance for fair value measurements also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The inputs are prioritized into three levels that may be used to measure fair value:

Level 1: Inputs that reflect quoted prices for identical assets or liabilities in active markets that are observable.

Level 2: Inputs that reflect quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3: Inputs that are unobservable to the extent that observable inputs are not available for the asset or liability at the measurement date.

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Asset and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2013 and September 30, 2012 were as follows:

	March 31, 2013
	Fair Value Measurements Using
In millions	Total		Quoted Prices in  Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other Current Assets:
Foreign currency forward contracts	$	1	$	—	$	1	$	—
Other Non-Current Assets:
Investments	$	3	$	2	$	1	$	—
Other Current Liabilities:
Foreign currency forward contracts	$	1	$	—	$	1	$	—
Interest rate swaps	6		—		6		—
	$	7	$	—	$	7	$	—

	September 30, 2012
	Fair Value Measurements Using
In millions	Total		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other Current Assets:
Foreign currency forward contracts	$	2	$	—	$	2	$	—
Investments	1		1		—		—
	$	3	$	1	$	2	$	—
Other Non-Current Assets:
Investments	$	4	$	2	$	2	$	—
Other Current Liabilities:
Interest rate swaps	$	15	$	—	$	15	$	—

Interest Rate Swaps

Interest rate swaps classified as Level 2 assets and liabilities are priced using discounted cash flow techniques which are corroborated by using non-binding market prices. Significant inputs to the discounted cash flow model include projected future cash flows based on projected 3-month LIBOR rates, and the average margin for companies with similar credit ratings and similar maturities. These are classified as Level 2 as they are not actively traded and are valued using pricing models that use observable market inputs.

Foreign Currency Forward Contracts

Foreign currency forward contracts classified as Level 2 assets and liabilities are priced using quoted market prices for similar assets or liabilities in active markets.

Investments

Investments classified as Level 2 assets and liabilities are priced using quoted market prices for identical assets which are subject to infrequent transactions (i.e. a less active market).

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Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Assets and liabilities measured at fair value on a nonrecurring basis as of March 31, 2013 were as follows:

	March 31, 2013
	Fair Value Measurements Using
In millions	Total		Quoted Prices in  Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Loss
Goodwill of ITPS reporting unit:	$	44	$	—	$	—	$	44	$	89

During the three months ended March 31, 2013 the Company performed an interim impairment test of goodwill for the ITPS reporting unit.  Using level 3 inputs, the Company estimated the implied fair value of its goodwill to be $44 million as compared with a carrying value of $133 million and recorded an impairment to goodwill of $89 million. See Note 4 “Goodwill and Intangible Assets”.

Fair Value of Financial Instruments

The fair values of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, to the extent the underlying liability will be settled in cash, approximate carrying values because of the short-term nature of these instruments.

On October 3, 2011 and October 3, 2012, the Company advanced $8 million and $10 million, respectively, to Parent in exchange for a note receivable. The proceeds of such notes were used by Parent to fund, in part, an acquisition of all outstanding shares of a unified communications solutions provider. Immediately upon completing the acquisition, Parent merged the acquired entity with and into Avaya Inc., with Avaya Inc. surviving the merger.

The principal amount of these notes plus any accrued and unpaid interest are due in full October 3, 2014 and October 3, 2015 with interest at the rate of 1.63% and 0.93% per annum, respectively. These notes are included in other assets in the Company's Consolidated Balance Sheet. The estimated fair value of the $8 million note receivable was $7 million and $6 million at March 31, 2013 and September 30, 2012, respectively. The estimated fair value of the $10 million note receivable was $8 million at March 31, 2013. The estimated fair value of each note was determined based on a Level 2 input using discounted cash flow techniques.

The estimated fair values of the amounts borrowed under the Company’s financing arrangements at March 31, 2013 and September 30, 2012 were estimated based on a Level 2 input using quoted market prices for the Company’s debt which is subject to infrequent transactions (i.e. a less active market).

The estimated fair values of the amounts borrowed under the Company’s credit agreements at March 31, 2013 and September 30, 2012 are as follows:

	March 31, 2013				September 30, 2012
In millions	Principal Amount		Fair Value		Principal Amount		Fair Value
Senior secured term B-1 loans	$	—	$	—	$	1,434	$	1,392
Senior secured term B-3 loans	2,139		2,013		2,152		1,960
Senior secured term B-4 loans	1		1		—		—
Senior secured term B-5 loans	1,148		1,153		—		—
7% Senior secured notes	1,009		982		1,009		938
9% Senior secured notes	290		300		—		—
10.50% Senior secured notes	1,384		1,314		—		—
9.75% senior unsecured cash pay notes due 2015	58		57		700		622
10.125%/10.875% senior unsecured PIK toggle notes due 2015	92		91		834		749
Total	$	6,121	$	5,911	$	6,129	$	5,661

10. Income Taxes

The benefit from income taxes for the six months ended March 31, 2013 was $6 million, as compared to the benefit from income taxes of $26 million for the six months ended March 31, 2012.

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The effective rate for the six months ended March 31, 2013 differs from the statutory U.S. Federal income tax rate primarily due to (1) the effect of tax rate differentials on foreign income/loss, (2) changes in the valuation allowance established against the Company’s deferred tax assets, (3) $17 million of income tax benefit recognized upon the expiration of certain interest rate swaps, and (4) $16 million release of valuation allowance associated with tax expense on net gains in other comprehensive income.

During the six months ended March 31, 2013, the Company recognized $17 million of income tax benefit related to the elimination of the tax effect of certain interest rate swaps in other comprehensive income. The tax effect of such interest rate swaps was recognized in other comprehensive income prior to the establishment of a valuation allowance against the Company's U.S. net deferred tax assets and was eliminated following the expiration of the final interest rate swap upon which the tax effect was established.

During the six months ended March 31, 2013, the Company recorded a tax charge of $16 million to other comprehensive income primarily relating to pension benefits. The charge to other comprehensive income and decrease in related deferred tax assets resulted in the recording of an income tax benefit in continuing operations related to the release of the corresponding valuation allowance.

The effective rate for the six months ended March 31, 2012 differs from the statutory U.S. Federal income tax rate primarily due to (1) the effect of tax rate differentials on foreign income/loss, (2) changes in the valuation allowance established against the Company’s deferred tax assets and (3) $6 million release of valuation allowance associated with tax expense on net gains in other comprehensive income.

During the six months ended March 31, 2012, the Company recorded a tax charge of $6 million to other comprehensive income primarily relating to pension benefits. The charge to other comprehensive income and decrease in related deferred tax assets resulted in the recording of an income tax benefit in continuing operations related to the release of the corresponding valuation allowance.

For interim financial statement purposes, U.S. GAAP income tax expense related to ordinary income is determined by applying an estimated annual effective income tax rate against the Company's ordinary income. Income tax expense related to items not characterized as ordinary income is recognized as a discrete item when incurred. The estimation of the Company's annual effective income tax rate requires the use of management forecasts and other estimates, projection of jurisdictional taxable income and losses, statutory income tax rates, and valuation allowances. The Company's estimated annual effective income tax rate may be revised, if necessary, in each interim period during the fiscal year.

11. Benefit Obligations

The Company sponsors non-contributory defined benefit pension plans covering a portion of its U.S. employees and retirees, and postretirement benefit plans covering a portion of its U.S. retirees that include healthcare benefits and life insurance coverage. Certain non-U.S. operations have various retirement benefit programs covering substantially all of their employees. Some of these programs are considered to be defined benefit pension plans for accounting purposes.

The Company froze benefit accruals and additional participation in the pension and postretirement plans for its U.S. management employees effective December 31, 2003. In addition, the Company amended the postretirement plan for its U.S. management employees effective January 1, 2013, to terminate retiree dental coverage, and to cease providing medical and prescription drug coverage to a retiree, dependent, or lawful spouse who has attained age 65.

Effective October 12, 2011 and November 18, 2011, the Company entered into a two-year contract extension with the Communications Workers of America (“CWA”) and the International Brotherhood of Electrical Workers (“IBEW”), respectively. With the contract extension, the contracts with the CWA and IBEW now terminate on June 7, 2014. The contract extension did not affect the level of pension and postretirement benefits available to U.S. employees of the Company who are represented by the CWA or IBEW (“represented employees”).

The components of the pension and postretirement net periodic benefit cost for the three and six months ended March 31, 2013 and 2012 are provided in the table below:

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	Pension Benefits - U.S.						Pension Benefits - Non-U.S.				Postretirement Benefits - U.S.
	Three months ended March 31,						Three months ended March 31,				Three months ended March 31,
In millions	2013			2012			2013		2012		2013			2012
Components of Net Periodic Benefit Cost
Service cost	$	2		$	1		$	2	$	1	$	—		$	—
Interest cost	34			38			5		6		5			7
Expected return on plan assets	(40		)	(43		)	—		—		(2		)	(2		)
Amortization of unrecognized prior service cost	—			1			—		—		(3		)	1
Amortization of previously unrecognized net actuarial loss	32			24			1		—		2			2
Net periodic benefit cost	$	28		$	21		$	8	$	7	$	2		$	8

	Pension Benefits - U.S.						Pension Benefits - Non-U.S.						Postretirement Benefits - U.S.
	Six months ended March 31,						Six months ended March 31,						Six months ended March 31,
In millions	2013			2012			2013			2012			2013			2012
Components of Net Periodic Benefit Cost
Service cost	$	3		$	3		$	4		$	3		$	1		$	1
Interest cost	68			75			10			12			10			15
Expected return on plan assets	(80		)	(86		)	(1		)	(1		)	(5		)	(5		)
Amortization of unrecognized prior service cost	—			1			—			—			(7		)	1
Amortization of previously unrecognized net actuarial loss	64			49			2			—			4			4
Net periodic benefit cost	$	55		$	42		$	15		$	14		$	3		$	16

The Company’s general funding policy with respect to its U.S. qualified pension plans is to contribute amounts at least sufficient to satisfy the minimum amount required by applicable law and regulations. For the six month period ended March 31, 2013, the Company made contributions of $35 million to satisfy minimum statutory funding requirements. Estimated payments to satisfy minimum statutory funding requirements for the remainder of fiscal 2013 are $67 million.

The Company provides certain pension benefits for U.S. employees, which are not pre-funded, and certain pension benefits for non-U.S. employees, the majority of which are not pre-funded. Consequently, the Company makes payments as these benefits are disbursed or premiums are paid. For the six month period ended March 31, 2013, the Company made payments for these U.S. and non-U.S. pension benefits totaling $3 million and $19 million, respectively. Estimated payments for these U.S. and non-U.S. pension benefits for the remainder of fiscal 2013 are $4 million and $8 million, respectively.

During the six months ended March 31, 2013, the Company contributed $22 million to the represented employees’ post-retirement health trust to fund current benefit claims and costs of administration in compliance with the terms of the 2009 agreements between the Company and the CWA and IBEW, as extended through June 7, 2014. Estimated contributions under the terms of the 2009 Agreement are $21 million for the remainder of fiscal 2013.

The Company also provides certain retiree medical benefits for U.S. employees, which are not pre-funded. Consequently, the Company makes payments as these benefits are disbursed. For the six month period ended March 31, 2013, the Company made payments totaling $4 million for these retiree medical benefits. Estimated payments for these retiree medical benefits for the remainder of fiscal 2013 are $4 million.

12. Share-based Compensation

Avaya Holdings Corp.’s Amended and Restated 2007 Equity Incentive Plan (“2007 Plan”) governs the issuance of equity awards, including restricted stock units (“RSUs”) and stock options, to eligible plan participants. Key employees, directors, and consultants of the Company may be eligible to receive awards under the 2007 Plan. Each stock option, when vested and exercised, and each RSU, when vested, entitles the holder to receive one share of Parent’s common stock, subject to certain

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restrictions on their transfer and sale as defined in the 2007 Plan and related award agreements. As of March 31, 2013, Parent had authorized the issuance of up to 49,848,157 shares of its common stock under the 2007 Plan, in addition to 2,924,125 shares of common stock underlying certain continuation awards that were permitted to be issued at the time of the Merger. There remained 9,748,283 shares available for grant under the 2007 Plan as of March 31, 2013.

On February 25, 2013, Avaya's Compensation Committee approved a stock option exchange program through which individuals holding market-based "multiple-of-money" and performance-based "EBITDA" stock options could exchange them on a three-for-one basis for RSUs. The replacement RSUs will vest in full in December 2013. The tender offer was closed on April 30, 2013 and 10,204,689 options were tendered for exchange. In connection with the exchange offer, 3,401,654 replacement RSUs were granted which have an effective grant date of May 6, 2013.

Option Awards

During the six months ended March 31, 2013, 1,769,500 time-based and 185,500 multiple-of-money options were granted in the ordinary course of business. All of the options expire ten years from the date of grant or upon cessation of employment, in which event there are limited exercise provisions allowed for vested options. Options granted between October 1, 2012 and November 30, 2012 have an exercise price of $4.00 per share. Options granted subsequent to November 30, 2012 have an exercise price of $3.00 per share.

Time-based options granted during the six months ended March 31, 2013 vest over their performance periods, generally four years. Compensation expense equal to the fair value of the option measured on the grant date is recognized utilizing graded attribution over the requisite service period.

Multiple-of-money options vest upon the achievement of defined returns on the Sponsors’ initial investment in Parent. Because vesting of the multiple-of-money market-based options is outside the control of the Company and the award recipients, compensation expense relative to the multiple-of-money options must be recognized upon the occurrence of a triggering event (e.g., sale or initial public offering of Parent).

The fair value of option awards is determined at the date of grant utilizing the Cox-Ross Rubinstein (“CRR”) binomial option pricing model which is affected by the fair value of Parent’s common stock as well as a number of complex and subjective assumptions. Expected volatility is based primarily on a combination of the Company’s peer group’s historical volatility and estimates of implied volatility of the Company’s peer group. The risk-free interest rate assumption was derived from reference to the U.S. Treasury Spot rates for the expected term of the stock options. The dividend yield assumption is based on Parent’s current intent not to issue a dividend under its dividend policy. The expected holding period assumption was estimated based on the Company’s historical experience.

For the three months ended March 31, 2013 and 2012, the Company recognized share-based compensation associated with options issued under the 2007 Plan of $1 million and $1 million, respectively, which is included in costs and operating expenses. For the six months ended March 31, 2013 and 2012, the Company recognized share-based compensation associated with options issued under the 2007 Plan of $2 million and $3 million, respectively, which is included in costs and operating expenses.

Restricted Stock Units

The Company has issued RSUs each of which represents the right to receive one share of Parent’s common stock when fully vested. The fair value of the RSUs is estimated by the Board of Directors on the respective dates of grant.

During the six months ended March 31, 2013, 555,003 RSUs were awarded in the ordinary course of business. For RSUs awarded between October 1, 2012 and November 30, 2012, the fair market value (as defined in the 2007 Plan) of these awards at the date of grant was $4.00 per share. For RSUs awarded subsequent to November 30, 2012, the fair market value (as defined in the 2007 Plan) of these awards at the date of grant was $3.00 per share.

At March 31, 2013, there were 3,436,684 awarded RSUs outstanding under the 2007 Plan, of which 1,716,876 were fully vested. For the three months ended March 31, 2013 and 2012, the Company recognized share-based compensation associated with RSUs granted under the 2007 Plan of less than $1 million and $1 million, respectively. For the six months ended March 31, 2013 and 2012, the Company recognized share-based compensation associated with RSUs granted under the 2007 Plan of $1 million and $2 million, respectively.

13. Reportable Segments

Avaya conducts its business operations in three segments. Two of those segments, Global Communications Solutions (“GCS”) and Avaya Networking (“Networking”), make up Avaya’s Enterprise Collaboration Solutions (“ECS”) product portfolio. The third segment contains Avaya’s services portfolio and is called Avaya Global Services (“AGS”).

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The GCS segment primarily develops, markets, and sells unified communications and contact center solutions by integrating multiple forms of communications, including telephone, e-mail, instant messaging and video. Avaya’s Networking segment’s portfolio of products offers integrated networking solutions which are scalable across customer enterprises. The AGS segment develops, markets and sells comprehensive end-to-end global service offerings that allow customers to evaluate, plan, design, implement, monitor, manage and optimize complex enterprise communications networks.

For internal reporting purposes, the Company’s chief operating decision maker makes financial decisions and allocates resources based on segment profit information obtained from the Company’s internal management systems. Management does not include in its segment measures of profitability selling, general, and administrative expenses, research and development expenses, amortization of intangible assets, and certain discrete items, such as charges relating to restructuring actions, impairment charges, and merger-related costs as these costs are not core to the measurement of segment management’s performance, but rather are controlled at the corporate level.

Summarized financial information relating to the Company’s reportable segments is shown in the following table:

	Three months ended March 31,						Six months ended March 31,
In millions	2013			2012			2013			2012
REVENUE
Global Communications Solutions	$	473		$	574		$	1,046		$	1,241
Avaya Networking	56			64			114			146
Enterprise Collaboration Solutions	529			638			1,160			1,387
Avaya Global Services	589			620			1,198			1,258
Unallocated Amounts (1)	—			(1		)	—			(1		)
	$	1,118		$	1,257		$	2,358		$	2,644
GROSS PROFIT
Global Communications Solutions	$	270		$	318		$	619		$	718
Avaya Networking	23			27			45			64
Enterprise Collaboration Solutions	293			345			664			782
Avaya Global Services	308			296			626			609
Unallocated Amounts (1)	(15		)	(28		)	(38		)	(74		)
	586			613			1,252			1,317
OPERATING EXPENSES
Selling, general and administrative	381			414			765			847
Research and development	113			117			231			228
Amortization of intangible assets	57			56			114			112
Goodwill impairment	89			—			89			—
Restructuring and impairment charges, net	18			90			102			111
Acquisition-related costs	—			2			—			3
	658			679			1,301			1,301
OPERATING (LOSS) INCOME	(72		)	(66		)	(49		)	16
INTEREST EXPENSE, LOSS ON EXTINGUISHMENT OF DEBT AND OTHER INCOME (EXPENSE), NET	(117		)	(120		)	(234		)	(230		)
LOSS BEFORE INCOME TAXES	$	(189	)	$	(186	)	$	(283	)	$	(214	)

(1) Unallocated Amounts in Gross Profit include the effect of the amortization of acquired technology intangibles and costs that are not core to the measurement of segment management’s performance, but rather are controlled at the corporate level. Unallocated Amounts in Revenue and Gross Profit also include the impacts of certain fair value adjustments recorded in purchase accounting in connection with the Merger.

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14. Commitments and Contingencies

Legal Proceedings

In the ordinary course of business, the Company is involved in litigation, claims, government inquiries, investigations and proceedings, including, but not limited to, those identified below, relating to intellectual property, commercial, employment, environmental and regulatory matters.

Other than as described below, the Company believes there is no litigation pending or environmental and regulatory matters against the Company that could have, individually or in the aggregate, a material adverse effect on the Company’s financial position, results of operations or cash flows.

Antitrust Litigation

In 2006, the Company instituted an action in the U.S. District Court, District of New Jersey, against defendants Telecom Labs, Inc., TeamTLI.com Corp. and Continuant Technologies, Inc. and subsequently amended its complaint to include certain individual officers of these companies as defendants. Defendants purportedly provide maintenance services to customers who have purchased or leased the Company's communications equipment. The Company asserts in its amended complaint that, among other things, defendants, or each of them, have engaged in tortious conduct and/or violated federal intellectual property laws by improperly accessing and utilizing the Company's proprietary software, including passwords, logins and maintenance service permissions, to perform certain maintenance services on the Company's customers' equipment. Defendants have filed counterclaims against the Company, alleging a number of tort claims and alleging that the Company has violated the Sherman Act's prohibitions against anticompetitive conduct through the manner in which the Company sells its products and services. Defendants seek to recover the profits they claim they would have earned from maintaining Avaya's products, and ask for injunctive relief prohibiting the conduct they claim is anticompetitive. Under the federal antitrust laws, defendants could be entitled to three times the amount of any actual damages awarded for lost profits plus attorney's fees and costs. The parties have engaged in extensive discovery and motion practice to, among other things, amend and dismiss pleadings and compel and oppose discovery requests. In January 2012, Avaya's motions to dismiss defendants' counterclaims were granted in part and denied in part. In February 2012, the parties filed motions for reconsideration of certain aspects of the Court's ruling and Avaya filed a motion for certification of an interlocutory appeal. The parties' motions were denied on April 26, 2012. Expert discovery on the Company's claims and the defendants' surviving counter-claims is completed, and in July 2012 the parties filed motions to exclude the opinion testimony of certain of each others' experts, which were denied without prejudice on August 28, 2012.  On August 17, 2012, defendants filed motions for partial summary judgment, seeking to dismiss the Company's claims for tortious interference with contractual relations and misappropriation of trade secrets, which were denied on October 26, 2012. The trial has been scheduled for September 9, 2013. Therefore, at this time an outcome cannot be predicted and, as a result, the Company cannot be assured that this case will not have a material adverse effect on the manner in which it does business, its financial position, results of operations, or cash flows.

Intellectual Property

In the ordinary course of business, the Company is involved in litigation alleging it has infringed upon third parties’ intellectual property rights, including patents; some litigation may involve claims for infringement against customers by third parties relating to the use of Avaya’s products, as to which the Company may provide indemnifications of varying scope to certain customers. These matters are on-going and the outcomes are subject to inherent uncertainties. As a result, the Company cannot be assured that any such matter will not have a material adverse effect on its financial position, results of operations or cash flows.

Other

In October 2009, a group of former employees of Avaya’s former Shreveport, Louisiana manufacturing facility brought suit in Louisiana state court, naming as defendants Alcatel-Lucent USA, Inc., Lucent Technologies Services Company, Inc., and AT&T Technologies, Inc. The former employees allege hearing loss due to hazardous noise exposure from the facility dating back over forty years, and stipulate that the total amount of each individual’s damages does not exceed fifty thousand dollars. In February 2010 plaintiffs amended their complaint to add the Company as a named defendant. There are 101 plaintiffs in the case. Defendants’ motion to dismiss plaintiffs’ complaint was denied on April 30, 2012. At this time an outcome cannot be predicted however, because the amounts of the claims are not material, the Company believes the outcome of this matter will not have a material adverse effect on the manner in which it does business, its financial position, results of operations, or cash flows.

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General

The Company records accruals for legal contingencies to the extent that it has concluded it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. No estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made at this time regarding the matters specifically described above because the inherently unpredictable nature of legal proceedings may be exacerbated by various factors, including: (i) the damages sought in the proceedings are unsubstantiated or indeterminate; (ii) discovery is not complete; (iii) the proceeding is in its early stages; (iv) the matters present legal uncertainties; (v) there are significant facts in dispute; (vi) there are a large number of parties (including where it is uncertain how liability, if any, will be shared among multiple defendants); or (vii) there is a wide range of potential outcomes.

Product Warranties

The Company recognizes a liability for the estimated costs that may be incurred to remedy certain deficiencies of quality or performance of the Company’s products. These product warranties extend over a specified period of time generally ranging up to two years from the date of sale depending upon the product subject to the warranty. The Company accrues a provision for estimated future warranty costs based upon the historical relationship of warranty claims to sales. The Company periodically reviews the adequacy of its product warranties and adjusts, if necessary, the warranty percentage and accrued warranty reserve, which is included in other current and non-current liabilities in the Consolidated Balance Sheets, for actual experience.

In millions
Balance as of October 1, 2012	$	16
Reductions for payments and costs to satisfy claims	(8		)
Accruals for warranties issued during the period	8
Balance as of March 31, 2013	$	16

Guarantees of Indebtedness and Other Off-Balance Sheet Arrangements

Letters of Credit

As of March 31, 2013, the Company had outstanding an aggregate of $119 million in irrevocable letters of credit which ensure the Company's performance or payment to third parties.  Included in this amount is $76 million issued underits $535 million committed revolving credit facilities, which facilities are available through October 26, 2016.  Also included is $43 million of letters of credit issued under uncommitted facilities.

Surety Bonds

The Company arranges for the issuance of various types of surety bonds, such as license, permit, bid and performance bonds, which are agreements under which the surety company guarantees that the Company will perform in accordance with contractual or legal obligations. These bonds vary in duration although most are issued and outstanding from three months to three years. These bonds are backed by $12 million of the Company’s letters of credit. If the Company fails to perform under its obligations, the maximum potential payment under these surety bonds is $12 million as of March 31, 2013. Historically, no surety bonds have been drawn upon.

Purchase Commitments and Termination Fees

The Company purchases components from a variety of suppliers and uses several contract manufacturers to provide manufacturing services for its products. During the normal course of business, in order to manage manufacturing lead times and to help assure adequate component supply, the Company enters into agreements with contract manufacturers and suppliers that allow them to produce and procure inventory based upon forecasted requirements provided by the Company. If the Company does not meet these specified purchase commitments, it could be required to purchase the inventory, or in the case of certain agreements, pay an early termination fee. Historically, the Company has not been required to pay a charge for not meeting its designated purchase commitments with these suppliers, but has been obligated to purchase certain excess inventory levels from its outsourced manufacturers due to actual sales of product varying from forecast and due to transition of manufacturing from one vendor to another.

The Company’s outsourcing agreements with its most significant contract manufacturers expire in July and September 2013. After the initial term, the outsourcing agreements are automatically renewed for successive periods of twelve months each, subject to specific termination rights for the Company and the contract manufacturers. All manufacturing of the Company’s products is performed in accordance with either detailed requirements or specifications and product designs furnished by the Company, and is subject to rigorous quality control standards.

25

Product Financing Arrangements

The Company sells products to various resellers that may obtain financing from certain unaffiliated third-party lending institutions. For the Company’s product financing arrangement with resellers outside the U.S., in the event participating resellers default on their payment obligations to the lending institution, the Company is obligated under certain circumstances to guarantee repayment to the lending institution. The repayment amount fluctuates with the level of product financing activity. The guaranteed repayment amount was approximately $3 million as of March 31, 2013. The Company reviews and sets the maximum credit limit for each reseller participating in this financing arrangement. Historically, there have not been any guarantee repayments by the Company. The Company has estimated the fair value of this guarantee as of March 31, 2013, and has determined that it is not significant. There can be no assurance that the Company will not be obligated to repurchase inventory under this arrangement in the future.

Long-Term Cash Incentive Bonus Plan

Parent has established a long-term incentive cash bonus plan (“LTIP”). Under the LTIP, Parent will make cash awards available to compensate certain key employees upon the achievement of defined returns on the Sponsors’ initial investment in the Parent (a “triggering event”). Parent has authorized LTIP awards covering a total of $60 million, of which $42 million in awards were outstanding as of March 31, 2013. The Company will begin to recognize compensation expense relative to the LTIP awards upon the occurrence of a triggering event (e.g., a sale or initial public offering). As of March 31, 2013, no compensation expense associated with the LTIP has been recognized.

Credit Facility Indemnification

In connection with its obligations under the credit facilities described in Note 7, “Financing Arrangements,” the Company has agreed to indemnify the third-party lending institutions for costs incurred by the institutions related to changes in tax law or other legal requirements. While there have been no amounts paid to the lenders pursuant to this indemnity in the past, there can be no assurance that the Company will not be obligated to indemnify the lenders under this arrangement in the future.

Transactions with Alcatel-Lucent

Pursuant to the Contribution and Distribution Agreement effective October 1, 2000, Lucent Technologies, Inc. (now Alcatel-Lucent) contributed to the Company substantially all of the assets, liabilities and operations associated with its enterprise networking businesses (the “Company’s Businesses”) and distributed the Company’s stock pro-rata to the shareholders of Lucent (“distribution”). The Contribution and Distribution Agreement, among other things, provides that, in general, the Company will indemnify Alcatel-Lucent for all liabilities including certain pre-distribution tax obligations of Alcatel-Lucent relating to the Company’s Businesses and all contingent liabilities primarily relating to the Company’s Businesses or otherwise assigned to the Company. In addition, the Contribution and Distribution Agreement provides that certain contingent liabilities not allocated to one of the parties will be shared by Alcatel-Lucent and the Company in prescribed percentages. The Contribution and Distribution Agreement also provides that each party will share specified portions of contingent liabilities based upon agreed percentages related to the business of the other party that exceed $50 million. The Company is unable to determine the maximum potential amount of other future payments, if any, that it could be required to make under this agreement.

The Tax Sharing Agreement governs Alcatel-Lucent’s and the Company’s respective rights, responsibilities and obligations after the distribution with respect to taxes for the periods ending on or before the distribution. Generally, pre-distribution taxes or benefits that are clearly attributable to the business of one party will be borne solely by that party, and other pre-distribution taxes or benefits will be shared by the parties based on a formula set forth in the Tax Sharing Agreement. The Company may be subject to additional taxes or benefits pursuant to the Tax Sharing Agreement related to future settlements of audits by state and local and foreign taxing authorities for the periods prior to the Company’s separation from Alcatel-Lucent.

26

15. Guarantor—Non Guarantor financial information

Borrowings by Avaya Inc. under the Cash Flow Credit Agreement are jointly and severally, fully, and unconditionally guaranteed (subject to certain customary release provisions) by substantially all wholly owned U.S. subsidiaries of Avaya Inc. (collectively, the “Guarantor Subsidiaries”) and Parent. Each of the Guarantor Subsidiaries is 100% owned, directly or indirectly by Avaya Inc. The 7% Senior Secured Notes, the 9% Senior Secured Notes, the 10.50% Senior Secured Notes and the senior unsecured notes issued by Avaya Inc. are jointly and severally, fully and unconditionally guaranteed by the Guarantor Subsidiaries. None of the other subsidiaries of Avaya Inc., either directly or indirectly, guarantees the Cash Flow Credit Agreement, the 7% Senior Secured Notes, the 9% Senior Secured Notes, the 10.50% Senior Secured Notes and the senior unsecured notes (“Non-Guarantor Subsidiaries”).

Avaya Inc. and each of the Guarantor Subsidiaries are authorized to borrow under the Cash Flow Credit Agreement. Borrowings under that facility are jointly and severally, fully, and unconditionally guaranteed by Avaya Inc. and the Guarantor Subsidiaries (subject to certain customary release provisions). Additionally these borrowings are fully and unconditionally guaranteed by Parent.

The 7% Senior Secured Notes, the 9% Senior Secured Notes and the related guarantees are secured equally and ratably (other than with respect to real estate) with the Cash Flow Credit Agreement and any future first lien obligations by (i) a first-priority lien on substantially all of Avaya Inc.’s and the Guarantor Subsidiaries’ assets, other than (x) any real estate and (y) collateral that secures the senior secured multi-currency asset based revolving credit facility on a first-priority basis (the “ABL Priority Collateral”), and (ii) a second-priority lien on the ABL Priority Collateral, subject to certain limited exceptions.

The 10.50% Senior Secured Notes and the related guarantees are secured equally and ratably on a junior priority basis to the ABL Credit Agreement, the Cash Flow Credit Agreement, the 7% Senior Secured Notes, the 9% Senior Secured Notes and any future senior obligations by a junior priority lien on substantially all of the Company's and the Guarantor Subsidiaries' assets, other than real estate.

The following tables present for Avaya Inc., the Guarantor Subsidiaries, the Non-Guarantor Subsidiaries and Intercompany Eliminations the results of operations and comprehensive income (loss) for the three and six months endedMarch 31, 2013 and 2012, financial position as of March 31, 2013 and September 30, 2012 and cash flows for the six months endedMarch 31, 2013 and 2012 to arrive at the information for Avaya Inc. on a consolidated basis.

27

Supplemental Condensed Consolidating Schedule of Operations and Comprehensive Loss

	Three Months Ended March 31, 2013
In millions	Avaya Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
REVENUE	$	554		$	84		$	557		$	(77	)	$	1,118
COST	284			55			270			(77		)	532
GROSS PROFIT	270			29			287			—			586
OPERATING EXPENSES
Selling, general and administrative	141			23			217			—			381
Research and development	64			1			48			—			113
Amortization of intangible assets	52			1			4			—			57
Goodwill impairment	89			—			—			—			89
Restructuring and impairment charges, net	6			1			11			—			18
	352			26			280			—			658
OPERATING (LOSS) INCOME	(82		)	3			7			—			(72		)
Interest expense	(110		)	(6		)	—			—			(116		)
Loss on extinguishment of debt	(3		)	—			—			—			(3		)
Other (expense) income, net	(14		)	(1		)	17			—			2
(LOSS) INCOME BEFORE INCOME TAXES	(209		)	(4		)	24			—			(189		)
Benefit from (provision for) income taxes	8			—			(11		)	—			(3		)
Equity in net (loss) income of consolidated subsidiaries	9			—			—			(9		)	—
NET (LOSS) INCOME	$	(192	)	$	(4	)	$	13		$	(9	)	$	(192	)
Comprehensive (loss) income	$	(182	)	$	(4	)	$	6		$	(2	)	$	(182	)

28

Supplemental Condensed Consolidating Schedule of Operations and Comprehensive Loss

	Three Months Ended March 31, 2012
In millions	Avaya Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
REVENUE	$	706		$	102		$	687		$	(238	)	$	1,257
COST	450			64			368			(238		)	644
GROSS PROFIT	256			38			319			—			613
OPERATING EXPENSES
Selling, general and administrative	147			26			241			—			414
Research and development	64			3			50			—			117
Amortization of intangible assets	52			1			3			—			56
Restructuring and impairment charges, net	9			1			80			—			90
Acquisition-related costs	2			—			—			—			2
	274			31			374			—			679
OPERATING (LOSS) INCOME	(18		)	7			(55		)	—			(66		)
Interest expense	(101		)	(7		)	—			—			(108		)
Other expense, net	(1		)	—			(11		)	—			(12		)
LOSS BEFORE INCOME TAXES	(120		)	—			(66		)	—			(186		)
Benefit from income taxes	3			—			21			—			24
Equity in net loss of consolidated subsidiaries	(45		)	—			—			45			—
NET LOSS	$	(162	)	$	—		$	(45	)	$	45		$	(162	)
Comprehensive loss	$	(146	)	$	—		$	(43	)	$	43		$	(146	)

29

Supplemental Condensed Consolidating Schedule of Operations and Comprehensive Loss

	Six Months Ended March 31, 2013
In millions	Avaya Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
REVENUE	$	1,278		$	164		$	1,168		$	(252	)	$	2,358
COST	651			109			598			(252		)	1,106
GROSS PROFIT	627			55			570			—			1,252
OPERATING EXPENSES
Selling, general and administrative	285			49			431			—			765
Research and development	130			3			98			—			231
Amortization of intangible assets	104			2			8			—			114
Goodwill impairment	89			—			—			—			89
Restructuring and impairment charges, net	23			3			76			—			102
	631			57			613			—			1,301
OPERATING LOSS	(4		)	(2		)	(43		)	—			(49		)
Interest expense	(215		)	(9		)	—			—			(224		)
Loss on extinguishment of debt	(6		)	—			—			—			(6		)
Other (expense) income, net	(18		)	(1		)	15			—			(4		)
LOSS BEFORE INCOME TAXES	(243		)	(12		)	(28		)	—			(283		)
Benefit from (provision for) income taxes	27			—			(21		)	—			6
Equity in net loss of consolidated subsidiaries	(61		)	—			—			61			—
NET LOSS	$	(277	)	$	(12	)	$	(49	)	$	61		$	(277	)
Comprehensive loss	$	(280	)	$	(12	)	$	(68	)	$	80		$	(280	)

30

Supplemental Condensed Consolidating Schedule of Operations and Comprehensive Income (Loss)

	Six Months Ended March 31, 2012
In millions	Avaya Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
REVENUE	$	1,497		$	198		$	1,332		$	(383	)	$	2,644
COST	826			131			753			(383		)	1,327
GROSS PROFIT	671			67			579			—			1,317
OPERATING EXPENSES
Selling, general and administrative	346			49			452			—			847
Research and development	126			7			95			—			228
Amortization of intangible assets	103			2			7			—			112
Restructuring charges, net	16			1			94			—			111
Acquisition-related costs	3			—			—			—			3
	594			59			648			—			1,301
OPERATING INCOME (LOSS)	77			8			(69		)	—			16
Interest expense	(206		)	(10		)	(1		)	—			(217		)
Other expense, net	—			—			(13		)	—			(13		)
LOSS BEFORE INCOME TAXES	(129		)	(2		)	(83		)	—			(214		)
Benefit from income taxes	2			—			24			—			26
Equity in net loss of consolidated subsidiaries	(61		)	—			—			61			—
NET LOSS	$	(188	)	$	(2	)	$	(59	)	$	61		$	(188	)
Comprehensive loss	$	(136	)	$	(2	)	$	(44	)	$	46		$	(136	)

31

Supplemental Condensed Consolidating Balance Sheet

	March 31, 2013
In millions	Avaya Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	99		$	12		$	191		$	—		$	302
Accounts receivable, net—external	265			36			380			—			681
Accounts receivable—internal	806			63			169			(1,038		)	—
Inventory	120			6			129			—			255
Deferred income taxes, net	—			—			21			—			21
Other current assets	99			31			150			—			280
Internal notes receivable, current	1,484			155			2			(1,641		)	—
TOTAL CURRENT ASSETS	2,873			303			1,042			(2,679		)	1,539
Property, plant and equipment, net	213			21			119			—			353
Deferred income taxes, net	1			—			43			—			44
Intangible assets, net	1,416			31			178			—			1,625
Goodwill	3,989			—			104			—			4,093
Other assets	166			4			26			—			196
Investment in consolidated subsidiaries	—			2			31			(33		)	—
TOTAL ASSETS	$	8,658		$	361		$	1,543		$	(2,712	)	$	7,850
LIABILITIES
Current liabilities:
Debt maturing within one year—external	$	35		$	—		$	—		$	—		$	35
Debt maturing within one year—internal	161			385			1,095			(1,641		)	—
Accounts payable—external	207			15			187			—			409
Accounts payable—internal	130			46			862			(1,038		)	—
Payroll and benefit obligations	104			9			134			—			247
Deferred revenue	590			13			86			—			689
Business restructuring reserve, current portion	6			4			93			—			103
Other current liabilities	155			4			94			—			253
TOTAL CURRENT LIABILITIES	1,388			476			2,551			(2,679		)	1,736
Long-term debt	6,068			—			—			—			6,068
Pension obligations	1,216			—			492			—			1,708
Other postretirement obligations	343			—			—			—			343
Deferred income taxes, net	190			—			19			—			209
Business restructuring reserve, non-current portion	23			1			32			—			56
Other liabilities	132			21			290			—			443
Deficiency in consolidated subsidiaries	2,011			—			—			(2,011		)	—
TOTAL NON-CURRENT LIABILITIES	9,983			22			833			(2,011		)	8,827
TOTAL DEFICIENCY	(2,713		)	(137		)	(1,841		)	1,978			(2,713		)
TOTAL LIABILITIES AND DEFICIENCY	$	8,658		$	361		$	1,543		$	(2,712	)	$	7,850

32

Supplemental Condensed Consolidating Balance Sheet

	September 30, 2012
In millions	Avaya Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	101		$	10		$	226		$	—		$	337
Accounts receivable, net—external	326			39			417			—			782
Accounts receivable—internal	782			66			164			(1,012		)	—
Inventory	131			6			118			—			255
Deferred income taxes, net	—			—			18			—			18
Other current assets	150			30			72			—			252
Internal notes receivable, current	1,467			147			—			(1,614		)	—
TOTAL CURRENT ASSETS	2,957			298			1,015			(2,626		)	1,644
Property, plant and equipment, net	222			24			118			—			364
Deferred income taxes, net	—			—			43			—			43
Intangible assets, net	1,546			33			196			—			1,775
Goodwill	4,082			—			106			—			4,188
Other assets	150			5			25			—			180
Investment in consolidated subsidiaries	—			—			27			(27		)	—
TOTAL ASSETS	$	8,957		$	360		$	1,530		$	(2,653	)	$	8,194
LIABILITIES
Current liabilities:
Debt maturing within one year—external	$	37		$	—		$	—		$	—		$	37
Debt maturing within one year—internal	151			368			1,095			(1,614		)	—
Accounts payable—external	235			18			185			—			438
Accounts payable—internal	123			49			840			(1,012		)	—
Payroll and benefit obligations	81			13			168			—			262
Deferred revenue	523			7			86			—			616
Business restructuring reserve, current portion	5			4			75			—			84
Other current liabilities	261			4			37			—			302
TOTAL CURRENT LIABILITIES	1,416			463			2,486			(2,626		)	1,739
Long-term debt	6,084			—			—			—			6,084
Pension obligations	1,271			—			492			—			1,763
Other postretirement obligations	360			—			—			—			360
Deferred income taxes, net	182			—			22			—			204
Business restructuring reserve, non-current portion	22			1			28			—			51
Other liabilities	137			22			270			—			429
Deficiency in consolidated subsidiaries	1,921			3			—			(1,924		)	—
TOTAL NON-CURRENT LIABILITIES	9,977			26			812			(1,924		)	8,891
TOTAL DEFICIENCY	(2,436		)	(129		)	(1,768		)	1,897			(2,436		)
TOTAL LIABILITIES AND DEFICIENCY	$	8,957		$	360		$	1,530		$	(2,653	)	$	8,194

33

Supplemental Condensed Consolidating Schedule of Cash Flows

	Six Months Ended March 31, 2013
In millions	Avaya Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
OPERATING ACTIVITIES:
Net loss	$	(277	)	$	(12	)	$	(49	)	$	61		$	(277	)
Adjustments to reconcile net loss to net cash provided by (used for) operating activities	287			8			13			—			308
Changes in operating assets and liabilities	22			1			34			—			57
Equity in net loss of consolidated subsidiaries	61			—			—			(61		)	—
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES	93			(3		)	(2		)	—			88
INVESTING ACTIVITIES:
Capital expenditures	(16		)	—			(31		)	—			(47		)
Capitalized software development costs	(8		)	(2		)	—			—			(10		)
Acquisition of businesses, net of cash acquired	(1		)	—			—			—			(1		)
Proceeds from sale of long-lived assets	5			—			4			—			9
Proceeds from sale of investments	—			—			1			—			1
Advance to Parent	(10		)	—			—			—			(10		)
Other investing activities, net	(1		)	—			—			—			(1		)
NET CASH USED FOR INVESTING ACTIVITIES	(31		)	(2		)	(26		)	—			(59		)
FINANCING ACTIVITIES:
Proceeds from 9% senior secured notes	290			—			—			—			290
Repayment of term B-5 loans	(284		)	—			—			—			(284		)
Proceeds from term B-5 loans	589			—			—			—			589
Repayment of term B-1 loans	(584		)	—			—			—			(584		)
Debt issuance and third-party debt modification costs	(49		)	—			—			—			(49		)
Repayment of long-term debt	(19		)	—			—			—			(19		)
Net (repayments) borrowings of intercompany debt	(7		)	9			(2		)	—			—
Other financing activities, net	—			(2		)	—			—			(2		)
NET CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES	(64		)	7			(2		)	—			(59		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(5		)	—			(5		)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(2		)	2			(35		)	—			(35		)
Cash and cash equivalents at beginning of period	101			10			226			—			337
Cash and cash equivalents at end of period	$	99		$	12		$	191		$	—		$	302

34

Supplemental Condensed Consolidating Schedule of Cash Flows

	Six Months Ended March 31, 2012
In millions	Avaya Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
OPERATING ACTIVITIES:
Net loss	$	(188	)	$	(2	)	$	(59	)	$	61		$	(188	)
Adjustments to reconcile net loss to net cash (used for) provided by operating activities	257			6			61			—			324
Changes in operating assets and liabilities	(160		)	11			44			—			(105		)
Equity in net loss of consolidated subsidiaries	61			—			—			(61		)	—
NET CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES	(30		)	15			46			—			31
INVESTING ACTIVITIES:
Capital expenditures	(14		)	(1		)	(23		)	—			(38		)
Capitalized software development costs	(19		)	—			—			—			(19		)
Acquisition of businesses, net of cash acquired	(1		)	—			(3		)	—			(4		)
Proceeds from sale of long-lived assets	2			—			—			—			2
Proceeds from sale of investments	6			—			—			—			6
Restricted cash	(1		)	—			1			—			—
Advance to Parent	(8		)	—			—			—			(8		)
Other investing activities, net	(2		)	—			—			—			(2		)
NET CASH USED FOR INVESTING ACTIVITIES	(37		)	(1		)	(25		)	—			(63		)
FINANCING ACTIVITIES:
Repayment of long-term debt	(19		)	—			—			—			(19		)
Net borrowings (repayments) of intercompany debt	72			(10		)	(62		)	—			—
Other financing activities, net	—			(1		)	—			—			(1		)
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES	53			(11		)	(62		)	—			(20		)
Effect of exchange rate changes on cash and cash equivalents	—			—			7			—			7
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(14		)	3			(34		)	—			(45		)
Cash and cash equivalents at beginning of period	149			12			239			—			400
Cash and cash equivalents at end of period	$	135		$	15		$	205		$	—		$	355

35

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Unless the context otherwise indicates, as used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the terms “we,” “us,” “our,” “the Company,” “Avaya” and similar terms refer to Avaya Inc. and its subsidiaries. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the unaudited interim consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q. The matters discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. See “Cautionary Note Regarding Forward-Looking Statements” at the end of this discussion.

Our accompanying unaudited interim consolidated financial statements as of March 31, 2013 and for the three and six months ended March 31, 2013 and 2012 have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the United States Securities and Exchange Commission, or the SEC, for interim financial statements, and should be read in conjunction with our consolidated financial statements and other financial information for the fiscal year ended September 30, 2012, which were included in our Annual Report on Form 10-K filed with the SEC on December 12, 2012. In our opinion, the unaudited interim consolidated financial statements reflect all adjustments, consisting of normal and recurring adjustments, necessary for a fair statement of the financial condition, results of operations and cash flows for the periods indicated.

Certain prior period amounts have been reclassified to conform to the current interim period presentation. The consolidated results of operations for the interim periods reported are not necessarily indicative of the results to be experienced for the entire fiscal year.

Overview

We are a leading global provider of real-time business collaboration and communications solutions that bring people together with the right information at the right time in the right context, enabling businesses to improve their efficiency and quickly solve critical business challenges. Our solutions are designed to enable business users to work together more effectively internally and with their customers and suppliers, to accelerate decision-making and achieve business outcomes. These industry leading solutions are also designed to be flexible, reliable and secure, enabling simplified management and cost reduction while providing a platform for next-generation collaboration from Avaya.

We are highly focused on serving our core business collaboration and communications markets with open and unifying, fit-for-purpose solutions and distributed software services and support models. We shape our portfolio to meet the demands of customers today and in the future.

Our solutions and services are aimed at large enterprises, small- and mid-sized businesses and government organizations. We offer solutions in three key business collaboration and communications categories:

• Real-Time Collaboration, Video and Unified Communications Software, Infrastructure and Endpoints for an increasingly mobile workforce;

• Customer Experience Interaction Management, including Contact Center applications; and

• Networking.

These three categories are supported by Avaya's portfolio of services including product support, integration, and professional and managed services that enable customers to optimize and manage their communications networks worldwide and achieve enhanced business results.

Acquisition of RADVISION Ltd.

On June 5, 2012, Avaya acquired RADVISION Ltd. (“Radvision”) for $230 million in cash. Radvision is a global provider of videoconferencing and telepresence technologies over internet protocol (“IP”) and wireless networks.

Through this acquisition, Avaya will expand its technology portfolio and provide customers a highly integrated and interoperable suite of cost-effective, easy to use, high-definition video collaboration products, with the ability to interoperate with multiple mobile devices including Apple iPad and Google Android. We have begun to integrate Radvision’s enterprise video infrastructure and high value endpoints with Avaya’s award winning Avaya Aura^® Unified Communications (“UC”) platform to create a compelling and differentiated solution designed to accelerate the adoption of video collaboration. Radvision brings to Avaya a portfolio that includes a full range of videoconferencing products, technologies and expertise serving large enterprises, small businesses, and service providers. It includes standards-based applications, open infrastructure and endpoints for ad-hoc and scheduled videoconferencing with room-based systems, desktop, and mobile consumer devices. The integrated Avaya and Radvision portfolios will extend intra-company business to business and business to consumer video

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communications, and also support internal “Bring Your Own Device” (“BYOD”) initiatives. See discussion in Note 3, “Business Combinations,” to our unaudited interim consolidated financial statements for further details.

Initial Registration Statement of Parent

Avaya is a wholly owned subsidiary of Avaya Holdings Corp., a Delaware corporation (“Parent”). Parent was formed by affiliates of two private equity firms, Silver Lake Partners (“Silver Lake”) and TPG Capital (“TPG”) (collectively, the “Sponsors”). Silver Lake and TPG, through Parent, acquired Avaya in a transaction that was completed on October 26, 2007 (the “Merger”). See discussion in Note 1, “Background, Merger and Basis of Presentation - Merger,” to our unaudited interim consolidated financial statements for further details.

On June 9, 2011, Parent filed with the SEC a registration statement on Form S-1 (as it may be amended from time to time, the “registration statement”) relating to a proposed initial public offering of its common stock. As contemplated in the registration statement, the net proceeds of the proposed offering are expected to be used, among other things, to repay a portion of our long-term indebtedness. The registration statement remains under review by the SEC and shares of common stock registered thereunder may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This Form 10-Q and the pending registration statement shall not constitute an offer to sell or the solicitation of any offer to buy nor shall there be any sale of those securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. Further, there is no way to predict whether or not Parent will be successful in completing the offering as contemplated and if it is successful, we cannot be certain if, or how much of, the net proceeds will be used for the purposes identified above.

Refinancing of Debt

During the six months ended March 31, 2013, the Company completed a series of transactions which allowed the Company to refinance (1) its senior secured term B-1 loans ("term B-1 loans") outstanding under its senior secured credit facility originally due October 26, 2014, and (2) $642 million of its 9.75% senior unsecured cash-pay notes and $742 million of its senor unsecured paid-in-kind ("PIK") toggle notes each originally due November 1, 2015 (collectively, the "Old Notes").

During the three months ended December 31, 2012, the Company completed three transactions which allowed the Company to refinance $848 million of its term B-1 loans. On October 29, 2012 the Company completed an amendment and restatement of the senior secured credit facility and senior secured multi-currency asset-based revolving credit facility along with the extension of the maturity date of $135 million aggregate principal amount of term B-1 loans from October 26, 2014 to October 26, 2017 by converting such loans into a new tranche of senior secured term B-4 loans ("term B-4 loans"). On December 21, 2012 the Company completed an amendment and restatement of the senior secured credit facility along with the extension of the maturity date of $713 million aggregate principal amount of term B-1 loans from October 26, 2014 to October 26, 2017 and $134 million aggregate principal amount of term B-4 loans from October 26, 2017 to March 31, 2018 in each case by converting such loans into a new tranche of senior secured term B-5 loans ("term B-5 loans"). On December 21, 2012 the Company issued $290 million of 9% senior secured notes due April 2019 (the "9% Senior Secured Notes"), the proceeds of which were used to repay $284 million principal amount of term B-5 loans and to pay related fees and expenses.

On March 12, 2013 the Company refinanced the remaining $584 million of its term B-1 loans with the cash proceeds from the issuance of $589 million aggregate principal amount of term B-5 loans due October 26, 2017 under its senior secured credit facility.

In connection with the amendments and restatements of the senior secured credit facility necessary to effectuate the transactions described above, the applicable interest rate for the portion of the term B-1 loans that were converted into term B-4 loans and term B-5 loans was also changed.

On March 7, 2013, the Company completed an exchange offer in which $1,384 million of Old Notes were exchanged for $1,384 million of senior secured notes due 2021 (the "10.50% Senior Secured Notes"). The 10.50% Senior Secured Notes were issued at par, bear interest at a rate of 10.50% per annum and mature on March 1, 2021.

Both the 9% Senior Secured Notes and the 10.50% Senior Secured Notes have not been, and will not be, registered under the Securities Act or applicable state securities laws and may not be offered or sold absent registration under the Securities Act or applicable state securities laws or applicable exemptions from registration requirements.

See Note 7, “Financing Arrangements” to our unaudited interim consolidated financial statements for further details.

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Major Business Areas

Avaya conducts its business operations in three segments. Two of those segments, Global Communications Solutions (“GCS”) and Avaya Networking (“Networking”), make up Avaya’s Enterprise Collaboration Solutions (“ECS”) product portfolio. The third segment contains Avaya’s services portfolio and is called Avaya Global Services (“AGS”).

Our Products

Our product portfolio spans a broad range of unified communications, collaboration, customer service, video and data networking products designed to meet the diverse needs of small and mid-size businesses, as well as large enterprises. The majority of our portfolio comprises software products that reside on either a client or server. Client software resides on both our own and third-party devices, including desk phones, tablets, desktop PCs and mobile phones. Server-side software controls communication and collaboration for the enterprise, and delivers rich value-added applications such as messaging, telephony, voice, video and web conferencing, mobility and customer service. Hardware includes a broad range of desk phones, video endpoints, servers and gateways and LAN/WAN switching wireless access points and gateways. A portion of the portfolio has been subjected to rigorous interoperability and security testing and is approved for acquisition by the US Government. Highlights of our portfolio include:

Avaya Aura Portfolio

At the core of our next-generation collaboration solutions is the Avaya Aura platform, our session initiation protocol ("SIP") standards-based software suite of collaboration applications, including real-time voice, video, instant messaging, presence, conferencing, and non-real-time email, voicemail and social networking. The Avaya Aura platform is part of our infrastructure solutions portfolio. The Avaya Aura architecture simplifies complex communications networks and reduces infrastructure costs. Using this architecture, organizations are able to rapidly and cost-effectively deploy applications from a centralized data center to users regardless of the device they are using or the network to which they are connected. The Avaya Aura platform provides a simple means of connecting legacy, multi-vendor systems to new open standards SIP-based applications, helping enterprises to reduce costs and increase user productivity and choice simultaneously. We believe our Avaya Aura platform is one of the most reliable, secure and comprehensive offerings in the industry and that our commitment to open, standards-based solutions helps provide our customers with the flexibility to be more efficient and successful.

At the heart of our Avaya Aura portfolio is Session Manager, which provides multimedia communications control and management. Multi-vendor voice, video and data communications can all be managed and controlled from one centralized software platform. The Avaya Aura platform uses virtualization technology across all applications to reduce the physical number of servers relative to existing offerings, reducing total cost of ownership for medium sized and large enterprises alike. The Avaya Aura portfolio allows business users to work from any location, on any device, by providing collaboration and communication capabilities on a broad variety of operating systems, devices, desktop, laptop and tablet computers, smart phones, mobile devices and dedicated deskphones.

Highlights of the Avaya Aura portfolio include the following:

• Avaya Aura Messaging, an application that enables migration from traditional voice messaging systems to SIP-based multimedia messaging with enterprise-class features, scalability and reliability.

• Avaya Aura Presence Services, an application that provides contextual information and availability from across multiple devices and applications to users, delivering a richer collaboration experience. These capabilities are leveraged across the entire spectrum of communications applications, ranging from voice calls and instant messaging to customer services and business processes.

• Avaya Aura Conferencing, which offers a rich set of scalable conferencing configurations and delivers audio conferencing, web conferencing, document-based collaboration and video-enabled web conferencing while letting users leverage familiar desktop applications and interfaces for increased conference control.

• The Avaya Aura architecture supports communications and collaboration endpoints including telephones, speaker phones, personal video collaboration devices and client software designed to provide enterprise class communications and our Avaya Flare Experience, as discussed below, on our own devices as well as laptops, smartphones and tablets.

• Avaya Aura Video Conferencing solutions, a wide suite of high-definition, low-bandwidth, SIP-based video endpoints combined with software applications to enable rich video conferencing to serve individual desktop users and small workgroups as well as large conference rooms.

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Radvision Scopia

In June 2012, Avaya acquired RADVISION Ltd., a global provider of videoconferencing and telepresence technologies over IP and wireless networks. Through that transaction, Avaya acquired a video conferencing portfolio designed to help customers be more effective regardless of whether they are working from their desktop, a conference room or a mobile device.

The Radvision Scopia infrastructure is designed to deliver flexibility and cost effectiveness as enterprises adopt the latest HD and Unified Communications technologies. The Radvision Scopia platform is an effective combination of hardware and software that supports media processing for advanced room system devices while delivering high scalability and distributed processing for desktops and mobile deployments.

Our Radvision Scopia XT video conferencing room systems incorporate the latest video communications technology including dual 1080p/60fps video channels, H.264 high profile for bandwidth efficiency, H.264 scalable video coding for error resiliency, and Apple iPad device multi-touch control.

The Radvision Scopia Desktop application extends a room system deployment to remote, mobile, and desktop users with a simple web-browser plug-in that is centrally managed, distributed and deployed. It allows for scheduled and ad hoc video conferences across a variety of devices and provides the ability to easily include participants from both inside and outside the organization.

Radvision Scopia Mobile provides applications for video conferencing, conference control, and management for smart phones and tablets supporting Apple iOS when connected over mobile broadband or Wi-Fi.

Avaya Contact Centers

Avaya is a leader in the contact center market. Across the contact center our portfolio provides a foundation for managing voice interactions that has been extended to include multiple channels supporting instant messaging, video, email, and social media.

Our Avaya Aura Contact Center is a SIP-based application that enables session based media, independent communications, and interactions. This session based approach allows for blended agent queues and assigns customer interactions specific to the incoming channel. Agents receive the request at the desktop through a single integrated queue, unified reporting is provided to the supervisor supported by analytics across activities, and users are administrated through a single unified tool.

Avaya Aura Contact Center allows an agent to see all the information related to a customer and provides that customer with a seamless interaction as he or she traverses channels (e.g. telephone call, video, chat or email). With improved information, agents have the ability to provide better customer support for service related issues and support questions arising during sales and customer support. As a result, the combined portfolio not only optimizes agent skill sets to address multiple communication channels and customer needs, but enhances customer experience.

Avaya Aura Contact Center is a scalable communications infrastructure that enables small, medium, and large enterprises that span global implementations.

The capabilities of our contact center solutions include:

• Assisted and Automated Experience Management, which provides intelligent routing of voice and multimedia contacts and a variety of applications for customer service agents, as well as outbound and self-service applications to manage collaboration and workflow between an enterprise and its customers;

• Workforce Optimization, which includes call recording, quality monitoring and workforce management applications; and

• Performance Management, which provides contact center reporting, analytics and operations performance management solutions, as well as agent performance management and scheduling to ensure optimal use of resources and improve customer satisfaction.

In today's mobile and distributed environments, agents and supervisors benefit from the ability to move the delivery of their communications and customer support activities to the location of their choice (office, home, or remote location). Avaya Aura Contact Center also provides agents and supervisors with the ability to move from device to device (hard phone, soft phone and mobile phone).

Avaya Flare Experience

In September 2010, we unveiled the Avaya Flare Experience, a real-time, enterprise video communications and collaboration solution. The Avaya Flare Experience is part of our Unified Communication Applications or UC Applications solutions portfolio and helps break down the barriers between today’s communications and collaboration tools with a distinctive user interface for quick, easy access to voice and video, social media, presence and instant messaging and audio/video/web conferencing, a consolidated view of multiple directories, context history and more.

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The Avaya Flare Experience features a central spotlight that highlights active or in-progress collaboration sessions. Initiating a communication session is as easy as moving one or more contacts from the directory into the spotlight. For text messages, a pop-up keyboard appears when a user taps a text-based icon under a contact’s photo. The Avaya Flare Experience combines contacts from multiple sources into a single “fan,” synchronizes email/calendars with Microsoft ActiveSync and integrates collaboration activity into a common interaction history, providing context to any session. We believe these capabilities deliver a simpler, more compelling experience to end-users using video, voice and text.

Currently, the Avaya Flare Experience runs on the Avaya Desktop Video Device, an Android-based, video-enabled desktop collaboration endpoint for executive desktops or power communicators that can also perform as a customer kiosk. In addition, in January 2012 we announced the availability of Avaya Flare Communicator for Apple iPad tablets. We are adapting the Avaya Flare software for other devices and operating systems such as Google Android tablets, Windows laptops and other consumer device classes and platforms. Overall, we believe our software-centric solutions are helping to enable customers to be more productive and compete more effectively by changing the way users collaborate. The Avaya Flare Experience complements the widely deployed Avaya one-X product line that provides mobile applications for smartphones (Google Android, Apple iPhone, RIM BlackBerry, Symbian), or any phone using natural speech commands, as well as desktop-integrated Microsoft Windows and Apple Mac clients. Avaya one-X clients are expected to evolve over time to incorporate Avaya Flare capabilities in a single software family. Avaya Flare and Avaya one-X Unified Collaboration and Communication clients provide flexibility that helps organizations to provide the right experience to the right users to drive faster decision-making, reduce costs and provide more streamlined communications.

Avaya IP Office

Avaya IP Office is our award-winning global flagship Small and Medium Enterprises, or SME, communications solution specially designed to meet communications challenges facing small and medium enterprises. Avaya IP Office is part of our infrastructure solutions portfolio. IP Office provides solutions that help simplify processes and streamline information exchange within systems. Communications capabilities can be added as needed, and IP Office connects to both traditional and the latest IP lines to give growing companies flexibility and the ability to retain and leverage their existing investment. We recently unveiled the latest version of our communications solution for this market - Avaya IP Office 8.1 - which adds innovative capabilities to tap the full potential of next-generation collaboration. This includes new mobility, management and security features, as well increased scalability, to help SMEs efficiently and securely take advantage of BYOD environments and advanced mobility. 

Avaya Agile Communication Environment (ACE)

Avaya ACE offers a rich set of web application programming interfaces, or APIs, that enable developers to integrate communications into other business applications (such as CRM, ERP, BPM and social application frameworks) and business processes (such as dynamic team formation, business continuity planning and customer engagements).  For more policy-based style customization on enterprise communications, the Avaya ACE Foundation Toolkit offers Java APIs to allow customers to build Java feature sets to influence the treatment of incoming and/or outbound communications leveraging the SIP architecture. These capabilities enable rapid development of custom applications, which helps reduce costs and increases flexibility for enterprises. Programmers with limited communications expertise can readily embed real-time communications in business applications and workflows, expanding both the ability and opportunity to use Avaya collaboration capabilities. Avaya ACE provides a versatile platform for the members of Avaya DevConnect, our developer ecosystem, to build applications.

AvayaLive

AvayaLive is our overall Avaya-provided cloud solutions portfolio, allowing our customers to procure, provision, and deploy unified collaboration solutions without the need for on-premise equipment. The AvayaLive portfolio is focused on providing feature-rich, user deployable, collaboration platforms in a Communications As a Service (Caas) model, without requiring additional IT staffing or training.

AvayaLive Connect is a single-source for a complete unified communication experience for entrepreneurial businesses. The entrepreneurial business is defined by agility, creativity, and the rapid access to technology and the AvayaLive Connect solution is hallmarked by all three. The solution provides voice, video, conferencing, chat and messaging solutions in a simple, cloud-based solution. These services are accessible from mobile devices, personal computers, “hard” phones and tablets to enable collaboration from nearly anywhere a network is available. AvayaLive Connect is billed on a per-user/per month basis allowing businesses to add users to meet the demands of their customers. Utilizing the Amazon Elastic Compute Cloud (EC2), AvayaLive Connect scales to meet these demands with ease and without expensive resource or administrative overhead.

AvayaLive Engage is an online, immersive conferencing and social collaboration environment that lets users collaborate as though they were face to face. AvayaLive Engage replicates real life interactions using personalized avatars, which users control to navigate through an online, three-dimensional environment, with the ability to talk, chat, share, collaborate and present in real-time. A cloud-based solution requiring only a web browser plug-in, the product allows collaboration between users from any browser, inside or outside of the enterprise.

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Avaya Networking

In support of our data communications strategy, our networking product portfolio is designed to address and surpass competitors’ products with respect to three key requirements: resiliency, efficiency and performance.

Our networking portfolio is complementary to our business collaboration, unified communications and contact center portfolios based on the Avaya Aura architecture. We believe that customers today benefit from end-to-end solution design, testing and support. Over time we expect customers to benefit from development work in integrated provisioning, system management, quality of experience and bandwidth utilization.

Our networking products focus on data center, branch and wireless access networking, and we believe these products provide better support for real-time collaboration. Our networking portfolio includes:

• Ethernet Switching—a range of Local Area Network switches for data center, core, edge and branch applications;

• Unified Branch—a range of routers and Virtual Private Network appliances that provide a secure connection for branches;

• Wireless Networking—a cost-effective and scalable solution enabling enterprises to deploy wireless coverage;

• Access Control—solutions that provide policy decision to enforce role-based access control to the network;

• Unified Management—providing support for data and voice networks by simplifying the requirements associated across functional areas; and

• Avaya VENA—an end-to-end virtualization strategy and architecture that helps simplify data center and campus networking and optimizes business applications and service deployments in and between data centers and campuses, while helping to reduce costs and improve time to service.

We sell our portfolio of data networking products globally into enterprises of all types, with particular strength in healthcare, education, hospitality, financial services and local and state government.

Our Technology

We believe that technology enhances the way in which people collaborate. At Avaya, we work with customers, industry groups and technical bodies to foster innovation. Across our portfolio we leverage critical technology to our customers’ advantage. Avaya is a leading innovator in leveraging the use of SIP for business collaboration. This open-standard based protocol shifts communications from having to coordinate multiple, independent media and communications systems toward session management based environments, where multiple media and resources can flexibly be brought into a fully-integrated, session-based interaction. This fundamental difference supports more fluid, effective and persistent collaboration across multiple media and modes of communications.

Centralized SIP-Based Architecture

At the core of our architecture, SIP based Avaya Aura Session Manager centralizes communications control and application integration. Session Manager orchestrates a wide array of communication and collaboration applications and systems by decoupling them from the network. Applications can be deployed to individual users based on their need, rather than by where they work or the capabilities of the system to which they are connected. Session Manager instantly reduces complexity and provides the foundation for broader unified communications and collaboration strategies.

Unique SIP-Based Experiences

The Avaya Flare Experience leverages the Avaya Aura technology and its session control and management, presence, unified communications features and services, application creation and enablement capabilities. Social network interfaces to services, such as Facebook, allow for integrated directories across platforms. Users can access Microsoft Exchange services, such as e-mail, contacts and calendar, directly from a user’s contact card and, via the Avaya Aura Presence Services, can exchange instant message and presence information with Microsoft Lync users (i.e., Microsoft Communicator clients). Point-to-point video calls do not require a separate video conferencing server, and multi-party conferencing is enabled by Avaya Aura Conferencing.

Additional Technologies

In addition to SIP, we use technologies including:

• SIP/SIMPLE and XMP: the Avaya Aura Presence Services collects, publishes, aggregates and federates using SIP/SIMPLE and XMPP standards, providing interoperability with systems from other vendors, including but not limited to Microsoft, IBM and Google;

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• Service Oriented Architecture, or SOA, oriented web services, including SOAP, REST and WSDL, are used extensively in Avaya ACE, leveraging open, extensible standards and protocols to facilitate rapid deployment and deliver customer choice;

• Operating System, or OS, Support: our software applications run on a broad range of operating systems including, but not limited to, Microsoft Windows, Apple MAC OS, Google Android and RIM Blackberry;

• Virtualization Technology is used in our core Avaya Aura portfolio to reduce the physical server footprint using hypervisor technology to run multiple applications concurrently on a single physical platform; and

• Resilient data networking: our data portfolio provides highly resilient IPv4 and IPv6 routing services, with redundant hardware components, forwarding and restart capabilities that minimize interruptions, including one of the industry’s few sub second failover capabilities.

Our Services

AGS evaluates, plans, designs, implements, supports, manages and optimizes enterprise communications networks to help customers achieve enhanced business results both directly and through partners. Our award-winning portfolio of services includes product support, integration and professional and managed services that enable customers to optimize and manage their converged communications networks worldwide and achieve enhanced business results. AGS is supported by patented design and management tools and network operations and technical support centers around the world.

Within AGS are Avaya Client Services and Professional Services.

Avaya Client Services (“ACS”)

ACS is a market-leading organization that supports, manages and optimizes enterprise communications networks to help customers maximize the performance of their communications solutions. Avaya Client Services is supported by patented tools and by network operations and technical support centers around the world. The contracts for these services range between one and seven years, with three year terms being the most common. Custom or complex services contracts are typically five years in length.

The portfolio of ACS services includes:

• Global Support Services which provides a comprehensive suite of support options both directly and through partners, which enables customers to choose from modular options such as remote support, monitoring, parts, onsite, major upgrade subscription and more. We believe Avaya's solutions also enable customers to receive faster and better support than competitors can deliver, often with little or no additional costs. For example, through our new support site, customers now have access to live chat with agents, web based knowledge articles and "how-to" videos, virtual agent technology, and voice and online collaboration tools for faster resolution of customer issues. Secure Access Link is high speed network connectivity between the client and Avaya, capturing vital information to help ensure reliability, uptime and faster issue resolution of their Avaya systems and applications. Operations Intelligence Suite is a web-based portal that allows clients to have visibility to incidents if they occur to ensure rapid resolution. It also enhances and maintains the client's network by the ability to perform testing, root cause analysis and issue prevention.

• Avaya Operations Services which provides holistic managed services for customers' communications environments. Avaya can manage complex multi-vendor, multi-technology and aging networks with Service Level Agreements (SLAs) to help optimize network performance. With AOS services, Avaya can manage a customer's mixed environment and gain the opportunity to upgrade it over time to the latest technology, at the pace and in an operational expense model that makes sense for the customer. Managed services can be procured in standard packages or in fully custom arrangements that include tailored SLAs, billing, reporting, or private cloud options. AOS has approximately 700 experts in managing communications environments, supporting hundreds of customers across the globe.

Professional Services

Our planning, design and integration specialists and communications consultants provide and implement solutions that help reduce costs and enhance business agility. We also provide vertical solutions designed to leverage existing product environments, contact centers and unified communications networks and our IT professional services ("ITPS") unit provides IT services to U.S. Government customers.

Financial Results Summary

Our revenues for the six months ended March 31, 2013decreased11% as compared to the corresponding period in the prior year. The decrease is primarily the result of lower customer spend on unified communications, contact center, and network products in a cautious spending environment. During the six months ended March 31, 2013, these factors impacting our

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revenues across most of our product solutions also contributed to lower maintenance and professional services revenues. Further, the reduction in spending by government customers in the U.S. in anticipation of sequestration and budget cuts has also negatively impacted our product and services revenues.

During the six months ended March 31, 2013, we experienced lower sales of our unified communications products, particularly gateways and legacy NES phones and platforms. We believe these declines are primarily attributable to customers delaying systems upgrades in a cautious spending environment. The decline in gateway sales may be in part impacted by better utilization of SIP technology, which enables our customers to do more with less hardware. We believe the decrease in our contact center product revenues is in part due to pricing pressures of the increasing competition in the marketplace as well as a growing market trend around Cloud consumption preferences with more customers exploring OPEX models for procuring services.

Operating loss for the six months ended March 31, 2013 was $49 million as compared to operating income of $16 million for the six months ended March 31, 2012, a decrease of $65 million. The decrease in operating income is primarily attributable to the decrease in revenues described above and the impact of an impairment charge to goodwill, partially offset by the continued benefit from cost savings initiatives.

Operating (loss) income for the six months ended March 31, 2013 and 2012 includes non-cash expenses for depreciation and amortization of $221 million and $286 million, goodwill impairment of $89 million and $0 and share-based compensation of $3 million and $5 million for each of the periods, respectively.

Net loss for the six months ended March 31, 2013 and 2012 was $277 million and $188 million, respectively. The increase in our net loss is primarily attributable to the decrease in operating income as described above, as well as costs incurred in connection with the modifications to certain credit facilities, and a decrease in the benefit from income taxes, partially offset by higher foreign currency transaction gains for the six months ended March 31, 2013 as compared to the six months ended March 31, 2012.

Results From Operations

Three Months Ended March 31, 2013 Compared with Three Months Ended March 31, 2012

Revenue

Our revenue for the three months ended March 31, 2013 and 2012 was $1,118 million and $1,257 million, respectively, a decrease of $139 million or 11%. Incremental revenue from the Radvision business for the current period was $20 million. The following table sets forth a comparison of revenue by portfolio:

	Three months ended March 31,
	2013		2012			Percentage of Total Revenue				Yr. to Yr. Percentage Change		Yr. to Yr. Percentage Change, net of Foreign Currency Impact
Dollars in millions						2013		2012
GCS	$	473	$	574		42	%	46	%	-18	%	-18	%
Purchase accounting adjustments	—		(1		)	0	%	0	%	(1)		(1)
Networking	56		64			5	%	5	%	-13	%	-13	%
Total ECS product revenue	529		637			47	%	51	%	-17	%	-17	%
AGS	589		620			53	%	49	%	-5	%	-4	%
Total revenue	$	1,118	$	1,257		100	%	100	%	-11	%	-11	%

GCS revenue for the three months ended March 31, 2013 and 2012 was $473 million and $574 million, respectively, a decrease of $101 million or 18%. The decrease in GCS revenue was primarily the result of lower customer spend on unified communications and contact center products in a cautious spending environment as discussed above. These decreases were partially offset by the incremental revenue from the Radvision business for the current period.

Networking revenue for the three months ended March 31, 2013 and 2012 was $56 million and $64 million, respectively, a decrease of $8 million or 13%. The decrease in Networking revenue is primarily a result of lower demand.

AGS revenue for the three months ended March 31, 2013 and 2012 was $589 million and $620 million, respectively, a decrease of $31 million or 5%. The decrease in AGS revenue was primarily due to lower maintenance and professional services revenues

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as a result of lower product sales particularly in the U.S. and lower ITPS revenues associated with our U.S. government customers. These decreases were partially offset by an increase in revenues from managed services performed under SLAs entered into in prior periods.

The following table sets forth a comparison of revenue by location:

	Three months ended March 31,
	2013		2012		Percentage of Total Revenue				Yr. to Yr. Percentage Change		Yr. to Yr. Percentage Change, net of Foreign Currency Impact
Dollars in millions					2013		2012
U.S.	$	592	$	678	53	%	54	%	-13	%	-13	%
International:
EMEA	298		327		27	%	26	%	-9	%	-9	%
APAC - Asia Pacific	116		117		10	%	9	%	-1	%	0	%
Americas International - Canada and Latin America	112		135		10	%	11	%	-17	%	-15	%
Total International	526		579		47	%	46	%	-9	%	-8	%
Total revenue	$	1,118	$	1,257	100	%	100	%	-11	%	-11	%

Revenue in the U.S. for the three months ended March 31, 2013 and 2012 was $592 million and $678 million, respectively, a decrease of $86 million or 13%. The decrease in U.S. revenue was primarily attributable to lower sales of unified communications and contact center products, which contributed to lower revenues from maintenance and professional services, particularly with our U.S. Government customers. The decrease in U.S. revenue was also attributable to lower demand for networking products and was partially offset by the incremental revenues from the Radvision business.  Revenue in EMEA for the three months ended March 31, 2013 and 2012 was $298 million and $327 million, respectively, a decrease of $29 million or 9%. The decrease in EMEA revenue was primarily attributable to lower sales of unified communications products and to a lesser extent our contact center products, and was partially offset by revenues from the Radvision business. Revenue in APAC for the three months ended March 31, 2013 and 2012 was $116 million and $117 million, respectively. The decrease in APAC revenue is primarily attributable to lower sales of our networking products and professional services, partially offset by higher maintenance services. Revenue in Americas International was $112 million and $135 million for the three months ended March 31, 2013 and 2012, respectively, a decrease of $23 million or 17%. The decrease in Americas International revenue was primarily attributable to Canada, Brazil and the Andean Region and was primarily attributable to lower sales of unified communications products and contact center products, as well as an unfavorable impact of foreign currency.

We sell our solutions directly to end users and through an indirect sales channel. The following table sets forth a comparison of revenue from sales of products by channel:

	Three months ended March 31,
	2013		2012		Percentage of Total ECS Product Revenue				Yr. to Yr. Percentage Change		Yr. to Yr. Percentage Change, net of Foreign Currency Impact
Dollars in millions					2013		2012
Direct	$	125	$	166	24	%	26	%	-25	%	-25	%
Indirect	404		471		76	%	74	%	-14	%	-14	%
Total ECS product revenue	$	529	$	637	100	%	100	%	-17	%	-17	%

44

Gross Profit

The following table sets forth a comparison of gross profit by segment:

	Three months ended March 31,
	Gross Profit						Gross Margin				Change
Dollars in millions	2013			2012			2013		2012		Amount			Pct.
GCS	$	270		$	318		57.1	%	55.4	%	$	(48	)	(15	)%
Networking	23			27			41.1	%	42.2	%	(4		)	(15	)%
ECS	293			345			55.4	%	54.2	%	(52		)	(15	)%
AGS	308			296			52.3	%	47.7	%	12			4	%
Unallocated amounts	(15		)	(28		)	(1	)	(1	)	13			(1	)
Total	$	586		$	613		52.4	%	48.8	%	$	(27	)	(4	)%

⁽¹⁾  Not meaningful

Gross profit for the three months ended March 31, 2013 and 2012 was $586 million and $613 million, respectively, a decrease of $27 million or 4%. The decrease was primarily attributable to a decrease in sales volume and lower pricing partially offset by the success of our gross margin improvement initiatives and the impact of lower amortization of technology intangible assets. Our gross margin improvement initiatives include exiting facilities, reducing the workforce, relocating positions to lower-cost geographies, productivity improvements, and obtaining better pricing from our contract manufacturers and transportation vendors. As a result of the above factors, gross margin increased to 52.4% for the three months ended March 31, 2013 from 48.8% for the three months ended March 31, 2012.

GCS gross profit for the three months ended March 31, 2013 and 2012 was $270 million and $318 million, respectively, a decrease of $48 million or 15%. The decrease in GCS gross profit is primarily due to the decrease in sales volume and lower pricing partially offset by the success of our gross margin improvement initiatives discussed above. As a result of the above factors, GCS gross margin increased to 57.1% for the three months ended March 31, 2013 compared to 55.4% for the three months ended March 31, 2012.

Networking gross profit for the three months ended March 31, 2013 and 2012 was $23 million and $27 million, respectively, a decrease of $4 million or 15%. Networking gross margin decreased to 41.1% for the three months ended March 31, 2013 from 42.2% for the three months ended March 31, 2012. The decreases in Networking gross profit and margin were due to lower revenues which did not allow us to leverage our fixed costs.

AGS gross profit for the three months ended March 31, 2013 and 2012 was $308 million and $296 million, respectively, an increase of $12 million or 4%. The increase in AGS gross profit is primarily due to the success of our gross margin improvement initiatives discussed above. We have redesigned the Avaya support website and continue to transition our customers from an agent-based support model to a self-service/web-based support model. These improvements have allowed us to reduce the workforce and relocate positions to lower-cost geographies. These increases in AGS gross profit were partially offset by a decrease in services revenue. As a result of the above factors, AGS gross margin increased to 52.3% for the three months ended March 31, 2013 compared to 47.7% for the three months ended March 31, 2012.

Unallocated amounts for the three months ended March 31, 2013 and 2012 include the effect of the amortization of acquired technology intangibles related to the acquisition of NES and the Merger, costs that are not core to the measurement of segment management’s performance, but rather are controlled at the corporate level, and certain purchase accounting adjustments in connection with the Merger. Unallocated costs for three months ended March 31, 2013 also included the effect of the amortization of acquired technology intangible assets related to the acquisition of Radvision in June 2012. The decrease in unallocated costs is primarily due to the impact of lower amortization associated with technology intangible assets acquired prior to fiscal 2012.

45

Operating expenses

	Three months ended March 31,
	2013		2012		Percentage of Revenue				Change
Dollars in millions					2013		2012		Amount			Pct.
Selling, general and administrative	$	381	$	414	34.1	%	32.9	%	$	(33	)	(8	)%
Research and development	113		117		10.1	%	9.3	%	(4		)	(3	)%
Amortization of intangible assets	57		56		5.1	%	4.5	%	1			2	%
Goodwill impairment	89		—		8.0	%	—	%	89			-
Restructuring and impairment charges, net	18		90		1.6	%	7.2	%	(72		)	(80	)%
Acquisition-related costs	—		2		—	%	0.2	%	(2		)	(100	)%
Total operating expenses	$	658	$	679	58.9	%	54.1	%	$	(21	)	(3	)%

Selling, general and administrative (“SG&A”) expenses for the three months ended March 31, 2013 and 2012 were $381 million and $414 million, respectively, a decrease of $33 million. The decrease was primarily due to lower expenses as a result of our cost savings initiatives and lower selling expenses. Our cost savings initiatives include exiting facilities, reducing the workforce and relocating positions to lower-cost geographies. These decreases were partially offset by the incremental expenses associated with the Radvision business.

Research and development (“R&D”) expenses for the three months ended March 31, 2013 and 2012 were $113 million and $117 million, respectively, a decrease of $4 million. The decrease was primarily due to a decrease in costs of new product development and cost savings initiatives. These decreases were partially offset by the incremental expenses associated with the Radvision business and a lower portion of product development costs that were capitalized in the current period. Capitalized software development costs for the three months ended March 31, 2013 and 2012 were $3 million and $7 million, respectively, a decrease of $4 million. Because the projects in our product development portfolio for the three months ended March 31, 2012 were generally further along in the development cycle than those for the three months ended March 31, 2013, we capitalized a lower portion of our current period R&D spend.

Amortization of intangible assets was $57 million and $56 million for the three months ended March 31, 2013 and 2012, respectively.

Goodwill impairment associated with our ITPS reporting unit for the three months ended March 31, 2013 was $89 million. The ITPS reporting unit provides specialized information technology services exclusively to U.S. government customers and has experienced a decline in revenues as compared to previous periods and a reduction in its forecasts for the remainder of fiscal 2013. The reporting unit was impacted by reduced government spending in anticipation of sequestration and general budget cuts. Additionally, there is much uncertainty regarding how sequestration cuts will be implemented and the impact they will have on contractors supporting the government. As a result of these events, the Company determined that an interim impairment test of the reporting unit's goodwill should be performed.

Based on our performance of step one of the goodwill impairment test, we determined that the estimated fair value of the ITPS reporting unit was less than the carrying value of its net assets (including goodwill). Based on the second step of the goodwill impairment test, we determined that the book value of the reporting unit's goodwill exceeded its implied fair value. Accordingly, we wrote down the goodwill balance by $89 million. The impairment was primarily the result of budgetary constraints, sequestration and uncertainty regarding spending on the part of the U.S. government. The reduced valuation of the reporting unit reflects additional market risks and lower sales forecasts for the reporting unit, which is consistent with economic trends at that time.

During the three months ended March 31, 2012, the Company tested goodwill for impairment and determined that no impairment existed. During the three months ended March 31, 2012, the Company experienced a decline in revenue as compared to the same period of the prior year and sequential quarters. This revenue decline impacted the Company’s forecasts for the remainder of fiscal 2012. As a result of these events, the Company determined that an interim impairment test of goodwill should be performed. Using the revised forecasts as of March 31, 2012, we performed step one of the impairment test of goodwill. Although the revised forecasts provided for lower cash flows, the respective book values of each reporting unit did not exceed their estimated fair values and therefore no impairment was identified.

Restructuring and impairment charges, net, for the three months ended March 31, 2013 and 2012 were $18 million and $90 million, respectively, a decrease of $72 million. The Company continued to identify opportunities to streamline its operations and generate cost savings which included consolidating and exiting facilities and eliminating employee positions. Restructuring charges recorded during the three months ended March 31, 2013 include employee separation costs of $9 million and lease

46

obligations of $9 million. The employee separation costs are primarily associated with employee severance actions in EMEA and the U.S. Restructuring charges recorded during the three months ended March 31, 2012 include employee separation costs of $87 million and lease obligations of $3 million. Employee separation charges for this period are primarily associated with employee severance actions in Germany. In April 2013, the Company initiated a voluntary employee severance program in the U.S. and will recognize the expense associated with this program during the quarter ending June 30, 2013.  The Company is also evaluating the potential for additional employee severance actions to reduce headcount globally and could initiate these actions during the quarter ending June 30, 2013. The Company continues to evaluate opportunities to streamline its operations and identify cost savings globally and may take additional restructuring actions in the future and the costs of those actions could be material.

Acquisition-related costs for the three months ended March 31, 2012 was $2 million and include third-party legal and other costs related to business acquisitions in fiscal 2012. There were no acquisition-related costs for the three months ended March 31, 2013.

Operating Loss

For the three months ended March 31, 2013, operating loss was $72 million compared to $66 million for the three months ended March 31, 2012.

Operating loss for the three months ended March 31, 2013 and 2012 includes non-cash expenses for depreciation and amortization of $107 million and $143 million, goodwill impairment of $89 million and $0, and share-based compensation of $1 million and $2 million for each of the periods, respectively.

Interest Expense

Interest expense for the three months ended March 31, 2013 and 2012 was $116 million and $108 million, respectively, which includes non-cash interest expense of $6 million in each period. Non-cash interest expense for each period includes amortization of debt issuance costs and accretion of debt discount. Cash interest expense for the three months ended March 31, 2013 compared to the three months ended March 31, 2012 increased as a result of certain debt refinancing transactions partially offset by a decrease in interest expense associated with the expiration of certain unfavorable interest rate swap contracts.

During the six months endedMarch 31, 2013, the Company completed a series of transactions which allowed the Company to refinance term loans under its senior secured credit facilities that originally matured October 26, 2014 and senior unsecured notes that originally matured on November 1, 2015. As a result of these debt refinancing transactions, the interest rate associated with the portion of the Company's debt that was refinanced increased. See Note 7, "Financing Arrangements" to our unaudited interim consolidated financial statements for further details.

Loss on Extinguishment of Debt

In connection with the refinancing of $584 million of outstanding term B-1 loans, we recognized a loss on extinguishment of debt for the three months ended March 31, 2013 of $3 million. The loss represents the difference between the reacquisition price and the carrying value (including unamortized discount and debt issue costs) of the debt. See Note 7, "Financing Arrangements" to our unaudited interim consolidated financial statements for further details on the refinancing of our term B-1 loans.

Other Income (Expense), Net

Other income, net for the three months ended March 31, 2013 was $2 million as compared to other expense, net of $12 million for the three months ended March 31, 2012. Other income, net, for the three months ended March 31, 2013 includes net foreign currency transaction gains of $17 million, partially offset by third party fees incurred in connection with debt modifications of $14 million. Also included in other income, net for the three months ended March 31, 2013 is a $1 million translation loss recognized in connection with the devaluation of the bolivar by the Venezuela government in February 2013. Other expense, net for the three months ended March 31, 2012 includes net foreign currency transaction losses of $11 million.

(Provision for) Benefit from Income Taxes

The provision for income taxes for the three months ended March 31, 2013 was $3 million, as compared to a benefit from income taxes of $24 million for the three months ended March 31, 2012.

The effective rate for the three months ended March 31, 2013 differs from the statutory U.S. Federal income tax rate primarily due to (1) the effect of tax rate differentials on foreign income/loss, (2) changes in the valuation allowance established against the Company’s deferred tax assets, and (3) a $14 million release of valuation allowance associated with tax expense on net gains in other comprehensive income.

The effective rate for the three months ended March 31, 2012 differs from the statutory U.S. Federal income tax rate primarily due to (1) the effect of tax rate differentials on foreign income/loss, (2) changes in the valuation allowance established against

47

the Company’s deferred tax assets and (3) a $6 million increase in the valuation allowance associated with tax expense on net gains in other comprehensive income.

During the three months ended March 31, 2012, the Company recorded a tax benefit of $6 million to other comprehensive income primarily relating to pension benefits. The benefit to other comprehensive income and increase in related deferred tax assets resulted in the recording of an income tax expense in continuing operations related to the increase of the corresponding valuation allowance.

Six Months Ended March 31, 2013 Compared with Six Months Ended March 31, 2012

Revenue

Our revenue for the six months ended March 31, 2013 and 2012 was $2,358 million and $2,644 million, respectively, a decrease of $286 million or 11%. Incremental revenue from the Radvision business for the current period was $44 million. The following table sets forth a comparison of revenue by portfolio:

	Six months ended March 31,
	2013		2012			Percentage of Total Revenue				Yr. to Yr. Percentage Change		Yr. to Yr. Percentage Change, net of Foreign Currency Impact
Dollars in millions						2013		2012
GCS	$	1,046	$	1,241		44	%	47	%	-16	%	-16	%
Purchase accounting adjustments	—		(1		)	0	%	0	%	(1)		(1)
Networking	114		146			5	%	5	%	-22	%	-22	%
Total ECS product revenue	1,160		1,386			49	%	52	%	-16	%	-16	%
AGS	1,198		1,258			51	%	48	%	-5	%	-4	%
Total revenue	$	2,358	$	2,644		100	%	100	%	-11	%	-10	%

GCS revenue for the six months ended March 31, 2013 and 2012 was $1,046 million and $1,241 million, respectively, a decrease of $195 million or 16%. The decrease in GCS revenue was primarily the result of lower customer spend on unified communications and contact center products in a cautious spending environment as discussed above. These decreases were partially offset by the incremental revenue from the Radvision business for the current period.

Networking revenue for the six months ended March 31, 2013 and 2012 was $114 million and $146 million, respectively, a decrease of $32 million or 22%. The decrease in Networking revenue is primarily a result of lower demand.

AGS revenue for the six months ended March 31, 2013 and 2012 was $1,198 million and $1,258 million, respectively, a decrease of $60 million or 5%. The decrease in AGS revenue was primarily due to lower maintenance and professional services revenues as a result of lower product sales particularly in the U.S. and lower ITPS revenues associated with our U.S. government customers. These decreases were partially offset by an increase in revenues from operational services performed under SLAs entered into in prior periods.

48

The following table sets forth a comparison of revenue by location:

	Six months ended March 31,
	2013		2012		Percentage of Total Revenue				Yr. to Yr. Percentage Change		Yr. to Yr. Percentage Change, net of Foreign Currency Impact
Dollars in millions					2013		2012
U.S.	$	1,262	$	1,426	54	%	54	%	(12	)%	(12	)%
International:
EMEA	629		692		27	%	26	%	(9	)%	(8	)%
APAC - Asia Pacific	239		243		10	%	9	%	(2	)%	(1	)%
Americas International - Canada and Latin America	228		283		9	%	11	%	(19	)%	(18	)%
Total International	1,096		1,218		46	%	46	%	(10	)%	(9	)%
Total revenue	$	2,358	$	2,644	100	%	100	%	(11	)%	(10	)%

Revenue in the U.S. for the six months ended March 31, 2013 and 2012 was $1,262 million and $1,426 million, respectively, a decrease of $164 million or 12%. The decrease in U.S. revenue was primarily attributable to lower sales associated with our unified communications and contact center products, which contributed to lower revenues from maintenance and professional services, particularly with our U.S. Government customers. The decrease is also attributable to lower sales associated with our contact center and networking products and was partially offset by the incremental revenues from the Radvision business.  Revenue in EMEA for the six months ended March 31, 2013 and 2012 was $629 million and $692 million, respectively, a decrease of $63 million or 9%. The decrease in EMEA revenue was primarily attributable to lower sales associated with our unified communications and contact center products and to a lesser extent an unfavorable impact of foreign currency and was partially offset by the incremental revenues from the Radvision business. Revenue in APAC for the six months ended March 31, 2013 and 2012 was $239 million and $243 million, respectively, a decrease of $4 million or 2%. The decrease in APAC revenue is primarily attributable to lower revenues associated with our unified communications products and professional services, and an unfavorable impact of foreign currency, partially offset by higher maintenance services. Revenue in Americas International was $228 million and $283 million for the six months ended March 31, 2013 and 2012, respectively, a decrease of $55 million or 19%. The decrease in Americas International revenue was particularly attributable to Canada and Brazil and was associated primarily with our unified communications and contact center products, as well as an unfavorable impact of foreign currency.

We sell our solutions directly to end users and through an indirect sales channel. The following table sets forth a comparison of revenue from sales of products by channel:

	Six months ended March 31,
	2013		2012		Percentage of Total ECS Product Revenue				Yr. to Yr. Percentage Change		Yr. to Yr. Percentage Change, net of Foreign Currency Impact
Dollars in millions					2013		2012
Direct	$	266	$	333	23	%	24	%	(20	)%	(20	)%
Indirect	894		1,053		77	%	76	%	(15	)%	(15	)%
Total ECS product revenue	$	1,160	$	1,386	100	%	100	%	(16	)%	(16	)%

49

Gross Profit

The following table sets forth a comparison of gross profit by segment:

	Six months ended March 31,
	Gross Profit						Gross Margin				Change
Dollars in millions	2013			2012			2013		2012		Amount		Pct.
GCS	$	619		$	718		59.2	%	57.9	%	(99	)	(14	)%
Networking	45			64			39.5	%	43.8	%	(19	)	(30	)%
ECS	664			782			57.2	%	56.4	%	(118	)	(15	)%
AGS	626			609			52.3	%	48.4	%	17		3	%
Unallocated amounts	(38		)	(74		)	(1)		(1)		36		(1)
Total	$	1,252		$	1,317		53.1	%	49.8	%	(65	)	(5	)%

⁽¹⁾  Not meaningful

Gross profit for the six months ended March 31, 2013 and 2012 was $1,252 million and $1,317 million, respectively, a decrease of $65 million or 5%. The decrease is primarily attributable to a decrease in sales volume and lower pricing partially offset by the success of our gross margin improvement initiatives, the impact of lower amortization of technology intangible assets, and a $5 million benefit associated with the release of a contingent liability related to a labor matter in EMEA that we released as a result of a favorable court ruling. Our gross margin improvement initiatives include exiting facilities, reducing the workforce, relocating positions to lower-cost geographies, productivity improvements, and obtaining better pricing from our contract manufacturers and transportation vendors. As a result of the above factors, gross margin increased to 53.1% for the six months ended March 31, 2013 from 49.8% for the six months ended March 31, 2012.

GCS gross profit for the six months ended March 31, 2013 and 2012 was $619 million and $718 million, respectively, a decrease of $99 million or 14%. The decrease in GCS gross profit is primarily due to the decrease in sales volume and lower pricing partially offset by the success of our gross margin improvement initiatives discussed above. As a result of the above factors, GCS gross margin increased to 59.2% for the six months ended March 31, 2013 compared to 57.9% for the six months ended March 31, 2012.

Networking gross profit for the six months ended March 31, 2013 and 2012 was $45 million and $64 million, respectively, a decrease of $19 million or 30%. Networking gross margin decreased to 39.5% for the six months ended March 31, 2013 from 43.8% for the six months ended March 31, 2012. The decreases in Networking gross profit and margin were due to lower revenues which did not allow us to leverage our fixed costs.

AGS gross profit for the six months ended March 31, 2013 and 2012 was $626 million and $609 million, respectively, an increase of $17 million or 3%. The increase in AGS gross profit is primarily due to the continued benefit from our gross margin improvement initiatives discussed above, and a $5 million benefit associated with the release of a contingent liability related to a labor matter in EMEA that we released as a result of a favorable court ruling. We have redesigned the Avaya support website and continue to transition our customers from an agent-based support model to a self-service/web-based support model. These improvements have allowed us to reduce the workforce and relocate positions to lower-cost geographies. These increases in AGS gross profit were partially offset by a decrease in services revenue. As a result of the above factors, AGS gross margin increased to 52.3% for the six months ended March 31, 2013 compared to 48.4% for the six months ended March 31, 2012.

Unallocated amounts for the six months ended March 31, 2013 and 2012 include the effect of the amortization of acquired technology intangibles related to the acquisition of NES and the Merger, costs that are not core to the measurement of segment management’s performance, but rather are controlled at the corporate level, and certain purchase accounting adjustments in connection with the Merger. Unallocated costs for six months ended March 31, 2013 also included the effect of the amortization of acquired technology intangible assets related to the acquisition of Radvision in June 2012. The decrease in unallocated costs is primarily due to the impact of lower amortization associated with technology intangible assets acquired prior to fiscal 2012.

50

Operating expenses

	Six months ended March 31,
	2013		2012		Percentage of Revenue				Change
Dollars in millions					2013		2012		Amount			Pct.
Selling, general and administrative	$	765	$	847	32.4	%	32.0	%	$	(82	)	(10	)%
Research and development	231		228		9.8	%	8.6	%	3			1	%
Amortization of intangible assets	114		112		4.8	%	4.2	%	2			2	%
Goodwill impairment	89		—		3.8	%	—	%	89			-
Restructuring and impairment charges, net	102		111		4.3	%	4.2	%	(9		)	(8	)%
Acquisition-related costs	—		3		—	%	0.1	%	(3		)	(100	)%
Total operating expenses	$	1,301	$	1,301	55.1	%	49.1	%	$	—		—	%

SG&A expenses for the six months ended March 31, 2013 and 2012 were $765 million and $847 million, respectively, a decrease of $82 million. The decrease was primarily due to lower expenses as a result of our cost savings initiatives, lower selling expenses, and a $3 million benefit associated with the release of a contingent liability related to a labor matter in EMEA that we released as a result of a favorable court ruling. Our cost savings initiatives include exiting facilities, reducing the workforce and relocating positions to lower-cost geographies. These decreases were partially offset by the incremental expenses associated with the Radvision business.

R&D expenses for the six months ended March 31, 2013 and 2012 were $231 million and $228 million, respectively, an increase of $3 million. The increase was primarily due to the incremental expenses associated with the Radvision business and a lower portion of product development costs that were capitalized in the current period. These increases were partially offset by lower expenses associated with our cost savings initiatives discussed above. Capitalized software development costs for the six months ended March 31, 2013 and 2012 were $10 million and $19 million, respectively, a decrease of $9 million. Because the projects in our product development portfolio for the six months ended March 31, 2012 were generally further along in the development cycle than those for the six months ended March 31, 2013, we capitalized a lower portion of our current period R&D spend.

Amortization of intangible assets was $114 million and $112 million for the six months ended March 31, 2013 and 2012, respectively.

Goodwill impairment associated with our ITPS reporting unit for the six months ended March 31, 2013 was $89 million. The ITPS reporting unit provides specialized information technology services exclusively to U.S. government customers and has experienced a decline in revenues as compared to previous periods and a reduction in its forecasts for the remainder of fiscal 2013. The reporting unit was impacted by reduced government spending in anticipation of sequestration and general budget cuts. Additionally, there is much uncertainty regarding how sequestration cuts will be implemented and the impact they will have on contractors supporting the government. As a result of these events, the Company determined that an interim impairment test of the reporting unit's goodwill should be performed.

Based on our performance of step one of the goodwill impairment test, we determined that the estimated fair value of the ITPS reporting unit was less than the carrying value of its net assets (including goodwill). Based on the second step of the goodwill impairment test, we determined that the book value of the reporting unit's goodwill exceeded its implied fair value. Accordingly, we wrote down the goodwill balance by $89 million. The impairment was primarily the result of budgetary constraints, sequestration and uncertainty regarding spending on the part of the U.S. government. The reduced valuation of the reporting unit reflects additional market risks and lower sales forecasts for the reporting unit, which is consistent with economic trends at that time.

During the three months ended March 31, 2012, the Company tested goodwill for impairment and determined that no impairment existed. During the three months ended March 31, 2012, the Company experienced a decline in revenue as compared to the same period of the prior year and sequential quarters. This revenue decline impacted the Company’s forecasts for the remainder of fiscal 2012. As a result of these events, the Company determined that an interim impairment test of goodwill should be performed. Using the revised forecasts as of March 31, 2012, we performed step one of the impairment test of goodwill. Although the revised forecasts provided for lower cash flows, the respective book value of each reporting unit did not exceed their estimated fair values and therefore no impairment existed.

Restructuring and impairment charges, net, for the six months ended March 31, 2013 and 2012 were $102 million and $111 million, respectively, a decrease of $9 million. The Company continued to identify opportunities to streamline its operations and generate cost savings which included consolidating and exiting facilities and eliminating employee positions. Restructuring

51

charges recorded during the six months ended March 31, 2013 include employee separation costs of $79 million and lease obligations of $23 million. The employee separation costs are primarily associated with employee severance actions in EMEA and the U.S. The EMEA approved plan provides for the elimination of 234 positions and resulted in a charge of $47 million. The separation charges include, but are not limited to, social pension fund payments and health care and unemployment insurance costs to be paid to or on behalf of the affected employees. A voluntary program offered to certain management employees in the U.S. resulted in the elimination of 195 positions and resulted in a charge of $9 million. Restructuring charges for the six months ended March 31, 2013 includes lease obligations primarily related to the Company's Maidenhead, United Kingdom, Guilford, United Kingdom, and Highlands Ranch, Colorado facilities. Restructuring charges recorded during the six months ended March 31, 2012 include employee separation costs of $107 million and lease obligations of $4 million. Employee separation charges for this period are primarily associated with employee severance actions in the EMEA, U.S., and Canada. In April 2013, the Company initiated a voluntary employee severance program in the U.S. and will recognize the expense associated with this program during the quarter ending June 30, 2013.  The Company is also evaluating the potential for additional employee severance actions to reduce headcount globally and could initiate these actions during the quarter ending June 30, 2013. The Company continues to evaluate opportunities to streamline its operations and identify cost savings globally and may take additional restructuring actions in the future and the costs of those actions could be material.

Acquisition-related costs for the six months ended March 31, 2012 was $3 million and include third-party legal and other costs related to business acquisitions in fiscal 2012. There were no acquisition-related costs for the six months ended March 31, 2013.

Operating (Loss) Income

For the six months ended March 31, 2013, operating loss was $49 million compared to operating income of $16 million for the six months ended March 31, 2012.

Operating (loss) income for the six months ended March 31, 2013 and 2012 includes non-cash expenses for depreciation and amortization of $221 million and $286 million, goodwill impairment of $89 million and $0, and share-based compensation of $3 million and $5 million for each of the periods, respectively.

Interest Expense

Interest expense for the six months ended March 31, 2013 and 2012 was $224 million and $217 million, respectively, which includes non-cash interest expense of $12 million in each period. Non-cash interest expense for each period includes amortization of debt issuance costs and accretion of debt discount. Cash interest expense for the six months ended March 31, 2013 compared to the six months ended March 31, 2012 increased as a result of certain debt refinancing transactions partially offset by a decrease in interest expense as a result of the expiration of certain unfavorable interest rate swap contracts.

During the six months endedMarch 31, 2013, the Company completed a series of transactions which allowed the Company to refinance term loans under its senior secured credit facilities that originally matured October 26, 2014 and senior unsecured notes that originally matured on November 1, 2015. As a result of these debt refinancing transactions, the interest rate associated with the portion of the Company's debt that was refinanced increased. See Note 7, "Financing Arrangements" to our unaudited interim consolidated financial statements for further details.

Loss on Extinguishment of Debt

In connection with (1) the issuance of our 9% Senior Secured Notes and the payment of $284 million of our term B-5 loans and (2) the refinancing of $584 million of outstanding term B-1 loans, we recognized a loss on extinguishment of debt for the six months ended March 31, 2013 of $6 million. The loss represents the difference between the reacquisition price and the carrying value (including unamortized discount and debt issue costs) of the debt. See Note 7, "Financing Arrangements" to our unaudited interim consolidated financial statements for further details.

Other Expense, Net

Other expense, net, for the six months ended March 31, 2013 was $4 million as compared to $13 million for the six months ended March 31, 2012. Other expense, net, for the current period includes third party fees incurred in connection with debt modifications of $18 million, partially offset by net foreign currency transaction gains of $15 million. Also included in other expense, net for the six months ended March 31, 2013 is a $1 million translation loss recognized in connection with the devaluation of the bolivar by the Venezuela government in February 2013. Other expense, net for the six months ended March 31, 2012 includes net foreign currency transaction losses of $12 million.

Benefit from Income Taxes

The benefit from income taxes for the six months ended March 31, 2013 was $6 million, as compared to a benefit from income taxes of $26 million for the six months ended March 31, 2012.

The effective rate for the six months ended March 31, 2013 differs from the statutory U.S. Federal income tax rate primarily due to (1) the effect of tax rate differentials on foreign income/loss, (2) changes in the valuation allowance established against the

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Company’s deferred tax assets, (3) $17 million of income tax benefit recognized upon the expiration of certain interest rate swaps, and (4) $16 million release of valuation allowance associated with tax expense on net gains in other comprehensive income.

During the six months ended March 31, 2013, the Company recognized $17 million of income tax benefit related to the elimination of the tax effect of certain interest rate swaps in other comprehensive income. The tax effect of such interest rate swaps was recognized in other comprehensive income prior to the establishment of a valuation allowance against the Company's U.S. net deferred tax assets and was eliminated following the expiration of the final interest rate swap upon which the tax effect was established.

During the six months ended March 31, 2013, the Company recorded a tax charge of $16 million to other comprehensive income primarily relating to pension benefits. The charge to other comprehensive income and decrease in related deferred tax assets resulted in the recording of an income tax benefit in continuing operations related to the release of the corresponding valuation allowance.

The effective rate for the six months ended March 31, 2012 differs from the statutory U.S. Federal income tax rate primarily due to (1) the effect of tax rate differentials on foreign income/loss, (2) changes in the valuation allowance established against the Company’s deferred tax assets and (3) $6 million release of valuation allowance associated with tax expense on net gains in other comprehensive income.

During the six months ended March 31, 2012, the Company recorded a tax charge of $6 million to other comprehensive income primarily relating to pension benefits. The charge to other comprehensive income and decrease in related deferred tax assets resulted in the recording of an income tax benefit in continuing operations related to the release of the corresponding valuation allowance.

Liquidity and Capital Resources

Cash and cash equivalents decreased by $35 million to $302 million at March 31, 2013 from $337 million at September 30, 2012. Our existing cash balance, cash generated by operations and borrowings available under our credit facilities are our primary sources of short-term liquidity. Based on our current level of operations, we believe these sources will be adequate to meet our liquidity needs for at least the next 12 months. Our ability to meet our cash requirements will depend on our ability to generate cash in the future, which is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. As part of our analysis, we have assessed the implications of recent financial events on our current business and determined that these market conditions have not affected our ability to meet our obligations as they come due in the ordinary course of business and have not had a significant impact on our liquidity as of March 31, 2013. However, we cannot assure you that our business will generate sufficient cash flows from operations or that future borrowings will be available to us under our credit facilities in an amount sufficient to enable us to repay our indebtedness or to fund our other liquidity needs.

Sources and Uses of Cash

A condensed statement of cash flows for the six months ended March 31, 2013 and 2012 follows:

	Six months ended March 31,
In millions	2013			2012
Net cash (used for) provided by:
Net loss	$	(277	)	$	(188	)
Adjustments to net loss for non-cash items	308			324
Changes in operating assets and liabilities	57			(105		)
Operating activities	88			31
Investing activities	(59		)	(63		)
Financing activities	(59		)	(20		)
Effect of exchange rate changes on cash and cash equivalents	(5		)	7
Net decrease in cash and cash equivalents	(35		)	(45		)
Cash and cash equivalents at beginning of period	337			400
Cash and cash equivalents at end of period	$	302		$	355

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Operating Activities

Cash provided by operating activities was $88 million for the six months ended March 31, 2013 compared to cash provided by operating activities of $31 million for the six months ended March 31, 2012.

Adjustments to reconcile net loss to net cash provided by operations for the six months ended March 31, 2013 and 2012 were $308 million and $324 million, respectively and primarily consisted of depreciation and amortization of $221 million and $286 million, respectively. Adjustments to reconcile net loss to net cash provided by operations during the six months ended March 31, 2013 also included goodwill impairment of $89 million and third-party fees expensed in connection with our debt modifications of $18 million, which were partially offset by unrealized gains on foreign currency exchanges of $27 million.

During the six months ended March 31, 2013, changes in our operating assets and liabilities resulted in a net increase in cash and cash equivalents of $57 million. The net increase was driven by improvements in the collection of receivables, increases in deferred revenues attributable to a significant number of annual prepaid maintenance contracts closed in January 2013, and the effects of non-cash business restructuring reserves net of cash payments against our reserves. These increases in cash and cash equivalents were partially offset by payment of accrued interest, payments associated with our employee incentive programs and the pay down of accounts payable.

During the six months ended March 31, 2012, changes in our operating assets and liabilities resulted in a net decrease in cash and cash equivalents of $105 million. The net decrease was primarily driven by the payment of accrued interest, payments associated with our business restructuring reserves and payments associated with our employee incentive programs.

Investing Activities

Cash used for investing activities was $59 million and $63 million for the six months ended March 31, 2013 and 2012, respectively. The primary use of cash for investing activities for the six months ended March 31, 2013 was related to capital expenditures and capitalized software development costs of $47 million and $10 million, respectively. These uses of cash for investing activities for the six months ended March 31, 2013 were partially offset by $9 million of cash proceeds from the sales of long-lived assets. Cash used for investing activities for the six months ended March 31, 2012 included capital expenditures and capitalized software development costs of $38 million and $19 million, respectively. Further, during the six months ended March 31, 2013 and 2012, the Company advanced to Parent $10 million and $8 million, respectively, in exchange for notes receivable. The principal amount of these notes plus any accrued and unpaid interest are due in full October 3, 2015 and October 3, 2014 with interest at the rate of 0.93% and 1.63% per annum, respectively. The proceeds of these notes were used by Parent to partially fund an acquisition in October 2011. Once the acquisition was complete, Parent immediately merged the acquired entity with and into the Company, with the Company surviving the merger. Also included in cash used for investing activities for the six months ended March 31, 2012 is $4 million for other acquisitions and $8 million of cash proceeds for the sale of investments and long-lived assets.

Financing Activities

Net cash used for financing activities was $59 million and $20 million for the six months ended March 31, 2013 and 2012. Cash from financing activities for the six months ended March 31, 2013 includes proceeds of $589 million from the issuance of senior secured term B-5 loans and proceeds of $290 million from the issuance of 9% Senior Secures Notes. The proceeds from the issuance of the senior secured term B-5 loans were used to repay $584 million principal amount of our senior secured term B-1 loans and the proceeds from the issuance of the 9% Senior Secured Notes were used to repay $284 million principal amount of our term B-5 loans. Cash used for financing activities for the six months ended March 31, 2013 also includes cash paid for debt issuance and modification costs of $49 million. Included in cash used for financing activities is $19 million in scheduled debt payments for each of the six months ended March 31, 2013 and 2012. See Note 7, "Financing Arrangements" to our unaudited consolidated financial statements for further details on the debt refinancing transactions entered into during the six months ended March 31, 2013.

Credit Facilities

We have entered into borrowing arrangements and further amended the arrangements with several financial institutions in connection with the Merger on October 26, 2007 and the acquisitions of the enterprise solutions business ("NES"). See Note 7, "Financing Arrangements" to our unaudited consolidated financial statements for further details.

During the three months ended December 31, 2012, the Company completed three transactions which allowed the Company to refinance $848 million of term loans under its senior secured credit facilities that originally matured October 26, 2014. These transactions were (1) an amendment and restatement of the senior secured credit facility and the senior secured multi-currency asset-based revolving credit facility on October 29, 2012 along with the extension of the maturity date of $135 million aggregate principal amount of senior secured term B-1 loans ("term B-1 loans"), (2) an amendment and restatement of the senior secured credit facility on December 21, 2012 along with the extension of the maturity date of $713 million aggregate

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principal amount of term B-1 loans and $134 million aggregate principal amount of senior secured term B-4 loans, and (3) the issuance on December 21, 2012 of $290 million of 9% senior secured notes due April 2019.

During the three months ended March 31, 2013, the Company refinanced the remaining $584 million of term B-1 loans outstanding under its senior secured credit facility with the cash proceeds of $589 million aggregate principal amount of term B-5 loans under the senior secured credit facility.

Additionally, during the three months ended March 31, 2013, the Company refinanced $1,384 million of senior unsecured notes, through (1) amendments to the senior secured credit facility and the senior secured multi-currency asset-based revolving credit facility permitting the refinancing of the 9.75% senior unsecured notes due 2015 and 10.125%/10.875% senior unsecured PIK toggle notes due 2015 (collectively, the “Old Notes”) with indebtedness secured by a lien on certain collateral on a junior-priority basis and (2) the exchange of $1,384 million of Old Notes for $1,384 million of 10.50% senior secured notes due 2021.

As of March 31, 2013, term loans outstanding under the Cash Flow Credit Agreement include term B-3 loans, term B-4 loans and term B-5 loans with remaining face values (after all principal payments through March 31, 2013) of $2,139 million, $1 million, and $1,148 million respectively. The Company regularly evaluates market conditions, its liquidity profile, and various financing alternatives for opportunities to enhance its capital structure. If opportunities are favorable, the Company may refinance existing debt or issue additional debt securities.

In connection with the acquisition of Radvision, the Company borrowed $60 million under its senior secured asset-based credit facility. Following the completion of the acquisition, all amounts borrowed were repaid in full.

See Note 7, “Financing Arrangements,” to our unaudited interim consolidated financial statements for further details.

Future Cash Requirements

Our primary future cash requirements will be to fund benefit obligations, debt service, capital expenditures and restructuring payments. In addition, we may use cash in the future to make strategic acquisitions.

Specifically, we expect our primary cash requirements for the remainder of fiscal 2013 to be as follows:

• Benefit obligations—We estimate we will make payments under our pension and postretirement obligations totaling $104 million during the remainder of fiscal 2013. These payments include: $67 million to satisfy the minimum statutory funding requirements of our U.S. qualified plans, $4 million of payments under our U.S. benefit plans which are not pre-funded, $8 million under our non-U.S. benefit plans which are predominately not pre-funded, $21 million under our U.S. retiree medical benefit plan which is not pre-funded and $4 million under the agreements for represented retirees to post-retirement health trusts. See discussion in Note 11, “Benefit Obligations” to our unaudited interim consolidated financial statements for further details of our benefit obligations.

• Debt service—As discussed above and in Note 7, "Financing Arrangements" to our unaudited interim consolidated financial statements, the Company entered into certain refinancing transactions during the six months ended March 31, 2013. We expect to make payments of $242 million during the remainder of fiscal 2013 for principal and interest associated with our long-term debt, as refinanced. We will also make payments associated with our interest rate swaps used to reduce the Company’s exposure to variable-rate interest payments.

• Capital expenditures—We expect to spend approximately $62 million for capital expenditures and capitalized software development costs during the remainder of fiscal 2013.

• Restructuring payments—We expect to make payments of approximately $56 million during the remainder of fiscal 2013 for employee separation costs and lease termination obligations associated with restructuring actions we have implemented through March 31, 2013.

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As discussed above and in Note 7, "Financing Arrangements" to our unaudited interim consolidated financial statements, the Company entered into certain refinancing transactions during the six months ended March 31, 2013. Annual maturities of debt, based on our debt profile as of March 31, 2013 and September 30, 2012, for the next five years ending September 30th and thereafter consist of:

In millions	March 31, 2013		September 30, 2012
2013	$	19	$	38
2014	38		38
2015	53		1,442
2016	174		1,542
2017	38		23
2018 and thereafter	5,799		3,046
Total	$	6,121	$	6,129

We and our subsidiaries, affiliates and significant shareholders may from time to time seek to retire or purchase our outstanding debt (including publicly issued debt) through cash purchases and/or exchanges, in open market purchases, privately negotiated transactions, by tender offer or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Future Sources of Liquidity

We expect our existing cash balance, cash generated by operations and borrowings available under our credit facilities to be our primary sources of short-term liquidity. We expect that revenues from higher margin products and services and continued focus on accounts receivable, inventory management and cost containment will enable us to generate positive net cash from operating activities. Further, we continue to focus on cost reductions and have initiated restructuring plans during fiscal 2013 designed to reduce overhead and provide cash savings.

We are currently party to (a) a senior secured credit facility which consists of both term loans and a senior secured multi-currency revolver allowing for borrowings of up to $200 million, and (b) a multi-currency asset-based revolving credit facility which provides senior secured revolving financing of up to $335 million, subject to availability under a borrowing base - see Note 7, “Financing Arrangements” to our unaudited interim consolidated financial statements.

Our existing cash and cash equivalents and net cash provided by operating activities may be insufficient if we face unanticipated cash needs such as the funding of a future acquisition or other capital investment.

If we do not generate sufficient cash from operations, face unanticipated cash needs such as the need to fund significant strategic acquisitions or do not otherwise have sufficient cash and cash equivalents, we may need to incur additional debt or issue additional equity. In order to meet our cash needs we may, from time to time, borrow under our credit facilities or issue long-term or short-term debt or equity, if the market and our credit facilities and the indentures governing our notes permit us to do so. Furthermore, if we acquire a business in the future that has existing debt, our debt service requirements may increase. We regularly evaluate market conditions, our liquidity profile, and various financing alternatives for opportunities to enhance our capital structure. If opportunities are favorable, we may refinance our existing debt or issue additional securities.

On June 9, 2011, Parent filed with the SEC a registration statement on Form S-1 (as it may be amended from time to time, the “registration statement”) relating to a proposed initial public offering of its common stock. As contemplated in the registration statement, the net proceeds of the proposed offering are expected to be used, among other things, to repay a portion of our long-term indebtedness.  The registration statement remains under review by the SEC and shares of common stock registered thereunder may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This document shall not constitute an offer to sell or the solicitation of any offer to buy nor shall there be any sale of those securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. Further, there is no way to predict whether or not Parent will be successful in completing the offering as contemplated and if it is successful, we cannot be certain if, or how much of, the net proceeds will be used for the purposes identified above.

During the fourth quarter of fiscal 2012, the Company changed its indefinite reinvestment of undistributed foreign earnings assertion with respect to its non-U.S. subsidiaries. This change in assertion reflects the Company's intention and ability to maintain flexibility with respect to sourcing of funds from non-U.S. locations.

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Debt Ratings

As of March 31, 2013, we had a long-term corporate family rating of B3 with a negative outlook from Moody’s and a corporate credit rating of B- with a stable outlook from Standard & Poor’s. Our ability to obtain additional external financing and the related cost of borrowing may be affected by our debt ratings, which are periodically reviewed by the major credit rating agencies. The ratings are subject to change or withdrawal at any time by the respective credit rating agencies.

Critical Accounting Policies and Estimates

Management has reassessed the critical accounting policies as disclosed in our Annual Report on Form 10-K filed with the SEC on December 9, 2012 and determined that there were no significant changes to our critical accounting policies in the three months ended March 31, 2013 except for recently adopted accounting guidance as discussed in Note 2, “Recent Accounting Pronouncements” to our unaudited interim consolidated financial statements.

Goodwill, Intangible and Long-lived Assets

March 31, 2013

During the second quarter of fiscal 2013, the Company tested the long-lived assets and goodwill of its ITPS reporting unit for impairment.  The ITPS reporting unit provides specialized information technology services exclusively to government customers in the U.S.  During the three months ended March 31, 2013, ITPS experienced a decline in revenues as a result of reduced government spending in anticipation of sequestration and budget cuts.  Additionally there is uncertainty regarding how the sequestration and budget cuts will be implemented and the impact they will have on contractors supporting the government.  As a result of these events, the Company determined that an interim impairment test of the reporting unit's long-lived assets and goodwill should be performed. 

Using the revised forecasts, the Company tested the intangible assets and other long-lived assets of the ITPS reporting unit for impairment during the three months ended March 31, 2013 and no impairment was identified.

The test of goodwill for impairment began with preparing a valuation of the ITPS reporting unit utilizing our latest near-term and long-term cash flow forecasts.  The valuation was prepared based on a discounted cash flow model, consistent with the methodology used as part of the annual goodwill impairment test.  This valuation reflected additional market risks and lower sales forecasts for the reporting unit, which are consistent with the government events and economic trends at that time.  Specifically, the discounted cash flow model used a discount rate of 13% and did not provide for long-term growth. 

The results of step one of the goodwill impairment test indicated that the estimated fair value of the ITPS reporting unit was less than the carrying value of its net assets (including goodwill) and as such, the Company performed step two of the impairment test.  The second step of the impairment test compares the implied fair value of the reporting unit's goodwill with the carrying value of that goodwill.  If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to that excess.  The implied fair value is determined in the same manner as the amount of goodwill recognized in a business combination.  That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit.  This allocation is performed only for purposes of assessing goodwill for impairment; accordingly Avaya did not adjust the net book value of the assets and liabilities on its Consolidated Balance Sheets other than goodwill as a result of this process. 

As a result of the application of step two of the goodwill impairment test, the Company estimated the implied fair value of the goodwill to be $44 million as compared with a carrying value of $133 million and recorded an impairment to goodwill of $89 million.  See Note 4, “Goodwill and Intangible Assets” to our consolidated interim financial statements.

The financial forecast utilized for purposes of the impairment analysis is based on estimated future cash flows that a market participant would expect the reporting unit to generate in the future.  While the Company believes the assumptions used in the impairment analysis are reasonable, changes in the projected cash flows, the discount rate, and short-term and long-term growth rates could produce significantly different results for the impairment analysis.  Internal and external factors could result in changes in these assumptions which may result in future impairment tests and charges.  The Company will continue to monitor any changes in circumstances for indicators of impairment.

The Company determined that no events occurred or circumstances changed during the six months ended March 31, 2013 that would more likely than not reduce the fair value of its other reporting units below their respective carrying amounts.  As part of the annual goodwill impairment test at September 30, 2012, the Company applied a hypothetical 10% decrease to the fair value of each reporting unit in order to evaluate the sensitivity of the fair value calculations on the goodwill impairment test.  This hypothetical decrease in the fair value of each reporting unit at September 30, 2012 indicated that no other reporting unit was at risk for failing step one of the goodwill impairment assessment.

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New Accounting Pronouncements

See discussion in Note 2, “Recent Accounting Pronouncements” to our unaudited interim consolidated financial statements for further details.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements.” All statements other than statements of historical fact are “forward-looking” statements for purposes of the U.S. federal and state securities laws. These statements may be identified by the use of forward looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “should” or “will” or the negative thereof or other variations thereon or comparable terminology. In particular, statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance contained in this report under Part II, Item 1A, “Risk Factors,” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” are forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors, including those discussed in this report, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Some of the key factors that could cause actual results to differ from our expectations include:

• our ability to develop and sell advanced communications products and services, including unified communications, data networking solutions and contact center applications;

• the market for our products and services, including unified communications solutions;

• our ability to remain competitive in the markets we serve;

• economic conditions and the willingness of enterprises to make capital investments;

• our reliance on our indirect sales channel;

• the ability to protect our intellectual property and avoid claims of infringement;

• the ability to retain and attract key employees;

• our degree of leverage and its effect on our ability to raise additional capital and to react to changes in the economy or our industry;

• our ability to manage our supply chain and logistics functions;

• liquidity and our access to capital markets;

• risks relating to the transaction of business internationally;

• our ability to effectively integrate acquired businesses into ours, including Radvision;

• an adverse result in any significant litigation, including antitrust, intellectual property or employment litigation;

• our ability to maintain adequate security over our information systems;

• environmental, health and safety laws, regulations, costs and other liabilities;

• climate change; and

• pension and post-retirement healthcare and life insurance liabilities.

We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this report may not in fact occur. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

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EBITDA and Adjusted EBITDA

EBITDA is defined as net income (loss) before income taxes, interest expense, interest income and depreciation and amortization. EBITDA provides us with a measure of operating performance that excludes items that are outside the control of management, which can differ significantly from company to company depending on capital structure, the tax jurisdictions in which companies operate and capital investments. Under the Company’s debt agreements, the ability to draw down on the revolving credit facilities or engage in activities such as incurring additional indebtedness, making investments and paying dividends is tied in part to ratios based on Adjusted EBITDA. As defined in our debt agreements, Adjusted EBITDA is a non-GAAP measure of EBITDA further adjusted to exclude certain charges and other adjustments permitted in calculating covenant compliance under our debt agreements. We believe that including supplementary information concerning Adjusted EBITDA is appropriate to provide additional information to investors to demonstrate compliance with our debt agreements and because it serves as a basis for determining management compensation. In addition, we believe Adjusted EBITDA provides more comparability between our historical results and results that reflect purchase accounting and our new capital structure following the Merger. Accordingly, Adjusted EBITDA measures our financial performance based on operational factors that management can impact in the short-term, namely the Company’s pricing strategies, volume, costs and expenses of the organization.

EBITDA and Adjusted EBITDA have limitations as analytical tools. Adjusted EBITDA does not represent net income (loss) or cash flow from operations as those terms are defined by GAAP and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. While Adjusted EBITDA and similar measures are frequently used as measures of operations and the ability to meet debt service requirements, these terms are not necessarily comparable to other similarly titled captions of other companies due to the potential inconsistencies in the method of calculation. Adjusted EBITDA does not reflect the impact of earnings or charges resulting from matters that we consider not to be indicative of our ongoing operations. In particular, based on our debt agreements the definition of Adjusted EBITDA allows us to add back certain non-cash charges that are deducted in calculating net income (loss). Our debt agreements also allow us to add back restructuring charges, Sponsor monitoring fees and other specific cash costs and expenses as defined in the agreements and that portion of our pension costs, other post-employment benefits costs, and non-retirement post-employment benefits costs representing the amortization of pension service costs and actuarial gain or loss associated with these employment benefits. However, these are expenses that may recur, may vary and are difficult to predict. Further, our debt agreements require that Adjusted EBITDA be calculated for the most recent four fiscal quarters. As a result, the measure can be disproportionately affected by a particularly strong or weak quarter. Further, it may not be comparable to the measure for any subsequent four-quarter period or any complete fiscal year.

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The unaudited reconciliation of net loss, which is a GAAP measure, to EBITDA and Adjusted EBITDA is presented below:

	Three months ended March 31,						Six months ended March 31,
(In millions)	2013			2012			2013			2012
Net loss	$	(192	)	$	(162	)	$	(277	)	$	(188	)
Interest expense	116			108			224			217
Interest income	—			(1		)	(1		)	(2		)
Provision for (benefit from) income taxes	3			(24		)	(6		)	(26		)
Depreciation and amortization	107			143			221			286
EBITDA	34			64			161			287
Impact of purchase accounting adjustments	—			1			—			1
Restructuring charges, net	18			90			102			111
Sponsors’ fees (a)	2			2			4			4
Acquisition-related costs (b)	—			2			—			3
Integration-related costs (c)	5			3			9			8
Loss on extinguishment of debt (d)	3			—			6			—
Third-party fees expensed in connection with the debt modification (e)	14			—			18			—
Non-cash share-based compensation	1			2			3			5
Loss on investments and sale of long-lived assets, net	—			2			—			3
Goodwill impairment	89			—			89			—
Venezuela hyperinflationary and devaluation charges	1			—			1			—
(Gain) loss on foreign currency transactions	(17		)	11			(15		)	12
Pension/OPEB/nonretirement postemployment benefits and long-term disability costs (f)	22			23			45			45
Adjusted EBITDA	$	172		$	200		$	423		$	479

(a) Sponsors’ fees represent monitoring fees payable to affiliates of the Sponsors pursuant to a management services agreement entered into at the time of the Merger.

(b) Acquisition-related costs include legal and other costs related to Radvision, the acquisition of NES and other acquisitions.

(c) Integration-related costs primarily represent third-party consulting fees and other administrative costs associated with consolidating and coordinating the operations of Avaya with Radvision, NES and other acquisitions. In fiscal 2013, the costs primarily relate to developing compatible IT systems and internal processes with NES and consolidating and coordinating the operations of Avaya with Radvision and other acquisitions. In fiscal 2012, the costs primarily relate to developing compatible IT systems and internal processes with NES.

(d) Loss on extinguishment of debt represents the loss recognized in connection with the repayment of $284 million of term B-5 loans and $584 million of term B-1 loans. The loss is based on the difference between the reacquisition price and the carrying value (including unamortized debt issue costs) of the debt. See Note 7, “Financing Arrangements,” to our unaudited interim consolidated financial statements located elsewhere in this Form 10-Q.

(e) The third-party fees expensed in connection with debt modification represent fees paid to third parties in connection with modifications of the senior secured credit facility and the exchange of $1,384 million of senior unsecured notes for senior secured notes. See Note 7, “Financing Arrangements,” to our unaudited interim consolidated financial statements located elsewhere in this Form 10-Q.

(f) Represents that portion of our pension costs, other post-employment benefit costs and non-retirement post-employment benefit costs representing the amortization of prior service costs and net actuarial gains/losses associated with these employment benefits.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosure About Market Risk” in Avaya’s Annual Report on Form 10-K for the fiscal year ended September 30, 2012 filed with the SEC on December 12, 2012. As of March 31, 2013, there has been no material changes in this information.

Item 4. Controls and Procedures.

a) Evaluation of Disclosure Controls and Procedures.

As of the end of the period covered by this report, our management, under the supervision and with the participation of the principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)). Based on this evaluation, our principal executive officer and principal financial officer have concluded (1) that the disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and (2) that the disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

b)  Changes in Internal Control Over Financial Reporting.

On June 5, 2012, the Company completed the acquisition of RADVISION Ltd. (“Radvision”). The Company is in the process of integrating the Radvision business and, in doing so, the Company is analyzing, evaluating and, if necessary, implementing changes in controls and procedures relating to the Radvision business. As a result, this process may result in additions or changes to our internal control over financial reporting. Otherwise, there were no changes in our internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

61

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

See Note 14, “Commitments and Contingencies” to the unaudited Consolidated Financial Statements.

Item 1A. Risk Factors

There have been no material changes during the quarterly period ended March 31, 2013 to the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2012.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

Not Applicable.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information.

Pursuant to Section 15(d) of the Securities Exchange Act of 1934, the Company’s obligations to file periodic and current reports ended as of October 1, 2010. Nevertheless, the Company continues to file periodic reports and current reports with the SEC voluntarily to comply with the terms of the indenture governing its senior secured notes due 2021.

During and subsequent to the quarter ended March 31, 2013, no events took place that were required to be disclosed in a report on Form 8-K but were not reported.

62

Item 6. Exhibits.

Exhibit Number
31.1	Certification of Kevin J. Kennedy pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of David Vellequette pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Kevin J. Kennedy pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of David Vellequette pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following materials from Avaya Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, formatted in XBRL (eXtensible Business Reporting Language); (i) Consolidated Balance Sheets at March 31, 2013 and September 30, 2012, (ii) Consolidated Statement of Operations for the three and six months ended March 31, 2013 and 2012(iii) the Consolidated Statement of Comprehensive Income for the three and six months ended March 31, 2013 and 2012 (iv) Consolidated Statements of Cash Flows for the six months ended March 31, 2013 and 2012, and (v) Notes to Consolidated Financial Statements (Unaudited)*

* Pursuant to Rule 406 T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those Sections.

63

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AVAYA INC.
By:	/S/    KEVIN J. MACKAY
	Kevin J. MacKay Vice President, Controller & Chief Accounting Officer (Principal Accounting Officer)

May 10, 2013

64

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Kevin J. Kennedy, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Avaya Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(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

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(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.

Date: May 10, 2013

/s/    KEVIN J. KENNEDY

Kevin J. Kennedy

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, David Vellequette, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Avaya Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(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

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(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.

Date: May 10, 2013

/s/    DAVID VELLEQUETTE

David Vellequette

Senior Vice President and Chief Financial Officer

(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Avaya Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kevin J. Kennedy, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/    KEVIN J. KENNEDY

Kevin J. Kennedy

President and Chief Executive Officer

(Principal Executive Officer)

May 10, 2013

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Avaya Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David Vellequette, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/    DAVID VELLEQUETTE

David Vellequette

Senior Vice President and Chief Financial Officer

(Principal Financial Officer)

May 10, 2013

XML

Financing Arrangements (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended									6 Months Ended							3 Months Ended		6 Months Ended	12 Months Ended																	0 Months Ended					0 Months Ended									6 Months Ended				6 Months Ended			6 Months Ended					3 Months Ended	6 Months Ended											6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013 Senior Secured Multi-Currency Revolver	Mar. 31, 2013 10.125%/10.875% senior unsecured PIK toggle notes due 2015 Minimum	Sep. 30, 2012 10.125%/10.875% senior unsecured PIK toggle notes due 2015 Minimum	Dec. 30, 2011 10.125%/10.875% senior unsecured PIK toggle notes due 2015 Minimum	Mar. 31, 2013 10.125%/10.875% senior unsecured PIK toggle notes due 2015 Maximum	Sep. 30, 2012 10.125%/10.875% senior unsecured PIK toggle notes due 2015 Maximum	Dec. 30, 2011 10.125%/10.875% senior unsecured PIK toggle notes due 2015 Maximum	Mar. 31, 2013 Senior secured term B-1 loans	Mar. 31, 2012 Senior secured term B-1 loans	Mar. 31, 2013 Senior secured term B-5 loans	Mar. 31, 2012 Senior secured term B-5 loans	Mar. 31, 2013 9.75% senior unsecured cash pay notes due 2015	Sep. 30, 2012 9.75% senior unsecured cash pay notes due 2015	Dec. 30, 2011 9.75% senior unsecured cash pay notes due 2015	Mar. 31, 2013 Secured Debt 10.50% Senior secured notes	Mar. 31, 2013 Secured Debt Senior Secured Multi-Currency Asset-Based Revolver	Mar. 31, 2013 Secured Debt Letter of Credit	Sep. 30, 2012 Secured Debt Letter of Credit	Mar. 31, 2013 Secured Debt Senior Secured Multi-Currency Revolver	Mar. 31, 2013 Secured Debt Senior Secured Term B-3, B-4, and B-5 Loans	Sep. 30, 2012 Secured Debt Senior secured term B-1 loans	Sep. 30, 2012 Secured Debt Senior secured term B-1 loans Silver Lake Partners	Sep. 30, 2012 Secured Debt Senior secured term B-1 loans TPG Capital	Mar. 31, 2013 Secured Debt Senior secured term B-3 loans	Sep. 30, 2012 Secured Debt Senior secured term B-3 loans	Dec. 21, 2012 Secured Debt Senior secured term B-3 loans Federal Funds Rate	Dec. 21, 2012 Secured Debt Senior secured term B-3 loans LIBOR Borrowings	Dec. 21, 2012 Secured Debt Senior secured term B-3 loans Base Rate Borrowings	Mar. 31, 2013 Secured Debt Senior secured term B-3 loans Silver Lake Partners	Sep. 30, 2012 Secured Debt Senior secured term B-3 loans Silver Lake Partners	Mar. 31, 2013 Secured Debt Senior secured term B-4 loans	Dec. 21, 2012 Secured Debt Senior secured term B-4 loans Federal Funds Rate	Dec. 21, 2012 Secured Debt Senior secured term B-4 loans LIBOR Borrowings	Dec. 21, 2012 Secured Debt Senior secured term B-4 loans Base Rate Borrowings	Dec. 21, 2012 Secured Debt Senior secured term B-5 loans	Mar. 31, 2013 Secured Debt Senior secured term B-5 loans	Dec. 21, 2012 Secured Debt Senior secured term B-5 loans LIBOR Borrowings	Dec. 21, 2012 Secured Debt Senior secured term B-5 loans Base Rate Borrowings	Mar. 31, 2013 Secured Debt Senior secured term B-5 loans Silver Lake Partners	Dec. 21, 2012 Secured Debt Senior secured term B-5 loans TPG Capital	Mar. 31, 2013 Secured Debt 9% Senior secured notes	Dec. 21, 2012 Secured Debt 9% Senior secured notes	Sep. 30, 2012 Secured Debt 9% Senior secured notes	Mar. 31, 2013 Secured Debt Senior secured notes	Sep. 30, 2012 Secured Debt Senior secured notes	Feb. 11, 2011 Secured Debt Senior secured notes	Jun. 05, 2012 Secured Debt Senior secured notes LIBOR Borrowings	Jun. 05, 2012 Secured Debt Senior secured notes Base Rate Borrowings	Mar. 31, 2013 Unsecured Debt Minimum	Mar. 31, 2013 Unsecured Debt Maximum	Mar. 31, 2013 Unsecured Debt Senior Unsecured Cash Pay Notes and Senior Unsecured PIK Notes [Member]	Mar. 07, 2013 Unsecured Debt Senior Unsecured Cash Pay Notes and Senior Unsecured PIK Notes [Member]	Apr. 30, 2010 Unsecured Debt 10.125%/10.875% senior unsecured PIK toggle notes due 2015	Oct. 31, 2009 Unsecured Debt 10.125%/10.875% senior unsecured PIK toggle notes due 2015	Mar. 31, 2013 Unsecured Debt 10.125%/10.875% senior unsecured PIK toggle notes due 2015	Mar. 31, 2013 Unsecured Debt Senior secured term B-3 loans	Mar. 31, 2013 Unsecured Debt 9.75% senior unsecured cash pay notes due 2015	Mar. 07, 2013 Unsecured Debt 9.75% senior unsecured cash pay notes due 2015	Mar. 31, 2013 Unsecured Debt Senior Unsecured Cash Interest Notes	Mar. 31, 2013 Other current liabilities	Mar. 31, 2013 Refinancing of Debt Secured Debt	Mar. 31, 2013 Refinancing of Debt Secured Debt	Mar. 31, 2013 Refinancing of Debt Secured Debt Senior secured term B-1 loans	Mar. 31, 2013 Refinancing of Debt Unsecured Debt	Mar. 31, 2013 Issuance of Debt [Member] Secured Debt	Dec. 21, 2012 Extension of Maturity, Debt Secured Debt Senior secured term B-1 loans	Oct. 29, 2012 Extension of Maturity, Debt Secured Debt Senior secured term B-1 loans	Dec. 21, 2012 Extension of Maturity, Debt Secured Debt Senior secured term B-4 loans	Oct. 29, 2012 Effective Yield Certain Refinancing, Extended or Replacement Term Loans Senior secured term B-4 loans	Oct. 29, 2012 Effective Yield Certain Refinancing, Extended or Replacement Term Loans 9% Senior secured notes	Dec. 21, 2012 Base Rate Secured Debt Senior secured term B-4 loans	Dec. 21, 2012 London Interbank Offered Rate (LIBOR) Secured Debt Senior secured term B-4 loans	Mar. 31, 2013 On March 1, 2018 [Member] 10.50% Senior secured notes [Member]	Mar. 31, 2013 On March 1, 2019 [Member] 10.50% Senior secured notes [Member]	Mar. 31, 2013 On March 1, 2020 [Member] 10.50% Senior secured notes [Member]	Mar. 31, 2013 Sales Of Certain Assets 10.50% Senior secured notes	Mar. 31, 2013 Sales Of Certain Assets 9% Senior secured notes	Mar. 31, 2013 Sales Of Certain Assets Senior secured notes	Mar. 31, 2013 On March 1, 2017 [Member] 10.50% Senior secured notes [Member]	Mar. 31, 2013 On November 1, 2012 10.125%/10.875% senior unsecured PIK toggle notes due 2015	Mar. 31, 2013 On November 1, 2012 9.75% senior unsecured cash pay notes due 2015	Mar. 31, 2013 On or after November 1, 2013 9.75% senior unsecured cash pay notes due 2015	Mar. 31, 2013 On April 1, 2015 9% Senior secured notes	Mar. 31, 2013 On April 1, 2015 Senior secured notes	Mar. 31, 2013 On April 1, 2016 9% Senior secured notes	Mar. 31, 2013 On April 1, 2016 Senior secured notes	Mar. 31, 2013 On or after April 1, 2017 9% Senior secured notes	Mar. 31, 2013 On or after April 1, 2017 Senior secured notes	Mar. 31, 2013 Prior to April 1, 2015 plus make-whole premium 9% Senior secured notes	Mar. 31, 2013 Prior to April 1, 2015 9% Senior secured notes	Mar. 31, 2013 Prior to April 1, 2015 Senior secured notes	Mar. 31, 2013 Prior to April 1, 2014 Senior secured notes	Mar. 31, 2013 Change In Control 10.50% Senior secured notes	Mar. 31, 2013 Change In Control 9% Senior secured notes	Mar. 31, 2013 Change In Control Senior secured notes	Mar. 31, 2013 Prior to April 1, 2015 Original Aggregate Principal Balance Allowed Following Equity Offering 9% Senior secured notes	Mar. 31, 2013 Prior to March 1, 2017 [Member] Senior secured notes	Mar. 31, 2013 Prior to March 1, 2016 [Member] 10.50% Senior secured notes	Mar. 31, 2013 Prior to March 1, 2016 [Member] 10.50% Senior secured notes [Member]
Debt Instrument [Line Items]
Proceeds from Issuance of Long-term Debt														$ 589,000,000	$ 0
Long-term Debt, Refinanced, Amount																			1,384,000,000																																																848,000,000
Debt Instrument, Face Amount																									1,434,000,000				2,152,000,000																	290,000,000				1,009,000,000						1,384,000,000			750,000,000		700,000,000	642,000,000								713,000,000	135,000,000	134,000,000
Repayments of Debt and Capital Lease Obligations																																							284,000,000					22,000,000
Repayments of Other Debt												584,000,000	0	284,000,000	0
Debt Instrument, Interest Rate, Base Rate																																																																											2.25%	1.25%
Debt Instrument, Basis Spread on Base Rate																																3.50%						5.25%				5.75%
Debt Instrument, Interest Rate, Stated Percentage						10.125%	10.125%	10.125%	10.875%	10.875%	10.875%					9.75%	9.75%	9.75%																						10.50%					9.00%	9.00%	9.00%	7.00%	7.00%	7.00%									10.875%		9.75%		10.125%
Unamortized Debt Issuance Expense																																													7,000,000																							4,000,000	5,000,000
Line of Credit Facility, Maximum Borrowing Capacity					200,000,000															335,000,000	150,000,000		200,000,000
Line of Credit Facility, Borrowing Base, Percentage Of Eligible Accounts Receivable Included In Calculation																					85.00%
Line of Credit, Borrowing Base, Percentage Of Eligible Inventory Liquidation Value Included In Calculation																					85.00%
Debt Instrument, Basis Spread on Variable Rate																														0.50%	4.50%					0.50%	6.25%				6.75%										1.50%	0.50%																					0.50%	0.50%
Debt Instrument, Covenants, Maturity Date, Maximum Net Leverage Ratio before Change is Triggered																								5.0
Debt Instrument, Covenants, Maturity Date, Aggregate Principal Amount Of Debt Repaid or Refinanced Before Change is Triggered																																																							750,000,000
Debt Instrument, Covenants, Maturity Date, Minimum Extension Period Before Change is Triggered																																																												91 days
Long-term Debt, Gross	6,121,000,000		6,121,000,000																							45,000,000	44,000,000	2,139,000,000					106,000,000	122,000,000	1,000,000					1,148,000,000			45,000,000
Debt Instrument Prepayment Percentage Of Face Value																																																					100.00%	101.00%																							105.25%	102.625%	100.00%	100.00%	100.00%	100.00%	107.875%	102.5313%	102.4375%	100.00%	104.50%	103.50%	102.25%	101.75%	100.00%	100.00%	100.00%		100.00%	107.00%	101.00%	101.00%	101.00%	109.00%	100.00%		110.50%
Paid-in-Kind Interest																																																									43,000,000	41,000,000
Line Of Credit Facility, Additional Borrowing Capacity																					100,000,000	100,000,000
Line of Credit Facility, Amount Outstanding																					76,000,000	77,000,000
Line of Credit Facility, Remaining Borrowing Capacity																					218,000,000	258,000,000
Debt Prepayment Percentage Of Original Aggregate Principal Balance Allowed Following Equity Offering																																																																																														35.00%		35.00%						35.00%
Debt Instrument, Fee Amount																																																																	15,000,000	15,000,000
Loss on extinguishment of debt	(3,000,000)	0	(6,000,000)	0																																																													3,000,000
Debt Issuance Cost																																																																		6,000,000		9,000,000	3,000,000
Debt, Weighted Average Interest Rate	7.40%		7.40%
Capital lease obligations																																																																$ 23,000,000

XML

Guarantor-Non Guarantor Financial Information (Supplemental Condensed Consolidating Balance Sheet) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012	Mar. 31, 2012	Dec. 30, 2011	Sep. 30, 2011
Current assets:
Cash and cash equivalents	$ 302	$ 337	$ 355	$ 355	$ 400
Accounts receivable, net—external	681	782
Accounts receivable—internal	0	0
Inventory	255	255
Deferred income taxes, net	21	18
Other current assets	280	252
Internal notes receivable, current	0	0
TOTAL CURRENT ASSETS	1,539	1,644
Property, plant and equipment, net	353	364
Deferred income taxes, net	44	43
Intangible assets, net	1,625	1,775
Goodwill	4,093	4,188
Other assets	196	180
Investment in consolidated subsidiaries	0	0
TOTAL ASSETS	7,850	8,194
Current liabilities:
Debt maturing within one year—external	35	37
Debt maturing within one year—internal	0	0
Accounts payable—external	409	438
Accounts payable—internal	0	0
Payroll and benefit obligations	247	262
Deferred revenue	689	616
Business restructuring reserve, current portion	103	84
Other current liabilities	253	302
TOTAL CURRENT LIABILITIES	1,736	1,739
Long-term debt	6,068	6,084
Pension obligations	1,708	1,763
Other postretirement obligations	343	360
Deferred income taxes, net	209	204
Business restructuring reserve, non-current portion	56	51
Other liabilities	443	429
TOTAL NON-CURRENT LIABILITIES	8,827	8,891
Deficiency In Consolidated Subsidiaries	0	0
TOTAL DEFICIENCY	(2,713)	(2,436)
TOTAL LIABILITIES AND DEFICIENCY	7,850	8,194
Avaya Inc.
Current assets:
Cash and cash equivalents	99	101		135	149
Accounts receivable, net—external	265	326
Accounts receivable—internal	806	782
Inventory	120	131
Deferred income taxes, net	0	0
Other current assets	99	150
Internal notes receivable, current	1,484	1,467
TOTAL CURRENT ASSETS	2,873	2,957
Property, plant and equipment, net	213	222
Deferred income taxes, net	1	0
Intangible assets, net	1,416	1,546
Goodwill	3,989	4,082
Other assets	166	150
Investment in consolidated subsidiaries	0	0
TOTAL ASSETS	8,658	8,957
Current liabilities:
Debt maturing within one year—external	35	37
Debt maturing within one year—internal	161	151
Accounts payable—external	207	235
Accounts payable—internal	130	123
Payroll and benefit obligations	104	81
Deferred revenue	590	523
Business restructuring reserve, current portion	6	5
Other current liabilities	155	261
TOTAL CURRENT LIABILITIES	1,388	1,416
Long-term debt	6,068	6,084
Pension obligations	1,216	1,271
Other postretirement obligations	343	360
Deferred income taxes, net	190	182
Business restructuring reserve, non-current portion	23	22
Other liabilities	132	137
TOTAL NON-CURRENT LIABILITIES	9,983	9,977
Deficiency In Consolidated Subsidiaries	2,011	1,921
TOTAL DEFICIENCY	(2,713)	(2,436)
TOTAL LIABILITIES AND DEFICIENCY	8,658	8,957
Guarantor Subsidiaries
Current assets:
Cash and cash equivalents	12	10		15	12
Accounts receivable, net—external	36	39
Accounts receivable—internal	63	66
Inventory	6	6
Deferred income taxes, net	0	0
Other current assets	31	30
Internal notes receivable, current	155	147
TOTAL CURRENT ASSETS	303	298
Property, plant and equipment, net	21	24
Deferred income taxes, net	0	0
Intangible assets, net	31	33
Goodwill	0	0
Other assets	4	5
Investment in consolidated subsidiaries	2	0
TOTAL ASSETS	361	360
Current liabilities:
Debt maturing within one year—external	0	0
Debt maturing within one year—internal	385	368
Accounts payable—external	15	18
Accounts payable—internal	46	49
Payroll and benefit obligations	9	13
Deferred revenue	13	7
Business restructuring reserve, current portion	4	4
Other current liabilities	4	4
TOTAL CURRENT LIABILITIES	476	463
Long-term debt	0	0
Pension obligations	0	0
Other postretirement obligations	0	0
Deferred income taxes, net	0	0
Business restructuring reserve, non-current portion	1	1
Other liabilities	21	22
TOTAL NON-CURRENT LIABILITIES	22	26
Deficiency In Consolidated Subsidiaries	0	3
TOTAL DEFICIENCY	(137)	(129)
TOTAL LIABILITIES AND DEFICIENCY	361	360
Non-Guarantor Subsidiaries
Current assets:
Cash and cash equivalents	191	226		205	239
Accounts receivable, net—external	380	417
Accounts receivable—internal	169	164
Inventory	129	118
Deferred income taxes, net	21	18
Other current assets	150	72
Internal notes receivable, current	2	0
TOTAL CURRENT ASSETS	1,042	1,015
Property, plant and equipment, net	119	118
Deferred income taxes, net	43	43
Intangible assets, net	178	196
Goodwill	104	106
Other assets	26	25
Investment in consolidated subsidiaries	31	27
TOTAL ASSETS	1,543	1,530
Current liabilities:
Debt maturing within one year—external	0	0
Debt maturing within one year—internal	1,095	1,095
Accounts payable—external	187	185
Accounts payable—internal	862	840
Payroll and benefit obligations	134	168
Deferred revenue	86	86
Business restructuring reserve, current portion	93	75
Other current liabilities	94	37
TOTAL CURRENT LIABILITIES	2,551	2,486
Long-term debt	0	0
Pension obligations	492	492
Other postretirement obligations	0	0
Deferred income taxes, net	19	22
Business restructuring reserve, non-current portion	32	28
Other liabilities	290	270
TOTAL NON-CURRENT LIABILITIES	833	812
Deficiency In Consolidated Subsidiaries	0	0
TOTAL DEFICIENCY	(1,841)	(1,768)
TOTAL LIABILITIES AND DEFICIENCY	1,543	1,530
Intercompany Eliminations
Current assets:
Cash and cash equivalents	0	0		0	0
Accounts receivable, net—external	0	0
Accounts receivable—internal	(1,038)	(1,012)
Inventory	0	0
Deferred income taxes, net	0	0
Other current assets	0	0
Internal notes receivable, current	(1,641)	(1,614)
TOTAL CURRENT ASSETS	(2,679)	(2,626)
Property, plant and equipment, net	0	0
Deferred income taxes, net	0	0
Intangible assets, net	0	0
Goodwill	0	0
Other assets	0	0
Investment in consolidated subsidiaries	(33)	(27)
TOTAL ASSETS	(2,712)	(2,653)
Current liabilities:
Debt maturing within one year—external	0	0
Debt maturing within one year—internal	(1,641)	(1,614)
Accounts payable—external	0	0
Accounts payable—internal	(1,038)	(1,012)
Payroll and benefit obligations	0	0
Deferred revenue	0	0
Business restructuring reserve, current portion	0	0
Other current liabilities	0	0
TOTAL CURRENT LIABILITIES	(2,679)	(2,626)
Long-term debt	0	0
Pension obligations	0	0
Other postretirement obligations	0	0
Deferred income taxes, net	0	0
Business restructuring reserve, non-current portion	0	0
Other liabilities	0	0
TOTAL NON-CURRENT LIABILITIES	(2,011)	(1,924)
Deficiency In Consolidated Subsidiaries	(2,011)	(1,924)
TOTAL DEFICIENCY	1,978	1,897
TOTAL LIABILITIES AND DEFICIENCY	$ (2,712)	$ (2,653)

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Benefit Obligations (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended			6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2013
Pension Benefits - U.S.
Defined Benefit Plan Disclosure [Line Items]
Estimated future employer contributions in current fiscal year	$ 67			$ 67
Benefits paid				3
Expected future benefit payments, remainder of fiscal year	4			4
Components of Net Periodic Benefit Cost
Service cost	2	1	3	3
Interest cost	34	38	75	68
Expected return on plan assets	(40)	(43)	(86)	(80)
Amortization of unrecognized prior service cost	0	1	1	0
Amortization of previously unrecognized net actuarial loss	32	24	49	64
Net periodic benefit cost	28	21	42	55
Pension Benefits - Non-U.S.
Defined Benefit Plan Disclosure [Line Items]
Benefits paid				19
Expected future benefit payments, remainder of fiscal year	8			8
Components of Net Periodic Benefit Cost
Service cost	2	1	3	4
Interest cost	5	6	12	10
Expected return on plan assets	0	0	(1)	(1)
Amortization of unrecognized prior service cost	0	0	0	0
Amortization of previously unrecognized net actuarial loss	1	0	0	2
Net periodic benefit cost	8	7	14	15
Postretirement Benefits - U.S.
Defined Benefit Plan Disclosure [Line Items]
Estimated future employer contributions in current fiscal year	21			21
Benefits paid				4
Expected future benefit payments, remainder of fiscal year	4			4
Components of Net Periodic Benefit Cost
Service cost	0	0	1	1
Interest cost	5	7	15	10
Expected return on plan assets	(2)	(2)	(5)	(5)
Amortization of unrecognized prior service cost	(3)	1	1	(7)
Amortization of previously unrecognized net actuarial loss	2	2	4	4
Net periodic benefit cost	2	8	16	3
Pre-Funded | Pension Benefits - U.S.
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer				35
Pre-Funded | Postretirement Benefits - U.S.
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Estimated Future Employer Contributions in Next Fiscal Year	$ 22			$ 22

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Guarantor-Non Guarantor Financial Information (Supplemental Condensed Consolidating Cash Flows) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended			6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2013	Mar. 31, 2012	Dec. 30, 2011
OPERATING ACTIVITIES:
Net loss	$ (192)	$ (162)	$ (188)	$ (277)	$ (188)
Adjustments to reconcile net loss to net cash (used for) provided by operating activities			324	308
Changes in operating assets and liabilities			(105)	57
Equity in net loss of consolidated subsidiaries	0	0	0	0
NET CASH PROVIDED BY OPERATING ACTIVITIES			31	88	31
INVESTING ACTIVITIES:
Capital expenditures			(38)	(47)	(38)
Capitalized software development costs			(19)	(10)	(19)
Acquisition of businesses, net of cash acquired			(4)	(1)	(4)
Proceeds from sale of investments			2	9
Proceeds from Sale, Maturity and Collection of Investments			6	1	6
Restricted cash			0
Advance to Parent			(8)	(10)	(8)
Other investing activities, net			(2)	(1)	(2)
NET CASH USED FOR INVESTING ACTIVITIES			(63)	(59)	(63)
FINANCING ACTIVITIES:
Proceeds from 9% senior secured notes				290	0
Debt issuance and third-party debt modification costs				(49)	0
Repayment of long-term debt			(19)	(19)	(19)
Net borrowings (repayments) of intercompany debt			0	0
Other financing activities, net			(1)	(2)	(1)
NET CASH USED FOR FINANCING ACTIVITIES			(20)	(59)	(20)
Effect of exchange rate changes on cash and cash equivalents			7	(5)	7
NET DECREASE IN CASH AND CASH EQUIVALENTS			(45)	(35)	(45)
Cash and cash equivalents at beginning of period			400	337	400	355
Cash and cash equivalents at end of period	302	355		302	355	355
Avaya Inc.
OPERATING ACTIVITIES:
Net loss	(192)	(162)	(188)	(277)
Adjustments to reconcile net loss to net cash (used for) provided by operating activities			257	287
Changes in operating assets and liabilities			(160)	22
Equity in net loss of consolidated subsidiaries	(9)	45	61	61
NET CASH PROVIDED BY OPERATING ACTIVITIES			(30)	93
INVESTING ACTIVITIES:
Capital expenditures			(14)	(16)
Capitalized software development costs			(19)	(8)
Acquisition of businesses, net of cash acquired			(1)	(1)
Proceeds from sale of investments			2	5
Proceeds from Sale, Maturity and Collection of Investments			6	0
Restricted cash			(1)
Advance to Parent			(8)	(10)
Other investing activities, net			(2)	(1)
NET CASH USED FOR INVESTING ACTIVITIES			(37)	(31)
FINANCING ACTIVITIES:
Proceeds from 9% senior secured notes				290
Debt issuance and third-party debt modification costs				(49)
Repayment of long-term debt			(19)	(19)
Net borrowings (repayments) of intercompany debt			72	(7)
Other financing activities, net			0	0
NET CASH USED FOR FINANCING ACTIVITIES			53	(64)
Effect of exchange rate changes on cash and cash equivalents			0	0
NET DECREASE IN CASH AND CASH EQUIVALENTS			(14)	(2)
Cash and cash equivalents at beginning of period			149	101	149	135
Cash and cash equivalents at end of period	99			99		135
Guarantor Subsidiaries
OPERATING ACTIVITIES:
Net loss	(4)	0	(2)	(12)
Adjustments to reconcile net loss to net cash (used for) provided by operating activities			6	8
Changes in operating assets and liabilities			11	1
Equity in net loss of consolidated subsidiaries	0	0	0	0
NET CASH PROVIDED BY OPERATING ACTIVITIES			15	(3)
INVESTING ACTIVITIES:
Capital expenditures			(1)	0
Capitalized software development costs			0	(2)
Acquisition of businesses, net of cash acquired			0	0
Proceeds from sale of investments			0	0
Proceeds from Sale, Maturity and Collection of Investments			0	0
Restricted cash			0
Advance to Parent			0	0
Other investing activities, net			0	0
NET CASH USED FOR INVESTING ACTIVITIES			(1)	(2)
FINANCING ACTIVITIES:
Proceeds from 9% senior secured notes				0
Debt issuance and third-party debt modification costs				0
Repayment of long-term debt			0	0
Net borrowings (repayments) of intercompany debt			(10)	9
Other financing activities, net			(1)	(2)
NET CASH USED FOR FINANCING ACTIVITIES			(11)	7
Effect of exchange rate changes on cash and cash equivalents			0	0
NET DECREASE IN CASH AND CASH EQUIVALENTS			3	2
Cash and cash equivalents at beginning of period			12	10	12	15
Cash and cash equivalents at end of period	12			12		15
Non-Guarantor Subsidiaries
OPERATING ACTIVITIES:
Net loss	13	(45)	(59)	(49)
Adjustments to reconcile net loss to net cash (used for) provided by operating activities			61	13
Changes in operating assets and liabilities			44	34
Equity in net loss of consolidated subsidiaries	0	0	0	0
NET CASH PROVIDED BY OPERATING ACTIVITIES			46	(2)
INVESTING ACTIVITIES:
Capital expenditures			(23)	(31)
Capitalized software development costs			0	0
Acquisition of businesses, net of cash acquired			(3)	0
Proceeds from sale of investments			0	4
Proceeds from Sale, Maturity and Collection of Investments			0	1
Restricted cash			1
Advance to Parent			0	0
Other investing activities, net			0	0
NET CASH USED FOR INVESTING ACTIVITIES			(25)	(26)
FINANCING ACTIVITIES:
Proceeds from 9% senior secured notes				0
Debt issuance and third-party debt modification costs				0
Repayment of long-term debt			0	0
Net borrowings (repayments) of intercompany debt			(62)	(2)
Other financing activities, net			0	0
NET CASH USED FOR FINANCING ACTIVITIES			(62)	(2)
Effect of exchange rate changes on cash and cash equivalents			7	(5)
NET DECREASE IN CASH AND CASH EQUIVALENTS			(34)	(35)
Cash and cash equivalents at beginning of period			239	226	239	205
Cash and cash equivalents at end of period	191			191		205
Intercompany Eliminations
OPERATING ACTIVITIES:
Net loss	(9)	45	61	61
Adjustments to reconcile net loss to net cash (used for) provided by operating activities			0	0
Changes in operating assets and liabilities			0	0
Equity in net loss of consolidated subsidiaries	9	(45)	(61)	(61)
NET CASH PROVIDED BY OPERATING ACTIVITIES			0	0
INVESTING ACTIVITIES:
Capital expenditures			0	0
Capitalized software development costs			0	0
Acquisition of businesses, net of cash acquired			0	0
Proceeds from sale of investments			0	0
Proceeds from Sale, Maturity and Collection of Investments			0	0
Restricted cash			0
Advance to Parent			0	0
Other investing activities, net			0	0
NET CASH USED FOR INVESTING ACTIVITIES			0	0
FINANCING ACTIVITIES:
Proceeds from 9% senior secured notes				0
Debt issuance and third-party debt modification costs				0
Repayment of long-term debt			0	0
Net borrowings (repayments) of intercompany debt			0	0
Other financing activities, net			0	0
NET CASH USED FOR FINANCING ACTIVITIES			0	0
Effect of exchange rate changes on cash and cash equivalents			0	0
NET DECREASE IN CASH AND CASH EQUIVALENTS			0	0
Cash and cash equivalents at beginning of period			0	0	0	0
Cash and cash equivalents at end of period	0			0		0
Senior secured term B-1 loans
FINANCING ACTIVITIES:
Repayment of term B-5 loans				(584)
Senior secured term B-1 loans
FINANCING ACTIVITIES:
Repayment of term B-5 loans				(584)	0
Senior secured term B-1 loans | Avaya Inc.
FINANCING ACTIVITIES:
Repayment of term B-5 loans				(584)
Senior secured term B-1 loans | Guarantor Subsidiaries
FINANCING ACTIVITIES:
Repayment of term B-5 loans				0
Senior secured term B-1 loans | Non-Guarantor Subsidiaries
FINANCING ACTIVITIES:
Repayment of term B-5 loans				0
Senior secured term B-1 loans | Intercompany Eliminations
FINANCING ACTIVITIES:
Repayment of term B-5 loans				0
Senior secured term B-5 loans
FINANCING ACTIVITIES:
Repayment of term B-5 loans				(284)	0
Proceeds from Issuance of Long-term Debt				589	0
Senior secured term B-5 loans | Avaya Inc.
FINANCING ACTIVITIES:
Repayment of term B-5 loans				(284)
Proceeds from Issuance of Long-term Debt				589
Senior secured term B-5 loans | Guarantor Subsidiaries
FINANCING ACTIVITIES:
Repayment of term B-5 loans				0
Proceeds from Issuance of Long-term Debt				0
Senior secured term B-5 loans | Non-Guarantor Subsidiaries
FINANCING ACTIVITIES:
Repayment of term B-5 loans				0
Proceeds from Issuance of Long-term Debt				0
Senior secured term B-5 loans | Intercompany Eliminations
FINANCING ACTIVITIES:
Repayment of term B-5 loans				0
Proceeds from Issuance of Long-term Debt				$ 0

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Fair Value Measures (Fair Value, Other Disclosures) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended																												3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012	Oct. 31, 2011	Mar. 31, 2013 9.75% senior unsecured cash pay notes due 2015	Sep. 30, 2012 9.75% senior unsecured cash pay notes due 2015	Dec. 30, 2011 9.75% senior unsecured cash pay notes due 2015	Mar. 31, 2013 10.125%/10.875% senior unsecured PIK toggle notes due 2015 Minimum	Sep. 30, 2012 10.125%/10.875% senior unsecured PIK toggle notes due 2015 Minimum	Dec. 30, 2011 10.125%/10.875% senior unsecured PIK toggle notes due 2015 Minimum	Mar. 31, 2013 10.125%/10.875% senior unsecured PIK toggle notes due 2015 Maximum	Sep. 30, 2012 10.125%/10.875% senior unsecured PIK toggle notes due 2015 Maximum	Dec. 30, 2011 10.125%/10.875% senior unsecured PIK toggle notes due 2015 Maximum	Mar. 31, 2013 Senior secured notes Secured Debt	Sep. 30, 2012 Senior secured notes Secured Debt	Feb. 11, 2011 Senior secured notes Secured Debt	Mar. 31, 2013 9% Senior secured notes Secured Debt	Dec. 21, 2012 9% Senior secured notes Secured Debt	Sep. 30, 2012 9% Senior secured notes Secured Debt	Mar. 31, 2013 Unified Communications Solutions Provider	Oct. 03, 2012 Unified Communications Solutions Provider	Oct. 03, 2012 Unified Communications Solutions Provider Advance to Parent due October 3, 2015	Mar. 31, 2013 Other Assets Fair Value	Sep. 30, 2012 Other Assets Fair Value	Oct. 31, 2011 Other Assets Fair Value	Mar. 31, 2013 Quoted prices in active markets for identical instruments (Level 1) Foreign currency forward contracts Recurring Derivative assets Other current assets	Mar. 31, 2013 Significant other observable inputs (Level 2) Foreign currency forward contracts Recurring Derivative assets Other current assets	Mar. 31, 2013 Significant unobservable inputs (Level 3) Foreign currency forward contracts Recurring Derivative assets Other current assets	Mar. 31, 2013 Fair Value Foreign currency forward contracts Recurring Derivative assets	Mar. 31, 2013 ITPS [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets, Fair Value Disclosure																											$ 0	$ 0	$ 44	$ 44
Notes Receivable, Related Parties, Noncurrent																					8	10		7	6	8
Notes Receivable, Related Parties, Stated Interest Rate Percentage					1.63%																		0.93%
Debt Instrument, Interest Rate, Stated Percentage						9.75%	9.75%	9.75%	10.125%	10.125%	10.125%	10.875%	10.875%	10.875%	7.00%	7.00%	7.00%	9.00%	9.00%	9.00%
Goodwill impairment	$ 89	$ 0	$ 89	$ 0																											$ 89

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Goodwill And Intangible Assets (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012	Sep. 30, 2012
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 4,093		$ 4,093		$ 4,188
Goodwill impairment	89	0	89	0
Capitalized software development costs	45		45		51
Minimum
Finite-Lived Intangible Assets [Line Items]
Intangible assets, economic life			5 years
Maximum
Finite-Lived Intangible Assets [Line Items]
Intangible assets, economic life			15 years
ITPS [Member]
Finite-Lived Intangible Assets [Line Items]
Goodwill	44		44		133
Goodwill impairment	$ 89

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Derivatives And Other Financial Instruments (Tables)

6 Months Ended

Mar. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The details of these swaps are as follows:

In millions	Effective Date	Maturity Date	Notional Amount		Floating Rate Received by Avaya	Fixed Rate Paid by Avaya
3-year swap	August 26, 2010	August 26, 2013	$	750	3-month LIBOR	1.160	%
3-year swap	August 26, 2010	August 26, 2013	750		3-month LIBOR	1.135	%
Notional amount—Total			$	1,500

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The following table summarizes the (gains) and losses of the interest rate contracts qualifying and designated as cash flow hedging instruments:

	Three months ended March 31,					Six months ended March 31,
In millions	2013			2012		2013			2012
(Gain) Loss on interest rate swaps
Recognized in other comprehensive loss	$	(3	)	$	—	$	(7	)	$	(10	)
Reclassified from accumulated other comprehensive loss into interest expense	$	3		$	5	$	8		$	13
Recognized in operations (ineffective portion)	$	—		$	—	$	—		$	—

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following table summarizes the estimated fair value of derivatives:

In millions	March 31, 2013									September 30, 2012
Balance Sheet Location	Total			Foreign Currency Forward Contracts			Interest Rate Swaps			Total			Foreign Currency Forward Contracts		Interest Rate Swaps
Other current assets	$	1		$	1		$	—		$	2		$	2	$	—
Other current liabilities	(7		)	(1		)	(6		)	(15		)	—		(15		)
Net Liability	$	(6	)	$	—		$	(6	)	$	(13	)	$	2	$	(15	)

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Reportable Segments (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended					6 Months Ended
	Mar. 31, 2013		Mar. 31, 2012		Dec. 31, 2011	Mar. 31, 2013		Mar. 31, 2012
Segment Reporting Information [Line Items]
REVENUE	$ 1,118		$ 1,257		$ 2,644	$ 2,358		$ 2,644
GROSS PROFIT	586		613		1,317	1,252		1,317
Selling, general and administrative	381		414		847	765		847
Research and development	113		117		228	231		228
Amortization of intangible assets	57		56		112	114		112
Goodwill impairment	89		0			89		0
Restructuring and impairment charges, net	18		90		111	102		111
Acquisition-related costs	0		2		3	0		3
TOTAL OPERATING EXPENSES	658		679		1,301	1,301		1,301
OPERATING (LOSS) INCOME	(72)		(66)		16	(49)		16
INTEREST EXPENSE, LOSS ON EXTINGUISHMENT OF DEBT AND OTHER INCOME (EXPENSE), NET	(117)		(120)			(234)		(230)
LOSS BEFORE INCOME TAXES	(189)		(186)		(214)	(283)		(214)
Global Communications Solutions
Segment Reporting Information [Line Items]
REVENUE	473		574			1,046		1,241
GROSS PROFIT	270		318			619		718
Avaya Networking
Segment Reporting Information [Line Items]
REVENUE	56		64			114		146
GROSS PROFIT	23		27			45		64
Enterprise Collaboration Solutions
Segment Reporting Information [Line Items]
REVENUE	529		638			1,160		1,387
GROSS PROFIT	293		345			664		782
Avaya Global Services
Segment Reporting Information [Line Items]
REVENUE	589		620			1,198		1,258
GROSS PROFIT	308		296			626		609
Unallocated Amounts (1)
Segment Reporting Information [Line Items]
REVENUE	0	[1]	(1)	[1]		0	[1]	(1)	[1]
GROSS PROFIT	$ (15)		$ (28)			$ (38)	[1]	$ (74)	[1]

[1] Unallocated Amounts in Gross Profit include the effect of the amortization of acquired technology intangibles and costs that are not core to the measurement of segment management’s performance, but rather are controlled at the corporate level. Unallocated Amounts in Revenue and Gross Profit also include the impacts of certain fair value adjustments recorded in purchase accounting in connection with the Merger.

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Derivatives And Other Financial Instruments (Estimated fair value of derivatives) (Details) (USD $) In Millions, unless otherwise specified																			3 Months Ended		6 Months Ended
	Mar. 31, 2013 Designated as hedging instrument	Sep. 30, 2012 Designated as hedging instrument	Mar. 31, 2013 Designated as hedging instrument Other current assets	Sep. 30, 2012 Designated as hedging instrument Other current assets	Mar. 31, 2013 Designated as hedging instrument Other current liabilities	Sep. 30, 2012 Designated as hedging instrument Other current liabilities	Mar. 31, 2013 Foreign currency forward contracts Designated as hedging instrument	Sep. 30, 2012 Foreign currency forward contracts Designated as hedging instrument	Mar. 31, 2013 Foreign currency forward contracts Designated as hedging instrument Other current assets	Sep. 30, 2012 Foreign currency forward contracts Designated as hedging instrument Other current assets	Mar. 31, 2013 Foreign currency forward contracts Designated as hedging instrument Other current liabilities	Sep. 30, 2012 Foreign currency forward contracts Designated as hedging instrument Other current liabilities	Mar. 31, 2013 Interest rate swaps Designated as hedging instrument	Sep. 30, 2012 Interest rate swaps Designated as hedging instrument	Mar. 31, 2013 Interest rate swaps Designated as hedging instrument Other current assets	Sep. 30, 2012 Interest rate swaps Designated as hedging instrument Other current assets	Mar. 31, 2013 Interest rate swaps Designated as hedging instrument Other current liabilities	Sep. 30, 2012 Interest rate swaps Designated as hedging instrument Other current liabilities	Mar. 31, 2013 Foreign currency forward contracts	Mar. 31, 2012 Foreign currency forward contracts	Mar. 31, 2013 Foreign currency forward contracts Other Income	Mar. 31, 2012 Foreign currency forward contracts Other Income
Derivatives, Fair Value [Line Items]
Net liability	$ (6)	$ (13)	$ 1	$ 2	$ (7)	$ (15)	$ 0	$ 2	$ 1	$ 2	$ (1)	$ 0	$ (6)	$ (15)	$ 0	$ 0	$ (6)	$ (15)
Gain (loss) on foreign currency contracts included in other income (expense)																			$ (4)	$ 1	$ (7)	$ (5)

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Financing Arrangements (Schedule of long term debt) (Details) (USD $)																	3 Months Ended								6 Months Ended
	Mar. 31, 2013	Sep. 30, 2012	Mar. 31, 2013 Secured Debt Senior secured term B-1 loans	Sep. 30, 2012 Secured Debt Senior secured term B-1 loans	Mar. 31, 2013 Secured Debt Senior secured term B-3 loans	Sep. 30, 2012 Secured Debt Senior secured term B-3 loans	Mar. 31, 2013 Secured Debt Senior secured term B-4 loans	Sep. 30, 2012 Secured Debt Senior secured term B-4 loans	Mar. 31, 2013 Secured Debt Senior secured term B-5 loans	Sep. 30, 2012 Secured Debt Senior secured term B-5 loans	Mar. 31, 2013 Secured Debt Senior secured notes	Sep. 30, 2012 Secured Debt Senior secured notes	Feb. 11, 2011 Secured Debt Senior secured notes	Mar. 31, 2013 Secured Debt 9% Senior secured notes	Dec. 21, 2012 Secured Debt 9% Senior secured notes	Sep. 30, 2012 Secured Debt 9% Senior secured notes	Mar. 31, 2013 Secured Debt 10.50% Senior secured notes	Mar. 07, 2013 Unsecured Debt Senior Unsecured Cash Pay Notes and Senior Unsecured PIK Notes [Member]	Mar. 31, 2013 Unsecured Debt 9.75% senior unsecured cash pay notes due 2015	Mar. 07, 2013 Unsecured Debt 9.75% senior unsecured cash pay notes due 2015	Sep. 30, 2012 Unsecured Debt 9.75% senior unsecured cash pay notes due 2015	Mar. 07, 2013 Unsecured Debt Senior Unsecured Pik Toggle Notes [Member]	Mar. 31, 2013 Unsecured Debt 10.125%/10.875% senior unsecured PIK toggle notes due 2015	Sep. 30, 2012 Unsecured Debt 10.125%/10.875% senior unsecured PIK toggle notes due 2015	Mar. 31, 2013 Refinancing of Debt Secured Debt Senior secured term B-1 loans
Debt Instrument [Line Items]
Debt Instrument, Face Amount				$ 1,434,000,000		$ 2,152,000,000							$ 1,009,000,000		$ 290,000,000			$ 1,384,000,000	$ 700,000,000	$ 642,000,000		$ 742,000,000	$ 750,000,000
Long-term debt, current and noncurrent portions	6,103,000,000	6,121,000,000	0	1,434,000,000	2,139,000,000	2,152,000,000	1,000,000	0	1,148,000,000	0	1,009,000,000	1,009,000,000		290,000,000		0			58,000,000		700,000,000		92,000,000	834,000,000
Long-term Debt, Refinanced, Amount																	1,384,000,000								848,000,000
Debt Instrument, Unamortized Discount	(18,000,000)	(8,000,000)
Debt maturing within one year	(35,000,000)	(37,000,000)
Long-term debt	$ 6,068,000,000	$ 6,084,000,000

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Commitments And Contingencies (Commitments and Contingencies, other disclosures) (Details) (USD $)	6 Months Ended
	Mar. 31, 2013
Loss Contingencies [Line Items]
Letters of credit backing surety bonds, amount	$ 12,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Value of Shares Authorized	60,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Value of Shares Outstanding	42,000,000
Other Disclosure Items [Abstract]
Length of subsequent renewals of significant purchase commitments	12 months
Surety Bond
Loss Contingencies [Line Items]
Maximum potential payout under surety bonds	12,000,000
Product Financing Guarantees
Loss Contingencies [Line Items]
Maximum potential payout under surety bonds	3,000,000
Indemnification Agreement
Loss Contingencies [Line Items]
Threshold amount of Contribution And Distribution Agreement	50,000,000
Minimum | Surety Bond
Loss Contingencies [Line Items]
Surety bonds duration	three months
Maximum | Surety Bond
Loss Contingencies [Line Items]
Surety bonds duration	three years
Standby Letters of Credit
Loss Contingencies [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	119,000,000
Revolving Credit Facility
Loss Contingencies [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	76,000,000
Revolving Credit Facility | Maximum
Loss Contingencies [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	535,000,000
Uncommitted Facilities
Loss Contingencies [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	43,000,000
Hazardous Noise Exposure Litigation By Former Employees
Loss Contingencies [Line Items]
Litigation, number of plaintiffs	101
Other Disclosure Items [Abstract]
Litigation, length of period related to claim	40 years
Hazardous Noise Exposure Litigation By Former Employees | Maximum
Loss Contingencies [Line Items]
Loss Contingency, Damages Sought, Value	$ 50,000

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Income Taxes (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended			6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2013	Mar. 31, 2012
Operating Loss Carryforwards [Line Items]
(Provision for) benefit from income taxes	$ 3	$ (24)	$ 26	$ (6)	$ (26)
Domestic Tax Authority
Operating Loss Carryforwards [Line Items]
Income Tax Expense (Benefit) from Expiration of Interest Rate Swaps				17
Other Comprehensive Income (Loss), Tax				$ 16	$ 6

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Business Combinations

6 Months Ended

Mar. 31, 2013

Business Combinations [Abstract]

Business Combinations

Business Combinations

RADVISION Ltd.

On June 5, 2012, Avaya acquired Radvision for $230 million in cash. The purchase price was funded with (i) a capital contribution to Avaya from Parent in the amount of $196 million from the Parent's issuance of Series B preferred stock and warrants to purchase common stock of Parent, and (ii) approximately $34 million of Avaya's cash. The acquisition of Radvision has been accounted for under the acquisition method, which requires an allocation of the purchase price of the acquired entity to the assets acquired and liabilities assumed based on their estimated fair values from a market-participant perspective at the date of acquisition.

Other Acquisitions

During the six months ended March 31, 2013 and 2012, the Company completed other acquisitions primarily to enhance the Company’s technology portfolio. The aggregate purchase price of acquisitions completed by the Company and Parent was $1 million and $36 million during the six months ended March 31, 2013 and 2012, respectively. The other acquisitions have been accounted for under the acquisition method. The acquired technologies and other intangible assets associated with these acquisitions were not material.

These unaudited consolidated financial statements include the operating results of the acquired entities since their respective acquisition dates. The revenues and expenses specific to these businesses and their pro forma results are not material to these unaudited consolidated financial statements.

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Derivatives And Other Financial Instruments (Narrative) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended	3 Months Ended
	Mar. 31, 2013 Interest rate swaps	Mar. 31, 2013 Foreign currency forward contracts	Mar. 31, 2012 Foreign currency forward contracts
Derivative [Line Items]
Amounts expected to be reclassified from other comprehensive loss into expense in the next twelve months	$ 5
Gain (loss) on foreign currency contracts included in other income (expense)		$ (4)	$ 1

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Commitments And Contingencies (Tables)

6 Months Ended

Mar. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Schedule of Product Warranty Liability

In millions
Balance as of October 1, 2012	$	16
Reductions for payments and costs to satisfy claims	(8		)
Accruals for warranties issued during the period	8
Balance as of March 31, 2013	$	16

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Reportable Segments (Tables)

6 Months Ended

Mar. 31, 2013

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

Summarized financial information relating to the Company’s reportable segments is shown in the following table:

	Three months ended March 31,						Six months ended March 31,
In millions	2013			2012			2013			2012
REVENUE
Global Communications Solutions	$	473		$	574		$	1,046		$	1,241
Avaya Networking	56			64			114			146
Enterprise Collaboration Solutions	529			638			1,160			1,387
Avaya Global Services	589			620			1,198			1,258
Unallocated Amounts (1)	—			(1		)	—			(1		)
	$	1,118		$	1,257		$	2,358		$	2,644
GROSS PROFIT
Global Communications Solutions	$	270		$	318		$	619		$	718
Avaya Networking	23			27			45			64
Enterprise Collaboration Solutions	293			345			664			782
Avaya Global Services	308			296			626			609
Unallocated Amounts (1)	(15		)	(28		)	(38		)	(74		)
	586			613			1,252			1,317
OPERATING EXPENSES
Selling, general and administrative	381			414			765			847
Research and development	113			117			231			228
Amortization of intangible assets	57			56			114			112
Goodwill impairment	89			—			89			—
Restructuring and impairment charges, net	18			90			102			111
Acquisition-related costs	—			2			—			3
	658			679			1,301			1,301
OPERATING (LOSS) INCOME	(72		)	(66		)	(49		)	16
INTEREST EXPENSE, LOSS ON EXTINGUISHMENT OF DEBT AND OTHER INCOME (EXPENSE), NET	(117		)	(120		)	(234		)	(230		)
LOSS BEFORE INCOME TAXES	$	(189	)	$	(186	)	$	(283	)	$	(214	)

(1) Unallocated Amounts in Gross Profit include the effect of the amortization of acquired technology intangibles and costs that are not core to the measurement of segment management’s performance, but rather are controlled at the corporate level. Unallocated Amounts in Revenue and Gross Profit also include the impacts of certain fair value adjustments recorded in purchase accounting in connection with the Merger.

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Fair Value Measures (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012	Sep. 30, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Goodwill	$ 4,093		$ 4,093		$ 4,188
Goodwill impairment	89	0	89	0
Other assets, non-current | Recurring | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure					3
Other assets, non-current | Recurring | Quoted prices in active markets for identical instruments (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure					1
Other assets, non-current | Recurring | Significant other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure					2
Other assets, non-current | Recurring | Significant unobservable inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure					0
Investments | Other current assets | Recurring | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure					1
Investments | Other current assets | Recurring | Quoted prices in active markets for identical instruments (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure					1
Investments | Other current assets | Recurring | Significant other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure					0
Investments | Other current assets | Recurring | Significant unobservable inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure					0
Investments | Other assets, non-current | Recurring | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	3		3		4
Investments | Other assets, non-current | Recurring | Quoted prices in active markets for identical instruments (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	2		2		2
Investments | Other assets, non-current | Recurring | Significant other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	1		1		2
Investments | Other assets, non-current | Recurring | Significant unobservable inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	0		0		0
Derivative liabilities | Other current liabilities | Recurring | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, Fair Value Disclosure	7		7
Derivative liabilities | Other current liabilities | Recurring | Quoted prices in active markets for identical instruments (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, Fair Value Disclosure	0		0
Derivative liabilities | Other current liabilities | Recurring | Significant other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, Fair Value Disclosure	7		7
Derivative liabilities | Other current liabilities | Recurring | Significant unobservable inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, Fair Value Disclosure	0		0
Foreign currency forward contracts | Derivative assets | Other current assets | Recurring | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	1		1		2
Foreign currency forward contracts | Derivative assets | Other current assets | Recurring | Quoted prices in active markets for identical instruments (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	0		0		0
Foreign currency forward contracts | Derivative assets | Other current assets | Recurring | Significant other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	1		1		2
Foreign currency forward contracts | Derivative assets | Other current assets | Recurring | Significant unobservable inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	0		0		0
Foreign currency forward contracts | Derivative liabilities | Other current liabilities | Recurring | Quoted prices in active markets for identical instruments (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, Fair Value Disclosure	0		0
Foreign currency forward contracts | Derivative liabilities | Other current liabilities | Recurring | Significant other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, Fair Value Disclosure	1		1
Foreign currency forward contracts | Derivative liabilities | Other current liabilities | Recurring | Significant unobservable inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, Fair Value Disclosure	0		0
Foreign currency forward contracts | Derivative liabilities | Other current liabilities | Recurring | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, Fair Value Disclosure	1		1
Interest rate swaps | Derivative liabilities | Other current liabilities | Recurring | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, Fair Value Disclosure	6		6		15
Interest rate swaps | Derivative liabilities | Other current liabilities | Recurring | Quoted prices in active markets for identical instruments (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, Fair Value Disclosure	0		0		0
Interest rate swaps | Derivative liabilities | Other current liabilities | Recurring | Significant other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, Fair Value Disclosure	6		6		15
Interest rate swaps | Derivative liabilities | Other current liabilities | Recurring | Significant unobservable inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, Fair Value Disclosure	0		0		0
ITPS [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Goodwill	44		44		133
Goodwill impairment	$ 89

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Guarantor-Non Guarantor Financial Information (Tables)

6 Months Ended

Mar. 31, 2013

Guarantor-Non Guarantor Financial Information [Abstract]

Schedule Of Condensed Consolidating Financial Information

Supplemental Condensed Consolidating Schedule of Operations and Comprehensive Loss

	Six Months Ended March 31, 2013
In millions	Avaya Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
REVENUE	$	1,278		$	164		$	1,168		$	(252	)	$	2,358
COST	651			109			598			(252		)	1,106
GROSS PROFIT	627			55			570			—			1,252
OPERATING EXPENSES
Selling, general and administrative	285			49			431			—			765
Research and development	130			3			98			—			231
Amortization of intangible assets	104			2			8			—			114
Goodwill impairment	89			—			—			—			89
Restructuring and impairment charges, net	23			3			76			—			102
	631			57			613			—			1,301
OPERATING LOSS	(4		)	(2		)	(43		)	—			(49		)
Interest expense	(215		)	(9		)	—			—			(224		)
Loss on extinguishment of debt	(6		)	—			—			—			(6		)
Other (expense) income, net	(18		)	(1		)	15			—			(4		)
LOSS BEFORE INCOME TAXES	(243		)	(12		)	(28		)	—			(283		)
Benefit from (provision for) income taxes	27			—			(21		)	—			6
Equity in net loss of consolidated subsidiaries	(61		)	—			—			61			—
NET LOSS	$	(277	)	$	(12	)	$	(49	)	$	61		$	(277	)
Comprehensive loss	$	(280	)	$	(12	)	$	(68	)	$	80		$	(280	)

Supplemental Condensed Consolidating Schedule of Operations and Comprehensive Income (Loss)

	Six Months Ended March 31, 2012
In millions	Avaya Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
REVENUE	$	1,497		$	198		$	1,332		$	(383	)	$	2,644
COST	826			131			753			(383		)	1,327
GROSS PROFIT	671			67			579			—			1,317
OPERATING EXPENSES
Selling, general and administrative	346			49			452			—			847
Research and development	126			7			95			—			228
Amortization of intangible assets	103			2			7			—			112
Restructuring charges, net	16			1			94			—			111
Acquisition-related costs	3			—			—			—			3
	594			59			648			—			1,301
OPERATING INCOME (LOSS)	77			8			(69		)	—			16
Interest expense	(206		)	(10		)	(1		)	—			(217		)
Other expense, net	—			—			(13		)	—			(13		)
LOSS BEFORE INCOME TAXES	(129		)	(2		)	(83		)	—			(214		)
Benefit from income taxes	2			—			24			—			26
Equity in net loss of consolidated subsidiaries	(61		)	—			—			61			—
NET LOSS	$	(188	)	$	(2	)	$	(59	)	$	61		$	(188	)
Comprehensive loss	$	(136	)	$	(2	)	$	(44	)	$	46		$	(136	)

Supplemental Condensed Consolidating Balance Sheet

	March 31, 2013
In millions	Avaya Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	99		$	12		$	191		$	—		$	302
Accounts receivable, net—external	265			36			380			—			681
Accounts receivable—internal	806			63			169			(1,038		)	—
Inventory	120			6			129			—			255
Deferred income taxes, net	—			—			21			—			21
Other current assets	99			31			150			—			280
Internal notes receivable, current	1,484			155			2			(1,641		)	—
TOTAL CURRENT ASSETS	2,873			303			1,042			(2,679		)	1,539
Property, plant and equipment, net	213			21			119			—			353
Deferred income taxes, net	1			—			43			—			44
Intangible assets, net	1,416			31			178			—			1,625
Goodwill	3,989			—			104			—			4,093
Other assets	166			4			26			—			196
Investment in consolidated subsidiaries	—			2			31			(33		)	—
TOTAL ASSETS	$	8,658		$	361		$	1,543		$	(2,712	)	$	7,850
LIABILITIES
Current liabilities:
Debt maturing within one year—external	$	35		$	—		$	—		$	—		$	35
Debt maturing within one year—internal	161			385			1,095			(1,641		)	—
Accounts payable—external	207			15			187			—			409
Accounts payable—internal	130			46			862			(1,038		)	—
Payroll and benefit obligations	104			9			134			—			247
Deferred revenue	590			13			86			—			689
Business restructuring reserve, current portion	6			4			93			—			103
Other current liabilities	155			4			94			—			253
TOTAL CURRENT LIABILITIES	1,388			476			2,551			(2,679		)	1,736
Long-term debt	6,068			—			—			—			6,068
Pension obligations	1,216			—			492			—			1,708
Other postretirement obligations	343			—			—			—			343
Deferred income taxes, net	190			—			19			—			209
Business restructuring reserve, non-current portion	23			1			32			—			56
Other liabilities	132			21			290			—			443
Deficiency in consolidated subsidiaries	2,011			—			—			(2,011		)	—
TOTAL NON-CURRENT LIABILITIES	9,983			22			833			(2,011		)	8,827
TOTAL DEFICIENCY	(2,713		)	(137		)	(1,841		)	1,978			(2,713		)
TOTAL LIABILITIES AND DEFICIENCY	$	8,658		$	361		$	1,543		$	(2,712	)	$	7,850

Supplemental Condensed Consolidating Balance Sheet

	September 30, 2012
In millions	Avaya Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	101		$	10		$	226		$	—		$	337
Accounts receivable, net—external	326			39			417			—			782
Accounts receivable—internal	782			66			164			(1,012		)	—
Inventory	131			6			118			—			255
Deferred income taxes, net	—			—			18			—			18
Other current assets	150			30			72			—			252
Internal notes receivable, current	1,467			147			—			(1,614		)	—
TOTAL CURRENT ASSETS	2,957			298			1,015			(2,626		)	1,644
Property, plant and equipment, net	222			24			118			—			364
Deferred income taxes, net	—			—			43			—			43
Intangible assets, net	1,546			33			196			—			1,775
Goodwill	4,082			—			106			—			4,188
Other assets	150			5			25			—			180
Investment in consolidated subsidiaries	—			—			27			(27		)	—
TOTAL ASSETS	$	8,957		$	360		$	1,530		$	(2,653	)	$	8,194
LIABILITIES
Current liabilities:
Debt maturing within one year—external	$	37		$	—		$	—		$	—		$	37
Debt maturing within one year—internal	151			368			1,095			(1,614		)	—
Accounts payable—external	235			18			185			—			438
Accounts payable—internal	123			49			840			(1,012		)	—
Payroll and benefit obligations	81			13			168			—			262
Deferred revenue	523			7			86			—			616
Business restructuring reserve, current portion	5			4			75			—			84
Other current liabilities	261			4			37			—			302
TOTAL CURRENT LIABILITIES	1,416			463			2,486			(2,626		)	1,739
Long-term debt	6,084			—			—			—			6,084
Pension obligations	1,271			—			492			—			1,763
Other postretirement obligations	360			—			—			—			360
Deferred income taxes, net	182			—			22			—			204
Business restructuring reserve, non-current portion	22			1			28			—			51
Other liabilities	137			22			270			—			429
Deficiency in consolidated subsidiaries	1,921			3			—			(1,924		)	—
TOTAL NON-CURRENT LIABILITIES	9,977			26			812			(1,924		)	8,891
TOTAL DEFICIENCY	(2,436		)	(129		)	(1,768		)	1,897			(2,436		)
TOTAL LIABILITIES AND DEFICIENCY	$	8,957		$	360		$	1,530		$	(2,653	)	$	8,194

Supplemental Condensed Consolidating Schedule of Cash Flows

	Six Months Ended March 31, 2013
In millions	Avaya Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
OPERATING ACTIVITIES:
Net loss	$	(277	)	$	(12	)	$	(49	)	$	61		$	(277	)
Adjustments to reconcile net loss to net cash provided by (used for) operating activities	287			8			13			—			308
Changes in operating assets and liabilities	22			1			34			—			57
Equity in net loss of consolidated subsidiaries	61			—			—			(61		)	—
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES	93			(3		)	(2		)	—			88
INVESTING ACTIVITIES:
Capital expenditures	(16		)	—			(31		)	—			(47		)
Capitalized software development costs	(8		)	(2		)	—			—			(10		)
Acquisition of businesses, net of cash acquired	(1		)	—			—			—			(1		)
Proceeds from sale of long-lived assets	5			—			4			—			9
Proceeds from sale of investments	—			—			1			—			1
Advance to Parent	(10		)	—			—			—			(10		)
Other investing activities, net	(1		)	—			—			—			(1		)
NET CASH USED FOR INVESTING ACTIVITIES	(31		)	(2		)	(26		)	—			(59		)
FINANCING ACTIVITIES:
Proceeds from 9% senior secured notes	290			—			—			—			290
Repayment of term B-5 loans	(284		)	—			—			—			(284		)
Proceeds from term B-5 loans	589			—			—			—			589
Repayment of term B-1 loans	(584		)	—			—			—			(584		)
Debt issuance and third-party debt modification costs	(49		)	—			—			—			(49		)
Repayment of long-term debt	(19		)	—			—			—			(19		)
Net (repayments) borrowings of intercompany debt	(7		)	9			(2		)	—			—
Other financing activities, net	—			(2		)	—			—			(2		)
NET CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES	(64		)	7			(2		)	—			(59		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(5		)	—			(5		)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(2		)	2			(35		)	—			(35		)
Cash and cash equivalents at beginning of period	101			10			226			—			337
Cash and cash equivalents at end of period	$	99		$	12		$	191		$	—		$	302

Supplemental Condensed Consolidating Schedule of Cash Flows

	Six Months Ended March 31, 2012
In millions	Avaya Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
OPERATING ACTIVITIES:
Net loss	$	(188	)	$	(2	)	$	(59	)	$	61		$	(188	)
Adjustments to reconcile net loss to net cash (used for) provided by operating activities	257			6			61			—			324
Changes in operating assets and liabilities	(160		)	11			44			—			(105		)
Equity in net loss of consolidated subsidiaries	61			—			—			(61		)	—
NET CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES	(30		)	15			46			—			31
INVESTING ACTIVITIES:
Capital expenditures	(14		)	(1		)	(23		)	—			(38		)
Capitalized software development costs	(19		)	—			—			—			(19		)
Acquisition of businesses, net of cash acquired	(1		)	—			(3		)	—			(4		)
Proceeds from sale of long-lived assets	2			—			—			—			2
Proceeds from sale of investments	6			—			—			—			6
Restricted cash	(1		)	—			1			—			—
Advance to Parent	(8		)	—			—			—			(8		)
Other investing activities, net	(2		)	—			—			—			(2		)
NET CASH USED FOR INVESTING ACTIVITIES	(37		)	(1		)	(25		)	—			(63		)
FINANCING ACTIVITIES:
Repayment of long-term debt	(19		)	—			—			—			(19		)
Net borrowings (repayments) of intercompany debt	72			(10		)	(62		)	—			—
Other financing activities, net	—			(1		)	—			—			(1		)
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES	53			(11		)	(62		)	—			(20		)
Effect of exchange rate changes on cash and cash equivalents	—			—			7			—			7
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(14		)	3			(34		)	—			(45		)
Cash and cash equivalents at beginning of period	149			12			239			—			400
Cash and cash equivalents at end of period	$	135		$	15		$	205		$	—		$	355

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Background, Merger And Basis Of Presentation (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended			0 Months Ended
	Mar. 31, 2013 Partner Private_equity_firm Product_Service_Category Segment	Mar. 31, 2013 Product Portfolio Segment	Jun. 04, 2007 Merger Agreement	Dec. 18, 2009 Nortel Networks	Dec. 31, 2011 Nortel Networks	Jun. 05, 2012 RADVISION Ltd Parent
General Disclosures [Line Items]
Number of segments	3	2
Number of product and service categories	3
Number of channel partners worldwide	10,800
Purchase price			$ 8,400		$ 933	$ 230
Business acquisition preliminary purchase price				$ 943
Number of investor private equity firms	2

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Recent Accounting Pronouncements

6 Months Ended

Mar. 31, 2013

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

New Accounting Guidance Recently Adopted

Presentation of Comprehensive Income

In the first quarter of fiscal 2013, the Company adopted new guidance on the presentation of comprehensive income and its components in the financial statements. This guidance eliminated the option to report other comprehensive income and its components in the statement of changes in equity and instead requires presentation either in a single continuous statement or in two separate, but consecutive statements. The relevant presentation and disclosures have been applied retrospectively for all periods presented.

Goodwill Impairment Test

In September 2011, the Financial Accounting Standards Board ("FASB") issued revised guidance intended to simplify how an entity tests goodwill for impairment. As a result of the guidance, an entity will be allowed to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. An entity will not be required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The accounting guidance became effective for the Company beginning in fiscal year 2013 and did not have an impact on the consolidated financial statements or financial statement disclosures.

Indefinite-lived Intangible Asset Impairment Test

In July 2012, the FASB issued revised guidance intended to simplify how an entity tests indefinite-lived intangible assets other than goodwill for impairment. As a result of the guidance, an entity will be allowed to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. An entity will not be required to perform the quantitative impairment test unless the entity determines, based on a qualitative assessment, that it is more likely than not that the indefinite-lived asset is impaired. The accounting guidance became effective for the Company beginning in fiscal year 2013 and did not have an impact on the consolidated financial statements or financial statement disclosures.

Recent Accounting Guidance Not Yet Effective

On February 5, 2013, the FASB issued Accounting Standards Update No. 2013-02 "Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income".  The standard requires that companies present, either in a single note or parenthetically on the face of the financial statements, the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and the income statement line items affected by the reclassification.  This accounting guidance is effective for the Company beginning in the first quarter of fiscal 2014 and is only expected to impact the presentation of the Company's consolidated financial statements and related notes.

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Business Combinations (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013 Series of Individually Immaterial Business Acquisitions	Dec. 31, 2011 Series of Individually Immaterial Business Acquisitions	Jun. 05, 2012 Parent RADVISION Ltd
Business Acquisition [Line Items]
Purchase price	$ 1	$ 36	$ 230
Business Acquisition, Cost of Acquired Entity, Stockholders' Equity, Contributed Capital			196
Cash considerations			$ 34

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Derivatives And Other Financial Instruments (Interest rate swaps) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Mar. 31, 2013
Derivative [Line Items]
Notional Amount	$ 1,500
3-year swap
Derivative [Line Items]
Notional Amount	750
Floating Rate Received by Avaya	3-month LIBOR
Fixed Rate Paid by Avaya	1.16%
Term	3 years
3-year swap
Derivative [Line Items]
Notional Amount	$ 750
Floating Rate Received by Avaya	3-month LIBOR
Fixed Rate Paid by Avaya	1.135%
Term	3 years

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Guarantor-Non Guarantor Financial Information (Supplemental Condensed Consolidating Schedule Of Operations) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended			6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2013	Mar. 31, 2012
Condensed Financial Statements, Captions [Line Items]
REVENUE	$ 1,118	$ 1,257	$ 2,644	$ 2,358	$ 2,644
COST	532	644	1,327	1,106	1,327
GROSS PROFIT	586	613	1,317	1,252	1,317
OPERATING EXPENSES
Selling, general and administrative	381	414	847	765	847
Research and development	113	117	228	231	228
Amortization of intangible assets	57	56	112	114	112
Goodwill impairment	89	0		89	0
Restructuring and impairment charges, net	18	90	111	102	111
Acquisition-related costs	0	2	3	0	3
TOTAL OPERATING EXPENSES	658	679	1,301	1,301	1,301
OPERATING (LOSS) INCOME	(72)	(66)	16	(49)	16
Interest Expense	(116)	(108)	(217)	(224)	(217)
Loss on extinguishment of debt	(3)	0		(6)	0
Other income (expense), net	2	(12)	(13)	(4)	(13)
LOSS BEFORE INCOME TAXES	(189)	(186)	(214)	(283)	(214)
(Provision for) benefit from income taxes	(3)	24	(26)	6	26
Income (Loss) from Equity Method Investments	0	0	0	0
NET LOSS	(192)	(162)	(188)	(277)	(188)
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	(182)	(146)	(136)	(280)	(136)
Other, net	0	(2)		(1)	(3)
Avaya Inc.
Condensed Financial Statements, Captions [Line Items]
REVENUE	554	706	1,497	1,278
COST	284	450	826	651
GROSS PROFIT	270	256	671	627
OPERATING EXPENSES
Selling, general and administrative	141	147	346	285
Research and development	64	64	126	130
Amortization of intangible assets	52	52	103	104
Goodwill impairment	89			89
Restructuring and impairment charges, net	6	9	16	23
Acquisition-related costs		2	3
TOTAL OPERATING EXPENSES	352	274	594	631
OPERATING (LOSS) INCOME	(82)	(18)	77	(4)
Interest Expense	(110)	(101)	(206)	(215)
Loss on extinguishment of debt	(3)			(6)
Other income (expense), net	(14)	(1)	0	(18)
LOSS BEFORE INCOME TAXES	(209)	(120)	(129)	(243)
(Provision for) benefit from income taxes	(8)	(3)	(2)	(27)
Income (Loss) from Equity Method Investments	9	(45)	(61)	(61)
NET LOSS	(192)	(162)	(188)	(277)
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	(182)	(146)	(136)	(280)
Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
REVENUE	84	102	198	164
COST	55	64	131	109
GROSS PROFIT	29	38	67	55
OPERATING EXPENSES
Selling, general and administrative	23	26	49	49
Research and development	1	3	7	3
Amortization of intangible assets	1	1	2	2
Goodwill impairment	0			0
Restructuring and impairment charges, net	1	1	1	3
Acquisition-related costs		0	0
TOTAL OPERATING EXPENSES	26	31	59	57
OPERATING (LOSS) INCOME	3	7	8	(2)
Interest Expense	(6)	(7)	(10)	(9)
Loss on extinguishment of debt	0			0
Other income (expense), net	(1)	0	0	(1)
LOSS BEFORE INCOME TAXES	(4)	0	(2)	(12)
(Provision for) benefit from income taxes	0	0	0	0
Income (Loss) from Equity Method Investments	0	0	0	0
NET LOSS	(4)	0	(2)	(12)
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	(4)	0	(2)	(12)
Non-Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
REVENUE	557	687	1,332	1,168
COST	270	368	753	598
GROSS PROFIT	287	319	579	570
OPERATING EXPENSES
Selling, general and administrative	217	241	452	431
Research and development	48	50	95	98
Amortization of intangible assets	4	3	7	8
Goodwill impairment	0			0
Restructuring and impairment charges, net	11	80	94	76
Acquisition-related costs		0	0
TOTAL OPERATING EXPENSES	280	374	648	613
OPERATING (LOSS) INCOME	7	(55)	(69)	(43)
Interest Expense	0	0	(1)	0
Loss on extinguishment of debt	0			0
Other income (expense), net	17	(11)	(13)	15
LOSS BEFORE INCOME TAXES	24	(66)	(83)	(28)
(Provision for) benefit from income taxes	11	(21)	(24)	21
Income (Loss) from Equity Method Investments	0	0	0	0
NET LOSS	13	(45)	(59)	(49)
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	6	(43)	(44)	(68)
Intercompany Eliminations
Condensed Financial Statements, Captions [Line Items]
REVENUE	(77)	(238)	(383)	(252)
COST	(77)	(238)	(383)	(252)
GROSS PROFIT	0	0	0	0
OPERATING EXPENSES
Selling, general and administrative	0	0	0	0
Research and development	0	0	0	0
Amortization of intangible assets	0	0	0	0
Goodwill impairment	0			0
Restructuring and impairment charges, net	0	0	0	0
Acquisition-related costs		0	0
TOTAL OPERATING EXPENSES	0	0	0	0
OPERATING (LOSS) INCOME	0	0	0	0
Interest Expense	0	0	0	0
Loss on extinguishment of debt	0			0
Other income (expense), net	0	0	0	0
LOSS BEFORE INCOME TAXES	0	0	0	0
(Provision for) benefit from income taxes	0	0	0	0
Income (Loss) from Equity Method Investments	(9)	45	61	61
NET LOSS	(9)	45	61	61
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	$ (2)	$ 43	$ 46	$ 80

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Consolidated Statements Of Operations (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
REVENUE
Products	$ 529	$ 637	$ 1,160	$ 1,386
Services	589	620	1,198	1,258
TOTAL REVENUES	1,118	1,257	2,358	2,644
Products:
Costs (exclusive of amortization of technology intangible assets)	236	280	497	591
Amortization of technology intangible assets	14	49	36	99
Services	282	315	573	637
TOTAL COST OF REVENUE	532	644	1,106	1,327
GROSS PROFIT	586	613	1,252	1,317
OPERATING EXPENSES
Selling, general and administrative	381	414	765	847
Research and development	113	117	231	228
Amortization of intangible assets	57	56	114	112
Goodwill impairment	89	0	89	0
Restructuring and impairment charges, net	18	90	102	111
Acquisition-related costs	0	2	0	3
TOTAL OPERATING EXPENSES	658	679	1,301	1,301
OPERATING (LOSS) INCOME	(72)	(66)	(49)	16
Interest expense	(116)	(108)	(224)	(217)
Loss on extinguishment of debt	(3)	0	(6)	0
Other income (expense), net	2	(12)	(4)	(13)
LOSS BEFORE INCOME TAXES	(189)	(186)	(283)	(214)
(Provision for) benefit from income taxes	(3)	24	6	26
NET LOSS	$ (192)	$ (162)	$ (277)	$ (188)

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Fair Value Measures (Fair Value of Financial Instruments) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	$ 6,103	$ 6,121
Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	6,121	6,129
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	5,911	5,661
Senior secured term B-1 loans | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	0	1,434
Senior secured term B-1 loans | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	0	1,392
Senior secured term B-3 loans | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	2,139	2,152
Senior secured term B-3 loans | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	2,013	1,960
Senior secured term B-4 loans | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	1	0
Senior secured term B-4 loans | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	1	0
Senior secured term B-5 loans | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	1,148	0
Senior secured term B-5 loans | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	1,153	0
Senior secured notes | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	1,009	1,009
Senior secured notes | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	982	938
9% Senior secured notes | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	290	0
9% Senior secured notes | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	300	0
10.50% Senior secured notes [Member] | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	1,384	0
10.50% Senior secured notes [Member] | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	1,314	0
9.75% senior unsecured cash pay notes due 2015 | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	58	700
9.75% senior unsecured cash pay notes due 2015 | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	57	622
10.125%/10.875% senior unsecured PIK toggle notes due 2015 | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	92	834
10.125%/10.875% senior unsecured PIK toggle notes due 2015 | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	$ 91	$ 749

XML

Consolidated Statements Of Cash Flows (USD $) In Millions, unless otherwise specified	6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
OPERATING ACTIVITIES:
Net loss	$ (277)	$ (188)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	221	286
Share-based compensation	3	5
Amortization of debt issuance costs	10	11
Accretion of debt discount	2	1
Non-cash charge for debt issuance costs upon redemption of term loans	5	0
Third-party fees expensed in connection with the debt modification	18	0
Premium on issuance of term loans	3	0
Provision for uncollectible receivables	1	2
Deferred income taxes, net	(17)	5
Loss on sale of investments and long-lived assets, net	0	3
Goodwill impairment	89	0
Unrealized (gain) loss on foreign currency exchange	(27)	11
Changes in operating assets and liabilities:
Accounts receivable	103	25
Inventory	0	8
Accounts payable	(28)	5
Payroll and benefit obligations	(35)	(69)
Business restructuring reserve	32	4
Deferred revenue	83	(8)
Other assets and liabilities	(98)	(70)
NET CASH PROVIDED BY OPERATING ACTIVITIES	88	31
INVESTING ACTIVITIES:
Capital expenditures	(47)	(38)
Capitalized software development costs	(10)	(19)
Acquisition of businesses, net of cash acquired	(1)	(4)
Proceeds from sale of long-lived assets	9	2
Proceeds from sale of investments	1	6
Advance to Parent	(10)	(8)
Other investing activities, net	(1)	(2)
NET CASH USED FOR INVESTING ACTIVITIES	(59)	(63)
FINANCING ACTIVITIES:
Proceeds from 9% senior secured notes	290	0
Debt issuance and third-party debt modification costs	(49)	0
Repayment of long-term debt	(19)	(19)
Other financing activities, net	(2)	(1)
NET CASH USED FOR FINANCING ACTIVITIES	(59)	(20)
Effect of exchange rate changes on cash and cash equivalents	(5)	7
NET DECREASE IN CASH AND CASH EQUIVALENTS	(35)	(45)
Cash and cash equivalents at beginning of period	337	400
Cash and cash equivalents at end of period	302	355
Senior secured term B-5 loans
FINANCING ACTIVITIES:
Repayment of term B-5 loans	(284)	0
Proceeds from Issuance of Long-term Debt	589	0
Senior secured term B-1 loans
FINANCING ACTIVITIES:
Repayment of term B-5 loans	$ (584)	$ 0

XML

Business Restructuring Reserves And Programs Restructuring Reserve (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended			6 Months Ended														12 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013 Fiscal 2008-2011 Restructuring Programs		Mar. 31, 2013 Fiscal 2013 Restructuring Program	Mar. 31, 2013 Fiscal 2012 Restructuring Program	Mar. 31, 2013 Employee Separation Costs Fiscal 2008-2011 Restructuring Programs		Mar. 31, 2013 Employee Separation Costs Fiscal 2013 Restructuring Program	Mar. 31, 2013 Employee Separation Costs Fiscal 2012 Restructuring Program	Mar. 31, 2013 Lease Obligations Fiscal 2008-2011 Restructuring Programs		Mar. 31, 2013 Lease Obligations Fiscal 2013 Restructuring Program	Mar. 31, 2013 Lease Obligations Fiscal 2012 Restructuring Program	Sep. 30, 2012 German subsidiary Employee Separation Costs Fiscal 2012 Restructuring Program
Restructuring Cost and Reserve [Line Items]
Restructuring and impairment charges, net	$ 18	$ 90	$ 111	$ 102	$ 111			$ 97				$ 80				$ 17		$ 70
Restructuring Reserve [Roll Forward]
Balance as of October 1, 2012						65			70	13			58	52			12
Cash payments						(14)		(24)	(32)	(7)		(23)	(30)	(7)		(1)	(2)
Adjustments (1)						(1)	[1]			(1)	[1]			0	[1]
Adjustments (1)						(1)		(2)	1	0		(1)	(1)	(1)		(1)	2
Balance as of March 31, 2013						$ 49		$ 71	$ 39	$ 5		$ 56	$ 27	$ 44		$ 15	$ 12

[1] Included in adjustments are changes in estimates, whereby all increases and decreases in costs related to the fiscal 2009 through 2011 restructuring programs are recorded to the restructuring charges line item in operating expenses in the period of the adjustment. Included in adjustments are changes in estimates whereby all increases in costs related to the fiscal 2008 restructuring reserve are recorded in the restructuring charges line item in operating expenses in the period of the adjustments and decreases in costs are recorded as adjustments to goodwill.

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Supplementary Financial Information (Tables)

6 Months Ended

Mar. 31, 2013

Supplementary Financial Information [Abstract]

Schedule of Additional Financial Information

Consolidated Statements of Operations Information

	Three months ended March 31,						Six months ended March 31,
In millions	2013			2012			2013			2012
OTHER INCOME (EXPENSE), NET
Interest income	$	—		$	1		$	1		$	2
Gain (loss) on foreign currency transactions	17			(11		)	15			(12		)
Third party fees incurred in connection with debt modifications	(14		)	—			(18		)	—
Venezuela hyperinflationary and devaluation charges	(1		)	—			(1		)	—
Other, net	—			(2		)	(1		)	(3		)
Total other income (expense), net	$	2		$	(12	)	$	(4	)	$	(13	)

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Business Restructuring Reserves And Programs (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended			6 Months Ended			12 Months Ended	6 Months Ended				12 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013 Fiscal 2013 Restructuring Program	Sep. 30, 2012 Fiscal 2012 Restructuring Program Position	Mar. 31, 2013 Employee Separation Costs Fiscal 2013 Restructuring Program	Mar. 31, 2013 Lease Obligations Fiscal 2013 Restructuring Program	Mar. 31, 2013 EMEA approved plan Employee Separation Costs Fiscal 2013 Restructuring Program Position	Mar. 31, 2013 US Voluntary Program Employee Separation Costs Fiscal 2013 Restructuring Program Position	Sep. 30, 2012 German subsidiary Employee Separation Costs Fiscal 2012 Restructuring Program
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	$ 18	$ 90	$ 111	$ 102	$ 111	$ 97		$ 80	$ 17	$ 47	$ 9	$ 70
Restructuring and Related Cost, Number of Positions Eliminated							327			234	195
Net realizable value of remaining assets							$ 3

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Financing Arrangements (Tables)

6 Months Ended

Mar. 31, 2013

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

Long-term debt consists of the following:

In millions	March 31, 2013			September 30, 2012
Senior secured term B-1 loans	$	—		$	1,434
Senior secured term B-3 loans	2,139			2,152
Senior secured term B-4 loans	1			—
Senior secured term B-5 loans	1,148			—
7% senior secured notes	1,009			1,009
9% senior secured notes	290			—
10.50% senior secured notes	1,384			—
9.75% senior unsecured cash pay notes due 2015	58			700
10.125%/10.875% senior unsecured PIK toggle notes due 2015	92			834
Unaccreted discount	(18		)	(8		)
	6,103			6,121
Debt maturing within one year	(35		)	(37		)
Long-term debt	$	6,068		$	6,084

Schedule of Maturities of Long-term Debt

Annual maturities of long-term debt for the next five years ending September 30 and thereafter consist of:

In millions
Remainder of fiscal 2013	$	19
2014	38
2015	53
2016	174
2017	38
2018 and thereafter	5,799
Total	$	6,121

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Background, Merger And Basis Of Presentation

6 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Background, Merger And Basis Of Presentation

Background, Merger and Basis of Presentation

Background

Avaya Inc. together with its consolidated subsidiaries (collectively, the “Company” or “Avaya”) is a leading global provider of business collaboration and communications solutions. The Company’s solutions are designed to enable business users to work together more effectively as a team internally or with their customers and suppliers, increasing innovation, improving productivity and accelerating decision-making and business outcomes.

Avaya conducts its business operations in three segments. Two of those segments, Global Communications Solutions and Avaya Networking, make up Avaya's Enterprise Collaboration Solutions product portfolio. The third segment contains Avaya’s services portfolio and is called Avaya Global Services.

The Company's solutions and services are aimed at large enterprises, small- and mid-sized businesses and government organizations. Avaya's solutions are in three key business collaboration and communications categories:

• Real-Time Collaboration, Video and Unified Communications Software, Infrastructure and Endpoints for an increasingly mobile workforce;

• Customer Experience Interaction Management, including Contact Center applications; and

• Networking.

These three categories are supported by Avaya's portfolio of services including product support, integration, and professional and managed services that enable customers to optimize and manage their communications networks worldwide and achieve enhanced business results.

Avaya sells solutions directly and through its worldwide sales force and through its global network of channel partners. As of March 31, 2013, Avaya had approximately 10,800 channel partners worldwide, including system integrators, service providers, value-added resellers and business partners that provide sales and service support.

Merger

On June 4, 2007, Avaya entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Avaya Holdings Corp. (formerly Sierra Holdings Corp.), a Delaware corporation (“Parent”), and Sierra Merger Corp., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub was merged with and into the Company, with the Company continuing as the surviving corporation and a wholly owned subsidiary of Parent (the “Merger”). Parent was formed by affiliates of two private equity firms, Silver Lake Partners (“Silver Lake”) and TPG Capital (“TPG”) (collectively, the “Sponsors”), solely for the purpose of entering into the Merger Agreement and consummating the Merger. The Merger Agreement provided for a purchase price of $8.4 billion for Avaya’s common stock and was completed on October 26, 2007 pursuant to the terms of the Merger Agreement.

Acquisition of the Enterprise Solutions Business of Nortel Networks Corporation

On December 18, 2009, Avaya acquired certain assets and assumed certain liabilities of the enterprise solutions business (“NES”) of Nortel Networks Corporation (“Nortel”), including all the shares of Nortel Government Solutions Incorporated, for $943 million in cash consideration. The Company and Nortel were required to determine the final purchase price post-closing based upon the various purchase price adjustments included in the acquisition agreements. During the first quarter of fiscal 2011, the Company and Nortel agreed on a final purchase price of $933 million. The terms of the acquisition did not include any significant contingent consideration arrangements.

Acquisition of RADVISION Ltd.

On June 5, 2012, Avaya acquired RADVISION Ltd. (“Radvision”) for $230 million in cash. Radvision is a global provider of videoconferencing and telepresence technologies over internet protocol (“IP”) and wireless networks. These unaudited consolidated financial statements include the operating results of Radvision since June 5, 2012.

Basis of Presentation

The consolidated financial statements include the accounts of Avaya Inc. and its subsidiaries. The accompanying unaudited interim consolidated financial statements as of March 31, 2013 and for the three and six months endedMarch 31, 2013 and 2012 have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial statements, and should be read in conjunction with the consolidated financial statements and other financial information for the fiscal year ended September 30, 2012, which were included in the Company’s Annual Report on Form 10-K filed with the SEC on December 12, 2012. The consolidated balance sheet as of September 30, 2012 was derived from the Company’s audited financial statements. The significant accounting policies used in preparing these unaudited interim consolidated financial statements are the same as those described in Note 2 to those audited consolidated financial statements except for recently adopted accounting guidance as discussed in Note 2 “Recent Accounting Pronouncements” of these unaudited interim consolidated financial statements. In management’s opinion, these unaudited interim consolidated financial statements reflect all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the financial condition, results of operations and cash flows for the periods indicated.

Certain prior period amounts have been reclassified to conform to the current period’s presentation. The consolidated results of operations for the interim periods reported are not necessarily indicative of the results to be experienced for the entire fiscal year.

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Consolidated Statements of Comprehensive Income (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
NET LOSS	$ (192)	$ (162)	$ (277)	$ (188)
Other comprehensive income (loss):
Pension, postretirement and postemployment benefit-related items, net of tax of $9 and $18 for the three and six months ended March 31, 2013 and 2012, respectively	14	14	28	28
Cumulative translation adjustment	(7)	2	(19)	15
Change in interest rate swaps, net of tax of $1 and $3 for the three and six months ended March 31, 2013 and $0 and $4 for the three and six months ended March 31, 2012, respectively	3	0	5	6
Income tax benefit reclassified into earnings upon the expiration of certain interest rate swaps	0	0	(17)	0
Unrealized loss on investments reclassified into earnings, net of tax of $1 and $2 for the three and six months ended March 31, 2012, respectively	0	1	0	3
Net gain on investments reclassified into earnings	0	(1)	0	0
Other comprehensive income (loss)	10	16	(3)	52
Comprehensive loss	(182)	(146)	(280)	(136)
Pension, postretirement and postemployment benefit-related items, net of tax of $9 and $18 for the three and six months ended March 31, 2013 and 2012, respectively	9	18	9	18
Change in interest rate swaps, net of tax of $1 and $3 for the three and six months ended March 31, 2013 and $0 and $4 for the three and six months ended March 31, 2012, respectively	1	3	0	4
Unrealized loss on investments reclassified into earnings, net of tax of $1 and $2 for the three and six months ended March 31, 2012, respectively		$ 1		$ 2

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Benefit Obligations

6 Months Ended

Mar. 31, 2013

Compensation and Retirement Disclosure [Abstract]

Benefit Obligations

Benefit Obligations

The Company sponsors non-contributory defined benefit pension plans covering a portion of its U.S. employees and retirees, and postretirement benefit plans covering a portion of its U.S. retirees that include healthcare benefits and life insurance coverage. Certain non-U.S. operations have various retirement benefit programs covering substantially all of their employees. Some of these programs are considered to be defined benefit pension plans for accounting purposes.

The Company froze benefit accruals and additional participation in the pension and postretirement plans for its U.S. management employees effective December 31, 2003. In addition, the Company amended the postretirement plan for its U.S. management employees effective January 1, 2013, to terminate retiree dental coverage, and to cease providing medical and prescription drug coverage to a retiree, dependent, or lawful spouse who has attained age 65.

Effective October 12, 2011 and November 18, 2011, the Company entered into a two-year contract extension with the Communications Workers of America (“CWA”) and the International Brotherhood of Electrical Workers (“IBEW”), respectively. With the contract extension, the contracts with the CWA and IBEW now terminate on June 7, 2014. The contract extension did not affect the level of pension and postretirement benefits available to U.S. employees of the Company who are represented by the CWA or IBEW (“represented employees”).

The components of the pension and postretirement net periodic benefit cost for the three and six months ended March 31, 2013 and 2012 are provided in the table below:

	Pension Benefits - U.S.						Pension Benefits - Non-U.S.				Postretirement Benefits - U.S.
	Three months ended March 31,						Three months ended March 31,				Three months ended March 31,
In millions	2013			2012			2013		2012		2013			2012
Components of Net Periodic Benefit Cost
Service cost	$	2		$	1		$	2	$	1	$	—		$	—
Interest cost	34			38			5		6		5			7
Expected return on plan assets	(40		)	(43		)	—		—		(2		)	(2		)
Amortization of unrecognized prior service cost	—			1			—		—		(3		)	1
Amortization of previously unrecognized net actuarial loss	32			24			1		—		2			2
Net periodic benefit cost	$	28		$	21		$	8	$	7	$	2		$	8

	Pension Benefits - U.S.						Pension Benefits - Non-U.S.						Postretirement Benefits - U.S.
	Six months ended March 31,						Six months ended March 31,						Six months ended March 31,
In millions	2013			2012			2013			2012			2013			2012
Components of Net Periodic Benefit Cost
Service cost	$	3		$	3		$	4		$	3		$	1		$	1
Interest cost	68			75			10			12			10			15
Expected return on plan assets	(80		)	(86		)	(1		)	(1		)	(5		)	(5		)
Amortization of unrecognized prior service cost	—			1			—			—			(7		)	1
Amortization of previously unrecognized net actuarial loss	64			49			2			—			4			4
Net periodic benefit cost	$	55		$	42		$	15		$	14		$	3		$	16

The Company’s general funding policy with respect to its U.S. qualified pension plans is to contribute amounts at least sufficient to satisfy the minimum amount required by applicable law and regulations. For the six month period ended March 31, 2013, the Company made contributions of $35 million to satisfy minimum statutory funding requirements. Estimated payments to satisfy minimum statutory funding requirements for the remainder of fiscal 2013 are $67 million.

The Company provides certain pension benefits for U.S. employees, which are not pre-funded, and certain pension benefits for non-U.S. employees, the majority of which are not pre-funded. Consequently, the Company makes payments as these benefits are disbursed or premiums are paid. For the six month period ended March 31, 2013, the Company made payments for these U.S. and non-U.S. pension benefits totaling $3 million and $19 million, respectively. Estimated payments for these U.S. and non-U.S. pension benefits for the remainder of fiscal 2013 are $4 million and $8 million, respectively.

During the six months ended March 31, 2013, the Company contributed $22 million to the represented employees’ post-retirement health trust to fund current benefit claims and costs of administration in compliance with the terms of the 2009 agreements between the Company and the CWA and IBEW, as extended through June 7, 2014. Estimated contributions under the terms of the 2009 Agreement are $21 million for the remainder of fiscal 2013.

The Company also provides certain retiree medical benefits for U.S. employees, which are not pre-funded. Consequently, the Company makes payments as these benefits are disbursed. For the six month period ended March 31, 2013, the Company made payments totaling $4 million for these retiree medical benefits. Estimated payments for these retiree medical benefits for the remainder of fiscal 2013 are $4 million.

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Document And Entity Information	6 Months Ended
	Mar. 31, 2013	May 10, 2013
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2013
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2013
Entity Central Index Key	0001116521
Entity Registrant Name	AVAYA INC
Current Fiscal Year End Date	--09-30
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		100

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Share-Based Compensation

6 Months Ended

Mar. 31, 2013

Share-based Compensation [Abstract]

Share-Based Compensation

12. Share-based Compensation

Avaya Holdings Corp.’s Amended and Restated 2007 Equity Incentive Plan (“2007 Plan”) governs the issuance of equity awards, including restricted stock units (“RSUs”) and stock options, to eligible plan participants. Key employees, directors, and consultants of the Company may be eligible to receive awards under the 2007 Plan. Each stock option, when vested and exercised, and each RSU, when vested, entitles the holder to receive one share of Parent’s common stock, subject to certain restrictions on their transfer and sale as defined in the 2007 Plan and related award agreements. As of March 31, 2013, Parent had authorized the issuance of up to 49,848,157 shares of its common stock under the 2007 Plan, in addition to 2,924,125 shares of common stock underlying certain continuation awards that were permitted to be issued at the time of the Merger. There remained 9,748,283 shares available for grant under the 2007 Plan as of March 31, 2013.

On February 25, 2013, Avaya's Compensation Committee approved a stock option exchange program through which individuals holding market-based "multiple-of-money" and performance-based "EBITDA" stock options could exchange them on a three-for-one basis for RSUs. The replacement RSUs will vest in full in December 2013. The tender offer was closed on April 30, 2013 and 10,204,689 options were tendered for exchange. In connection with the exchange offer, 3,401,654 replacement RSUs were granted which have an effective grant date of May 6, 2013.

Option Awards

During the six months ended March 31, 2013, 1,769,500 time-based and 185,500 multiple-of-money options were granted in the ordinary course of business. All of the options expire ten years from the date of grant or upon cessation of employment, in which event there are limited exercise provisions allowed for vested options. Options granted between October 1, 2012 and November 30, 2012 have an exercise price of $4.00 per share. Options granted subsequent to November 30, 2012 have an exercise price of $3.00 per share.

Time-based options granted during the six months ended March 31, 2013 vest over their performance periods, generally four years. Compensation expense equal to the fair value of the option measured on the grant date is recognized utilizing graded attribution over the requisite service period.

Multiple-of-money options vest upon the achievement of defined returns on the Sponsors’ initial investment in Parent. Because vesting of the multiple-of-money market-based options is outside the control of the Company and the award recipients, compensation expense relative to the multiple-of-money options must be recognized upon the occurrence of a triggering event (e.g., sale or initial public offering of Parent).

The fair value of option awards is determined at the date of grant utilizing the Cox-Ross Rubinstein (“CRR”) binomial option pricing model which is affected by the fair value of Parent’s common stock as well as a number of complex and subjective assumptions. Expected volatility is based primarily on a combination of the Company’s peer group’s historical volatility and estimates of implied volatility of the Company’s peer group. The risk-free interest rate assumption was derived from reference to the U.S. Treasury Spot rates for the expected term of the stock options. The dividend yield assumption is based on Parent’s current intent not to issue a dividend under its dividend policy. The expected holding period assumption was estimated based on the Company’s historical experience.

For the three months ended March 31, 2013 and 2012, the Company recognized share-based compensation associated with options issued under the 2007 Plan of $1 million and $1 million, respectively, which is included in costs and operating expenses. For the six months ended March 31, 2013 and 2012, the Company recognized share-based compensation associated with options issued under the 2007 Plan of $2 million and $3 million, respectively, which is included in costs and operating expenses.

Restricted Stock Units

The Company has issued RSUs each of which represents the right to receive one share of Parent’s common stock when fully vested. The fair value of the RSUs is estimated by the Board of Directors on the respective dates of grant.

During the six months ended March 31, 2013, 555,003 RSUs were awarded in the ordinary course of business. For RSUs awarded between October 1, 2012 and November 30, 2012, the fair market value (as defined in the 2007 Plan) of these awards at the date of grant was $4.00 per share. For RSUs awarded subsequent to November 30, 2012, the fair market value (as defined in the 2007 Plan) of these awards at the date of grant was $3.00 per share.

At March 31, 2013, there were 3,436,684 awarded RSUs outstanding under the 2007 Plan, of which 1,716,876 were fully vested. For the three months ended March 31, 2013 and 2012, the Company recognized share-based compensation associated with RSUs granted under the 2007 Plan of less than $1 million and $1 million, respectively. For the six months ended March 31, 2013 and 2012, the Company recognized share-based compensation associated with RSUs granted under the 2007 Plan of $1 million and $2 million, respectively.

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Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Current assets:
Cash and cash equivalents	$ 302	$ 337
Accounts receivable, net	681	782
Inventory	255	255
Deferred income taxes, net	21	18
Other current assets	280	252
TOTAL CURRENT ASSETS	1,539	1,644
Property, plant and equipment, net	353	364
Deferred income taxes, net	44	43
Intangible assets, net	1,625	1,775
Goodwill	4,093	4,188
Other assets	196	180
TOTAL ASSETS	7,850	8,194
Current liabilities:
Debt maturing within one year	35	37
Accounts payable	409	438
Payroll and benefit obligations	247	262
Deferred revenue	689	616
Business restructuring reserve, current portion	103	84
Other current liabilities	253	302
TOTAL CURRENT LIABILITIES	1,736	1,739
Long-term debt	6,068	6,084
Pension obligations	1,708	1,763
Other postretirement obligations	343	360
Deferred income taxes, net	209	204
Business restructuring reserve, non-current portion	56	51
Other liabilities	443	429
TOTAL NON-CURRENT LIABILITIES	8,827	8,891
Commitments and contingencies
DEFICIENCY
Common stock, par value $.01 per share; 100 shares authorized, issued and outstanding	0	0
Additional paid-in capital	2,929	2,926
Accumulated deficit	(4,513)	(4,236)
Accumulated other comprehensive loss	(1,129)	(1,126)
TOTAL DEFICIENCY	(2,713)	(2,436)
TOTAL LIABILITIES AND DEFICIENCY	$ 7,850	$ 8,194

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Business Restructuring Reserves And Programs

6 Months Ended

Mar. 31, 2013

Restructuring Reserve [Abstract]

Business Restructuring Reserves and Programs

Business Restructuring Reserve and Programs

Fiscal 2013 Restructuring Program

The Company continued to identify opportunities to streamline operations and generate cost savings which included exiting facilities and eliminating employee positions. During the six months ended March 31, 2013, the Company recognized restructuring charges of $102 million, net. These charges included employee separation costs of $80 million primarily associated with employee severance actions in Europe, the Middle East and Africa (“EMEA”) and the U.S. The EMEA approved plan provides for the elimination of 234 positions and resulted in a charge of $47 million. The elimination of employee positions identified in this action and the related payments are expected to be completed in fiscal 2015. The separation charges include, but are not limited to, social pension fund payments and health care and unemployment insurance costs to be paid to or on behalf of the impacted employees. A voluntary program offered to certain management employees in the U.S. resulted in the elimination of 195 positions and resulted in a charge of $9 million, for which the related payments are expected to be completed in fiscal 2013.

Restructuring charges also include $17 million of lease obligations primarily related to the Company's Maidenhead, United Kingdom and Highlands Ranch, Colorado facilities. The future rental payments, net of estimated sublease income, related to operating lease obligations for unused space in connection with the closing or consolidation of facilities during fiscal 2013 are expected to continue through fiscal 2021.

As the Company continues to evaluate and identify additional operational synergies, additional cost saving opportunities may be identified.

The following table summarizes the components of the fiscal 2013 restructuring program during the six months ended March 31, 2013:

In millions	Employee Separation Costs			Lease Obligations			Total
2013 restructuring charges	$	80		$	17		$	97
Cash payments	(23		)	(1		)	(24		)
Impact of foreign currency fluctuations	(1		)	(1		)	(2		)
Balance as of March 31, 2013	$	56		$	15		$	71

Fiscal 2012 Restructuring Program

During fiscal 2012, the Company identified opportunities to streamline operations and generate cost savings which include exiting facilities and eliminating employee positions. Restructuring charges associated with these initiatives include employee separation costs primarily associated with employee severance actions in Germany, as well as the US, EMEA excluding Germany, and Canada. Employee separation charges included $70 million related to an agreement reached with the works council representing employees of certain of Avaya's German subsidiaries for the elimination of 327 positions. The headcount reductions identified in this action are expected to be completed in fiscal 2013 with the related payments to be completed in fiscal 2014. The payments include, but are not limited to, social pension fund payments and health care and unemployment insurance costs to be paid to or on behalf of the affected employees. The payments related to the headcount reductions for the other actions taken, globally, excluding Germany, are expected to be completed in fiscal 2014.

The Company initiated a plan to dispose of a Company owned facility in Munich, Germany and relocate to a new facility.  Accordingly, the Company wrote the value of this asset down to its net realizable value of $3 million and had reclassified this asset as held for sale.  During the first quarter of fiscal 2013, the Company sold this facility for its net realizable value.

The following table summarizes the components of the fiscal 2012 restructuring program during the six months ended March 31, 2013:

In millions	Employee Separation Costs			Lease Obligations			Total
Balance as of October 1, 2012	$	58		$	12		$	70
Cash payments	(30		)	(2		)	(32		)
Adjustments (1)	(1		)	2			1
Balance as of March 31, 2013	$	27		$	12		$	39

⁽¹⁾  Included in adjustments are changes in estimates, whereby all increases and decreases in costs related to the fiscal 2012 restructuring programs are recorded to the restructuring charges line item in operating expenses in the period of the adjustment.

Fiscal 2008 through 2011 Restructuring Programs

During fiscal years 2008 through 2011, the Company identified opportunities to streamline operations and generate cost savings which included exiting facilities and eliminating employee positions. The payments related to the headcount reductions identified in those programs are expected to be completed in fiscal 2018. Future rental payments, net of estimated sublease income, related to operating lease obligations for unused space in connection with the closing or consolidation of facilities are expected to continue through fiscal 2021.

The following table aggregates the remaining components of the fiscal 2008 through 2011 restructuring programs during the six months ended March 31, 2013:

In millions	Employee Separation Costs			Lease Obligations			Total
Balance as of October 1, 2012	$	13		$	52		$	65
Cash payments	(7		)	(7		)	(14		)
Adjustments (1)	(1		)	—			(1		)
Impact of foreign currency fluctuations	—			(1		)	(1		)
Balance as of March 31, 2013	$	5		$	44		$	49

⁽¹⁾  Included in adjustments are changes in estimates, whereby all increases and decreases in costs related to the fiscal 2009 through 2011 restructuring programs are recorded to the restructuring charges line item in operating expenses in the period of the adjustment. Included in adjustments are changes in estimates whereby all increases in costs related to the fiscal 2008 restructuring reserve are recorded in the restructuring charges line item in operating expenses in the period of the adjustments and decreases in costs are recorded as adjustments to goodwill.

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Supplementary Financial Information

6 Months Ended

Mar. 31, 2013

Supplementary Financial Information [Abstract]

Supplementary Financial Information

Supplementary Financial Information

Consolidated Statements of Operations Information

	Three months ended March 31,						Six months ended March 31,
In millions	2013			2012			2013			2012
OTHER INCOME (EXPENSE), NET
Interest income	$	—		$	1		$	1		$	2
Gain (loss) on foreign currency transactions	17			(11		)	15			(12		)
Third party fees incurred in connection with debt modifications	(14		)	—			(18		)	—
Venezuela hyperinflationary and devaluation charges	(1		)	—			(1		)	—
Other, net	—			(2		)	(1		)	(3		)
Total other income (expense), net	$	2		$	(12	)	$	(4	)	$	(13	)

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Business Restructuring Reserves And Programs (Tables)

6 Months Ended

Mar. 31, 2013

Fiscal 2013 Restructuring Program

Restructuring Cost and Reserve [Line Items]

Schedule of Restructuring and Related Costs

The following table summarizes the components of the fiscal 2013 restructuring program during the six months ended March 31, 2013:

In millions	Employee Separation Costs			Lease Obligations			Total
2013 restructuring charges	$	80		$	17		$	97
Cash payments	(23		)	(1		)	(24		)
Impact of foreign currency fluctuations	(1		)	(1		)	(2		)
Balance as of March 31, 2013	$	56		$	15		$	71

Fiscal 2012 Restructuring Program

Restructuring Cost and Reserve [Line Items]

Schedule of Restructuring and Related Costs

The following table summarizes the components of the fiscal 2012 restructuring program during the six months ended March 31, 2013:

In millions	Employee Separation Costs			Lease Obligations			Total
Balance as of October 1, 2012	$	58		$	12		$	70
Cash payments	(30		)	(2		)	(32		)
Adjustments (1)	(1		)	2			1
Balance as of March 31, 2013	$	27		$	12		$	39

⁽¹⁾  Included in adjustments are changes in estimates, whereby all increases and decreases in costs related to the fiscal 2012 restructuring programs are recorded to the restructuring charges line item in operating expenses in the period of the adjustment.

Fiscal 2008-2011 Restructuring Programs

Restructuring Cost and Reserve [Line Items]

Schedule of Restructuring and Related Costs

The following table aggregates the remaining components of the fiscal 2008 through 2011 restructuring programs during the six months ended March 31, 2013:

In millions	Employee Separation Costs			Lease Obligations			Total
Balance as of October 1, 2012	$	13		$	52		$	65
Cash payments	(7		)	(7		)	(14		)
Adjustments (1)	(1		)	—			(1		)
Impact of foreign currency fluctuations	—			(1		)	(1		)
Balance as of March 31, 2013	$	5		$	44		$	49

⁽¹⁾  Included in adjustments are changes in estimates, whereby all increases and decreases in costs related to the fiscal 2009 through 2011 restructuring programs are recorded to the restructuring charges line item in operating expenses in the period of the adjustment. Included in adjustments are changes in estimates whereby all increases in costs related to the fiscal 2008 restructuring reserve are recorded in the restructuring charges line item in operating expenses in the period of the adjustments and decreases in costs are recorded as adjustments to goodwill.

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Reportable Segments

6 Months Ended

Mar. 31, 2013

Segment Reporting [Abstract]

Reportable Segments

Reportable Segments

Avaya conducts its business operations in three segments. Two of those segments, Global Communications Solutions (“GCS”) and Avaya Networking (“Networking”), make up Avaya’s Enterprise Collaboration Solutions (“ECS”) product portfolio. The third segment contains Avaya’s services portfolio and is called Avaya Global Services (“AGS”).

The GCS segment primarily develops, markets, and sells unified communications and contact center solutions by integrating multiple forms of communications, including telephone, e-mail, instant messaging and video. Avaya’s Networking segment’s portfolio of products offers integrated networking solutions which are scalable across customer enterprises. The AGS segment develops, markets and sells comprehensive end-to-end global service offerings that allow customers to evaluate, plan, design, implement, monitor, manage and optimize complex enterprise communications networks.

For internal reporting purposes, the Company’s chief operating decision maker makes financial decisions and allocates resources based on segment profit information obtained from the Company’s internal management systems. Management does not include in its segment measures of profitability selling, general, and administrative expenses, research and development expenses, amortization of intangible assets, and certain discrete items, such as charges relating to restructuring actions, impairment charges, and merger-related costs as these costs are not core to the measurement of segment management’s performance, but rather are controlled at the corporate level.

Summarized financial information relating to the Company’s reportable segments is shown in the following table:

	Three months ended March 31,						Six months ended March 31,
In millions	2013			2012			2013			2012
REVENUE
Global Communications Solutions	$	473		$	574		$	1,046		$	1,241
Avaya Networking	56			64			114			146
Enterprise Collaboration Solutions	529			638			1,160			1,387
Avaya Global Services	589			620			1,198			1,258
Unallocated Amounts (1)	—			(1		)	—			(1		)
	$	1,118		$	1,257		$	2,358		$	2,644
GROSS PROFIT
Global Communications Solutions	$	270		$	318		$	619		$	718
Avaya Networking	23			27			45			64
Enterprise Collaboration Solutions	293			345			664			782
Avaya Global Services	308			296			626			609
Unallocated Amounts (1)	(15		)	(28		)	(38		)	(74		)
	586			613			1,252			1,317
OPERATING EXPENSES
Selling, general and administrative	381			414			765			847
Research and development	113			117			231			228
Amortization of intangible assets	57			56			114			112
Goodwill impairment	89			—			89			—
Restructuring and impairment charges, net	18			90			102			111
Acquisition-related costs	—			2			—			3
	658			679			1,301			1,301
OPERATING (LOSS) INCOME	(72		)	(66		)	(49		)	16
INTEREST EXPENSE, LOSS ON EXTINGUISHMENT OF DEBT AND OTHER INCOME (EXPENSE), NET	(117		)	(120		)	(234		)	(230		)
LOSS BEFORE INCOME TAXES	$	(189	)	$	(186	)	$	(283	)	$	(214	)

(1) Unallocated Amounts in Gross Profit include the effect of the amortization of acquired technology intangibles and costs that are not core to the measurement of segment management’s performance, but rather are controlled at the corporate level. Unallocated Amounts in Revenue and Gross Profit also include the impacts of certain fair value adjustments recorded in purchase accounting in connection with the Merger.

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Fair Value Measures

6 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value Measures

Fair Value Measures

Pursuant to the accounting guidance for fair value measurements and its subsequent updates, fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

Fair Value Hierarchy

The accounting guidance for fair value measurements also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The inputs are prioritized into three levels that may be used to measure fair value:

Level 1: Inputs that reflect quoted prices for identical assets or liabilities in active markets that are observable.

Level 2: Inputs that reflect quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3: Inputs that are unobservable to the extent that observable inputs are not available for the asset or liability at the measurement date.

Asset and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2013 and September 30, 2012 were as follows:

	March 31, 2013
	Fair Value Measurements Using
In millions	Total		Quoted Prices in  Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other Current Assets:
Foreign currency forward contracts	$	1	$	—	$	1	$	—
Other Non-Current Assets:
Investments	$	3	$	2	$	1	$	—
Other Current Liabilities:
Foreign currency forward contracts	$	1	$	—	$	1	$	—
Interest rate swaps	6		—		6		—
	$	7	$	—	$	7	$	—

	September 30, 2012
	Fair Value Measurements Using
In millions	Total		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other Current Assets:
Foreign currency forward contracts	$	2	$	—	$	2	$	—
Investments	1		1		—		—
	$	3	$	1	$	2	$	—
Other Non-Current Assets:
Investments	$	4	$	2	$	2	$	—
Other Current Liabilities:
Interest rate swaps	$	15	$	—	$	15	$	—

Interest Rate Swaps

Interest rate swaps classified as Level 2 assets and liabilities are priced using discounted cash flow techniques which are corroborated by using non-binding market prices. Significant inputs to the discounted cash flow model include projected future cash flows based on projected 3-month LIBOR rates, and the average margin for companies with similar credit ratings and similar maturities. These are classified as Level 2 as they are not actively traded and are valued using pricing models that use observable market inputs.

Foreign Currency Forward Contracts

Foreign currency forward contracts classified as Level 2 assets and liabilities are priced using quoted market prices for similar assets or liabilities in active markets.

Investments

Investments classified as Level 2 assets and liabilities are priced using quoted market prices for identical assets which are subject to infrequent transactions (i.e. a less active market).

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Assets and liabilities measured at fair value on a nonrecurring basis as of March 31, 2013 were as follows:

	March 31, 2013
	Fair Value Measurements Using
In millions	Total		Quoted Prices in  Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Loss
Goodwill of ITPS reporting unit:	$	44	$	—	$	—	$	44	$	89

During the three months ended March 31, 2013 the Company performed an interim impairment test of goodwill for the ITPS reporting unit.  Using level 3 inputs, the Company estimated the implied fair value of its goodwill to be $44 million as compared with a carrying value of $133 million and recorded an impairment to goodwill of $89 million. See Note 4 “Goodwill and Intangible Assets”.

Fair Value of Financial Instruments

The fair values of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, to the extent the underlying liability will be settled in cash, approximate carrying values because of the short-term nature of these instruments.

On October 3, 2011 and October 3, 2012, the Company advanced $8 million and $10 million, respectively, to Parent in exchange for a note receivable. The proceeds of such notes were used by Parent to fund, in part, an acquisition of all outstanding shares of a unified communications solutions provider. Immediately upon completing the acquisition, Parent merged the acquired entity with and into Avaya Inc., with Avaya Inc. surviving the merger.

The principal amount of these notes plus any accrued and unpaid interest are due in full October 3, 2014 and October 3, 2015 with interest at the rate of 1.63% and 0.93% per annum, respectively. These notes are included in other assets in the Company's Consolidated Balance Sheet. The estimated fair value of the $8 million note receivable was $7 million and $6 million at March 31, 2013 and September 30, 2012, respectively. The estimated fair value of the $10 million note receivable was $8 million at March 31, 2013. The estimated fair value of each note was determined based on a Level 2 input using discounted cash flow techniques.

The estimated fair values of the amounts borrowed under the Company’s financing arrangements at March 31, 2013 and September 30, 2012 were estimated based on a Level 2 input using quoted market prices for the Company’s debt which is subject to infrequent transactions (i.e. a less active market).

The estimated fair values of the amounts borrowed under the Company’s credit agreements at March 31, 2013 and September 30, 2012 are as follows:

	March 31, 2013				September 30, 2012
In millions	Principal Amount		Fair Value		Principal Amount		Fair Value
Senior secured term B-1 loans	$	—	$	—	$	1,434	$	1,392
Senior secured term B-3 loans	2,139		2,013		2,152		1,960
Senior secured term B-4 loans	1		1		—		—
Senior secured term B-5 loans	1,148		1,153		—		—
7% Senior secured notes	1,009		982		1,009		938
9% Senior secured notes	290		300		—		—
10.50% Senior secured notes	1,384		1,314		—		—
9.75% senior unsecured cash pay notes due 2015	58		57		700		622
10.125%/10.875% senior unsecured PIK toggle notes due 2015	92		91		834		749
Total	$	6,121	$	5,911	$	6,129	$	5,661

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Financing Arrangements

6 Months Ended

Mar. 31, 2013

Debt Disclosure [Abstract]

Financing Arrangements

Financing Arrangements

In connection with the Merger, on October 26, 2007, the Company entered into financing arrangements consisting of a senior secured credit facility, a senior unsecured credit facility, which later became senior unsecured notes, and a senior secured multi-currency asset-based revolving credit facility, certain of which arrangements were amended on December 18, 2009 in connection with the acquisition of NES and amended on February 11, 2011 in connection with a debt refinancing. During the six months ended March 31, 2013, the Company completed a series of transactions which allowed the Company to refinance term loans under its senior secured credit facility that originally matured October 26, 2014 and to refinance $1,384 million of senior unsecured notes that originally matured on November 1, 2015.

During the three months ended December 31, 2012, the Company completed three transactions to refinance $848 million of term loans under its senior secured credit facility, which were (1) an amendment and restatement of the senior secured credit facility and the senior secured multi-currency asset-based revolving credit facility on October 29, 2012 along with the extension of the maturity date of $135 million aggregate principal amount of senior secured term B-1 loans (the "term B-1 loans") by converting such loans into a new tranche of senior secured term B-4 loans (the "term B-4 loans"), (2) an amendment and restatement of the senior secured credit facility on December 21, 2012 along with the extension of the maturity date of $713 million aggregate principal amount of term B-1 loans and $134 million aggregate principal amount of term B-4 loans, in each case, by converting such loans into a new tranche of senior secured term B-5 loans (the "term B-5 loans") and (3) the issuance on December 21, 2012 of $290 million of 9% senior secured notes due April 2019, the net proceeds of which were used to repay $284 million of term B-5 loans.

During the three months ended March 31, 2013, the Company refinanced the remaining $584 million of term B-1 loans outstanding under its senior secured credit facility with cash proceeds from the issuance of $589 million aggregate principal amount of term B-5 loans under the senior secured credit facility.

Additionally, during the three months ended March 31, 2013, the Company refinanced $1,384 million of senior unsecured notes, through (1) amendments to the senior secured credit facility and the senior secured multi-currency asset-based revolving credit facility permitting the refinancing of the 9.75% senior unsecured notes due 2015 and 10.125%/10.875% senior unsecured paid-in-kind ("PIK") toggle notes due 2015 (collectively, the “Old Notes”) with indebtedness secured by a lien on certain collateral on a junior-priority basis and (2) the exchange of $1,384 million of Old Notes for $1,384 million of 10.50% senior secured notes due 2021.

Long-term debt consists of the following:

In millions	March 31, 2013			September 30, 2012
Senior secured term B-1 loans	$	—		$	1,434
Senior secured term B-3 loans	2,139			2,152
Senior secured term B-4 loans	1			—
Senior secured term B-5 loans	1,148			—
7% senior secured notes	1,009			1,009
9% senior secured notes	290			—
10.50% senior secured notes	1,384			—
9.75% senior unsecured cash pay notes due 2015	58			700
10.125%/10.875% senior unsecured PIK toggle notes due 2015	92			834
Unaccreted discount	(18		)	(8		)
	6,103			6,121
Debt maturing within one year	(35		)	(37		)
Long-term debt	$	6,068		$	6,084

Senior Secured Credit Facility

Prior to the fiscal 2013 refinancing transactions, the senior secured credit facility consisted of (a) a senior secured multi-currency revolver allowing for borrowings of up to $200 million, (b) term B-1 loans with an outstanding principal amount as of September 30, 2012 of $1,434 million, and (c) senior secured term B-3 loans (the "term B-3 loans") with an outstanding principal amount as of September 30, 2012 of $2,152 million.

On October 29, 2012, Avaya Inc., Citibank, N.A. and the lenders party thereto entered into Amendment No. 4 to Credit Agreement pursuant to which the senior secured credit facility was amended and restated in its entirety (as so amended and restated, the "Cash Flow Credit Agreement"). The modified terms of the Cash Flow Credit Agreement included (1) an amendment which allowed the Company to extend the maturity of a portion of the term B-1 loans representing outstanding principal amounts of $135 million from October 26, 2014 to October 26, 2017 (potentially springing to July 26, 2015, under the circumstances described below) by converting such loans into a new tranche of term B-4 loans, (2) permission to issue Incremental Replacement Secured Notes and Junior Secured Debt as described below under the heading “Senior Secured Asset-Based Credit Facility” (except, pursuant to the Cash Flow Credit Agreement, such Incremental Replacement Secured Notes and Junior Secured Debt must be secured by a lien on the Collateral (as defined in the Cash Flow Credit Agreement) ranking junior to the lien securing the obligations under the Cash Flow Credit Agreement) and (3) permission to issue indebtedness to refinance a portion of the term loans outstanding under the Cash Flow Credit Agreement and to secure such indebtedness by a lien on the Collateral (as defined in the Cash Flow Credit Agreement) ranking junior to the lien securing the obligations under the Cash Flow Credit Agreement, subject to certain other conditions and limitations set forth in the Cash Flow Credit Agreement.

On December 21, 2012, Avaya Inc., Citibank, N.A. and the lenders party thereto entered into Amendment No. 5 to Credit Agreement, pursuant to which the Cash Flow Credit Agreement was amended and restated in its entirety. The modified terms of the Cash Flow Credit Agreement included (1) an amendment which allowed the Company to extend the maturity of $713 million aggregate principal amount of the outstanding term B-1 loans from October 26, 2014 to March 31, 2018 (potentially springing to July 26, 2015, under the circumstances described below) and $134 million aggregate principal amount of the outstanding term B-4 loans from October 26, 2017 to March 31, 2018 (potentially springing to July 26, 2015, under the circumstances described below), in each case, by converting such loans into a new tranche of term B-5 loans; and (2) permission to apply net proceeds from Credit Agreement Refinancing Indebtedness (as defined in the Cash Flow Credit Agreement) incurred or issued on December 21, 2012 to refinance, at the Company's election, any class or classes of senior secured term loans, including the new term B-5 loans.

Additionally, as discussed more fully below, on December 21, 2012, the Company completed a private placement of $290 million of senior secured notes, the net proceeds of which were used to repay $284 million of term B-5 loans outstanding under the Cash Flow Credit Agreement. Funds affiliated with TPG were holders of $22 million of term B-5 loans repaid with the proceeds of the senior secured notes.

On February 13, 2013, Avaya Inc. and Citibank, N.A. and the lenders party thereto entered into Amendment No. 6 to Credit Agreement pursuant to which the Cash Flow Credit Agreement was amended. The modified terms of the Cash Flow Credit Agreement permitted the Company to refinance all of the Company's outstanding Old Notes with indebtedness secured by a lien on the Collateral (as defined in the Cash Flow Credit Agreement) ranking junior to the lien on the Collateral securing the obligations under the Cash Flow Credit Agreement, subject to certain other conditions and limitations set forth in the Cash Flow Credit Agreement.

On March 12, 2013, Avaya Inc., Citibank, N.A. and the lenders party thereto entered into Amendment No. 7 to Credit Agreement pursuant to which the Cash Flow Credit Agreement was amended. Pursuant to the amendment, the Company refinanced in full all the outstanding term B-1 loans with the cash proceeds from the issuance of $589 million aggregate principal amount of term B-5 loans under the Cash Flow Credit Agreement.

Subsequent to the fiscal 2013 refinancing transactions, the Cash Flow Credit Agreement consists of (a) a senior secured multi-currency revolver allowing for borrowings of up to $200 million, (b) term B-3 loans with an outstanding principal amount as of March 31, 2013 of $2,139 million, (c) term B-4 loans with an outstanding principal amount as of March 31, 2013 of $1 million million, and (d) term B-5 loans with an outstanding principal amount as of March 31, 2013 of $1,148 million.

The term B-3 loans, term B-4 loans, and term B-5 loans each bear interest at a rate per annum equal to either a base rate (subject to a floor of 2.25% in the case of the term B-4 loans and term B-5 loans) or a LIBOR rate (subject to a floor of 1.25% in the case of the term B-4 loans and term B-5 loans), in each case plus an applicable margin. Subject to the floor described in the immediately preceding sentence the base rate is determined by reference to the higher of (1) the prime rate of Citibank, N.A. and (2) the federal funds effective rate plus 1/2 of 1%. The applicable margin for borrowings of term B-3 loans, term B-4 loans, and term B-5 loans is 3.50%, 5.25%, and 5.75%, respectively per annum with respect to base rate borrowings and 4.50%, 6.25%, and 6.75%, respectively per annum with respect to LIBOR borrowings. The applicable margin on the term B-4 loans and term B-5 loans is subject to increase pursuant to the Cash Flow Credit Agreement in connection with the making of certain refinancing, extended or replacement term loans under the Cash Flow Credit Agreement with an Effective Yield (as defined in the Cash Flow Credit Agreement) greater than the applicable Effective Yield payable in respect of the applicable loans at such time plus 50 basis points.

Under the terms of the Cash Flow Credit Agreement the term B-3 loans, term B-4 loans, and term B-5 loans, would automatically have become due on July 26, 2015 unless (i) the total net leverage ratio as tested on that date based upon the most recent financial statements provided to the lenders under the Cash Flow Credit Agreement was no greater than 5.0 to 1.0 or (ii) on or prior to such date, either (x) an initial public offering of Parent shall have occurred or (y) at least $750 million in aggregate principal amount of the Company’s senior unsecured cash-pay notes and/or senior unsecured PIK toggle notes had been repaid or refinanced or their maturity had been extended to a date no earlier than 91 days after October 26, 2017. As discussed more fully below, the Company completed an exchange offer in which $642 million of senior unsecured cash pay notes and $742 million of senior unsecured PIK toggle notes were exchanged for 10.50% senior secured notes due in 2021 thereby preventing the maturity date of the term B-3 loans, term B-4 loans and term B-5 loans from being accelerated under the terms of this provision.

The October 29, 2012, December 21, 2012, and February 13, 2013 amendments and restatements of the Cash Flow Credit Agreement represent debt modifications for accounting purposes. Accordingly, third party expenses of $6 million incurred in connection with the transactions were expensed as incurred and included in other income, net during the six months ended March 31, 2013. Avaya’s financing sources that held term B-1 loans, term B-3 loans, term B-5 loans and/or revolving credit commitments under the Cash Flow Credit Agreement and consented to each amendment and restatement of the Cash Flow Credit Agreement received in aggregate a consent fee of $15 million. Fees paid to or on behalf of the holders of term loans in connection with the modification were recorded as a discount to the face value of the respective debt and are being accreted over the term of the debt as interest expense. Fees paid to or on behalf of the holders of the revolving credit commitments in connection with the modification were recorded as deferred debt issuance costs and are being amortized over the term of the debt as interest expense.

The March 12, 2013 amendment and restatement of the Cash Flow Credit Agreement was accounted for as a modification of debt to the extent the existing term B-1 loans were refinanced with term B-5 loans issued to the same creditor and an extinguishment of debt to the extent refinanced with term B-5 loans issued to a different creditor. Accordingly, for the portion accounted for as a debt extinguishment the difference between the reacquisition price and the carrying value of the term B-1 loans (including any unamortized discount and debt issue costs) of $3 million was recognized as a loss upon debt extinguishment during fiscal 2013. Third party expenses of $5 million associated with the issuance of the new term B-5 loans were capitalized and are being amortized over the term of the term B-5 loans. Third party expenses of $3 million associated with the modification of debt were expensed as incurred and included in other income, net.

The senior secured multi-currency revolver allows for borrowings of up to $200 million. The senior secured multi-currency revolver includes capacity available for letters of credit and for short-term borrowings, and is available in euros in addition to dollars. Borrowings are guaranteed by Parent and substantially all of the Company’s U.S. subsidiaries. The Cash Flow Credit Agreement, consisting of the term loans and the senior secured multi-currency revolver, is secured by substantially all assets of Parent, the Company and the subsidiary guarantors.

As of March 31, 2013 affiliates of Silver Lake held $106 million and $45 million in outstanding principal amounts of term B-3 loans and term B-5 loans, respectively. As of September 30, 2012 affiliates of Silver Lake held $45 million and $122 million in outstanding principal amounts of term B-1 loans and term B-3 loans, respectively.

As of March 31, 2013 affiliates of TPG held no outstanding principal amounts of term loans under the Cash Flow Credit Agreement. As of September 30, 2012 affiliates of TPG held $44 million in outstanding principal amounts of term B-1 loans.

Senior Unsecured Notes

The Company has issued senior unsecured cash-pay notes and senior unsecured PIK toggle notes, each due November 1, 2015. The interest rate for the cash-pay notes is fixed at 9.75% and the interest rates for the cash interest and PIK interest portions of the PIK-toggle notes are fixed at 10.125% and 10.875%, respectively. The Company may prepay the senior unsecured notes at 102.4375% of the cash-pay note and 102.5313% of the PIK-toggle note principal amount redeemed on November 1, 2012 which decreases to 100% of each on or after November 1, 2013. Upon the occurrence of specific kinds of changes of control, the Company will be required to make an offer to purchase the senior unsecured notes at 101% of their principal amount. If the Company or any of its restricted subsidiaries engages in certain asset sales, under certain circumstances the Company will be required to use the net proceeds to make an offer to purchase the senior unsecured notes at 100% of their principal amount. Substantially all of the Company’s U.S. 100%-owned subsidiaries are guarantors of the senior unsecured notes. Prior to March 7, 2013, the Company had $700 million and $750 million of cash-pay and PIK-toggle notes, respectively.

For the periods May 1, 2009 through October 31, 2009 and November 1, 2009 through April 30, 2010, the Company elected to pay interest in kind on its senior unsecured PIK toggle notes. PIK interest of $41 million and $43 million was added, for these periods, respectively, to the principal amount of the senior unsecured notes effective November 1, 2009 and May 1, 2010, respectively. For the periods from May 1, 2010 to October 31, 2011 the Company elected to make such payments in cash interest. Under the terms of these notes, after November 1, 2011 the Company is required to make all interest payments on the senior unsecured PIK toggle notes entirely in cash.

As discussed more fully below, on March 7, 2013, the Company completed an exchange offer (the “Exchange Offer”) in which $1,384 million of Old Notes (including $642 million of senior unsecured cash-pay notes and $742 million of senior unsecured PIK toggle notes) were exchanged for 10.50% senior secured notes due 2021. The Exchange Offer represents a debt modification for accounting purposes. Accordingly, third party expenses of $9 million incurred in connection with the transaction were expensed as incurred and included in other income, net during the six months ended March 31, 2013. Avaya's financing sources that held the Old Notes that elected to exchange received a consent fee in aggregate of $4 million. Fees paid to or on behalf of the holders of the Old Notes in connection with the modification were recorded as a discount to the face value of the 10.50% senior secured notes due 2021 and are being accreted over the term of the debt as interest expense.

Senior Secured Asset-Based Credit Facility

The Company’s senior secured multi-currency asset-based revolving credit facility allows for borrowings of up to $335 million, subject to availability under a borrowing base, of which $150 million may be in the form of letters of credit. The borrowing base at any time equals the sum of 85% of eligible accounts receivable plus 85% of the net orderly liquidation value of eligible inventory, subject to certain reserves and other adjustments. The Company and substantially all of its U.S. subsidiaries are borrowers under this facility, and borrowings are guaranteed by Parent, the Company and substantially all of the Company’s U.S. subsidiaries. The facility is secured by substantially all assets of Parent, the Company and the subsidiary guarantors. The senior secured multi-currency asset-based revolving credit facility also provides the Company with the right to request up to $100 million of additional commitments under this facility.

On October 29, 2012 Avaya Inc., the several subsidiary borrowers (the “Subsidiary Borrowers”) party thereto, Citicorp USA, Inc. and the lenders party thereto entered into Amendment No. 2 to Credit Agreement, pursuant to which the senior secured multi-currency asset-based revolving credit facility was amended and restated in its entirety (as so amended and restated, the “ABL Credit Agreement”).

The modified terms of the ABL Credit Agreement include permission to issue or incur, as applicable, secured indebtedness in the form of (1) one or more series of secured notes in lieu of any Revolving Commitment Increases (as defined in the ABL Credit Agreement) in an aggregate principal amount not to exceed $100 million, plus the amount by which unused Commitments (as defined in the ABL Credit Agreement) have been previously reduced pursuant to the ABL Credit Agreement, less the amount of all Revolving Commitment Increases effected at or prior to the time of issuance of such notes (“Incremental Replacement Secured Notes”), and (2) one or more series of secured notes or secured loans in an aggregate principal amount not to exceed $750 million (“Junior Secured Debt”). Any such Incremental Replacement Secured Notes or Junior Secured Debt (a) must be (x) issued or incurred, as applicable, in connection with a modification, refinancing, refunding, renewal, replacement, exchange or extension of senior unsecured indebtedness and (y) secured by a lien on the Collateral (as defined in the ABL Credit Agreement) ranking junior to the lien securing the obligations under the ABL Credit Agreement and (b) will be subject to certain other conditions and limitations set forth in the ABL Credit Agreement.

On February 13, 2013, Avaya Inc., the Subsidiary Borrowers, Citicorp USA, Inc. and the lenders party thereto entered into Amendment No. 3 to Credit Agreement pursuant to which the ABL Credit Agreement was amended. The modified terms of the ABL Credit Agreement permitted the Company to refinance all of the Company's outstanding Old Notes with indebtedness secured by a lien on the Collateral (as defined in the ABL Credit Agreement) ranking junior to the lien on the Collateral securing the obligations under the ABL Credit Agreement, subject to certain other conditions and limitations set forth in the ABL Credit Agreement. Further, the terms of the amendment permit certain other obligations of the Company and certain of its subsidiaries to be secured by the ABL Priority Collateral (as defined in the ABL Credit Agreement) on a junior-priority basis.

Borrowings under the ABL Credit Agreement bear interest at a rate per annum equal to, at the Company's option, either (a) a LIBOR rate plus a margin of 1.50% or (b) a base rate plus a margin of 0.50%.

At March 31, 2013 and September 30, 2012, there were no borrowings under this facility. At March 31, 2013 and September 30, 2012 there were $76 million and $77 million, respectively, of letters of credit issued in the ordinary course of business under the ABL Credit Agreement resulting in remaining availability of $218 million and $258 million, respectively.

7% Senior Secured Notes

On February 11, 2011, the Company completed a private placement of $1,009 million of senior secured notes (the "7% Senior Secured Notes"). The 7% Senior Secured Notes bear interest at a rate of 7% per annum, mature on April 1, 2019 and were sold at par through a private placement to qualified institutional buyers pursuant to Rule 144A (and outside the United States in reliance on Regulation S) under the Securities Act of 1933, as amended (the “Securities Act”) and have not been, and will not be, registered under the Securities Act or applicable state securities laws.

The Company may redeem the 7% Senior Secured Notes commencing April 1, 2015 at 103.5% of the principal amount redeemed, which decreases to 101.75% on April 1, 2016 and to 100% on or after April 1, 2017. The Company may redeem all or part of the notes at any time prior to April 1, 2015 at 100% of the principal amount redeemed plus a “make-whole” premium. In addition, the Company may redeem up to 35% of the original aggregate principal balance of the 7% Senior Secured Notes at any time prior to April 1, 2014 with the net proceeds of certain equity offerings at 107% of the aggregate principal amount of 7% Senior Secured Notes redeemed. Upon the occurrence of specific kinds of changes of control, the Company will be required to make an offer to purchase the 7% Senior Secured Notes at 101% of their principal amount. If the Company or any of its restricted subsidiaries engages in certain asset sales, under certain circumstances the Company will be required to use the net proceeds to make an offer to purchase the 7% Senior Secured Notes at 100% of their principal amount.

Substantially all of the Company’s U.S. 100%-owned subsidiaries are guarantors of the 7% Senior Secured Notes. The 7% Senior Secured Notes are secured by substantially all of the assets of the Company and the subsidiary guarantors (other than with respect to real estate). The notes and the guarantees are secured equally and ratably with the Cash Flow Credit Agreement and any future first lien obligations by (i) a first-priority lien on substantially all of the Company’s and the guarantors’ assets, other than (x) any real estate and (y) collateral that secures the ABL Credit Agreement on a first-priority basis (the “ABL Priority Collateral”), and (ii) a second-priority lien on the ABL Priority Collateral, in each case, subject to certain customary exceptions.

9% Senior Secured Notes

On December 21, 2012, the Company completed a private placement of $290 million of senior secured notes (the "9% Senior Secured Notes"). The 9% Senior Secured Notes bear interest at a rate of 9% per annum, mature on April 1, 2019, and were sold at par through a private placement to qualified institutional buyers pursuant to Rule 144A (and outside the United States in reliance on Regulation S) under the Securities Act. The 9% Senior Secured Notes have not been, and will not be, registered under the Securities Act or applicable state securities laws and may not be offered or sold absent registration under the Securities Act or applicable state securities laws or applicable exemptions from registration requirements.

The 9% Senior Secured Notes are redeemable commencing April 1, 2015 at 104.5% of the principal amount redeemed, which decreases to 102.25% on April 1, 2016 and to 100% on or after April 1, 2017. The Company may redeem all or part of the notes at any time prior to April 1, 2015 at 100% of the principal amount redeemed plus a “make-whole” premium, as defined in the indenture governing the 9% Senior Secured Notes. In addition, the Company may redeem up to 35% of the original aggregate principal balance of the 9% Senior Secured Notes at any time prior to April 1, 2015 with the net proceeds of certain equity offerings at 109% of the aggregate principal amount redeemed. Upon the occurrence of specific kinds of changes of control, the Company will be required to make an offer to purchase the 9% Senior Secured Notes at 101% of their principal amount. If the Company or any of its restricted subsidiaries engages in certain asset sales, under certain circumstances the Company will be required to use the net proceeds to make an offer to purchase the 9% Senior Secured Notes at 100% of their principal amount.

The 9% Senior Secured Notes are secured by substantially all of the assets of the Company and substantially all of the Company’s U.S. 100%-owned subsidiaries (other than with respect to real estate). The notes and the guarantees are secured equally and ratably with the Cash Flow Credit Agreement, the 7% Senior Secured Notes due 2019 and any future first lien obligations by (i) a first-priority lien on substantially all of the Company’s and the guarantors’ assets, other than (x) any real estate and (y) collateral that secures the ABL Credit Agreement on a first-priority basis (the “ABL Priority Collateral”), and (ii) a second-priority lien on the ABL Priority Collateral, in each case, subject to certain customary exceptions.

The proceeds from the 9% Senior Secured Notes were used to repay $284 million aggregate principal amount of term B-5 loans and to pay related fees and expenses. In connection with the issuance of the 9% Senior Secured Notes, the Company capitalized financing costs of $7 million during fiscal 2013 and is amortizing these costs over the term of the 9% Senior Secured Notes.

The repayment of the term B-5 loans was accounted for as an extinguishment of debt. Accordingly the difference between the reacquisition price and the carrying value of the term B-5 loans (including unamortized debt issue costs) of $3 million was recognized as a loss upon debt extinguishment during fiscal 2013.

10.50% Senior Secured Notes

On March 7, 2013, the Company completed an Exchange Offer in which $1,384 million of Old Notes were exchanged for $1,384 million of senior secured notes due 2021 (the “10.50% Senior Secured Notes”). The 10.50% Senior Secured Notes were issued at par, bear interest at a rate of 10.50% per annum and mature on March 1, 2021. The 10.50% Senior Secured Notes have not been, and will not be, registered under the Securities Act or applicable state securities laws and may not be offered or sold absent registration under the Securities Act or applicable state securities laws or applicable exemptions from registration requirements.

The 10.50% Senior Secured Notes are redeemable commencing March 1, 2017 at 107.875% of the principal amount redeemed, which decreases to 105.250% on March 1, 2018, to 102.625% on March 1, 2019 and to 100% on or after March 1, 2020. The Company may redeem all or part of the notes at any time prior to March 1, 2017 at 100% of the principal amount redeemed plus a “make-whole” premium. In addition, the Company may redeem up to 35% of the original aggregate principal balance of the notes at any time prior to March 1, 2016 with the net proceeds of certain equity offerings at 110.50% of the aggregate principal amount redeemed. Upon the occurrence of specific kinds of changes of control, the Company will be required to make an offer to purchase the 10.50% Senior Secured Notes at 101% of their principal amount. If the Company or any of its restricted subsidiaries engages in certain asset sales, under certain circumstances the Company will be required to use the net proceeds to make an offer to purchase the 10.50% Senior Secured Notes at 100% of their principal amount.

The 10.50% Senior Secured Notes are secured by substantially all of the assets of the Company and substantially all of the Company's U.S. 100%-owned subsidiaries (other than with respect to real estate). The notes and the corresponding guarantees are secured on a junior priority basis to the Company's ABL Credit Agreement, the Company's Cash Flow Credit Agreement, the Company's existing 7% Senior Secured Notes due 2019, the Company's existing 9% Senior Secured Notes due 2019 and any future senior obligations by a junior priority lien on substantially all of the Company's and the guarantors' assets, other than any real estate.

The Company’s Cash Flow Credit Agreement, ABL Credit Agreement, and indentures governing its notes contain a number of covenants that, among other things and subject to certain exceptions, restrict the Company’s ability and the ability of certain of its subsidiaries to: (a) incur or guarantee additional debt and issue or sell certain preferred stock; (b) pay dividends on, redeem or repurchase capital stock; (c) make certain acquisitions or investments; (d) incur or assume certain liens; (e) enter into transactions with affiliates; (f) merge or consolidate with another company; (g) transfer or otherwise dispose of assets; (h) redeem subordinated debt; (i) incur obligations that restrict the ability of the Company’s subsidiaries to make dividends or other payments to the Company or Parent; and (j) create or designate unrestricted subsidiaries. They also contain customary affirmative covenants and events of default. As of March 31, 2013 and September 30, 2012, the Company was not in default under any of these agreements.

The weighted average interest rate of the Company’s outstanding debt as of March 31, 2013 was 7.4% excluding the impact of the interest rate swaps described in Note 8, “Derivatives and Other Financial Instruments."

Annual maturities of long-term debt for the next five years ending September 30 and thereafter consist of:

In millions
Remainder of fiscal 2013	$	19
2014	38
2015	53
2016	174
2017	38
2018 and thereafter	5,799
Total	$	6,121

Capital Lease Obligations

Included in other liabilities at March 31, 2013 is $23 million of capital lease obligations, primarily associated with an office facility.

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Derivatives And Other Financial Instruments

6 Months Ended

Mar. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives And Other Financial Instruments

Derivatives and Other Financial Instruments

Interest Rate Swaps

The Company uses interest rate swaps to manage the amount of its floating rate debt in order to reduce its exposure to variable rate interest payments associated with certain borrowings under the Cash Flow Credit Agreement. The interest rate swaps presented below are designated as cash flow hedges. The fair value of each interest rate swap is reflected as an asset or liability in the Consolidated Balance Sheets, reported as a component of other comprehensive loss and reclassified to earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on derivative instruments representing hedge ineffectiveness are recognized in current earnings. The fair value of each interest rate swap is estimated as the net present value of their projected cash flows at the balance sheet date.

The details of these swaps are as follows:

In millions	Effective Date	Maturity Date	Notional Amount		Floating Rate Received by Avaya	Fixed Rate Paid by Avaya
3-year swap	August 26, 2010	August 26, 2013	$	750	3-month LIBOR	1.160	%
3-year swap	August 26, 2010	August 26, 2013	750		3-month LIBOR	1.135	%
Notional amount—Total			$	1,500

The following table summarizes the (gains) and losses of the interest rate contracts qualifying and designated as cash flow hedging instruments:

	Three months ended March 31,					Six months ended March 31,
In millions	2013			2012		2013			2012
(Gain) Loss on interest rate swaps
Recognized in other comprehensive loss	$	(3	)	$	—	$	(7	)	$	(10	)
Reclassified from accumulated other comprehensive loss into interest expense	$	3		$	5	$	8		$	13
Recognized in operations (ineffective portion)	$	—		$	—	$	—		$	—

The Company expects to reclassify approximately $5 million from accumulated other comprehensive loss into expense in the next twelve months related to the Company’s interest rate swaps based on the projected borrowing rates as of March 31, 2013.

Foreign Currency Forward Contracts

The Company utilizes foreign currency forward contracts primarily to manage short-term exchange rate exposures on certain receivables, payables and intercompany loans residing on foreign subsidiaries’ books, which are denominated in currencies other than the subsidiary’s functional currency. When those items are revalued into the subsidiaries’ functional currencies at the month-end exchange rates, the fluctuations in the exchange rates are recognized in the Consolidated Statements of Operations as other income (expense), net. Changes in the fair value of the Company’s foreign currency forward contracts used to offset these exposed items are also recognized in the Consolidated Statements of Operations as other income (expense), net in the period in which the exchange rates change.

The gains and (losses) of the foreign currency forward contracts included in other income (expense), net were $(4) million and less than $1 million for the three months ended March 31, 2013 and 2012, respectively, and $(7) million and $(5) million for the six months ended March 31, 2013 and 2012, respectively.

The following table summarizes the estimated fair value of derivatives:

In millions	March 31, 2013									September 30, 2012
Balance Sheet Location	Total			Foreign Currency Forward Contracts			Interest Rate Swaps			Total			Foreign Currency Forward Contracts		Interest Rate Swaps
Other current assets	$	1		$	1		$	—		$	2		$	2	$	—
Other current liabilities	(7		)	(1		)	(6		)	(15		)	—		(15		)
Net Liability	$	(6	)	$	—		$	(6	)	$	(13	)	$	2	$	(15	)

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Income Taxes

6 Months Ended

Mar. 31, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The benefit from income taxes for the six months ended March 31, 2013 was $6 million, as compared to the benefit from income taxes of $26 million for the six months ended March 31, 2012.

The effective rate for the six months ended March 31, 2013 differs from the statutory U.S. Federal income tax rate primarily due to (1) the effect of tax rate differentials on foreign income/loss, (2) changes in the valuation allowance established against the Company’s deferred tax assets, (3) $17 million of income tax benefit recognized upon the expiration of certain interest rate swaps, and (4) $16 million release of valuation allowance associated with tax expense on net gains in other comprehensive income.

During the six months ended March 31, 2013, the Company recognized $17 million of income tax benefit related to the elimination of the tax effect of certain interest rate swaps in other comprehensive income. The tax effect of such interest rate swaps was recognized in other comprehensive income prior to the establishment of a valuation allowance against the Company's U.S. net deferred tax assets and was eliminated following the expiration of the final interest rate swap upon which the tax effect was established.

During the six months ended March 31, 2013, the Company recorded a tax charge of $16 million to other comprehensive income primarily relating to pension benefits. The charge to other comprehensive income and decrease in related deferred tax assets resulted in the recording of an income tax benefit in continuing operations related to the release of the corresponding valuation allowance.

The effective rate for the six months ended March 31, 2012 differs from the statutory U.S. Federal income tax rate primarily due to (1) the effect of tax rate differentials on foreign income/loss, (2) changes in the valuation allowance established against the Company’s deferred tax assets and (3) $6 million release of valuation allowance associated with tax expense on net gains in other comprehensive income.

During the six months ended March 31, 2012, the Company recorded a tax charge of $6 million to other comprehensive income primarily relating to pension benefits. The charge to other comprehensive income and decrease in related deferred tax assets resulted in the recording of an income tax benefit in continuing operations related to the release of the corresponding valuation allowance.

For interim financial statement purposes, U.S. GAAP income tax expense related to ordinary income is determined by applying an estimated annual effective income tax rate against the Company's ordinary income. Income tax expense related to items not characterized as ordinary income is recognized as a discrete item when incurred. The estimation of the Company's annual effective income tax rate requires the use of management forecasts and other estimates, projection of jurisdictional taxable income and losses, statutory income tax rates, and valuation allowances. The Company's estimated annual effective income tax rate may be revised, if necessary, in each interim period during the fiscal year.

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Supplementary Financial Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended			6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2013	Mar. 31, 2012
OTHER INCOME (EXPENSE), NET
Interest income	$ 0	$ 1		$ 1	$ 2
Gain (loss) on foreign currency transactions	17	(11)		15	(12)
Third party fees incurred in connection with debt modifications	(14)	0		(18)	0
Venezuela Hyperinflationary and Devaluation Charges	(1)	0		(1)	0
Other, net	0	(2)		(1)	(3)
Total other income (expense), net	$ 2	$ (12)	$ (13)	$ (4)	$ (13)

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Commitments And Contingencies (Movement in product warranty liability) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Mar. 31, 2013
Movement in product warranty liability:
Balance as of October 1, 2012	$ 16
Reductions for payments and costs to satisfy claims	8
Accruals for warranties issued during the period	8
Balance as of March 31, 2013	$ 16
General length of product warranty, maximum	2 years

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Guarantor-Non Guarantor Financial Information

6 Months Ended

Mar. 31, 2013

Guarantor-Non Guarantor Financial Information [Abstract]

Guarantor-Non Guarantor Financial Information

Guarantor—Non Guarantor financial information

Borrowings by Avaya Inc. under the Cash Flow Credit Agreement are jointly and severally, fully, and unconditionally guaranteed (subject to certain customary release provisions) by substantially all wholly owned U.S. subsidiaries of Avaya Inc. (collectively, the “Guarantor Subsidiaries”) and Parent. Each of the Guarantor Subsidiaries is 100% owned, directly or indirectly by Avaya Inc. The 7% Senior Secured Notes, the 9% Senior Secured Notes, the 10.50% Senior Secured Notes and the senior unsecured notes issued by Avaya Inc. are jointly and severally, fully and unconditionally guaranteed by the Guarantor Subsidiaries. None of the other subsidiaries of Avaya Inc., either directly or indirectly, guarantees the Cash Flow Credit Agreement, the 7% Senior Secured Notes, the 9% Senior Secured Notes, the 10.50% Senior Secured Notes and the senior unsecured notes (“Non-Guarantor Subsidiaries”).

Avaya Inc. and each of the Guarantor Subsidiaries are authorized to borrow under the Cash Flow Credit Agreement. Borrowings under that facility are jointly and severally, fully, and unconditionally guaranteed by Avaya Inc. and the Guarantor Subsidiaries (subject to certain customary release provisions). Additionally these borrowings are fully and unconditionally guaranteed by Parent.

The 7% Senior Secured Notes, the 9% Senior Secured Notes and the related guarantees are secured equally and ratably (other than with respect to real estate) with the Cash Flow Credit Agreement and any future first lien obligations by (i) a first-priority lien on substantially all of Avaya Inc.’s and the Guarantor Subsidiaries’ assets, other than (x) any real estate and (y) collateral that secures the senior secured multi-currency asset based revolving credit facility on a first-priority basis (the “ABL Priority Collateral”), and (ii) a second-priority lien on the ABL Priority Collateral, subject to certain limited exceptions.

The 10.50% Senior Secured Notes and the related guarantees are secured equally and ratably on a junior priority basis to the ABL Credit Agreement, the Cash Flow Credit Agreement, the 7% Senior Secured Notes, the 9% Senior Secured Notes and any future senior obligations by a junior priority lien on substantially all of the Company's and the Guarantor Subsidiaries' assets, other than real estate.

The following tables present for Avaya Inc., the Guarantor Subsidiaries, the Non-Guarantor Subsidiaries and Intercompany Eliminations the results of operations and comprehensive income (loss) for the three and six months endedMarch 31, 2013 and 2012, financial position as of March 31, 2013 and September 30, 2012 and cash flows for the six months endedMarch 31, 2013 and 2012 to arrive at the information for Avaya Inc. on a consolidated basis.

Supplemental Condensed Consolidating Balance Sheet

	March 31, 2013
In millions	Avaya Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	99		$	12		$	191		$	—		$	302
Accounts receivable, net—external	265			36			380			—			681
Accounts receivable—internal	806			63			169			(1,038		)	—
Inventory	120			6			129			—			255
Deferred income taxes, net	—			—			21			—			21
Other current assets	99			31			150			—			280
Internal notes receivable, current	1,484			155			2			(1,641		)	—
TOTAL CURRENT ASSETS	2,873			303			1,042			(2,679		)	1,539
Property, plant and equipment, net	213			21			119			—			353
Deferred income taxes, net	1			—			43			—			44
Intangible assets, net	1,416			31			178			—			1,625
Goodwill	3,989			—			104			—			4,093
Other assets	166			4			26			—			196
Investment in consolidated subsidiaries	—			2			31			(33		)	—
TOTAL ASSETS	$	8,658		$	361		$	1,543		$	(2,712	)	$	7,850
LIABILITIES
Current liabilities:
Debt maturing within one year—external	$	35		$	—		$	—		$	—		$	35
Debt maturing within one year—internal	161			385			1,095			(1,641		)	—
Accounts payable—external	207			15			187			—			409
Accounts payable—internal	130			46			862			(1,038		)	—
Payroll and benefit obligations	104			9			134			—			247
Deferred revenue	590			13			86			—			689
Business restructuring reserve, current portion	6			4			93			—			103
Other current liabilities	155			4			94			—			253
TOTAL CURRENT LIABILITIES	1,388			476			2,551			(2,679		)	1,736
Long-term debt	6,068			—			—			—			6,068
Pension obligations	1,216			—			492			—			1,708
Other postretirement obligations	343			—			—			—			343
Deferred income taxes, net	190			—			19			—			209
Business restructuring reserve, non-current portion	23			1			32			—			56
Other liabilities	132			21			290			—			443
Deficiency in consolidated subsidiaries	2,011			—			—			(2,011		)	—
TOTAL NON-CURRENT LIABILITIES	9,983			22			833			(2,011		)	8,827
TOTAL DEFICIENCY	(2,713		)	(137		)	(1,841		)	1,978			(2,713		)
TOTAL LIABILITIES AND DEFICIENCY	$	8,658		$	361		$	1,543		$	(2,712	)	$	7,850

Supplemental Condensed Consolidating Balance Sheet

	September 30, 2012
In millions	Avaya Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	101		$	10		$	226		$	—		$	337
Accounts receivable, net—external	326			39			417			—			782
Accounts receivable—internal	782			66			164			(1,012		)	—
Inventory	131			6			118			—			255
Deferred income taxes, net	—			—			18			—			18
Other current assets	150			30			72			—			252
Internal notes receivable, current	1,467			147			—			(1,614		)	—
TOTAL CURRENT ASSETS	2,957			298			1,015			(2,626		)	1,644
Property, plant and equipment, net	222			24			118			—			364
Deferred income taxes, net	—			—			43			—			43
Intangible assets, net	1,546			33			196			—			1,775
Goodwill	4,082			—			106			—			4,188
Other assets	150			5			25			—			180
Investment in consolidated subsidiaries	—			—			27			(27		)	—
TOTAL ASSETS	$	8,957		$	360		$	1,530		$	(2,653	)	$	8,194
LIABILITIES
Current liabilities:
Debt maturing within one year—external	$	37		$	—		$	—		$	—		$	37
Debt maturing within one year—internal	151			368			1,095			(1,614		)	—
Accounts payable—external	235			18			185			—			438
Accounts payable—internal	123			49			840			(1,012		)	—
Payroll and benefit obligations	81			13			168			—			262
Deferred revenue	523			7			86			—			616
Business restructuring reserve, current portion	5			4			75			—			84
Other current liabilities	261			4			37			—			302
TOTAL CURRENT LIABILITIES	1,416			463			2,486			(2,626		)	1,739
Long-term debt	6,084			—			—			—			6,084
Pension obligations	1,271			—			492			—			1,763
Other postretirement obligations	360			—			—			—			360
Deferred income taxes, net	182			—			22			—			204
Business restructuring reserve, non-current portion	22			1			28			—			51
Other liabilities	137			22			270			—			429
Deficiency in consolidated subsidiaries	1,921			3			—			(1,924		)	—
TOTAL NON-CURRENT LIABILITIES	9,977			26			812			(1,924		)	8,891
TOTAL DEFICIENCY	(2,436		)	(129		)	(1,768		)	1,897			(2,436		)
TOTAL LIABILITIES AND DEFICIENCY	$	8,957		$	360		$	1,530		$	(2,653	)	$	8,194

Supplemental Condensed Consolidating Schedule of Cash Flows

	Six Months Ended March 31, 2013
In millions	Avaya Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
OPERATING ACTIVITIES:
Net loss	$	(277	)	$	(12	)	$	(49	)	$	61		$	(277	)
Adjustments to reconcile net loss to net cash provided by (used for) operating activities	287			8			13			—			308
Changes in operating assets and liabilities	22			1			34			—			57
Equity in net loss of consolidated subsidiaries	61			—			—			(61		)	—
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES	93			(3		)	(2		)	—			88
INVESTING ACTIVITIES:
Capital expenditures	(16		)	—			(31		)	—			(47		)
Capitalized software development costs	(8		)	(2		)	—			—			(10		)
Acquisition of businesses, net of cash acquired	(1		)	—			—			—			(1		)
Proceeds from sale of long-lived assets	5			—			4			—			9
Proceeds from sale of investments	—			—			1			—			1
Advance to Parent	(10		)	—			—			—			(10		)
Other investing activities, net	(1		)	—			—			—			(1		)
NET CASH USED FOR INVESTING ACTIVITIES	(31		)	(2		)	(26		)	—			(59		)
FINANCING ACTIVITIES:
Proceeds from 9% senior secured notes	290			—			—			—			290
Repayment of term B-5 loans	(284		)	—			—			—			(284		)
Proceeds from term B-5 loans	589			—			—			—			589
Repayment of term B-1 loans	(584		)	—			—			—			(584		)
Debt issuance and third-party debt modification costs	(49		)	—			—			—			(49		)
Repayment of long-term debt	(19		)	—			—			—			(19		)
Net (repayments) borrowings of intercompany debt	(7		)	9			(2		)	—			—
Other financing activities, net	—			(2		)	—			—			(2		)
NET CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES	(64		)	7			(2		)	—			(59		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(5		)	—			(5		)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(2		)	2			(35		)	—			(35		)
Cash and cash equivalents at beginning of period	101			10			226			—			337
Cash and cash equivalents at end of period	$	99		$	12		$	191		$	—		$	302

Supplemental Condensed Consolidating Schedule of Cash Flows

	Six Months Ended March 31, 2012
In millions	Avaya Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
OPERATING ACTIVITIES:
Net loss	$	(188	)	$	(2	)	$	(59	)	$	61		$	(188	)
Adjustments to reconcile net loss to net cash (used for) provided by operating activities	257			6			61			—			324
Changes in operating assets and liabilities	(160		)	11			44			—			(105		)
Equity in net loss of consolidated subsidiaries	61			—			—			(61		)	—
NET CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES	(30		)	15			46			—			31
INVESTING ACTIVITIES:
Capital expenditures	(14		)	(1		)	(23		)	—			(38		)
Capitalized software development costs	(19		)	—			—			—			(19		)
Acquisition of businesses, net of cash acquired	(1		)	—			(3		)	—			(4		)
Proceeds from sale of long-lived assets	2			—			—			—			2
Proceeds from sale of investments	6			—			—			—			6
Restricted cash	(1		)	—			1			—			—
Advance to Parent	(8		)	—			—			—			(8		)
Other investing activities, net	(2		)	—			—			—			(2		)
NET CASH USED FOR INVESTING ACTIVITIES	(37		)	(1		)	(25		)	—			(63		)
FINANCING ACTIVITIES:
Repayment of long-term debt	(19		)	—			—			—			(19		)
Net borrowings (repayments) of intercompany debt	72			(10		)	(62		)	—			—
Other financing activities, net	—			(1		)	—			—			(1		)
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES	53			(11		)	(62		)	—			(20		)
Effect of exchange rate changes on cash and cash equivalents	—			—			7			—			7
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(14		)	3			(34		)	—			(45		)
Cash and cash equivalents at beginning of period	149			12			239			—			400
Cash and cash equivalents at end of period	$	135		$	15		$	205		$	—		$	355

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Fair Value Measures (Tables)

6 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements, Recurring and Nonrecurring

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2013 and September 30, 2012 were as follows:

	March 31, 2013
	Fair Value Measurements Using
In millions	Total		Quoted Prices in  Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other Current Assets:
Foreign currency forward contracts	$	1	$	—	$	1	$	—
Other Non-Current Assets:
Investments	$	3	$	2	$	1	$	—
Other Current Liabilities:
Foreign currency forward contracts	$	1	$	—	$	1	$	—
Interest rate swaps	6		—		6		—
	$	7	$	—	$	7	$	—

	September 30, 2012
	Fair Value Measurements Using
In millions	Total		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other Current Assets:
Foreign currency forward contracts	$	2	$	—	$	2	$	—
Investments	1		1		—		—
	$	3	$	1	$	2	$	—
Other Non-Current Assets:
Investments	$	4	$	2	$	2	$	—
Other Current Liabilities:
Interest rate swaps	$	15	$	—	$	15	$	—

Fair Value, by Balance Sheet Grouping

The estimated fair values of the amounts borrowed under the Company’s credit agreements at March 31, 2013 and September 30, 2012 are as follows:

	March 31, 2013				September 30, 2012
In millions	Principal Amount		Fair Value		Principal Amount		Fair Value
Senior secured term B-1 loans	$	—	$	—	$	1,434	$	1,392
Senior secured term B-3 loans	2,139		2,013		2,152		1,960
Senior secured term B-4 loans	1		1		—		—
Senior secured term B-5 loans	1,148		1,153		—		—
7% Senior secured notes	1,009		982		1,009		938
9% Senior secured notes	290		300		—		—
10.50% Senior secured notes	1,384		1,314		—		—
9.75% senior unsecured cash pay notes due 2015	58		57		700		622
10.125%/10.875% senior unsecured PIK toggle notes due 2015	92		91		834		749
Total	$	6,121	$	5,911	$	6,129	$	5,661

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Share-Based Compensation (Details) (USD $) In Millions, except Share data, unless otherwise specified				6 Months Ended			2 Months Ended	7 Months Ended	3 Months Ended			6 Months Ended	2 Months Ended	3 Months Ended		6 Months Ended		7 Months Ended	6 Months Ended
	Apr. 30, 2013 Time-based option awards	May 06, 2013 RSUs	Mar. 31, 2013 2007 Plan	Mar. 31, 2013 2007 Plan Options	Mar. 31, 2013 2007 Plan Time-based option awards	Mar. 31, 2013 2007 Plan Multiple-Of-Money Stock Option Awards	Jun. 30, 2012 2007 Plan Stock Options	Apr. 30, 2012 2007 Plan Stock Options	Mar. 31, 2013 2007 Plan Stock Options Costs and operating expenses	Mar. 31, 2012 2007 Plan Stock Options Costs and operating expenses	Dec. 31, 2011 2007 Plan Stock Options Costs and operating expenses	Mar. 31, 2013 2007 Plan Stock Options Costs and operating expenses	Jun. 30, 2012 2007 Plan RSUs	Mar. 31, 2013 2007 Plan RSUs	Mar. 31, 2012 2007 Plan RSUs	Mar. 31, 2013 2007 Plan RSUs	Mar. 31, 2012 2007 Plan RSUs	Apr. 30, 2012 2007 Plan RSUs	Mar. 31, 2013 2007 Plan RSUs Other Than Director	Mar. 31, 2013 Continuation awards issued at the time of the Merger	Mar. 31, 2013 Avaya Holdings Corporation [Member] 2007 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized																				2,924,125	49,848,157
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant			9,748,283
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Outstanding Options	10,204,689
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number		3,401,654
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross					1,769,500	185,500
Share Based Compensation Options Expected Life				10 years
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price							$ 3.00	$ 4.00
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period					4 years
Allocated Share-based Compensation Expense									$ 1	$ 1	$ 3	$ 2		$ 1	$ 1	$ 1	$ 2
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period																			555,003
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value													$ 3.00					$ 4.00
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number														3,436,684		3,436,684
Share-Based Compensation Arrangement Other Than Options, Vested, Number														1,716,876		1,716,876

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Derivatives And Other Financial Instruments (Gains & losses on interest rate contracts qualifying and designated as cash flow hedging instruments) (Details) (Designated as hedging instrument, Cash flow hedging instruments, Interest rate swaps, USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2012	Mar. 31, 2013
Derivative Instruments, Gain (Loss) [Line Items]
Recognized in other comprehensive loss	$ (3)	$ 0	$ (10)	$ (7)
Reclassified from accumulated other comprehensive loss into interest expense	3	5	13	8
Recognized in operations (ineffective portion)	$ 0	$ 0	$ 0	$ 0

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Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2013	Sep. 30, 2012
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100	100
Common stock, shares issued	100	100
Common stock, shares outstanding	100	100

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Goodwill And Intangible Assets

6 Months Ended

Mar. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill And Intangible Assets

Goodwill and Intangible Assets

Goodwill

Goodwill is not amortized but is subject to periodic testing for impairment in accordance with GAAP at the reporting unit level which is one level below the Company’s operating segments. The test for impairment is conducted annually each September 30th or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

March 31, 2013

During the three months ended March 31, 2013 the Company's IT professional services ("ITPS") reporting unit, which provides specialized information technology services exclusively to government customers in the U.S., experienced a decline in revenues as a result of reduced government spending in anticipation of sequestration and budget cuts. Additionally, there is uncertainty regarding how the sequestration cuts will be implemented and the impact they will have on contractors supporting the government. As a result of these events, the Company determined that an interim impairment test of the reporting unit's goodwill should be performed.

The impairment test for goodwill is a two-step process. Step one consists of a comparison of the fair value of the reporting unit with its carrying amount, including the goodwill allocated to that reporting unit. The Company estimated the fair value of the ITPS reporting unit using an income approach which values the unit based on the future cash flows expected from that reporting unit. Future cash flows are based on forward-looking information regarding market share and costs for the reporting unit and are discounted using an appropriate discount rate. Future discounted cash flows can be affected by changes in industry or market conditions or the rate and extent to which cost savings are realized. In step one of the test, a market approach was considered but was not used in the final determination of fair value.

The discounted cash flows model used in the Company’s income approach relies on assumptions regarding revenue growth rates, gross margin, projected working capital needs, selling, general and administrative expenses, research and development expenses, business restructuring costs, capital expenditures, income tax rates, discount rates and terminal growth rates. To estimate fair value, the Company discounts the expected cash flows of the reporting unit. The discount rate Avaya uses represents the estimated weighted average cost of capital, which reflects the overall level of inherent risk involved in the reporting unit's operations and the rate of return an outside investor would expect to earn. To estimate cash flows beyond the final year of its model, Avaya uses a terminal value approach. Under this approach, Avaya uses the estimated cash flows in the final year of its model, applies a perpetuity growth assumption and discounts by a perpetuity discount factor to determine the terminal value. Avaya incorporates the present value of the resulting terminal value into its estimate of fair value.

The Company forecasted cash flows for the ITPS reporting unit and took into consideration current economic conditions and trends, estimated future operating results, Avaya’s view of growth rates and anticipated future economic conditions applicable to the ITPS reporting unit. Revenue growth rates inherent in this forecast are based on input from internal and external market intelligence research sources. Macro economic factors such as changes in economies, product evolutions, industry consolidations and other changes beyond Avaya’s control could have a positive or negative impact on ITPS achieving its targets.

The results of step one of the goodwill impairment test indicated that the estimated fair value of the ITPS reporting unit was less than the respective carrying value of its net assets (including goodwill) and as such, the Company performed step two of the impairment test. The second step of the impairment test compares the implied fair value of the reporting unit's goodwill with the carrying value of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. This allocation is performed only for purposes of assessing goodwill for impairment; accordingly Avaya did not adjust the net book value of the assets and liabilities on its Consolidated Balance Sheets other than goodwill as a result of this process.

As a result of the application of step two of the goodwill impairment test, the Company estimated the implied fair value of the goodwill to be $44 million as compared with a carrying value of $133 million and recorded an impairment to goodwill of $89 million associated with the ITPS reporting unit within the Avaya Global Services segment. This fair value measurement is considered a nonrecurring level 3 measurement pursuant to the accounting guidance for fair value measurements.

The impairment was primarily the result of the continued budgetary constraints, sequestration and uncertainty regarding spending on the part of the U.S. government. The reduced valuation of the reporting unit reflects additional market risks and lower sales forecasts for the reporting unit, which is consistent with economic trends at that time.

The Company determined that no events occurred or circumstances changed during the six months ended March 31, 2013 that would more likely than not reduce the fair value of its other reporting units below their respective carrying amounts. However, if market conditions deteriorate, it may be necessary to record impairment charges in the future.

March 31, 2012

During the six months ended March 31, 2012, the Company experienced a decline in revenue as compared to the same period of the prior year and sequential quarters. This revenue decline impacted the Company's forecasts for the remainder of fiscal 2012. As a result of these events, the Company determined that an interim impairment test of its long-lived assets and goodwill should be performed.

The estimated fair value of each reporting unit at March 31, 2012 reflected the additional market risks, lower discount rates and the updated sales forecasts for the Company’s reporting units based off recent results. Using the revised valuations at March 31, 2012 the results of step one of the goodwill impairment test indicated that although the estimated fair values of each reporting unit were lower at March 31, 2012 when compared to September 30, 2011, their respective book values did not exceed their estimated fair values and therefore no impairment existed.

Intangible Assets

Intangible assets include acquired technology, customer relationships, trademarks and trade-names and other intangibles. Intangible assets with finite lives are amortized using the straight-line method over the estimated economic lives of the assets, which range from five years to fifteen years.

Acquired technology and patents do not include capitalized software development costs. Unamortized capitalized software developments costs of $45 million at March 31, 2013 and $51 million at September 30, 2012 are included in other assets in the Company's Consolidated Balance Sheet.

Long-lived assets, including intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Intangible assets determined to have indefinite useful lives are not amortized but are tested for impairment annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired.

Certain of the Company’s trademarks and trade names are expected to generate cash flow indefinitely. Consequently, these assets are classified as indefinite-lived intangibles.

March 31, 2013

Prior to the goodwill testing discussed above, the Company tested the intangible assets and other long-lived assets of the ITPS reporting unit for impairment during the six months ended March 31, 2013 and no impairment was identified. The Company determined that no events had occurred or circumstances changed during the six months ended March 31, 2013 that would indicate that the intangible assets and long-lived assets of its other reporting units may not be recoverable.

March 31, 2012

Prior to the goodwill testing discussed above, the Company tested its intangible assets with indefinite lives and other long-lived assets as of March 31, 2012. Using the revised forecasts as of March 31, 2012, the Company performed step one of the impairment test of long-lived assets with finite lives and determined that the carrying amount of these assets was recoverable and, therefore, no impairment was identified. GAAP requires that the fair value of intangible assets with indefinite lives be compared to the carrying value of those assets. In situations where the carrying value exceeds the fair value of the intangible asset, an impairment loss equal to the difference is recognized. The Company estimates the fair value of its indefinite-lived intangible assets using an income approach; specifically, based on discounted cash flows. Although the estimated fair values of the Company’s tradenames and trademarks were lower at March 31, 2012 when compared to September 30, 2011, their respective book values did not exceed their estimated fair values and therefore no impairment existed.

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Benefit Obligations (Tables)

6 Months Ended

Mar. 31, 2013

Compensation and Retirement Disclosure [Abstract]

Schedule of Net Benefit Costs

The components of the pension and postretirement net periodic benefit cost for the three and six months ended March 31, 2013 and 2012 are provided in the table below:

	Pension Benefits - U.S.						Pension Benefits - Non-U.S.				Postretirement Benefits - U.S.
	Three months ended March 31,						Three months ended March 31,				Three months ended March 31,
In millions	2013			2012			2013		2012		2013			2012
Components of Net Periodic Benefit Cost
Service cost	$	2		$	1		$	2	$	1	$	—		$	—
Interest cost	34			38			5		6		5			7
Expected return on plan assets	(40		)	(43		)	—		—		(2		)	(2		)
Amortization of unrecognized prior service cost	—			1			—		—		(3		)	1
Amortization of previously unrecognized net actuarial loss	32			24			1		—		2			2
Net periodic benefit cost	$	28		$	21		$	8	$	7	$	2		$	8

	Pension Benefits - U.S.						Pension Benefits - Non-U.S.						Postretirement Benefits - U.S.
	Six months ended March 31,						Six months ended March 31,						Six months ended March 31,
In millions	2013			2012			2013			2012			2013			2012
Components of Net Periodic Benefit Cost
Service cost	$	3		$	3		$	4		$	3		$	1		$	1
Interest cost	68			75			10			12			10			15
Expected return on plan assets	(80		)	(86		)	(1		)	(1		)	(5		)	(5		)
Amortization of unrecognized prior service cost	—			1			—			—			(7		)	1
Amortization of previously unrecognized net actuarial loss	64			49			2			—			4			4
Net periodic benefit cost	$	55		$	42		$	15		$	14		$	3		$	16

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Financing Arrangements (Maturity profile) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013
Debt Disclosure [Abstract]
Remainder of fiscal 2013	$ 19
2014	38
2015	53
2016	174
2017	38
2018 and thereafter	5,799
Long-term debt, current and noncurrent portions	$ 6,121

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Commitments And Contingencies

6 Months Ended

Mar. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

Commitments and Contingencies

Legal Proceedings

In the ordinary course of business, the Company is involved in litigation, claims, government inquiries, investigations and proceedings, including, but not limited to, those identified below, relating to intellectual property, commercial, employment, environmental and regulatory matters.

Other than as described below, the Company believes there is no litigation pending or environmental and regulatory matters against the Company that could have, individually or in the aggregate, a material adverse effect on the Company’s financial position, results of operations or cash flows.

Antitrust Litigation

In 2006, the Company instituted an action in the U.S. District Court, District of New Jersey, against defendants Telecom Labs, Inc., TeamTLI.com Corp. and Continuant Technologies, Inc. and subsequently amended its complaint to include certain individual officers of these companies as defendants. Defendants purportedly provide maintenance services to customers who have purchased or leased the Company's communications equipment. The Company asserts in its amended complaint that, among other things, defendants, or each of them, have engaged in tortious conduct and/or violated federal intellectual property laws by improperly accessing and utilizing the Company's proprietary software, including passwords, logins and maintenance service permissions, to perform certain maintenance services on the Company's customers' equipment. Defendants have filed counterclaims against the Company, alleging a number of tort claims and alleging that the Company has violated the Sherman Act's prohibitions against anticompetitive conduct through the manner in which the Company sells its products and services. Defendants seek to recover the profits they claim they would have earned from maintaining Avaya's products, and ask for injunctive relief prohibiting the conduct they claim is anticompetitive. Under the federal antitrust laws, defendants could be entitled to three times the amount of any actual damages awarded for lost profits plus attorney's fees and costs. The parties have engaged in extensive discovery and motion practice to, among other things, amend and dismiss pleadings and compel and oppose discovery requests. In January 2012, Avaya's motions to dismiss defendants' counterclaims were granted in part and denied in part. In February 2012, the parties filed motions for reconsideration of certain aspects of the Court's ruling and Avaya filed a motion for certification of an interlocutory appeal. The parties' motions were denied on April 26, 2012. Expert discovery on the Company's claims and the defendants' surviving counter-claims is completed, and in July 2012 the parties filed motions to exclude the opinion testimony of certain of each others' experts, which were denied without prejudice on August 28, 2012.  On August 17, 2012, defendants filed motions for partial summary judgment, seeking to dismiss the Company's claims for tortious interference with contractual relations and misappropriation of trade secrets, which were denied on October 26, 2012. The trial has been scheduled for September 9, 2013. Therefore, at this time an outcome cannot be predicted and, as a result, the Company cannot be assured that this case will not have a material adverse effect on the manner in which it does business, its financial position, results of operations, or cash flows.

Intellectual Property

In the ordinary course of business, the Company is involved in litigation alleging it has infringed upon third parties’ intellectual property rights, including patents; some litigation may involve claims for infringement against customers by third parties relating to the use of Avaya’s products, as to which the Company may provide indemnifications of varying scope to certain customers. These matters are on-going and the outcomes are subject to inherent uncertainties. As a result, the Company cannot be assured that any such matter will not have a material adverse effect on its financial position, results of operations or cash flows.

Other

In October 2009, a group of former employees of Avaya’s former Shreveport, Louisiana manufacturing facility brought suit in Louisiana state court, naming as defendants Alcatel-Lucent USA, Inc., Lucent Technologies Services Company, Inc., and AT&T Technologies, Inc. The former employees allege hearing loss due to hazardous noise exposure from the facility dating back over forty years, and stipulate that the total amount of each individual’s damages does not exceed fifty thousand dollars. In February 2010 plaintiffs amended their complaint to add the Company as a named defendant. There are 101 plaintiffs in the case. Defendants’ motion to dismiss plaintiffs’ complaint was denied on April 30, 2012. At this time an outcome cannot be predicted however, because the amounts of the claims are not material, the Company believes the outcome of this matter will not have a material adverse effect on the manner in which it does business, its financial position, results of operations, or cash flows.

General

The Company records accruals for legal contingencies to the extent that it has concluded it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. No estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made at this time regarding the matters specifically described above because the inherently unpredictable nature of legal proceedings may be exacerbated by various factors, including: (i) the damages sought in the proceedings are unsubstantiated or indeterminate; (ii) discovery is not complete; (iii) the proceeding is in its early stages; (iv) the matters present legal uncertainties; (v) there are significant facts in dispute; (vi) there are a large number of parties (including where it is uncertain how liability, if any, will be shared among multiple defendants); or (vii) there is a wide range of potential outcomes.

Product Warranties

The Company recognizes a liability for the estimated costs that may be incurred to remedy certain deficiencies of quality or performance of the Company’s products. These product warranties extend over a specified period of time generally ranging up to two years from the date of sale depending upon the product subject to the warranty. The Company accrues a provision for estimated future warranty costs based upon the historical relationship of warranty claims to sales. The Company periodically reviews the adequacy of its product warranties and adjusts, if necessary, the warranty percentage and accrued warranty reserve, which is included in other current and non-current liabilities in the Consolidated Balance Sheets, for actual experience.

In millions
Balance as of October 1, 2012	$	16
Reductions for payments and costs to satisfy claims	(8		)
Accruals for warranties issued during the period	8
Balance as of March 31, 2013	$	16

Guarantees of Indebtedness and Other Off-Balance Sheet Arrangements

Letters of Credit

As of March 31, 2013, the Company had outstanding an aggregate of $119 million in irrevocable letters of credit which ensure the Company's performance or payment to third parties.  Included in this amount is $76 million issued underits $535 million committed revolving credit facilities, which facilities are available through October 26, 2016.  Also included is $43 million of letters of credit issued under uncommitted facilities.

Surety Bonds

The Company arranges for the issuance of various types of surety bonds, such as license, permit, bid and performance bonds, which are agreements under which the surety company guarantees that the Company will perform in accordance with contractual or legal obligations. These bonds vary in duration although most are issued and outstanding from three months to three years. These bonds are backed by $12 million of the Company’s letters of credit. If the Company fails to perform under its obligations, the maximum potential payment under these surety bonds is $12 million as of March 31, 2013. Historically, no surety bonds have been drawn upon.

Purchase Commitments and Termination Fees

The Company purchases components from a variety of suppliers and uses several contract manufacturers to provide manufacturing services for its products. During the normal course of business, in order to manage manufacturing lead times and to help assure adequate component supply, the Company enters into agreements with contract manufacturers and suppliers that allow them to produce and procure inventory based upon forecasted requirements provided by the Company. If the Company does not meet these specified purchase commitments, it could be required to purchase the inventory, or in the case of certain agreements, pay an early termination fee. Historically, the Company has not been required to pay a charge for not meeting its designated purchase commitments with these suppliers, but has been obligated to purchase certain excess inventory levels from its outsourced manufacturers due to actual sales of product varying from forecast and due to transition of manufacturing from one vendor to another.

The Company’s outsourcing agreements with its most significant contract manufacturers expire in July and September 2013. After the initial term, the outsourcing agreements are automatically renewed for successive periods of twelve months each, subject to specific termination rights for the Company and the contract manufacturers. All manufacturing of the Company’s products is performed in accordance with either detailed requirements or specifications and product designs furnished by the Company, and is subject to rigorous quality control standards.

Product Financing Arrangements

The Company sells products to various resellers that may obtain financing from certain unaffiliated third-party lending institutions. For the Company’s product financing arrangement with resellers outside the U.S., in the event participating resellers default on their payment obligations to the lending institution, the Company is obligated under certain circumstances to guarantee repayment to the lending institution. The repayment amount fluctuates with the level of product financing activity. The guaranteed repayment amount was approximately $3 million as of March 31, 2013. The Company reviews and sets the maximum credit limit for each reseller participating in this financing arrangement. Historically, there have not been any guarantee repayments by the Company. The Company has estimated the fair value of this guarantee as of March 31, 2013, and has determined that it is not significant. There can be no assurance that the Company will not be obligated to repurchase inventory under this arrangement in the future.

Long-Term Cash Incentive Bonus Plan

Parent has established a long-term incentive cash bonus plan (“LTIP”). Under the LTIP, Parent will make cash awards available to compensate certain key employees upon the achievement of defined returns on the Sponsors’ initial investment in the Parent (a “triggering event”). Parent has authorized LTIP awards covering a total of $60 million, of which $42 million in awards were outstanding as of March 31, 2013. The Company will begin to recognize compensation expense relative to the LTIP awards upon the occurrence of a triggering event (e.g., a sale or initial public offering). As of March 31, 2013, no compensation expense associated with the LTIP has been recognized.

Credit Facility Indemnification

In connection with its obligations under the credit facilities described in Note 7, “Financing Arrangements,” the Company has agreed to indemnify the third-party lending institutions for costs incurred by the institutions related to changes in tax law or other legal requirements. While there have been no amounts paid to the lenders pursuant to this indemnity in the past, there can be no assurance that the Company will not be obligated to indemnify the lenders under this arrangement in the future.

Transactions with Alcatel-Lucent

Pursuant to the Contribution and Distribution Agreement effective October 1, 2000, Lucent Technologies, Inc. (now Alcatel-Lucent) contributed to the Company substantially all of the assets, liabilities and operations associated with its enterprise networking businesses (the “Company’s Businesses”) and distributed the Company’s stock pro-rata to the shareholders of Lucent (“distribution”). The Contribution and Distribution Agreement, among other things, provides that, in general, the Company will indemnify Alcatel-Lucent for all liabilities including certain pre-distribution tax obligations of Alcatel-Lucent relating to the Company’s Businesses and all contingent liabilities primarily relating to the Company’s Businesses or otherwise assigned to the Company. In addition, the Contribution and Distribution Agreement provides that certain contingent liabilities not allocated to one of the parties will be shared by Alcatel-Lucent and the Company in prescribed percentages. The Contribution and Distribution Agreement also provides that each party will share specified portions of contingent liabilities based upon agreed percentages related to the business of the other party that exceed $50 million. The Company is unable to determine the maximum potential amount of other future payments, if any, that it could be required to make under this agreement.

The Tax Sharing Agreement governs Alcatel-Lucent’s and the Company’s respective rights, responsibilities and obligations after the distribution with respect to taxes for the periods ending on or before the distribution. Generally, pre-distribution taxes or benefits that are clearly attributable to the business of one party will be borne solely by that party, and other pre-distribution taxes or benefits will be shared by the parties based on a formula set forth in the Tax Sharing Agreement. The Company may be subject to additional taxes or benefits pursuant to the Tax Sharing Agreement related to future settlements of audits by state and local and foreign taxing authorities for the periods prior to the Company’s separation from Alcatel-Lucent.