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 June 30, 2018

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 001-38289

_______________________________________________ 

AVAYA HOLDINGS CORP.

(Exact name of registrant as specified in its charter)

________________________________________________ 

Delaware	26-1119726
(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  x No  ¨

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  ¨
Emerging growth company ¨		(Do not check if a smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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

Indicate by check mark whether the registrant has filed all document and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ¨

As of July 31, 2018, 109,954,972 shares of Common Stock, $0.01 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	51
3.	Quantitative and Qualitative Disclosures About Market Risk	72
4.	Controls and Procedures	73
	PART II—OTHER INFORMATION
1.	Legal Proceedings	75
1A.	Risk Factors	75
2.	Unregistered Sales of Equity Securities and Use of Proceeds	75
3.	Defaults Upon Senior Securities	75
4.	Mine Safety Disclosures	76
5.	Other Information	76
6.	Exhibits	77
	Signatures	79

When we use the terms “we,” “us,” “our,” “Avaya” or the “Company,” we mean Avaya Holdings Corp., a Delaware corporation, and its consolidated subsidiaries taken as a whole, unless the context otherwise indicates.

This Quarterly Report on Form 10-Q contains the registered and unregistered Avaya Aura^®, AvayaLive^®, Scopia^® and other trademarks or service marks of Avaya and are the property of Avaya Holdings Corp. and/or its affiliates. This Quarterly Report on Form 10-Q also contains additional trade names, trademarks or service marks belonging to us and to other companies. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Avaya Holdings Corp.

Condensed Consolidated Statements of Operations (Unaudited)

(In millions, except per share amounts)

	Successor			Predecessor			Successor			Predecessor
	Three months ended June 30, 2018			Three months ended June 30, 2017			Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
REVENUE
Products	$	300		$	345		$	664		$	253		$	1,094
Services	392			458			848			351			1,388
	692			803			1,512			604			2,482
COSTS
Products:
Costs	114			121			257			84			394
Amortization of technology intangible assets	44			5			92			3			16
Services	182			184			410			155			560
	340			310			759			242			970
GROSS PROFIT	352			493			753			362			1,512
OPERATING EXPENSES
Selling, general and administrative	281			295			613			264			923
Research and development	51			59			110			38			178
Amortization of intangible assets	39			57			86			10			170
Impairment of indefinite-lived intangible assets	—			65			—			—			65
Goodwill impairment	—			52			—			—			52
Restructuring charges, net	30			8			80			14			22
	401			536			889			326			1,410
OPERATING (LOSS) INCOME	(49		)	(43		)	(136		)	36			102
Interest expense	(56		)	(17		)	(112		)	(14		)	(229		)
Other income (expense), net	37			(9		)	32			(2		)	(27		)
Reorganization items, net	—			(35		)	—			3,416			(77		)
(LOSS) INCOME BEFORE INCOME TAXES	(68		)	(104		)	(216		)	3,436			(231		)
(Provision for) benefit from income taxes	(20		)	6			235			(459		)	22
NET (LOSS) INCOME	$	(88	)	$	(98	)	$	19		$	2,977		$	(209	)
Net (loss) income per share:
Basic	$	(0.80	)	$	(0.22	)	$	0.17		$	5.19		$	(0.47	)
Diluted	$	(0.80	)	$	(0.22	)	$	0.17		$	5.19		$	(0.47	)
Weighted average shares outstanding:
Basic	109.8			497.2			109.8			497.3			497.0
Diluted	109.8			497.2			111.0			497.3			497.0

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

1

Avaya Holdings Corp.

Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited)

(In millions)

	Successor			Predecessor			Successor			Predecessor
	Three months ended June 30, 2018			Three months ended June 30, 2017			Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017		Nine months ended June 30, 2017
Net (loss) income	$	(88	)	$	(98	)	$	19		$	2,977	$	(209	)
Other comprehensive (loss) income:
Pension, post-retirement and postemployment benefit-related items, net of income taxes of $58 for the period from October 1, 2017 through December 15, 2017 and $1 and $16 for the three and nine months ended June 30, 2017, respectively	—			25			—			655		54
Cumulative translation adjustment, net of income taxes of $2 and $1 for the three and nine months ended June 30, 2017, respectively	(4		)	(44		)	(29		)	3		(18		)
Change in interest rate swaps, net of income taxes of ($3) for the three months ended June 30, 2018 and the period from December 16, 2017 through June 30, 2018	(12		)	—			(12		)	—		—
Other comprehensive (loss) income	(16		)	(19		)	(41		)	658		36
Elimination of Predecessor Company accumulated other comprehensive loss	—			—			—			790		—
Total comprehensive (loss) income	$	(104	)	$	(117	)	$	(22	)	$	4,425	$	(173	)

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

2

Avaya Holdings Corp.

Condensed Consolidated Balance Sheets (Unaudited)

(In millions, except per share and shares amounts)

	Successor			Predecessor
	June 30, 2018			September 30, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	685		$	876
Accounts receivable, net	367			536
Inventory	102			96
Other current assets	238			269
TOTAL CURRENT ASSETS	1,392			1,777
Property, plant and equipment, net	260			200
Deferred income taxes, net	21			—
Intangible assets, net	3,318			311
Goodwill	2,771			3,542
Other assets	64			68
TOTAL ASSETS	$	7,826		$	5,898
LIABILITIES
Current liabilities:
Debt maturing within one year	$	—		$	725
Long-term debt, current portion	29			—
Accounts payable	326			282
Payroll and benefit obligations	119			127
Deferred revenue	479			614
Business restructuring reserve	57			35
Other current liabilities	129			90
TOTAL CURRENT LIABILITIES	1,139			1,873
Non-current liabilities:
Long-term debt, net of current portion	3,099			—
Pension obligations	731			513
Other post-retirement obligations	213			—
Deferred income taxes, net	486			32
Business restructuring reserve	52			34
Other liabilities	388			170
TOTAL NON-CURRENT LIABILITIES	4,969			749
LIABILITIES SUBJECT TO COMPROMISE	—			7,705
TOTAL LIABILITIES	6,108			10,327
Commitments and contingencies (Note 20)
Predecessor equity awards on redeemable shares	—			7
Predecessor preferred stock, $0.001 par value, 250,000 shares authorized at September 30, 2017
Convertible Series B preferred stock; 48,922 shares issued and outstanding at September 30, 2017	—			393
Series A preferred stock; 125,000 shares issued and outstanding at September 30, 2017	—			184
Successor preferred stock, $0.01 par value; 55,000,000 authorized, no shares issued or outstanding at June 30, 2018
STOCKHOLDERS' EQUITY (DEFICIT)
Predecessor common stock, $0.001 par value; 750,000,000 shares authorized, 494,768,243 issued and outstanding at September 30, 2017	—			—
Successor common stock, $0.01 par value; 550,000,000 shares authorized, 110,160,835 issued and 109,954,972 outstanding at June 30, 2018	1			—
Additional paid-in capital	1,739			2,389
Retained earnings (accumulated deficit)	19			(5,954		)
Accumulated other comprehensive loss	(41		)	(1,448		)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)	1,718			(5,013		)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	7,826		$	5,898

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

3

Avaya Holdings Corp.

Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited)

(In millions)

	Common Stock
	Number		Par Value		Additional Paid-in Capital			(Accumulated Deficit) Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Total Stockholders' (Deficit) Equity
Balance as of September 30, 2017 (Predecessor)	494.8		$	—	$	2,389		$	(5,954	)	$	(1,448	)	$	(5,013	)
Issuance of common stock, net of shares redeemed and cancelled, under employee stock option plan														—
Amortization of share-based compensation					3									3
Accrued dividends on Series A preferred stock					(2		)							(2		)
Accrued dividends on Series B preferred stock					(4		)							(4		)
Reclassifications to equity awards on redeemable shares					1									1
Net income								2,977						2,977
Other comprehensive income											658			658
Balance as of December 15, 2017 (Predecessor)	494.8		—		2,387			(2,977		)	(790		)	(1,380		)
Cancellation of Predecessor equity	(494.8	)			(2,387		)	2,977			790			1,380
Balance as of December 15, 2017 (Predecessor)	—		$	—	$	—		$	—		$	—		$	—
	Common Stock
	Number		Par Value		Additional Paid-in Capital			Retained Earnings (Accumulated Deficit)			Accumulated Other Comprehensive (Loss) Income			Total Stockholders' Equity (Deficit)
Balance as of December 15, 2017 (Predecessor)	—		$	—	$	—		$	—		$	—		$	—
Issuance of Successor common stock
Common stock issued for settlement of Predecessor debt	103.9		1		1,575									1,576
Common stock issued to Pension Benefit Guaranty Corporation	6.1				92									92
Balance as of December 15, 2017 (Predecessor)	110.0		$	1	$	1,667		$	—		$	—		$	1,668
Balance as of December 16, 2017 (Successor)	110.0		$	1	$	1,667		$	—		—			$	1,668
Issuance of common stock under the equity incentive plan	0.2													—
Shares repurchased and retired for tax withholding on vesting of restricted stock units					(2		)							(2		)
Equity component of convertible notes, net of issuance costs and income taxes					67									67
Purchase of convertible note bond hedge, net of income taxes					(64		)							(64		)
Issuance of call spread warrants					58									58
Amortization of share-based compensation					13									13
Net income								19						19
Other comprehensive loss											(41		)	(41		)
Balance as of June 30, 2018 (Successor)	110.2		$	1	$	1,739		$	19		$	(41	)	$	1,718

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

4

Avaya Holdings Corp.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In millions)

	Successor			Predecessor
	Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
OPERATING ACTIVITIES:
Net income (loss)	$	19		$	2,977		$	(209	)
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization	264			31			263
Share-based compensation	13			—			10
Amortization of debt issuance costs	1			—			36
Accretion of debt discount	2			—			25
Impairment of long-lived asset	—			—			3
Impairment of indefinite-lived intangible assets	—			—			65
Goodwill impairment	—			—			52
Provision for uncollectible receivables	—			(1		)	1
Deferred income taxes, net	(207		)	455			(38		)
Post-retirement curtailment	—			—			(4		)
Loss on disposal/sale of long-lived assets, net	3			1			—
Change in fair value of emergence date warrants	9			—			—
Unrealized (gain) loss on foreign currency transactions	(33		)	—			4
Reorganization items:
Net gain on settlement of liabilities subject to compromise	—			(1,778		)	—
Payment to Pension Benefit Guaranty Corporation	—			(340		)	—
Payment to pension trust	—			(49		)	—
Payment of unsecured claims	—			(58		)	—
Fresh start adjustments, net	—			(1,697		)	—
Non-cash and financing related reorganization items, net	—			26			39
Changes in operating assets and liabilities:
Accounts receivable	23			40			85
Inventory	24			(2		)	20
Accounts payable	42			(40		)	(62		)
Payroll and benefit obligations	(73		)	16			(50		)
Business restructuring reserve	39			(7		)	(40		)
Deferred revenue	149			28			(59		)
Other assets and liabilities	(98		)	(16		)	(16		)
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES	177			(414		)	125
INVESTING ACTIVITIES:
Capital expenditures	(36		)	(13		)	(40		)
Capitalized software development costs	—			—			(2		)
Acquisition of businesses, net of cash acquired	(157		)	—			(4		)
Proceeds from sale of long-lived assets	1			—			—
Restricted cash	55			21			(77		)
Other investing activities, net	—			—			3
NET CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES	(137		)	8			(120		)
FINANCING ACTIVITIES:
Proceeds from Term Loan Credit Agreement	—			2,896			—
Repayment of debtor-in-possession financing	—			(725		)	—
Repayment of first lien debt	—			(2,061		)	—
Proceeds from debtor-in-possession financing	—			—			712
Repayment of Term Loan Credit Agreement due to refinancing	(2,918		)	—			—
Proceeds from Term Loan Credit Agreement due to refinancing	2,911			—			—
Proceeds from issuance of convertible notes	350			—			—
Proceeds from issuance of call spread warrants	58			—			—
Purchase of convertible note bond hedge	(84		)	—			—
Repayment of foreign asset-based revolving credit facility	—			—			(55		)
Repayment of domestic asset-based revolving credit facility	—			—			(77		)
Repayment of long-term debt, including adequate protection payments	(15		)	(111		)	(155		)
Debt issuance costs	(10		)	(97		)	(1		)
Repayments of borrowings on revolving loans under the senior secured credit agreement	—			—			(18		)
Repayments of borrowings under sale-leaseback transaction	(7		)	(4		)	(15		)
Other financing activities, net	(1		)	—			(4		)
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES	284			(102		)	387
Effect of exchange rate changes on cash and cash equivalents	(5		)	(2		)	1
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	319			(510		)	393
Cash and cash equivalents at beginning of period	366			876			336
Cash and cash equivalents at end of period	$	685		$	366		$	729

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

5

AVAYA HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Background and Basis of Presentation

Background

Avaya Holdings Corp. (the "Parent" or "Avaya Holdings"), together with its consolidated subsidiaries (collectively, the “Company” or “Avaya”), is a leading global provider of software and associated hardware and services for contact center and unified communications, offered on-premises, in the cloud, or as a hybrid solution. Avaya provides the mission-critical, real-time communication applications for small businesses to large multinational enterprises and government organizations. Currently, the Company manages its business operations in two segments, Global Communication Solutions ("GCS"), representing the Company's products portfolio, and Avaya Global Services ("AGS"), representing the Company's services portfolio. The Company sells directly through its worldwide sales force and indirectly through its global network of channel partners, including distributors, service providers, dealers, value-added resellers, system integrators and business partners that provide sales and services support.

Basis of Presentation

Avaya Holdings has no material assets or standalone operations other than its ownership of Avaya Inc. and its subsidiaries. The accompanying unaudited interim Condensed Consolidated Financial Statements as of June 30, 2018 and for the period from December 16, 2017 through June 30, 2018, the period from October 1, 2017 through December 15, 2017 and the nine months endedJune 30, 2017, reflect the operating results of Avaya Holdings and its consolidated subsidiaries, and 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, 2017, included in Amendment No. 3 to the Company’s Form 10 filed with the SEC on January 10, 2018. In management’s opinion, these unaudited interim Condensed Consolidated Financial Statements reflect all adjustments, consisting of normal and recurring adjustments, necessary to state fairly the results of operations, financial position and cash flows for the periods indicated. The condensed consolidated results of operations for the interim periods reported are not necessarily indicative of the results for the entire fiscal year.

Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenue and expenses during the periods reported. These estimates include assessing the collectability of accounts receivable, sales returns and allowances, the use and recoverability of inventory, the realization of deferred tax assets, business restructuring reserves, pension and post-retirement benefit costs, the fair value of equity compensation, the fair value of assets and liabilities in connection with fresh start accounting as well as those acquired in business combinations, the recoverability of long-lived assets, useful lives and impairment of tangible and intangible assets including goodwill, the amount of exposure from potential loss contingencies, and fair value measurements, among others. The markets for the Company’s products are characterized by intense competition, rapid technological development and frequent new product introductions, all of which could affect the future recoverability of the Company’s assets. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Actual results could differ from these estimates.

On January 19, 2017 (the “Petition Date”), Avaya Holdings, together with certain of its affiliates, namely Avaya CALA Inc., Avaya EMEA Ltd., Avaya Federal Solutions, Inc., Avaya Holdings LLC, Avaya Holdings Two, LLC, Avaya Inc., Avaya Integrated Cabinet Solutions Inc., Avaya Management Services Inc., Avaya Services Inc., Avaya World Services Inc., Octel Communications LLC, Sierra Asia Pacific Inc., Sierra Communication International LLC, Technology Corporation of America, Inc., Ubiquity Software Corporation, VPNet Technologies, Inc., and Zang, Inc. (the “Debtors”), filed voluntary petitions for relief (the “Bankruptcy Filing”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court"). The cases were jointly administered as Case No. 17-10089 (SMB). The Debtors operated their businesses as "debtors-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of Chapter 11 of the Bankruptcy Code and the orders of the Bankruptcy Court until their emergence from bankruptcy on December 15, 2017.

During Chapter 11 proceedings, all expenses, gains and losses directly associated with the reorganization proceedings were reported as Reorganization items, net in the accompanying Condensed Consolidated Statements of Operations. In addition, Liabilities subject to compromise during Chapter 11 proceedings were distinguished from liabilities of the non-debtors and

6

from post-petition liabilities in the accompanying Condensed Consolidated Balance Sheets. The Company's other subsidiaries that were not part of the Bankruptcy Filing ("non-debtors") continued to operate in the ordinary course of business.

Upon emergence from bankruptcy on December 15, 2017 (the "Emergence Date"), the Company applied fresh start accounting, which resulted in a new basis of accounting and the Company becoming a new entity for financial reporting purposes. As a result of the application of fresh start accounting and the effects of the implementation of the Second Amended Joint Plan of Reorganization filed by the Debtors on October 24, 2017 and approved by the Bankruptcy Court on November 28, 2017 (the "Plan of Reorganization"), the consolidated financial statements after the Emergence Date, are not comparable with the consolidated financial statements on or before that date. Upon emergence, income and expense on non-U.S. dollar functional currency subsidiaries are translated into U.S. dollars using an average rate for the period rather than the applicable spot rate. Refer to Note 4, "Fresh Start Accounting," for additional information.

The accompanying Condensed Consolidated Financial Statements of the Company have been prepared on a basis that assumes that the Company will continue as a going concern and contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. During the Chapter 11 proceedings, the Company's ability to continue as a going concern was contingent upon its ability to comply with the financial and other covenants contained in its debtor-in-possession credit agreement, the Bankruptcy Court's approval of the Company's Plan of Reorganization and the Company's ability to successfully implement the Plan of Reorganization, among other factors. As a result of the execution of the Plan of Reorganization, there is no longer substantial doubt about the Company's ability to continue as a going concern.

References to "Successor" or "Successor Company" relate to the financial position and results of operations of the reorganized Avaya Holdings after the Emergence Date. References to "Predecessor" or "Predecessor Company" refer to the financial position and results of operations of Avaya Holdings on or before the Emergence Date.

Revision of Prior Period Amounts

Subsequent to filing the first quarter fiscal 2018 Form 10-Q, the Company identified certain amounts that should have been recorded in the Predecessor Company's consolidated financial statements as of December 15, 2017, the Emergence Date. Such errors resulted in a $26 million understatement of cash and cash equivalents and cash flows from operating activities with a corresponding overstatement of accounts receivable. Because of the application of fresh start accounting as of December 15, 2017, Stockholders’ Equity and Goodwill were also each understated by the same amount at December 15, 2017 and December 31, 2017. These errors had no effect on the reported consolidated net income (loss) for the Predecessor and Successor periods. The Company assessed the materiality of the above errors individually and in the aggregate on the December 31, 2017 interim Condensed Consolidated Financial Statements in accordance with SEC Staff Accounting Bulletin No. 99 and, based on an analysis of quantitative and qualitative factors, determined that the errors were not material to the Company's Predecessor and Successor periods in the interim Condensed Consolidated Financial Statements for the quarter ended December 31, 2017.

The Condensed Consolidated Balance Sheet as of December 16, 2017, the Condensed Consolidated Statement of Cash Flows for the Predecessor period from October 1, 2017 through December 15, 2017, and the notes thereto have been revised to include the effects of these errors and the cash flow reclassification as follows:

	December 16, 2017 (Successor)
(In millions, except per share amounts)	As Previously Reported		Adjustments			Revised
Condensed Consolidated Balance Sheet:
Cash	$	340	$	26		$	366
Accounts receivable	417		(26		)	391
Goodwill	2,632		26			2,658
Total Assets	7,583		26			7,609
Additional paid-in capital (Successor)	1,641		26			1,667
Total Stockholders' Equity	1,642		26			1,668
Total Liabilities and Stockholders' Equity	7,583		26			7,609
Successor common stock value per share	$	14.93	$	0.23		$	15.16

7

	Period from October 1, 2017 through December 15, 2017 (Predecessor)
(In millions)	As Previously Reported			Adjustments			Revised
Condensed Consolidated Statement of Cash Flows:
Change in Accounts receivable	$	14		$	26		$	40
Net gain on settlement of Liabilities subject to compromise	(1,804		)	26			(1,778		)
Fresh start adjustments	(1,671		)	(26		)	(1,697		)
Net Cash Used from Operating Activities	(440		)	26			(414		)
Net decrease in cash and cash equivalents	(536		)	26			(510		)

For additional information refer to Notes: 4. “Fresh Start Accounting”; 6. “Goodwill and Intangible Assets”; 7. “Supplementary Financial Information”; and 10. “Derivative Instruments and Hedging Activities”.

2. Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In August 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” This standard sets forth targeted improvements to accounting for hedging activities and will make more financial and non-financial hedging strategies eligible for hedge accounting. It also modifies the presentation and disclosure requirements for hedging activities and changes how companies assess hedge effectiveness. The Company elected to early adopt this standard as of April 1, 2018, applying the updated provisions retrospectively to the beginning of the current fiscal year. As the Company did not maintain any hedging instruments prior to April 1, 2018, there was no retrospective impact due to this interim adoption. The new guidance will be applied to all hedging transactions entered into on or after April 1, 2018.

In March 2017, the FASB issued ASU No. 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost." This standard changes how employers that sponsor defined benefit pension and other post-retirement benefit plans present net periodic benefit cost in the income statement. This amendment requires that the service cost component be disaggregated from the other components of pension and post-retirement benefit costs on the income statement. The service cost component is reported in the same line items as other compensation costs and the other components of pension and post-retirement benefit costs (including interest cost, expected return on plan assets, amortization and curtailments and settlements) are reported in Other income (expense), net in the Company's Condensed Consolidated Financial Statements. The Company early adopted this accounting standard as of October 1, 2017. Changes to the Condensed Consolidated Financial Statements have been applied retrospectively. As a result, the Company reclassified $12 million and $29 million of other pension and post-retirement benefit costs to Other income (expense), net for the three and nine months endedJune 30, 2017 (Predecessor), respectively. For the three months ended June 30, 2018 (Successor), the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor), the Company recorded $4 million, $9 million and $(8) million, respectively, of other pension and post-retirement benefit credits (costs) in Other income (expense), net.

In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." This standard simplifies the accounting for share-based payments and their presentation in the statements of cash flows as well as the income tax effects of share-based payments. The Company adopted this standard as of October 1, 2017 on a prospective basis. The adoption of this standard did not have a material impact on the Company's Condensed Consolidated Financial Statements.

Recent Standards Not Yet Effective

In February 2018, the FASB issued ASU No. 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." This new standard allows companies to reclassify from accumulated other comprehensive income to retained earnings any stranded tax benefits resulting from the enactment of the Tax Cuts and Jobs Act. This standard is effective for the Company beginning in the first quarter of fiscal 2020. The Company is currently evaluating the impact that the adoption of this standard may have on its Condensed Consolidated Financial Statements.

In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." The standard requires the recognition of assets and liabilities for all leases with lease terms of more than 12 months. Subsequently, the FASB issued other standards that clarified certain aspects of the standard. This standard is effective for the Company in the first quarter of fiscal 2020 with early

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adoption permitted. The Company is currently evaluating the method of adoption and the effect that the adoption of the standard may have on its Condensed Consolidated Financial Statements.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” This standard supersedes most of the current revenue recognition guidance under GAAP and is intended to improve and converge with international standards the financial reporting requirements for revenue recognition. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. Subsequently, the FASB issued several standards that clarified certain aspects of the standard but did not change the original standard. This new guidance is effective for the Company beginning in the first quarter of fiscal 2019. The ASU may be applied retrospectively (a) to each reporting period presented or (b) with the cumulative effect in retained earnings at the beginning of the adoption period.

The Company will adopt the new standard effective October 1, 2018 using the modified retrospective method whereby the cumulative effect is recorded to retained earnings at the beginning of the adoption period. Adoption of the standard is dependent on completion of a detailed accounting assessment, the success of the design and implementation phase for changes to the Company's processes, internal controls and system functionality and the completion of the analysis of information necessary to assess the overall impact of adoption of this guidance on its Condensed Consolidated Financial Statements.

The Company continues to make progress on its accounting assessment phase and the design and implementation phases to implement the required business process and system changes to comply with the new accounting policies and disclosures in the consolidated financial statements. The Company will continue to monitor and assess the impact of changes to the standard and interpretations as they become available. The Company expects revenue recognition related to stand-alone product shipments and maintenance services to remain substantially unchanged. However, the Company continues to evaluate its preliminary conclusion and assess the impact on other sources of revenue recognition.

3. Emergence from Voluntary Reorganization under Chapter 11 Proceedings

Plan of Reorganization

On November 28, 2017, the Bankruptcy Court entered an order confirming the Plan of Reorganization. On the Emergence Date, the Plan of Reorganization became effective and the Debtors emerged from bankruptcy.

On or following the Emergence Date and pursuant to the terms of the Plan of Reorganization, the following occurred:

• Debtor-in-Possession Credit Agreement. The Company paid in full the debtor-in-possession credit agreement (the "DIP Credit Agreement") in the amount of $725 million;

• Predecessor Equity and Indebtedness. The Debtors' obligations under stock certificates, equity interests, and / or any other instrument or document directly or indirectly evidencing or creating any indebtedness or obligation of, or ownership interest in, the Debtors or giving rise to any claim or equity interest were cancelled, except as provided under the Plan of Reorganization;

• Successor Equity. The Company's certificate of incorporation was amended and restated to authorize the issuance of 605.0 million shares of Successor Company stock, consisting of 55.0 million shares of preferred stock, par value $0.01 per share, and 550.0 million shares of common stock, par value $0.01 per share, of which 110.0 million shares of common stock were issued (as discussed below);

• Exit Financing. The Successor Company entered into (1) a term loan credit agreement (the "Term Loan Credit Agreement") for a principal amount of $2,925 million maturing on December 15, 2024, and (2) a $300 million asset-based revolving credit facility (the "ABL Credit Agreement") maturing on December 15, 2022;

• First Lien Debt Claims. All the Predecessor Company's outstanding obligations under the variable rate term B-3, B-4, B-6, and B-7 loans and the 7% and 9% senior secured notes (collectively, the "Predecessor first lien obligations") were cancelled, and the holders of claims under the Predecessor first lien obligations received 99.3 million shares of Successor Company common stock. In addition, the holders of the Predecessor first lien obligations received cash in the amount of $2,061 million;

• Second Lien Debt Claims. All the Predecessor Company's outstanding obligations under the 10.50% senior secured notes (the "Predecessor second lien obligations") were cancelled, and the holders of claims under the Predecessor second lien obligations received 4.4 million shares of Successor Company common stock. In addition, holders of the Predecessor second lien obligations received warrants to purchase 5.6 million shares of Successor Company common stock at an exercise price of $25.55 per warrant (the "Emergence Date Warrants");

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• Claims of Pension Benefit Guaranty Corporation ("PBGC"). The Predecessor Company's outstanding obligations under the Avaya Inc. Pension Plan for Salaried Employees ("APPSE") were terminated and transferred to the PBGC. The PBGC received 6.1 million shares of Successor Company common stock and $340 million in cash; and

• General Unsecured Claims. Holders of the Predecessor Company's general unsecured claims will receive their pro rata share of the general unsecured recovery pool. A liquidating trust was established in the amount of $58 million for the benefit of the general unsecured claims. Included in the 110.0 million Successor Company common stock issued are 0.2 million additional shares of common stock that have been issued (but are not outstanding) for the benefit of the general unsecured creditors. The general unsecured creditors will receive a total of $58 million in cash and common stock. Any excess cash and / or common stock not distributed to the general unsecured creditors will be distributed to the holders of the Predecessor first lien obligations.

Section 363 Asset Sale

In July 2017, the Company sold its networking business ("Networking" or the "Networking business") to Extreme Networks, Inc. ("Extreme"). The Networking business was comprised primarily of certain assets of the Company's Networking segment (which prior to the sale was a separate operating segment), along with the maintenance and professional services of the Networking business, which were part of the AGS segment. Under a Transition Services Agreement ("TSA"), the Company provides administrative services to Extreme for process support, maintenance services and product logistics on a fee basis. Substantially all activities required to be provided under the TSA have been completed as of June 30, 2018.

4. Fresh Start Accounting

In connection with the Company's emergence from bankruptcy and in accordance with FASB Accounting Standards Codification ("ASC") 852, "Reorganizations" ("ASC 852"), the Company applied the provisions of fresh start accounting to its Condensed Consolidated Financial Statements on the Emergence Date. The Company was required to use fresh start accounting since (i) the holders of existing voting shares of the Predecessor Company received less than 50% of the voting shares of the emerging entity and (ii) the reorganization value of the Company's assets immediately prior to confirmation of the Plan of Reorganization was less than the post-petition liabilities and allowed claims.

ASC 852 prescribes that with the application of fresh start accounting, the Company allocated its reorganization value to its individual assets based on their estimated fair values in conformity with ASC 805, "Business Combinations". The reorganization value represents the fair value of the Successor Company's assets before considering liabilities. The excess reorganization value over the fair value of identified tangible and intangible assets is reported as goodwill. As a result of the application of fresh start accounting and the effects of the implementation of the Plan of Reorganization, the consolidated financial statements after December 15, 2017 are not comparable with the consolidated financial statements as of or prior to that date.

As discussed in Note 1, "Revision of Prior Period Amounts", prior period amounts as reported have been revised, where applicable.

Reorganization Value

As set forth in the Plan of Reorganization, the agreed upon enterprise value of the Company was $5,721 million. This value is within the initial range calculated by the Company of approximately $5,100 million to approximately $7,100 million using an income approach. The $5,721 million enterprise value was selected as it was the transaction price agreed to in the global settlement agreement with the Company’s creditor constituencies, including the PBGC. The reorganization value was then determined by adding liabilities other than interest bearing debt, pension obligations, and the deferred tax impact of the reorganization and fresh start adjustments.

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The following table reconciles the enterprise value to the estimated fair value of the Successor stockholders' equity as of the Emergence Date:

(In millions, except per share amount)	As Previously Reported			Adjustments		Revised
Enterprise value	$	5,721		$	—	$	5,721
Plus:
Cash and cash equivalents	340			26		366
Less:
Minimum cash required for operations	(120		)	—		(120		)
Fair value of Term Loan Credit Agreement(1)	(2,896		)	—		(2,896		)
Fair value of capitalized leases	(20		)	—		(20		)
Fair value of pension and other post-retirement obligations, net of tax(2)	(856		)	—		(856		)
Change in net deferred tax liabilities from reorganization	(510		)	—		(510		)
Fair value of Successor Emergence Date Warrants(3)	(17		)	—		(17		)
Fair value of Successor common stock	$	1,642		$	26	$	1,668
Shares issued at December 15, 2017 upon emergence	110.0			—		110.0
Successor common stock value per share	$	14.93		$	0.23	$	15.16

⁽¹⁾  The fair value of the Term Loan Credit Agreement was determined based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices and was estimated to be 99% of par value.

⁽²⁾  The following assumptions were used when measuring the fair value of the U.S. pension, non-U.S. pension, and post-retirement benefit plans: weighted-average return on assets of 7.75%, 3.80% and 5.90%, and weighted-average discount rate to measure plan obligations of 3.70%, 1.52% and 3.77%, respectively.

⁽³⁾  The fair value of the Emergence Date Warrants was estimated using the Black-Scholes-Merton ("Black-Scholes") pricing model.

The following table reconciles the enterprise value to the estimated reorganization value as of the Emergence Date:

(In millions)	As Previously Reported			Adjustments		Revised
Enterprise value	$	5,721		$	—	$	5,721
Plus:
Non-debt current liabilities	955			—		955
Non-debt non-current liabilities	2,090			—		2,090
Excess cash and cash equivalents	220			26		246
Less:
Pension and other post-retirement obligations, net of deferred taxes	(856		)	—		(856		)
Capital lease obligations	(20		)	—		(20		)
Change in net deferred tax liabilities from reorganization	(510		)	—		(510		)
Emergence Date Warrants issued	(17		)	—		(17		)
Reorganization value of Successor assets	$	7,583		$	26	$	7,609

Consolidated Balance Sheet

The reorganization and fresh start adjustments set forth in the following consolidated balance sheet as of December 16, 2017 reflect the effect of the consummation of the transactions contemplated by the Plan of Reorganization (reflected in the column "Reorganization Adjustments") as well as fair value adjustments as a result of applying fresh start accounting (reflected in the column "Fresh Start Adjustments"). The explanatory notes highlight methods used to determine fair values or other amounts of the assets and liabilities, as well as significant assumptions or inputs.

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	As Previously Reported
(In millions)	Predecessor Company December 15, 2017			Reorganization Adjustments				Fresh Start Adjustments				Successor Company December 16, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	744		$	(404	)	(1)	$	—			$	340
Accounts receivable, net	523			—				(106		)	(21)	417
Inventory	98			—				29			(22)	127
Other current assets	366			(58		)	(2)	(66		)	(23)	242
TOTAL CURRENT ASSETS	1,731			(462		)		(143		)		1,126
Property, plant and equipment, net	194			—				116			(24)	310
Deferred income taxes, net	—			48			(3)	(17		)	(25)	31
Intangible assets, net	298			—				3,137			(26)	3,435
Goodwill	3,541			—				(909		)	(27)	2,632
Other assets	70			6			(4)	(27		)	(28)	49
TOTAL ASSETS	$	5,834		$	(408	)		$	2,157			$	7,583
LIABILITIES
Current liabilities:
Debt maturing within one year	$	725		$	(696	)	(5)	$	—			$	29
Accounts payable	325			(49		)	(6)	—				276
Payroll and benefit obligations	123			23			(7)	—				146
Deferred revenue	627			50			(8)	(341		)	(29)	336
Business restructuring reserve	35			3			(9)	—				38
Other current liabilities	97			65			(6,10)	(3		)	(30)	159
TOTAL CURRENT LIABILITIES	1,932			(604		)		(344		)		984
Non-current liabilities:
Long-term debt, net of current portion	—			2,771			(11)	96			(31)	2,867
Pension obligations	539			246			(12)	—				785
Other post-retirement obligations	—			212			(13)	—				212
Deferred income taxes, net	28			113			(14)	548			(32)	689
Business restructuring reserve	26			4			(9)	4			(33)	34
Other liabilities	180			233			(8,15)	(43		)	(29,34)	370
TOTAL NON-CURRENT LIABILITIES	773			3,579				605				4,957
LIABILITIES SUBJECT TO COMPROMISE	7,585			(7,585		)	(16)	—				—
TOTAL LIABILITIES	10,290			(4,610		)		261				5,941
Commitments and contingencies
Equity awards on redeemable shares	6			(6		)	(17)	—				—
Preferred stock:
Series B	397			(397		)	(17)	—				—
Series A	186			(186		)	(17)	—				—
STOCKHOLDERS' (DEFICIT) EQUITY
Common stock (Successor)	—			1			(18)	—				1
Additional paid-in capital (Successor)	—			1,641			(18)	—				1,641
Common stock (Predecessor)	—			—				—				—
Additional paid-in capital (Predecessor)	2,387			(2,387		)	(17)	—				—
(Accumulated deficit) retained earnings	(5,978		)	4,872			(19)	1,106			(36)	—
Accumulated other comprehensive (loss) income	(1,454		)	664			(20)	790			(35)	—
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY	(5,045		)	4,791				1,896				1,642
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$	5,834		$	(408	)		$	2,157			$	7,583

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	Adjustments
(In millions)	Predecessor Company December 15, 2017			Reorganization Adjustments				Fresh Start Adjustments			Successor Company December 16, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	26		$	—			$	—		$	26
Accounts receivable, net	(26		)	—				—			(26		)
Inventory	—			—				—			—
Other current assets	—			—				—			—
TOTAL CURRENT ASSETS	—			—				—			—
Property, plant and equipment, net	—			—				—			—
Deferred income taxes, net	—			—				—			—
Intangible assets, net	—			—				—			—
Goodwill	—			—				26		(27)	26
Other assets	—			—				—			—
TOTAL ASSETS	$	—		$	—			$	26		$	26
LIABILITIES
Current liabilities:
Debt maturing within one year	$	—		$	—			$	—		$	—
Accounts payable	—			—				—			—
Payroll and benefit obligations	—			—				—			—
Deferred revenue	—			—				—			—
Business restructuring reserve	—			—				—			—
Other current liabilities	—			—				—			—
TOTAL CURRENT LIABILITIES	—			—				—			—
Non-current liabilities:
Long-term debt	—			—				—			—
Pension obligations	—			—				—			—
Other postretirement obligations	—			—				—			—
Deferred income taxes, net	—			—				—			—
Business restructuring reserve	—			—				—			—
Other liabilities	—			—				—			—
TOTAL NON-CURRENT LIABILITIES	—			—				—			—
LIABILITIES SUBJECT TO COMPROMISE	—			—				—			—
TOTAL LIABILITIES	—			—				—			—
Commitments and contingencies
Equity awards on redeemable shares	—			—				—			—
Preferred stock:
Series B	—			—				—			—
Series A	—			—				—			—
STOCKHOLDERS' (DEFICIT) EQUITY
Common stock (Successor)	—			—				—			—
Additional paid-in capital (Successor)	—			26			(18)	—			26
Common stock (Predecessor)	—			—				—			—
Additional paid-in capital (Predecessor)	—			—				—			—
(Accumulated deficit) retained earnings	—			(26		)	(19)	26		(36)	—
Accumulated other comprehensive (loss) income	—			—				—			—
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY	—			—				26			26
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$	—		$	—			$	26		$	26

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	Revised
(In millions)	Predecessor Company December 15,  2017			Reorganization Adjustments				Fresh Start Adjustments				Successor Company December 16,  2017
ASSETS
Current assets:
Cash and cash equivalents	$	770		$	(404	)	(1)	$	—			$	366
Accounts receivable, net	497			—				(106		)	(21)	391
Inventory	98			—				29			(22)	127
Other current assets	366			(58		)	(2)	(66		)	(23)	242
TOTAL CURRENT ASSETS	1,731			(462		)		(143		)		1,126
Property, plant and equipment, net	194			—				116			(24)	310
Deferred income taxes, net	—			48			(3)	(17		)	(25)	31
Intangible assets, net	298			—				3,137			(26)	3,435
Goodwill	3,541			—				(883		)	(27)	2,658
Other assets	70			6			(4)	(27		)	(28)	49
TOTAL ASSETS	$	5,834		$	(408	)		$	2,183			$	7,609
LIABILITIES
Current liabilities:
Debt maturing within one year	$	725		$	(696	)	(5)	$	—			$	29
Accounts payable	325			(49		)	(6)	—				276
Payroll and benefit obligations	123			23			(7)	—				146
Deferred revenue	627			50			(8)	(341		)	(29)	336
Business restructuring reserve	35			3			(9)	—				38
Other current liabilities	97			65			(6,10)	(3		)	(30)	159
TOTAL CURRENT LIABILITIES	1,932			(604		)		(344		)		984
Non-current liabilities:
Long-term debt, net of current portion	—			2,771			(11)	96			(31)	2,867
Pension obligations	539			246			(12)	—				785
Other post-retirement obligations	—			212			(13)	—				212
Deferred income taxes, net	28			113			(14)	548			(32)	689
Business restructuring reserve	26			4			(9)	4			(33)	34
Other liabilities	180			233			(8,15)	(43		)	(29,34)	370
TOTAL NON-CURRENT LIABILITIES	773			3,579				605				4,957
LIABILITIES SUBJECT TO COMPROMISE	7,585			(7,585		)	(16)	—				—
TOTAL LIABILITIES	10,290			(4,610		)		261				5,941
Commitments and contingencies
Equity awards on redeemable shares	6			(6		)	(17)	—				—
Preferred stock:
Series B	397			(397		)	(17)	—				—
Series A	186			(186		)	(17)	—				—
STOCKHOLDERS' (DEFICIT) EQUITY
Common stock (Successor)	—			1			(18)	—				1
Additional paid-in capital (Successor)	—			1,667			(18)	—				1,667
Common stock (Predecessor)	—			—				—				—
Additional paid-in capital (Predecessor)	2,387			(2,387		)	(17)	—				—
(Accumulated deficit) retained earnings	(5,978		)	4,846			(19)	1,132			(36)	—
Accumulated other comprehensive (loss) income	(1,454		)	664			(20)	790			(35)	—
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY	(5,045		)	4,791				1,922				1,668
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$	5,834		$	(408	)		$	2,183			$	7,609

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Reorganization Adjustments

In accordance with the Plan of Reorganization, the following adjustments were made:

1.Sources and Uses of Cash. The following reflects the net cash payments recorded as of the Emergence Date as a result of implementing the Plan of Reorganization:

(In millions)
Sources:
Proceeds from Term Loan Credit Agreement, net of original issue discount	$	2,896
Release of restricted cash	76
Total sources of cash	2,972
Uses:
Repayment of DIP Credit Agreement	(725		)
Payment of DIP Credit Agreement accrued interest	(1		)
Cash paid to Predecessor first lien debt-holders	(2,061		)
Cash paid to PBGC	(340		)
Payment for professional fees escrow account	(56		)
Funding payment for Avaya represented employee pension plan	(49		)
Payment of accrued professional & administrative fees	(27		)
Costs incurred for Term Loan Credit Agreement and ABL Credit Agreement	(59		)
Payment for general unsecured claims	(58		)
Total uses of cash	(3,376		)
Net uses of cash	$	(404	)

2. Other Current Assets.

(In millions)
Release of restricted cash	$	(76	)
Reclassification of prepaid debt issuance costs related to the Term Loan Credit Agreement	(42		)
Payment of fees related to the ABL Credit Agreement	5
Restricted cash for bankruptcy related professional fees	55
Total other current assets	$	(58	)

3. Deferred Income Taxes. The adjustment represents the release of the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of the bankruptcy reorganization.

4. Other Assets. The adjustment represents the re-establishment of foreign prepaid taxes.

5. Debt Maturing Within One Year. The adjustment represents the net effect of the Company’s repayment of $725 million for the DIP Credit Agreement and Term Loan Credit Agreement principal payments of $29 million due over the next year.

6. Accounts Payable. The net decrease of $49 million includes $50 million for professional fees that were reclassified to Other current liabilities for accrued bankruptcy related professional fees that will be paid from an escrow account and a payment of $3 million for bankruptcy related professional fees, partially offset by reinstatement of $4 million contract cure costs from liabilities subject to compromise.

7. Payroll and Benefit Obligations. The Company reinstated $23 million of liabilities subject to compromise related to the post-employment and post-retirement benefit obligations.

8. Deferred Revenue. The reinstatement of liabilities subject to compromise was $79 million of which $50 million is included in deferred revenue and $29 million in other liabilities.

9. Business Restructuring Reserve. The reinstatement of liabilities subject to compromise was $7 million, of which $3 million is current and $4 million is non-current.

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10.Other Current Liabilities.

(In millions)
Reclassification of accrued bankruptcy related professional fees	$	50
Reinstatement of other current liabilities	16
Payment of accrued interest on the DIP Credit Agreement	(1		)
Total other current liabilities	$	65

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

(In millions)
Term Loan Credit Agreement	$	2,925
Less:
Discount	(29		)
Upfront and underwriting fees	(54		)
Cash received upon emergence from bankruptcy	2,842
Reclassification of debt issuance cost incurred prior to emergence from bankruptcy	(42		)
Current portion of Long-term debt	(29		)
Long-term debt, net of current portion	$	2,771

12. Pension Obligations. In accordance with the Plan of Reorganization, the Company reinstated from liabilities subject to compromise $295 million related to the Avaya Pension Plan for represented employees and also contributed $49 million to the related pension trust.

13. Other Post-retirement Obligations. Other post-retirement benefit obligations of $212 million were reinstated from liabilities subject to compromise.

14. Deferred Income Taxes. The adjustment represents the reinstatement of the deferred tax liability that was included in liabilities subject to compromise.

15. Other Liabilities. The increase of $233 million primarily relates to the reinstatement of employee benefits, tax liabilities and deferred revenue from liabilities subject to compromise. Also included is the value of the Emergence Date Warrants issued to the holders of the Predecessor second lien obligations.

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16.Liabilities Subject to Compromise. Liabilities subject to compromise were reinstated or settled as follows in accordance with the Plan of Reorganization:

(In millions)
Liabilities subject to compromise			$	7,585
Less amounts settled per the Plan of Reorganization
Pre-petition first lien debt			(4,281		)
Pre-petition second lien debt			(1,440		)
Avaya Pension Plan for Salaried Employees			(620		)
Amounts reinstated:
Accounts payable	(4	)
Payroll and benefit obligations	(23	)
Deferred revenue	(50	)
Business restructuring reserves	(7	)
Other current liabilities	(16	)
Pension obligations	(295	)
Other post-retirement obligations	(212	)
Deferred income taxes, net	(118	)
Other liabilities	(216	)
Total liabilities reinstated at emergence			(941		)
General unsecured credit claims(1)			(303		)
Liabilities subject to compromise			$	—

⁽¹⁾ In settlement of allowed general unsecured claims, each claimant will receive a pro-rata distribution of $58 million of the general unsecured claims account.

The following table displays the detail on the gain on settlement of liabilities subject to compromise:

(In millions)	As Previously Reported			Adjustments			Revised
Pre-petition first lien debt	$	734		$	(23	)	$	711
Pre-petition second lien debt	1,357			(1		)	1,356
Avaya pension plan for salaried employees	(514		)	(2		)	(516		)
General unsecured creditors' claims	227			—			227
Net gain on settlement of Liabilities subject to compromise	$	1,804		$	(26	)	$	1,778

17. Cancellation of Predecessor Preferred and Common Stock. All common stock, Series A and B preferred stock and all other equity awards of the Predecessor Company were cancelled on the Emergence Date without any recovery on account thereof.

18. Issuance of Successor Common Stock and Emergence Date Warrants. In settlement of the Company's $5,721 million Predecessor first lien obligations and Predecessor second lien obligations, the holders of the Predecessor first lien obligations received a total of 99.3 million shares of common stock (fair value of $1,509 million) and $2,061 million in cash and the holders of the Predecessor second lien obligations received a total of 4.4 million shares of common stock (fair value of $67 million) and 5.6 million Emergence Date Warrants to purchase a like amount of common shares (fair value of $17 million). In addition, as part of the Plan of Reorganization, the Company completed a distressed termination of the APPSE in accordance with the Stipulation Settlement with the PBGC, the PBGC received $340 million in cash and 6.1 million shares of common stock (fair value of $92 million).

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19. Accumulated Deficit.

(In millions)	As Previously Reported			Adjustments			Revised
Accumulated deficit:
Net gain on settlement of liabilities subject to compromise	$	1,804		$	(26	)	$	1,778
Expense for certain professional fees	(26		)	—			(26		)
Benefit from income taxes	118			—			118
Cancellation of Predecessor equity awards	6			—			6
Cancellation of Predecessor Preferred stock Series B	397			—			397
Cancellation of Predecessor Preferred stock Series A	186			—			186
Cancellation of Predecessor Common stock	2,387			—			2,387
Total	$	4,872		$	(26	)	$	4,846

20. Accumulated Comprehensive Loss. The changes to Accumulated comprehensive loss relate to the settlement of the APPSE and the Avaya Supplemental Pension Plan ("ASPP") and associated taxes.

Fresh Start Adjustments

At the Emergence Date, the Company met the requirements under ASC 852 for the adoption of fresh start accounting. These adjustments reflect actual amounts recorded as of the Emergence Date.

21. Accounts Receivable. This adjustment relates to a change in accounting policy for the way the Company will present uncollected deferred revenue upon emergence from bankruptcy. The Company will offset such deferred revenue against the related account receivable.

22. Inventory. This adjustment relates to the write-up of inventory to fair value based on estimated selling prices, less costs of disposal.

23. Other Current Assets. This adjustment reflects the write-off of certain prepaid commissions, deferred installation costs and debt issuance costs that do not meet the definition of an asset upon emergence.

24. Property, Plant and Equipment. An adjustment of $116 million was recorded to increase the net book value of property, plant and equipment to its estimated fair value based on estimated current acquisition price, plus costs to make the property fully operational.

The following table reflects the components of property, plant and equipment, net as of December 15, 2017:

(In millions)
Buildings and improvements	$	82
Machinery and equipment	38
Rental equipment	85
Assets under construction	13
Internal use software	92
Total property, plant and equipment	310
Less: accumulated depreciation and amortization	—
Property, plant and equipment, net	$	310

25. Deferred Income Tax.The adjustment represents the release of the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of future taxable income from the reversal of deferred tax liabilities that were established as part of fresh start accounting.

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26. Intangible Assets. The Company recorded an adjustment to intangible assets for $3,137 million as follows:

	Successor		Predecessor
(In millions)	December 16, 2017 Post-emergence		December 15, 2017 Pre-emergence		Difference
Customer relationships and other intangible assets	$	2,155	$	96	$	2,059
Technology and patents	905		12		893
Trademarks and trade names	375		190		185
Total	$	3,435	$	298	$	3,137

The fair value of customer relationships was determined using the excess earnings method, a derivation of the income approach that calculates residual profit attributable to an asset after proper returns are paid to complementary or contributory assets.

The fair value of technology and patents and trademarks and trade names determined using the royalty savings method, a derivation of the income approach that estimates the royalties saved through ownership of the assets.

27. Goodwill. Predecessor goodwill of $3,541 million was eliminated and Successor goodwill of $2,658 million was established based on the calculated reorganization value.

(In millions)	As Previously Reported			Adjustments		Revised
Reorganization value of Successor Company	$	7,583		$	26	$	7,609
Less: Fair value of Successor Company assets	(4,951		)	—		(4,951		)
Reorganization value of Successor Company assets in excess of fair value - goodwill	$	2,632		$	26	$	2,658

28. Other Assets. The $27 million decrease to other assets is related to prepaid commissions that do not meet the definition of an asset upon emergence as there is no future benefit to the Successor Company.

29. Deferred Revenue. The fair value of deferred revenue, which principally relates to payments on annual maintenance contracts, was determined by deducting selling costs and associated profit from the Predecessor deferred revenue balance to arrive at the costs and profit associated with fulfilling the liability. Additionally, the decrease includes the impact of an accounting policy change whereby the Successor Company no longer recognizes deferred revenue relating to sales transactions that have been billed, but for which the related account receivable has not yet been collected.

30. Other Current Liabilities. The decrease of $3 million to other current liabilities is related to the fair value of real estate leases determined to be above or below market using the income approach based on the difference between the contractual rental rate and the estimated market rental rate, discounted utilizing a risk-related discount rate.

31. Long-term Debt. The fair value of the Term Loan Credit Agreement was determined based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices.

32. Deferred Income Taxes. The adjustment represents the establishment of deferred tax liabilities related to book/tax differences created by fresh start accounting adjustments. The amount is net of the release of the valuation allowance on deferred tax assets, which management believes more likely than not will be realized as a result of future taxable income from the reversal of such deferred tax liabilities.

33. Business Restructuring Reserve. The Company recorded an increase to its non-current business restructuring reserves based on estimated future cash flows applied to a current discount rate at emergence.

34. Other Liabilities. A decrease in other liabilities of $43 million relates to deferred revenue and real estate leases as previously discussed.

35. Accumulated Other Comprehensive Loss. The remaining balance in Accumulated comprehensive loss was reversed to Reorganization expenses, net.

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36. Fresh Start Adjustments. The following table reflects the cumulative impact of the fresh start adjustments as discussed above, the elimination of the Predecessor Company's accumulated other comprehensive loss and the adjustments required to eliminate accumulated deficit:

(In millions)	As Previously Reported			Adjustments		Revised
Eliminate Predecessor Intangible assets	$	(298	)	$	—	$	(298	)
Eliminate Predecessor Goodwill	(3,541		)	—		(3,541		)
Establish Successor Intangible assets	3,435			—		3,435
Establish Successor Goodwill	2,632			26		2,658
Fair value adjustment to Inventory	29			—		29
Fair value adjustment to Other current assets	(66		)	—		(66		)
Fair value adjustment to Property, plant and equipment	116			—		116
Fair value adjustment to Other assets	(27		)	—		(27		)
Fair value adjustment to Deferred revenue	235			—		235
Fair value adjustment to Business restructuring reserves	(4		)	—		(4		)
Fair value adjustment to Other current liabilities	3			—		3
Fair value adjustment to Long-term debt	(96		)			(96		)
Fair value adjustment to Other liabilities	43			—		43
Release Predecessor Accumulated comprehensive loss	(790		)	—		(790		)
Fresh start adjustments included in Reorganization items, net	1,671			26		1,697
Tax impact of fresh start adjustments	(565		)	—		(565		)
Gain on fresh start accounting, net	$	1,106		$	26	$	1,132

5. Business Combinations

Spoken Communications

On March 9, 2018 (“Acquisition Date”), the Company acquired Intellisist, Inc. (“Spoken”), a United States-based private technology company, which provides cloud-based Contact Center as a Service ("CCaaS") solutions and customer experience management and automation applications. The total purchase price was $172 million, consisting of $157 million in cash, $14 million in contingent consideration and settlement of Spoken’s net payable to the Company of $1 million. Prior to the acquisition, the Company and Spoken had been working in a co-development partnership for more than a year pursuant to which the Company had recorded a net receivable from Spoken for services provided.

Upon the achievement of three specified performance targets ("Earn-outs"), the Company may be required to pay up to $16 million of contingent consideration to Spoken's former owners and employees and up to $4 million in discretionary earn-out bonuses ("Earn-out Bonuses") to Spoken employees who are believed to have contributed to the achievement of the Earn-outs. The fair value of the Earn-outs at the Acquisition Date was $14 million, which was calculated using a probability-weighted discounted cash flow model and will be remeasured to fair value at each subsequent reporting period. The Earn-out Bonuses, which are intended to incentivize remaining employees to assist in achieving the Earn-outs, are excluded from the acquisition consideration and will be recognized as compensation expense in the Company's consolidated financial statements ratably over the estimated Earn-out periods. During the three months ended June 30, 2018, there was no material change to the fair value of the Earn-out liability.

The Company recorded goodwill of $120 million, which has been assigned to the GCS segment, identifiable intangible assets with a fair value of $64 million, and other net liabilities of $12 million. The goodwill recognized is attributable primarily to the potential that the Spoken technology, cloud platform and assembled workforce will accelerate the Company's growth in cloud-based solutions. The Company has determined that the goodwill is not deductible for tax purposes. The purchase price allocation is preliminary and subject to revision as additional information regarding the fair value of assets and liabilities acquired becomes available. Additional information that existed at the Acquisition Date that was unknown may become known during the remainder of the measurement period, a period not to exceed twelve months from the Acquisition Date. Adjustments in the purchase price allocation may require changes to certain assets and liabilities retroactive to the period in which the acquisition occurred. Any effects on earnings as a result of these potential changes would be calculated as if the accounting had been completed at the Acquisition Date and recognized in the reporting period the adjustments were identified. During the

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three months ended June 30, 2018, the Company adjusted the initial purchase price allocation resulting in a decrease in goodwill, from $122 million to $120 million.

The acquired intangible assets of $64 million included technology and patents of $56 million with a weighted average useful life of 4.9 years for all technology assets, $5 million of in-process research & development ("IPR&D") activities, which are considered indefinite lived until projects are completed or abandoned, and customer relationships of $3 million with a weighted average useful life of 7.5 years.

The Company recorded $3 million of acquisition-related costs, which included investment banking, legal and other third-party costs and $7 million of compensation expense resulting from the accelerated vesting of certain unvested Spoken stock option awards because post-combination service requirements were eliminated.

Spoken became a wholly-owned subsidiary of the Company, whose unaudited interim Condensed Consolidated Financial Statements reflect the financial results of the operations of Spoken beginning on March 9, 2018. Spoken’s revenue and operating loss included in the Company’s results for the three months ended June 30, 2018, was $4 million and $12 million, respectively, including $2 million of compensation expense for the accelerated vesting of certain Spoken stock option awards and $3 million for the amortization of acquired technology intangibles. Spoken’s revenue and operating loss included in the Company’s results for the period from December 16, 2017 through June 30, 2018 (Successor), was $5 million and $19 million, respectively, including $7 million of compensation expense for the accelerated vesting of certain Spoken stock option awards and $4 million for the amortization of acquired technology intangibles.

6. 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 Company performs impairment testing annually 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.

The Company determined that no events occurred or circumstances changed during the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor) that would more likely than not reduce the fair value of any of the Company's reporting units below their respective carrying amounts. However, if conditions deteriorate or there is a change in the business, it may be necessary to record impairment charges in the future.

The Company adjusted the carrying value of goodwill upon application of fresh start accounting.

As discussed in Note 1, "Revision of Prior Period Amounts", prior period amounts as reported have been revised, where applicable.

The carrying value of goodwill by operating segments for the periods indicated was as follows:

	As Previously Reported
(In millions)	Global Communications Solutions			Avaya Global Services			Total
Cost	$	2,669		$	2,501		$	5,170
Accumulated impairment	(1,576		)	(52		)	(1,628		)
September 30, 2017 (Predecessor)	$	1,093		$	2,449		$	3,542
Adjustments	(1		)	—			(1		)
Impact of fresh start accounting	68			(977		)	(909		)
December 15, 2017 (Predecessor)	$	1,160		$	1,472		$	2,632
December 16, 2017 (Successor)	$	1,160		$	1,472		$	2,632

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	Adjustments
(In millions)	Global Communications Solutions		Avaya Global Services		Total
Cost	$	—	$	—	$	—
Accumulated impairment	—		—		—
September 30, 2017 (Predecessor)	$	—	$	—	$	—
Adjustments	—		—		—
Impact of fresh start accounting	11		15		26
December 15, 2017 (Predecessor)	$	11	$	15	$	26
December 16, 2017 (Successor)	$	11	$	15	$	26

	Revised
(In millions)	Global Communications Solutions			Avaya Global Services			Total
Cost	$	2,669		$	2,501		$	5,170
Accumulated impairment	(1,576		)	(52		)	(1,628		)
September 30, 2017 (Predecessor)	1,093			2,449			3,542
Adjustments	(1		)	—			(1		)
Impact of fresh start accounting	79			(962		)	(883		)
December 15, 2017 (Predecessor)	$	1,171		$	1,487		$	2,658
December 16, 2017 (Successor)	$	1,171		$	1,487		$	2,658
Spoken acquisition	120			—			120
Impact of foreign currency fluctuations	(3		)	(4		)	(7		)
June 30, 2018 (Successor)	$	1,288		$	1,483		$	2,771

As a result of the sale of certain assets and liabilities of the Company's former Networking business to Extreme in July 2017, it was determined that the fair value of the Networking services component was less than its carrying value. As a result, the Company recorded a goodwill impairment charge of $52 million in the third quarter of fiscal year 2017.

Intangible Assets

Intangible assets include 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 one year to nineteen years.

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. The Company performs impairment testing annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired.

The Company determined that no events had occurred or circumstances changed during the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor) that would indicate that its long-lived assets, including intangible assets with finite lives, may not be recoverable or that it is more likely than not that its intangible assets with indefinite lives are impaired. However, if conditions deteriorate or there is a change in the business, it may be necessary to record impairment charges in the future.

The Company adjusted the carrying value of intangible assets upon application of fresh start accounting.

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The gross carrying amount and accumulated amortization by major intangible asset category as of June 30, 2018 (Successor) and September 30, 2017 (Predecessor) were as follows:

	Successor
	As of June 30, 2018
(In millions)	Technology and patents			Customer relationships and other intangibles			Trademarks and trade names			Total
Finite-lived intangible assets:
Cost	$	960		$	2,156		$	43		$	3,159
Accumulated amortization	(92		)	(84		)	(2		)	(178		)
Finite-lived intangible assets, net	868			2,072			41			2,981
Indefinite-lived intangible assets	5			—			332			337
Intangible assets, net	$	873		$	2,072		$	373		$	3,318
	Predecessor
	As of September 30, 2017
(In millions)	Technology and patents			Customer relationships and other intangibles			Trademarks and trade names			Total
Finite-lived intangible assets:
Cost	$	1,427		$	2,196		$	—		$	3,623
Accumulated amortization	(1,411		)	(2,091		)	—			(3,502		)
Finite-lived intangible assets, net	16			105			—			121
Indefinite-lived intangible assets:
Cost	—			—			545			545
Accumulated impairment	—			—			(355		)	(355		)
Indefinite-lived intangible assets, net	—			—			190			190
Intangible assets, net	$	16		$	105		$	190		$	311

Due to the Company filing for bankruptcy and also experiencing a decline in revenues, a revision of its five year forecast was completed in the third quarter ended June 30, 2017. Due to the decline in revenue in the five year forecast, the Company tested its intangible assets with indefinite lives and other long-lived assets for impairment. The Company estimated the fair values of its indefinite-lived intangible assets using the royalty savings method, which values an asset by estimating the royalties saved through ownership of the asset. As a result of the impairment test, the Company estimated the fair value of its trademarks and trade names to be $190 million as compared to a carrying amount of $255 million and recorded an impairment charge of $65 million in the third quarter of fiscal year 2017. No impairments have been recognized in fiscal 2018.

Amortization expense related to intangible assets was $83 million, $178 million and $13 million for the three months ended June 30, 2018 (Successor), the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor), respectively. Amortization expense related to intangible assets was $62 million and $186 million for the three and nine months endedJune 30, 2017 (Predecessor), respectively.

Amortizable technology and patents have useful lives that range between 1 year and 10 years with a weighted average remaining useful life of 5.2 years. IPR&D activities are considered indefinite-lived until projects are completed or abandoned. Customer relationships have useful lives that range between 1 year and 19 years with a weighted average remaining useful life of 14.1 years. Amortizable product trade names have useful lives of 10 years with a weighted average remaining useful life of 9.5 years. The Avaya trade name is expected to generate cash flows indefinitely and, consequently, this asset is classified as an indefinite-lived intangible.

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Future amortization expense related to amortizable intangible assets as of June 30, 2018 is as follows:

(In millions)
Remainder of fiscal 2018	$	84
2019	333
2020	333
2021	332
2022	305
2023 and thereafter	1,594
Total	$	2,981

7. Supplementary Financial Information

Supplemental Operations Information

A summary of other expense, net for the periods indicated is presented in the following table:

	Successor		Predecessor			Successor			Predecessor
(In millions)	Three months ended June 30, 2018		Three months ended June 30, 2017			Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
OTHER INCOME (EXPENSE), NET
Interest income	$	1	$	1		$	2		$	2		$	2
Foreign currency gains, net	25		2			24			—			1
Income from TSA, net	1		—			5			3			—
Other pension and post-retirement benefit credits (costs), net	4		(12		)	9			(8		)	(29		)
Change in fair value of Emergence Date Warrants	6		—			(9		)	—			—
Gain on sale of long-lived assets	—		—			1			—			—
Other, net	—		—			—			1			(1		)
Total other income (expense), net	$	37	$	(9	)	$	32		$	(2	)	$	(27	)

As discussed in Note 2, “Recent Accounting Pronouncements - Recently Adopted Accounting Pronouncements”, the adoption of ASU 2017-07 resulted in the recognition of Other pension and post-retirement benefit credits (costs), net (including the interest cost, expected return on plan assets, amortization and curtailments and settlements) in Other income (expense), net. Prior period amounts have been reclassified to conform to the current period presentation.

The Foreign currency gains, net for both the three months ended June 30, 2018 (Successor) and the period from December 16, 2017 through June 30, 2018 (Successor) were principally due to the strengthening of the U.S. dollar compared to certain foreign exchange rates on U.S. dollar denominated receivables maintained in non-U.S. locations, mainly Argentina, India and Mexico.

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A summary of reorganization items, net for the periods indicated is presented in the following tables:

	Successor		Predecessor
(In millions)	Three months ended June 30, 2018		Three months ended June 30, 2017
REORGANIZATION ITEMS, NET
Bankruptcy-related professional fees	$	—	$	(31	)
DIP Credit Agreement financing costs	—		—
Contract rejection fees	—		(4		)
Net gain on settlement of liabilities subject to compromise	—		—
Net gain on fresh start adjustments	—		—
Other items, net	—		—
Reorganization items, net	$	—	$	(35	)
Cash payments for reorganization items	$	—	$	33

	Successor		Predecessor
			As Previously Reported			Adjustments			Revised
(In millions)	Period from December 16, 2017 through June 30, 2018		Period from October 1, 2017 through December 15, 2017			Period from October 1, 2017 through December 15, 2017			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
REORGANIZATION ITEMS, NET
Bankruptcy-related professional fees	$	—	$	(56	)	$	—		$	(56	)	$	(59	)
DIP Credit Agreement financing costs	—		—			—			—			(14		)
Contract rejection fees	—		—			—			—			(4		)
Net gain on settlement of liabilities subject to compromise	—		1,804			(26		)	1,778			—
Net gain on fresh start adjustments	—		1,671			26			1,697			—
Other items, net	—		(3		)	—			(3		)	—
Reorganization items, net	$	—	$	3,416		$	—		$	3,416		$	(77	)
Cash payments for reorganization items	$	1	$	2,524		$	—		$	2,524		$	39

Costs directly attributable to the implementation of the Plan of Reorganization were reported as reorganization items, net. The cash payments for reorganization items for the period from October 1, 2017 through December 15, 2017 (Predecessor) included$2,468 million of claims paid related to liabilities subject to compromise and $56 million for bankruptcy-related professional fees, including emergence and success fees paid on the Emergence Date.

As discussed in Note 1, "Revision of Prior Period Amounts", prior period amounts as reported have been revised, where applicable.

8. Business Restructuring Reserves and Programs

For the three months ended June 30, 2018 and 2017, the Company recognized restructuring charges of $30 million and $8 million, respectively. For the period from December 16, 2017 through June 30, 2018 (Successor), the period from October 1, 2017 through December 15, 2017 (Predecessor) and the nine months ended June 30, 2017 (Predecessor), the Company recognized restructuring charges of $80 million, $14 million and $22 million, respectively. The restructuring charges include adjustments to the restructuring programs of prior fiscal years consisting of the termination/buyout of leases and employee separation costs. As the Company continues to evaluate opportunities to streamline its operations, it may identify cost savings globally and take additional restructuring actions in the future and the costs of those actions could be material.

Fiscal 2018 Restructuring Program

Recognized restructuring charges for fiscal 2018 restructuring programs included employee separation costs associated with employee severance actions primarily in Europe, Middle East and Africa ("EMEA"), the U.S. and Asia-Pacific ("APAC"), for

25

which the related payments are expected to be completed by the beginning of fiscal 2025. The separation charges include, but are not limited to, termination payments, pension fund payments, and health care and unemployment insurance costs to be paid to, or on behalf of, the affected employees. Lease obligation charges were also incurred in connection with the termination of certain U.S. real estate leases.

The following table summarizes the components of the fiscal 2018 restructuring program for the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor):

(In millions)	Employee Separation Costs			Lease Obligations			Total
2018 restructuring charges	$	12		$	—		$	12
Cash payments	(3		)	—			(3		)
Balance as of December 15, 2017 (Predecessor)	$	9		$	—		$	9
Balance as of December 16, 2017 (Successor)	$	9		$	—		$	9
2018 restructuring charges	68			10			78
Cash payments	(16		)	(10		)	(26		)
Impact of foreign currency fluctuations	(2		)	—			(2		)
Balance as of June 30, 2018 (Successor)	$	59		$	—		$	59

Fiscal 2017 Restructuring Program

During fiscal 2017, the Company identified opportunities to streamline operations and generate costs savings, which included eliminating employee positions. These obligations are primarily for employee separation costs associated with fiscal 2017 employee severance actions in the U.S. and EMEA, for which the related payments are expected to be completed in fiscal 2023. The separation charges include, but are not limited to, pension fund payments and health care and unemployment insurance costs to be paid to, or on behalf of, the affected employees.

The following table summarizes the components of the fiscal 2017 restructuring program for the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor):

(In millions)	Employee Separation Costs			Lease Obligations			Total
Balance as of September 30, 2017 (Predecessor)	$	4		$	1		$	5
Cash payments	(1		)	(1		)	(2		)
Balance as of December 15, 2017 (Predecessor)	$	3		$	—		$	3
Balance as of December 16, 2017 (Successor)	$	3		$	—		$	3
Cash payments	(1		)	—			(1		)
Balance as of June 30, 2018 (Successor)	$	2		$	—		$	2

Fiscal 2008 through 2016 Restructuring Programs

During fiscal years 2008 through 2016, the Company identified opportunities to streamline operations and generate cost savings, which included eliminating employee positions and exiting facilities. The remaining obligations related to these restructuring programs are for employee severance costs and are primarily associated with EMEA plans expected to be completed by fiscal 2023.

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The following table aggregates the components of the fiscal 2008 through 2016 restructuring programs for the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor):

(In millions)	Employee Separation Costs			Lease Obligations			Total
Balance as of September 30, 2017 (Predecessor)	$	51		$	24		$	75
Cash payments	(3		)	(17		)	(20		)
Expense	1			1			2
Adjustments - fresh start and reorganization items	$	4		$	(1	)	$	3
Balance as of December 15, 2017 (Predecessor)	$	53		$	7		$	60
Balance as of December 16, 2017 (Successor)	$	53		$	7		$	60
Expense	1			1			2
Cash payments	(12		)	(2		)	(14		)
Impact of foreign currency fluctuations	—			—			—
Balance as of June 30, 2018 (Successor)	$	42		$	6		$	48

As of September 30, 2017, the Business restructuring reserve of $80 million included $11 million that was recorded in Liabilities subject to compromise in the Condensed Consolidated Balance Sheets.

9. Financing Arrangements

The following table reflects principal amounts of debt and debt net of discounts and issuance costs as of June 30, 2018 (Successor) and September 30, 2017 (Predecessor), which includes the impact of adequate protection payments and accrued interest as of January 19, 2017, the date the Company filed for bankruptcy:

	Successor					Predecessor
	June 30, 2018					September 30, 2017
(In millions)	Principal amount		Net of discounts and issuance costs			Principal amount		Net of discounts and issuance costs
Term Loan Credit Agreement	$	2,910	$	2,876		$	—	$	—
Convertible 2.25% senior notes due June 15, 2023	350		252			—		—
DIP Credit Agreement due January 19, 2018	—		—			725		725
First lien debt:
Senior secured term B-3 loans	—		—			594		594
Senior secured term B-4 loans	—		—			1		1
Senior secured term B-6 loans	—		—			519		519
Senior secured term B-7 loans	—		—			2,012		2,012
7% senior secured notes	—		—			982		982
9% senior secured notes	—		—			284		284
Second lien debt:
10.50% senior secured notes	—		—			1,440		1,440
Total debt	$	3,260	3,128			$	6,557	6,557
Debt maturing within one year			(29		)			(725		)
Long-term debt, net of current portion(1)			$	3,099				$	5,832

⁽¹⁾ Pre-petition long-term debt as of September 30, 2017 (Predecessor) was included in liabilities subject to compromise.

On the Emergence Date:

1. the Successor Company entered into the Term Loan Credit Agreement and the ABL Credit Agreement;

2. the DIP Credit Agreement was paid in full;

3. the holders of the Predecessor first lien obligations received cash and Successor Company common stock (aggregate fair value of $3,570 million) and the Company cancelled $4,281 million of the Predecessor first lien obligations; and

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4. the holders of the Predecessor second lien obligations received Successor Company common stock and Emergence Date Warrants to purchase common stock (aggregate fair value of $84 million) and the Company cancelled $1,440 million of the Predecessor second lien obligations.

Successor Financing

Term Loan and ABL Credit Agreements

On the Emergence Date, Avaya Inc. entered into (i) the Term Loan Credit Agreement among Avaya Inc., as borrower, Avaya Holdings, the lending institutions from time to time party thereto, and Goldman Sachs Bank USA, as administrative agent and collateral agent, which provided a $2,925 million term loan facility maturing on December 15, 2024 and (ii) the ABL Credit Agreement maturing on December 15, 2022, among Avaya Inc., as borrower, Avaya Holdings, the several other borrowers party thereto, the several lenders from time to time party thereto, and Citibank, N.A., as administrative agent and collateral agent, which provided a revolving credit facility consisting of a U.S. tranche and a foreign tranche allowing for borrowings of up to an aggregate principal amount of $300 million from time to time, subject to borrowing base availability (the ABL Credit Agreement together with the Term Loan Credit Agreement, the “Credit Agreements”). 

On June 18, 2018, the Company amended the Term Loan Credit Agreement to reduce interest rates and to reduce the London Inter-bank Offered Rate ("LIBOR") floor that existed under the original agreement from 1.00% to 0.00%. After the amendment, the Term Loan Credit Agreement (a) in the case of alternative base rate ("ABR") Loans, bears interest at a rate per annum equal to 3.25% plus the highest of (i) the Federal Funds Rate plus 0.50%, (ii) the U.S. prime rate as publicly announced in the Wall Street Journal and (iii) the LIBOR Rate for an interest period of one month and (b) in the case of LIBOR Loans, bears interest at a rate per annum equal to 4.25% plus the applicable LIBOR rate, subject to a 0.00% floor. Prior to the amendment, the Term Loan Credit Agreement, in the case of ABR Loans, bore interest at a rate per annum equal to 3.75% plus the highest of (i) the Federal Funds Rate plus 0.50%, (ii) the U.S. prime rate as publicly announced in the Wall Street Journal and (iii) the LIBOR Rate for an interest period of one month and in the case of LIBOR Loans, bore interest at a rate per annum equal to 4.75% plus the applicable LIBOR rate, subject to a 1.00% floor. As a result of the amendment, outstanding loan balances under the original Term Loan Credit Agreement were paid in full and new debt was issued for the same outstanding principal amount. The amendment was accounted for as a loan modification under ASC 470, "Debt".

The ABL Credit Agreement bears interest:

1. In the case of Base Rate Loans denominated in U.S. dollars, at a rate per annum equal to 0.75% (subject to a 0.25% step-up or step-down based on availability) plus the highest of (i) the Federal Funds Rate plus 0.50%, (ii) the U.S. prime rate as publicly announced by Citibank, N.A. and (iii) the LIBOR Rate for an interest period of one month;    

2. In the case of LIBOR Rate Loans denominated in U.S. dollars, at a rate per annum equal to 1.75% (subject to a 0.25% step-up or step-down based on availability) plus the applicable LIBOR Rate;

3. In the case of Canadian Prime Rate Loans denominated in Canadian dollars, at a rate per annum equal to 0.75% (subject to a 0.25% step-up or step-down based on availability) plus the highest of (i) the “Base Rate” as publicly announced by Citibank, N.A., Canadian branch and (ii) the rate of interest per annum equal to the average rate applicable to Canadian Dollar Bankers Rate ("CDOR Rate") for an interest period of 30 days;

4. In the case of CDOR Rate Loans denominated in Canadian dollars, at a rate per annum equal to 1.75% (subject to a 0.25% step-up or step-down based on availability) plus the applicable CDOR Rate;

5. In the case of LIBOR Rate Loans denominated in Sterling, at a rate per annum equal to 1.75% (subject to a 0.25% step-up or step-down based on availability) plus the applicable LIBOR Rate;

6. In the case of Euro Interbank Offered Rate ("EURIBOR Rate") Loans denominated in Euro, at a rate per annum equal to 1.75% (subject to a 0.25% step-up or step-down based on availability) plus the applicable LIBOR Rate; and

7. In the case of Overnight LIBOR Rate Loans, at a rate per annum equal to 1.75% (subject to a 0.25% step-up or step-down based on availability) plus the applicable Overnight LIBOR Rate.

The Credit Agreements limit, among other things, Avaya Inc.’s ability to (i) incur indebtedness, (ii) incur liens, (iii) dispose of assets, (iv) make investments, (v) make dividends, or conduct redemptions and repurchases of capital stock, (vi) prepay junior indebtedness or amend junior indebtedness documents, (vii) enter into restricted agreements, (viii) enter into transactions with affiliates and (ix) modify the terms of any of its organizational documents.

The Term Loan Credit Agreement does not contain any financial covenants. The ABL Credit Agreement does not contain any financial covenants other than a requirement to maintain a minimum fixed charge coverage ratio of 1:1 that becomes applicable only in the event that the net borrowing availability under the ABL Credit Agreement is less than the greater of $25 million and 10% of the lesser of the total borrowing base and the ABL commitments (commonly known as the "line cap").

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As of June 30, 2018, the Company was not in default under any of its debt agreements.

Under the terms of the ABL Credit Agreement, the Company can issue letters of credit up to $150 million. At June 30, 2018, the Company had issued and outstanding letters of credit and guarantees of $48 million. The aggregate additional principal amount that may be borrowed under the ABL Credit Agreement, based on the borrowing base less $48 million of outstanding letters of credit and guarantees, was $195 million at June 30, 2018.

The weighted average contractual interest rate of the Company’s outstanding debt as of June 30, 2018 was 6.4%.

Convertible Notes

On June 11, 2018, the Company issued its 2.25% Convertible Notes in an aggregate principal of $350 million (including the underwriters’ exercise in full of an over-allotment option of $50 million), which mature on June 15, 2023 (“Convertible Notes”). The Convertible Notes were issued under an indenture (“Indenture”), by and between the Company and the Bank of New York Mellon Trust Company N.A., as Trustee. The Company received net proceeds from the offering of $314 million after giving effect to debt issuance costs, including the underwriting discount, the net cash used to purchase a bond hedge and the proceeds from the issuance of warrants, which are discussed below.

The Convertible Notes accrue interest at a rate of 2.25% per annum, payable semi-annually on June 15 and December 15 of each year beginning on December 15, 2018. On or after March 15, 2023, and until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert the Convertible Notes at the holders' option. The Convertible Notes are convertible at an initial rate of 36.0295 shares per $1,000 of principal (equivalent to an initial conversion price of $27.76 per share of the Company's common stock). The conversion rate is subject to customary adjustments for certain events as described in the Indenture. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company's election. It is the Company’s current intent to settle conversions of the Convertible Notes through combination settlement, which involves repayment of the principal portion in cash and any excess of the conversion value over the principal amount in shares of its common stock.

Holders may convert the Convertible Notes, at the holders' option, prior to March 15, 2023 only under the following circumstances:

• during any calendar quarter commencing after the calendar quarter ending on September 30, 2018 (and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

• during the five business day period after any five consecutive trading day period (the “Measurement Period”) in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sales price of the Company's common stock and the conversion rate on each such trading day; or

• upon the occurrence of specified corporate events.

The Company may not redeem the Convertible Notes prior to their maturity date, and no sinking fund is provided for them. If the Company undergoes a fundamental change, as described in the Indenture, subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of the Convertible Notes. The fundamental change repurchase price is equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest up to, but excluding, the fundamental change repurchase date. If holders elect to convert the Convertible Notes in connection with a make-whole fundamental change, as described in the Indenture, the Company will, to the extent provided in the Indenture, increase the conversion rate applicable to the Convertible Notes.

The Convertible Notes are senior unsecured obligations and rank senior in right of payment to any of the Company's indebtedness that is expressly subordinated in right of payment to the Convertible Notes and equal in right of payment to any of its existing and future unsecured indebtedness that is not subordinated. The Convertible Notes are effectively junior in right of payment to any of the Company's secured indebtedness (to the extent of the value of assets securing such indebtedness) and structurally junior to all existing and future indebtedness and other liabilities, including trade payables, of its subsidiaries. The Indenture does not limit the amount of debt that the Company or its subsidiaries may incur. The Convertible Notes are not guaranteed by any of the Company's subsidiaries.

The Indenture does not contain any financial or operating covenants or restrictions on the payment of dividends, the incurrence of indebtedness, or the issuance or repurchase of securities by the Company or any of its subsidiaries. The Indenture contains customary events of default with respect to the Convertible Notes and provides that upon certain events of default occurring and

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continuing, the Trustee may, and the Trustee at the request of holders of at least 25% in principal amount of the Convertible Notes shall, declare all principal and accrued and unpaid interest, if any, of the Convertible Notes to be due and payable. In case of certain events of bankruptcy, insolvency or reorganization, all of the principal of and accrued and unpaid interest on the Convertible Notes will automatically become due and payable.

In accounting for the issuance of the Convertible Notes, the Company separated the Convertible Notes into liability and equity components. The Company allocated $258 million of the Convertible Notes to the liability component, and $92 million to the equity component. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component, which represents the conversion option and does not meet the criteria for separate accounting as a derivative as it is indexed to the Company's own stock, was determined by deducting the fair value of the liability component from the par value of the Convertible Notes. The excess of the principal amount of the liability component over its carrying amount represents a debt discount, which is recorded as a direct deduction from the related debt liability in the Condensed Consolidated Balance Sheets and is amortized to interest expense over the term of the Convertible Notes using the effective interest method. The equity component is included in Additional paid-in capital in the Condensed Consolidated Balance Sheets and will not be remeasured as long as it continues to meet the conditions for equity classification.

The Company incurred issuance costs of $10 million related to the Convertible Notes. Issuance costs were allocated to the liability and equity components based on the same proportion used to allocate the proceeds. Issuance costs attributable to the liability component are being amortized to interest expense over the term of the Convertible Notes, and issuance costs attributable to the equity component are included along with the equity component in stockholders' equity.

For the three months ended June 30, 2018, the Company recognized interest expense of $1 million related to the Convertible Notes, which mainly consisted of amortization of the underwriting discount.

The net carrying amount of the Convertible Notes for the period indicated was as follows:

(In millions)	June 30, 2018
Principal	$	350
Less:
Unamortized debt discount	(91		)
Unamortized issuance costs	(7		)
Net carrying amount	$	252

The net carrying amount of the equity component of the Convertible Notes for the period indicated was as follows:

(In millions)	June 30, 2018
Debt discount for conversion option	$	92
Less:
Issuance costs	(3		)
Net carrying amount	$	89

Bond Hedge and Call Spread Warrants

In connection with the issuance of the Convertible Notes, the Company also entered into privately negotiated transactions to purchase hedge instruments (“Bond Hedge”), covering 12.6 million shares of its common stock at a cost of $84 million. The Bond Hedge is subject to anti-dilution provisions substantially similar to those of the Convertible Notes, has a strike price of $27.76 per share, is exercisable by the Company upon any conversion under the Convertible Notes, and expires on June 15, 2023. The Bond Hedge was recorded in equity and the cost of the Bond Hedge was recorded as a reduction of Additional paid-in capital in the accompanying Condensed Consolidated Balance Sheets.

The Company also sold warrants for the purchase of up to 12.6 million shares of its common stock for aggregate proceeds of $58 million (“Call Spread Warrants”). The Call Spread Warrants have a strike price of $37.3625 per share and are subject to customary anti-dilution provisions. The Call Spread Warrants will expire in ratable portions on a series of expiration dates commencing on September 15, 2023. The Call Spread Warrants were recorded in equity and the proceeds from the issuance of the Call Spread Warrants were recorded as an increase to Additional paid-in capital.

The Bond Hedge and Call Spread Warrants are intended to reduce the potential dilution with respect to the Company’s common stock and/or reduce the Company’s exposure to potential cash payments that the Company may be required to make upon conversion of the Convertible Notes by, in effect, increasing the conversion price, from the Company’s economic standpoint, to

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$37.3625 per share. However, the Call Spread Warrants could have a dilutive effect with respect to the Company's common stock or, if the Company so elects, obligate the Company to make cash payments to the extent that the market price of common stock exceeds $37.3625 per share on any date upon which the Call Spread Warrants are exercised.

Predecessor Financing

The Bankruptcy Filing constituted an event of default that accelerated the Predecessor’s payment obligations under the senior secured credit agreements and the senior secured notes. As a result of the Bankruptcy Filing, the principal and interest due under the Predecessor’s debt agreements became due and payable. However, any efforts to enforce such payment obligations were automatically stayed as a result of the Bankruptcy Filing, and the creditors’ rights of enforcement were subject to the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. Consequently, all debt outstanding was classified as liabilities subject to compromise and all unamortized debt issuance costs and unaccreted debt discounts were expensed.

DIP Credit Agreement. In connection with the Bankruptcy Filing, on the Petition Date, the Predecessor entered into the DIP Credit Agreement, which provided a $725 million term loan facility due January 2018, and a cash collateralized letter of credit facility in an aggregate amount equal to $150 million. All letters of credit were cash collateralized in an amount equal to 101.5% of the face amount of such letters of credit denominated in U.S. dollars and 103% of the face amount of letters of credit denominated in alternative currencies. The DIP Credit Agreement, in the case of the Base Rate Loans, bore interest at a rate per annum equal to 6.5% plus the highest of (i) Citibank, N.A.’s prime rate, (ii) the Federal Funds Rate plus 0.5% and (iii) the Eurocurrency Rate for an interest period of one month, subject to a 2% floor, and in the case of the Eurocurrency Loans, bore interest at a rate per annum equal to 7.5% plus the applicable Eurocurrency Rate, subject to a 1% floor.

Capital Lease Obligations

Included in Other liabilities is $15 million and $14 million of capital lease obligations, net of imputed interest as of June 30, 2018 (Successor) and September 30, 2017 (Predecessor), respectively, and excluded amounts included in Liabilities subject to compromise of $12 million as of September 30, 2017.

The Company outsources certain delivery services associated with the Avaya Private Cloud Services business. That agreement also included the sale of specified assets owned by the Company, which are being leased-back by the Company and accounted for as a capital lease. As of June 30, 2018 (Successor) and September 30, 2017 (Predecessor), capital lease obligations associated with this agreement were $14 million and $24 million, respectively, and include $10 million within Liabilities subject to compromise as of September 30, 2017.

10. Derivative Instruments and Hedging Activities

The Company accounts for derivative financial instruments in accordance with ASC 815, "Derivatives and Hedging" ("ASC 815") and does not enter into derivatives for trading or speculative purposes.

Interest Rate Contracts

The Company, from time-to-time, enters into interest rate swap contracts as a hedge against changes in interest rates on its variable rate loans outstanding.

On May 16, 2018, the Company entered into interest rate swap agreements with six counterparties, which fixed a portion of the variable interest due on its Term Loan Credit Agreement. Under the terms of the interest rate swap agreements, which mature on December 15, 2022, the Company pays a fixed rate of 2.935% and receives a variable rate of interest based on one-month LIBOR. As of June 30, 2018, the total notional amount of the six interest rate swap agreements was $1,800 million.

The interest rate swaps are designated as cash flow hedges as defined under ASC 815. As a result, the unrealized gains or losses on these contracts are initially recorded in Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets. As interest expense is recognized on the Term Loan Credit Agreement, the corresponding deferred gain or loss on the interest rate swaps is reclassified from Accumulated other comprehensive loss to Interest expense in the Condensed Consolidated Statements of Operations. Based on the amount in Accumulated other comprehensive loss at June 30, 2018, approximately $10 million would be reclassified into net income in the next twelve months.

It is management's intention that the notional amount of interest rate swaps be less than the variable rate loans outstanding during the life of the derivatives.

Emergence Date Warrants

In accordance with the Plan of Reorganization, the Company issued Emergence Date Warrants to purchase 5,645,200 shares of Successor Company common stock to the holders of the Predecessor second lien obligations pursuant to a warrant agreement. Each Emergence Date Warrant has an exercise price of $25.55 per share and expires December 15, 2022. The Emergence Date

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Warrants contain certain derivative features that require them to be classified as a liability and for changes in fair value of the liability to be recognized in earnings each reporting period. None of the Emergence Date Warrants have been exercised as of June 30, 2018.

As discussed in Note 1, "Revision of Prior Period Amounts", prior period amounts as reported have been revised, where applicable.

The fair value of the Emergence Date Warrants was determined using a probability weighted Black-Scholes option pricing model. This model requires certain input assumptions including risk-free interest rates, volatility, expected life and dividend rates. Selection of these inputs involves significant judgment.

The fair value of the Emergence Date Warrants upon emergence and as of June 30, 2018 was recorded in Non-current liabilities - Other liabilities in the Condensed Consolidated Balance Sheets, and was determined by using the Black-Scholes option pricing model with the input assumptions summarized below:

			As Previously Reported		Revised
	June 30, 2018		December 15, 2017		December 15, 2017
Expected volatility	50.96	%	54.57	%	54.38	%
Risk-free interest rates	2.68	%	2.20	%	2.20	%
Expected remaining life (in years)	4.46		5.00		5.00
Price per share of common stock	$20.08		$14.93		$15.16

In determining the fair value of the Emergence Date Warrants, the dividend yield was assumed to be zero as the Company does not anticipate paying dividends.

The following table summarizes the fair value of the Company's derivatives on a gross basis segregated between those that are designated as hedging instruments and those that are not designated as hedging instruments:

		Successor				Predecessor
		June 30, 2018				September 30, 2017
(In millions)	Balance Sheet Caption	Asset		Liability		Asset		Liability
Derivatives Designated as Hedging Instruments:
Interest rate contracts	Other current liabilities	$	—	$	11	$	—	$	—
Interest rate contracts	Other liabilities	—		5		—		—
		—		16		—		—
Derivatives Not Designated as Hedging Instruments:
Emergence Date Warrants	Other liabilities	—		26		—		—
Total derivative fair value		$	—	$	42	$	—	$	—

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The following table provides information regarding the location and amount of pre-tax gains (losses) for derivatives designated as cash flow hedges:

	Successor												Predecessor
	Three months ended June 30, 2018						Period from December 16, 2017 through June 30, 2018						Period from October 1, 2017 through December 15, 2017
(In millions)	Interest Expense			Other Comprehensive Income (Loss)			Interest Expense			Other Comprehensive Income (Loss)			Interest Expense			Other Comprehensive Income (Loss)
Financial Statement Line Item in which Cash Flow Hedges are Recorded	$	(56	)	$	(16	)	$	(112	)	$	(41	)	$	(14	)	$	658
Impact of cash flow hedging relationships:
Loss recognized in AOCI - on interest rate swaps	—			(17		)	—			(17		)	—			—
Interest expense reclassified from AOCI	(2		)	2			(2		)	2			—			—

The following table provides information regarding the pre-tax effects for derivatives not designated as hedging instruments on the Condensed Consolidated Statements of Operations:

		Successor					Predecessor
(In millions)	Location of Derivative Pre-tax Gain (Loss)	Three months ended June 30, 2018		Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017
Emergence Date Warrants	Other income (expense), net	$	6	$	(9	)	$	—

The Company records its derivatives on a gross basis in the Condensed Consolidated Balance Sheets. The Company has master netting agreements with several of its financial institution counterparties. The following table provides information on the Company's derivative positions as if those subject to master netting arrangements were presented on a net basis, allowing for the right to offset by counterparty per the master netting agreements:

	Successor				Predecessor
	June 30, 2018				September 30, 2017
(In millions)	Asset		Liability		Asset		Liability
Gross amounts recognized in the consolidated balance sheet	$	—	$	42	$	—	$	—
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet	—		—		—		—
Net amounts	$	—	$	42	$	—	$	—

11. Fair Value Measures

Pursuant to the accounting guidance for fair value measurements, fair value is 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.

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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 June 30, 2018 (Successor) and September 30, 2017 (Predecessor) were as follows:

	Successor
	June 30, 2018
	Fair Value Measurements Using
(In millions)	Total		Level 1		Level 2		Level 3
Other Non-Current Assets:
Investments	$	2	$	2	$	—	$	—
Liabilities:
Interest rate contracts	$	16	$	—	$	16	$	—
Spoken acquisition Earn-outs	15		—		—		15
Emergence Date Warrants	26		—		—		26
Total liabilities	$	57	$	—	$	16	$	41

	Predecessor
	September 30, 2017
	Fair Value Measurements Using
(In millions)	Total		Level 1		Level 2		Level 3
Other Non-Current Assets:
Investments	$	1	$	1	$	—	$	—

Investments

Investments classified as Level 1 assets are priced using quoted market prices for identical assets in active markets that are observable.

Interest rate contracts

Interest rate contracts classified as Level 2 liabilities are not actively traded and are valued using pricing models that use observable inputs.

Spoken acquisition Earn-outs

The Spoken acquisition Earn-outs classified as Level 3 liabilities are measured using a probability-weighted discounted cash flow model. Significant unobservable inputs, which included probability of the achievement of the earn out targets and discount rate assumption, reflected the assumptions market participants would use in valuing these liabilities.

Emergence Date Warrants

Emergence Date Warrants classified as Level 3 liabilities are priced using the Black-Scholes option pricing model. The change in fair value of the Emergence Date Warrants is recognized in Other income (expense), net in the Condensed Consolidated Statements of Operations.

During fiscal 2018, there were no transfers between Level 1 and Level 2, or into and out of Level 3.

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The following table summarizes the activity for the Company's Level 3 liabilities measured at fair value on a recurring basis:

(In millions)	Emergence Date Warrants			Spoken Acquisition Earn-outs		Total
September 30, 2017 (Predecessor)	$	—		$	—	$	—
Issuance of Emergence Date Warrants	17			—		17
December 15, 2017 (Predecessor)	$	17		$	—	$	17
December 16, 2017 (Successor)	$	17		$	—	$	17
Contingent consideration	—			14		14
Change in fair value(1)	15			—		15
March 31, 2018 (Successor)	32			14		46
Accretion of interest(1)	—			1		1
Change in fair value(1)	(6		)	—		(6		)
June 30, 2018 (Successor)	$	26		$	15	$	41

⁽¹⁾ Changes in fair value of the Emergence Date Warrants and accretion of interest on the Spoken acquisition earn-outs are included in Other income (expense), net.

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.

As of June 30, 2018 (Successor), the estimated fair value of the Convertible Notes was determined based on the quoted price of the Convertible Notes in an inactive market on the last trading day of the reporting period and has been classified as Level 2.

The estimated fair values of amounts borrowed under the Company’s other financing arrangements at June 30, 2018 (Successor) and September 30, 2017 (Predecessor) were estimated based on a Level 2 input based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices.

The estimated fair values of the amounts borrowed under the Company’s financing agreements at June 30, 2018 (Successor) and September 30, 2017 (Predecessor) are as follows:

	Successor				Predecessor
	June 30, 2018				September 30, 2017
(In millions)	Principal Amount		Fair Value		Principal Amount		Fair Value
Term Loan Credit Agreement due December 15, 2024	$	2,910	$	2,919	$	—	$	—
Convertible 2.25% senior notes due June 15, 2023	350		342		—		—
DIP Credit Agreement due January 19, 2018	—		—		725		732
Variable rate Term B-3 Loans due October 26, 2017	—		—		594		503
Variable rate Term B-4 Loans due October 26, 2017	—		—		1		1
Variable rate Term B-6 Loans due March 31, 2018	—		—		519		440
Variable rate Term B-7 Loans due May 29, 2020	—		—		2,012		1,709
7% senior secured notes due April 1, 2019	—		—		982		832
9% senior secured notes due April 1, 2019	—		—		284		241
10.50% senior secured notes due March 1, 2021	—		—		1,440		67
Total	$	3,260	$	3,261	$	6,557	$	4,525

The Company adjusted the carrying value of debt to fair value upon application of fresh start accounting.

12. Income Taxes

For the period from October 1, 2017 through December 15, 2017 (Predecessor), the difference between the Company’s recorded provision and the provision that would result from applying the U.S. statutory rate of 35% was primarily attributable

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to: (1) income and losses taxed at different foreign tax rates, (2) losses generated within certain foreign jurisdictions for which no benefit was recorded because it is more likely than not that the tax benefits would not be realized, (3) non-U.S. withholding taxes on foreign earnings, (4) current period changes to unrecognized tax positions, (5) U.S. state and local income taxes, and (6) the impact of reorganization and fresh start adjustments.

For the three months ended June 30, 2018 (Successor) and the period from December 16, 2017 through June 30, 2018 (Successor), the difference between the Company’s recorded (provision) benefit and the benefit that would result from applying the new U.S. statutory rate of 24.5%, was primarily attributable to: (1) income and losses taxed at different foreign tax rates, (2) losses generated within certain foreign jurisdictions for which no benefit was recorded because it is more likely than not that the tax benefits would not be realized, (3) non-U.S. withholding taxes on foreign earnings, (4) current period changes to unrecognized tax positions, (5) U.S. state and local income taxes, (6) an increase in estimated current year tax loss, which is eliminated as part of the attribute reduction related to the cancellation of indebtedness income (“CODI”), and (7) the impact of the Tax Cuts and Jobs Act (“the Act”), which only affects the December 16, 2017 through June 30, 2018 (Successor) period. The Act and CODI are more fully described below.

For the three months ended June 30, 2017 (Predecessor) and the nine months ended June 30, 2017 (Predecessor), the difference between the Company’s recorded benefit and the benefit that would result from applying the U.S. statutory rate of 35% was primarily attributable to: (1) income and losses taxed at different foreign tax rates, (2) losses generated within certain foreign jurisdictions for which no benefit was recorded because it is more likely than not that the tax benefits would not be realized, (3) non-U.S. withholding taxes on foreign earnings, (4) current period changes to unrecognized tax positions, (5) U.S. state and local income taxes, and (6) changes in the valuation allowance established against the Company’s deferred tax assets.

Under the Plan of Reorganization, a substantial amount of the Company’s debt was extinguished. Absent an exception, a debtor recognizes CODI upon discharge of its outstanding indebtedness for an amount of consideration that is less than its adjusted issue price. The Internal Revenue Code of 1986, as amended, provides that a debtor in a bankruptcy case may exclude CODI from taxable income but must reduce certain of its tax attributes by the amount of any CODI recognized as a result of the consummation of the Plan of Reorganization. The amount of CODI recognized by a taxpayer is the adjusted issue price of any indebtedness discharged less the sum of (i) the amount of cash paid, (ii) the issue price of any new indebtedness issued and (iii) the fair market value of any other consideration, including equity, issued. The reduction in tax attributes does not occur until the first day of the Company’s first tax year subsequent to the date of emergence, which is October 1, 2018. The Company estimates that the U.S. federal net operating loss (“NOL”) and tax credits disclosed in its September 30, 2017 Consolidated Financial Statements and the tax loss generated during the September 30, 2018 tax year will be eliminated on October 1, 2018. The Company estimates that $92 million of the tax loss generated during the period from October 1, 2017 through December 15, 2017 (Predecessor) will be absorbed by taxable income generated during the period from December 16, 2017 through September 30, 2018 (Successor). These estimates are subject to revision and any changes in the estimates will affect income or loss from continuing operations in the fiscal year ending September 30, 2018.

Prior to September 30, 2017, a full valuation allowance was established in any jurisdiction that had a net deferred tax asset. A portion of the U.S. valuation allowance in the amount of $787 million was reversed as part of the reorganization adjustments as it was previously established against (i) the NOL and tax credits, which will be eliminated as a result of the CODI rules and (ii) other deferred tax assets that were previously established for liabilities that were discharged in the Plan of Reorganization and eliminated as part of the reorganization adjustments. The valuation allowance in the amount of $47 million was reversed in certain non-U.S. jurisdictions as part of the reorganization adjustments as management concluded it is more likely than not that the related deferred tax assets will be realized. The remaining U.S. valuation allowance in the amount of $461 million was reversed as part of the fresh start adjustments because management concluded it is more likely than not that the deferred tax assets will be realized primarily due to future sources of taxable income that will be generated by the reversal of deferred tax liabilities established in the fresh start adjustments.

On December 22, 2017, the Act was signed into law. The Act lowered the U.S. federal corporate tax rate from 35% to 21% effective January 1, 2018. Corporations with a fiscal year-end that is not a calendar year but includes January 1, 2018 are subject to a blended tax rate based on the number of days in the fiscal year before and after January 1, 2018. The Company has a September 30^th tax year-end and therefore the U.S. federal tax rate for the fiscal year ending September 30, 2018 is 24.5%.

The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) on December 22, 2017, which provided guidance to registrants on the accounting for tax related impacts under the Act.  The guidance provides a measurement period of up to one year after the enactment date for companies to complete the tax accounting implications of the Act.  As of the first quarter, the Company has provided a provisional estimate related to the revaluation of its deferred taxes and the deemed repatriation of unremitted foreign earnings. The Company will continue to refine its estimate, which could result in a material adjustment, given additional guidance under the Act, interpretations, available information and assumptions made by the Company. As a fiscal year-end tax filer, we are subject to various provisions under the Act for fiscal 2018, including the change to the U.S. federal statutory tax rate and the mandatory deemed repatriation of unremitted foreign earnings. Beginning in the Company's 2019

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fiscal year, various other newly enacted provisions will become effective, including provisions that may result in the current U.S. taxation of certain income earned by the Company’s foreign subsidiaries. The FASB has published guidance (Topic 740, No. 5), regarding how to account for the Global Intangible Low-Taxed Income (“GILTI”) provisions included in the Act. The guidance states that a company may make a policy decision with respect to the accounting for taxes related to GILTI and whether deferred taxes should be established. The Company estimates that it will generate income that may be taxed as GILTI beginning in fiscal 2019. On a provisional basis, no deferred taxes have been established for GILTI as of June 30, 2018.

The Company does not expect to incur a cash tax liability with respect to the one-time tax on foreign earnings due to historical foreign deficits. The Company previously established a deferred tax liability for non-U.S. withholding taxes to be incurred upon the remittance of foreign earnings. The Condensed Consolidated Financial Statements for the Predecessor and Successor periods include an adjustment for such withholding taxes attributable to current period earnings. In prior periods, the Company established a U.S. deferred income tax liability for certain foreign earnings under the assumption that such earnings would be remitted to the U.S. This deferred tax liability has been adjusted in the Successor period based on the taxation of such earnings under the Act.

A net deferred tax liability was established at the U.S. federal tax rates in effect on December 15, 2017 as part of fresh start accounting for U.S. book-to-tax differences. These deferred taxes are primarily related to differences arising from recording intangible and other assets at fair market value. As of the December 22, 2017 enactment date of the Act, deferred taxes were adjusted to reflect the new tax rates in effect as of the date the deferred tax amounts are expected to be realized.

The provisional amount of the reduction to the net deferred tax liability as a result of the Act is $242 million and has been recorded as an income tax benefit from continuing operations in the period from December 16, 2017 through June 30, 2018 (Successor).

13. Benefit Obligations

The Company sponsors non-contributory defined benefit pension plans covering a portion of its U.S. employees and retirees, and post-retirement 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.

Effective January 25, 2018, the Company and the Communications Workers of America (“CWA”) and the International Brotherhood of Electrical Workers (“IBEW”), agreed to extend the 2009 Collective Bargaining Agreement (“CBA”), previously extended through June 14, 2018, until September 21, 2019. The contract extensions did not affect the Company’s obligation for pension and post-retirement benefits available to U.S. employees of the Company who are represented by the CWA or IBEW (“represented employees”).

In September 2015, the Company amended the post-retirement medical plan for represented retirees effective January 1, 2017, to replace medical coverage through the Company’s group plan for represented retirees who are retired as of October 15, 2015 and their eligible dependents, with medical coverage through the private and public insurance marketplace. The change allows the existing retirees to choose insurance from the marketplace and receive financial support from the Company toward the cost of coverage through a Health Reimbursement Arrangement ("HRA").

On December 15, 2017, the APPSE, a qualified pension plan, was settled with the PBGC. At that time, the Company and the PBGC executed a termination and trusteeship agreement to terminate the APPSE and to appoint the PBGC as the statutory trustee of the plan. The Company also paid settlement consideration to the PBGC consisting of $340 million in cash and 6.1 million shares of Successor Company common stock (fair value of $92 million). With this payment, any accrued but unpaid minimum funding contributions due were deemed to have been paid in full. As a result of the plan termination on December 15, 2017, the Company's projected benefit obligation and pension trust assets were reduced by $2,192 million and $1,573 million, respectively. Including the settlement consideration and $703 million of Accumulated other comprehensive loss recorded in the Condensed Consolidated Balance Sheet, a settlement loss of $516 million was recorded in Reorganization items, net in the Condensed Consolidated Statement of Operations for the period from October 1, 2017 through December 15, 2017 (Predecessor).

On December 15, 2017, the unfunded ASPP, a non-qualified excess benefit pension plan, was also terminated and settled. Benefit liabilities for ASPP participants were included as allowed claims in the general unsecured recovery pool. Settlement consideration of $17 million in the form of allowed claims payable to ASPP participants was estimated based upon claims data as of the Emergence Date as amounts due to individual general unsecured creditors had not been finalized and paid. As a result of the termination, the Company's projected benefit obligation was reduced by $88 million. Including the settlement consideration and $18 million of Accumulated other comprehensive loss recorded in the Condensed Consolidated Balance Sheet, a settlement gain of $53 million was recorded in Reorganization items, net in the Condensed Consolidated Statements of Operations for the period from October 1, 2017 through December 15, 2017 (Predecessor).

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The components of the pension and post-retirement net periodic benefit (credit) cost for the periods indicated are provided in the tables below:

	Successor			Predecessor			Successor			Predecessor
(In millions)	Three months ended June 30, 2018			Three months ended June 30, 2017			Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
Pension Benefits - U.S.
Components of Net Periodic Benefit (Credit) Cost
Service cost	$	1		$	1		$	2		$	1		$	3
Interest cost	9			24			19			22			73
Expected return on plan assets	(17		)	(44		)	(35		)	(38		)	(134		)
Amortization of unrecognized prior service cost	—			—			—			—			1
Amortization of previously unrecognized net actuarial loss	—			26			—			20			77
Settlement loss(1)	—			—			—			—			—
Net periodic benefit (credit) cost	$	(7	)	$	7		$	(14	)	$	5		$	20

⁽¹⁾ Excludes Plan of Reorganization related settlements that were recorded in Reorganization items, net in the Condensed Consolidated Statements of Operations.

	Successor		Predecessor		Successor		Predecessor
(In millions)	Three months ended June 30, 2018		Three months ended June 30, 2017		Period from December 16, 2017 through June 30, 2018		Period from October 1, 2017 through December 15, 2017		Nine months ended June 30, 2017
Pension Benefits - Non-U.S.
Components of Net Periodic Benefit Cost
Service cost	$	1	$	1	$	3	$	2	$	5
Interest cost	3		2		5		3		6
Expected return on plan assets	—		—		—		—		(1		)
Amortization of previously unrecognized net actuarial loss	—		4		—		1		12
Net periodic benefit cost	$	4	$	7	$	8	$	6	$	22

	Successor			Predecessor			Successor			Predecessor
(In millions)	Three months ended June 30, 2018			Three months ended June 30, 2017			Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
Post-retirement Benefits - U.S.
Components of Net Periodic Benefit Cost (Credit)
Service cost	$	1		$	—		$	1		$	—		$	1
Interest cost	4			4			7			3			10
Expected return on plan assets	(3		)	(2		)	(5		)	(2		)	(7		)
Amortization of unrecognized prior service cost	—			(5		)	—			(3		)	(13		)
Amortization of previously unrecognized net actuarial loss	—			3			—			2			9
Curtailment	—			—			—			—			(4		)
Net periodic benefit cost (credit)	$	2		$	—		$	3		$	—		$	(4	)

The service components of net periodic benefit cost (credit) are recorded similar to compensation expense, while all other components are recorded in Other income (expense), net.

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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 laws and regulations, or to directly pay benefits where appropriate. As a result of the Bankruptcy Filing in January 2017, there was an automatic stay on the Company's contributions to the U.S. pension plans during fiscal 2017. Therefore, the minimum funding requirements for the U.S. pension plans were not met during fiscal 2017.

The Plan of Reorganization included contributions to or settlements of all U.S. pension plans, which are the Avaya Pension Plan for Represented Employees ("APP"), the APPSE and the ASPP. On December 15, 2017, the Company paid the aggregate unpaid required minimum funding for the APP, a qualified plan, of $49 million.

Remeasurement as a result of fresh start accounting increased the APP and other post-retirement benefit plan obligations by $3 million on December 15, 2017.

The Company made $22 million in contributions to satisfy minimum statutory funding requirements for its U.S funded defined benefit pension plans for the period from December 16, 2017 through June 30, 2018 (Successor) and no contributions to satisfy minimum statutory funding requirements for its U.S. funded defined benefit pension plans for the period from October 1, 2017 through December 15, 2017 (Predecessor), exclusive of the payments discussed above as part of the Plan of Reorganization for the APP and settlement consideration to the PBGC for the APPSE. Estimated payments to satisfy minimum statutory funding requirements for the remainder of fiscal 2018 are $20 million.

The Company provides for certain pension benefits for non-U.S. employees, the majority of which are not pre-funded. The Company made payments for these non-U.S. pension benefits for the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor) totaling $19 million and $3 million, respectively. Estimated payments for these non-U.S. pension benefits for the remainder of fiscal 2018 are $6 million.

During the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor), the Company contributed $2 million and $2 million, respectively, to the represented employees’ post-retirement health trust to fund current benefit claims and costs of administration in compliance with the terms of the CBA, as extended through September 21, 2019. It is anticipated that there will be $3 million estimated payments under the terms of the 2009 agreement as extended for the remainder of fiscal 2018.

The Company also provides certain retiree medical benefits for U.S. employees through an HRA, which are not pre-funded. Consequently, the Company makes payments as these benefits are disbursed. For the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor), the Company made payments totaling $1 million and $0 million, respectively, for these retiree medical benefits. It is anticipated that there will be no additional payments made for the remainder of fiscal 2018.

14. Share-based Compensation

The Predecessor Company's common and preferred stock were cancelled and new common stock was issued on the Emergence Date. Accordingly, the Predecessor Company's then existing share-based compensation awards were also cancelled, which resulted in the recognition of any previously unamortized expense on the date of cancellation. Share-based compensation for the Successor and Predecessor periods are not comparable.

Successor

Pursuant to terms of the Plan of Reorganization, the Avaya Holdings Corp. 2017 Equity Incentive Plan ("2017 Equity Incentive Plan") became effective on the Emergence Date.

The Successor Company's Board of Directors or any committee duly authorized thereby will administer the 2017 Equity Incentive Plan. The administrator has broad authority to, among other things: (i) select participants; (ii) determine the types of awards that participants are to receive and the number of shares that are to be granted under such awards; and (iii) establish the terms and conditions of awards, including the price to be paid for the shares or the award.

Persons eligible to receive awards under the 2017 Equity Incentive Plan include non-employee directors, employees of the Successor Company or any of its affiliates, and certain consultants and advisors to the Successor Company or any of its affiliates. The types of awards that may be granted under the 2017 Equity Incentive Plan include stock options, restricted stock, restricted stock units, performance awards and other forms of awards granted or denominated in shares of Successor common stock, as well as certain cash-based awards.

The maximum number of shares of common stock that may be issued or granted under the 2017 Equity Incentive Plan is 7,381,609 shares. If any option or other stock-based award granted under the 2017 Equity Incentive Plan expires, terminates or is cancelled for any reason without having been exercised in full, the number of shares of common stock underlying any unexercised award will again be available for the purpose of awards under the 2017 Equity Incentive Plan. If any shares of

39

restricted stock, performance awards or other stock-based awards denominated in shares of common stock awarded under the 2017 Equity Incentive Plan to a participant are forfeited for any reason, the number of forfeited shares of restricted stock, performance awards or other stock-based awards denominated in shares of common stock will again be available for purposes of awards under the 2017 Equity Incentive Plan. Any award under the 2017 Equity Incentive Plan settled in cash will not be counted against the foregoing maximum share limitations. Shares withheld by the Company in satisfaction of the applicable exercise price or withholding taxes upon the issuance, vesting or settlement of awards, in each case, shall not be available for future issuance under the 2017 Equity Incentive Plan.

The aggregate grant date fair value of all awards granted to any non-employee director during any calendar year (excluding awards made pursuant to deferred compensation arrangements made in lieu of all or a portion of cash retainers and any dividends payable in respect of outstanding awards) may not exceed $750,000.

On the Emergence Date, share-based compensation awards granted by the Company consisted of 3,440,528 restricted stock units and 1,146,835 non-qualified stock options to executives and other employees. The fair value of the premium-priced stock options granted on the Emergence Date was determined using a lattice option pricing model. The awards are subject to time-based vesting.

The Black-Scholes option pricing model is used to value Successor stock options for all options granted thereafter. The valuation assumptions include the following: (1) expected term based on the vesting terms of the option and a contractual life of ten years; (2) volatility based on peer group companies adjusted for the Company's leverage; (3) risk-free interest rate based on U.S. Treasury yields with a term equal to the expected option term; and (4) dividend yield assumed to be zero as the Company does not anticipate paying dividends.

In addition to the above Emergence Date grants, the Company granted 422,532 restricted stock units and 87,065 non-qualified stock options for the period from December 16, 2017 through June 30, 2018. Cancellations of restricted stock units and non-qualified stock options were 291,725 and 89,281, respectively, for the period from December 16, 2017 through June 30, 2018, which were added back to the 2017 Equity Incentive Plan for future issuance.

The following assumptions were used in calculating the fair value of the options granted for the period from December 16, 2017 through June 30, 2018:

	Range
Exercise price	$	19.46		-	$	21.79
Expected volatility(1)	49.25		%	-	56.59		%
Expected life (in years)(2)	5.86 years			-	6.65 years
Risk-free interest rate(3)	2.35		%	-	2.95		%
Dividend yield(4)					—		%

⁽¹⁾ Expected volatility based on peer group companies adjusted for the Company's leverage.

⁽²⁾ Expected life based on the vesting terms of the option and a contractual life of ten years.

⁽³⁾ Risk-free interest rate based on U.S. Treasury yields with a term equal to the expected option term.

⁽⁴⁾ Dividend yield was assumed to be zero as the Company does not anticipate paying dividends.

As of June 30, 2018, there were 2,665,655 shares remaining under the 2017 Equity Incentive Plan available to be granted.

Share-based compensation expense recorded for the three months ended June 30, 2018 and the period from December 16, 2017 through June 30, 2018 was $7 million and $13 million, respectively. As of the Emergence Date, forfeitures are accounted for as incurred.

Predecessor

Prior to the Emergence Date, the Predecessor Company had granted share-based awards that were cancelled upon emergence from bankruptcy. In conjunction with the cancellation, the Predecessor Company accelerated the unrecognized share-based compensation expense and recorded $3 million of compensation expense in the period from October 1, 2017 through December 15, 2017 principally in reorganization costs.

Share-based compensation expense recorded for the three and nine months endedJune 30, 2017 was $4 million and $10 million, respectively.

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15. Capital Stock

Successor

Preferred Stock. The Successor Company's certificate of incorporation authorizes it to issue up to 55.0 million shares of preferred stock with a par value of $0.01 per share. As of June 30, 2018, there were no preferred shares issued or outstanding.

Common Stock. The Successor Company's certificate of incorporation authorizes it to issue up to 550.0 million shares of common stock with a par value of $0.01 per share. As of June 30, 2018, there were 110.2 million shares issued and 110.0 million outstanding with the remaining 0.2 million shares distributable in accordance with the Plan of Reorganization.

Predecessor

In connection with the Company's Plan of Reorganization and emergence from bankruptcy, all equity interests in the Predecessor Company were cancelled, including preferred and common stock, warrants and equity-based awards.

16. Earnings (Loss) Per Common Share

Basic earnings per share is calculated by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share reflects the potential dilution that would occur if equity awards granted under the various share-based compensation plans were vested or exercised, if the Company's Convertible Notes or Call Spread Warrants were exercised, and/or if the Emergence Date Warrants were exercised, resulting in the issuance of common shares that would participate in the earnings of the Company.

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The following table sets forth the calculation of net (loss) income attributable to common shareholders and the computation of basic and diluted (loss) earnings per share for the periods indicated:

	Successor			Predecessor			Successor			Predecessor
(In millions, except per share amounts)	Three months ended June 30, 2018			Three months ended June 30, 2017			Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
Net (loss) income per share:
Numerator
Net (loss) income	$	(88	)	$	(98	)	$	19		$	2,977		$	(209	)
Dividends to preferred stockholders	—			(8		)	—			(6		)	(23		)
Undistributed earnings	(88		)	(106		)	19			2,971			(232		)
Percentage allocated to common stockholders(1)	100.0		%	100.0		%	100.0		%	86.9		%	100.0		%
Numerator for basic and diluted earnings per common share	$	(88	)	$	(106	)	$	19		$	2,582		$	(232	)
Denominator
Denominator for basic earnings per weighted average common shares	109.8			497.2			109.8			497.3			497.0
Effect of dilutive securities
Restricted stock units	—			—			1.2			—			—
Stock options	—			—			—			—			—
Convertible Notes	—			—			—			—			—
Call Spread Warrants	—			—			—			—			—
Emergence Date Warrants	—			—			—			—			—
Denominator for diluted earnings per weighted average common shares	109.8			497.2			111.0			497.3			497.0
Per common share net (loss) income
Basic	$	(0.80	)	$	(0.22	)	$	0.17		$	5.19		$	(0.47	)
Diluted	$	(0.80	)	$	(0.22	)	$	0.17		$	5.19		$	(0.47	)
(1) Basic weighted average common stock outstanding	109.8			497.2			109.8			497.3			497.0
Basic weighted average common stock and common stock equivalents (preferred shares)	109.8			497.2			109.8			572.4			497.0
Percentage allocated to common stockholders	100.0		%	100.0		%	100.0		%	86.9		%	100.0		%

For the three months ended June 30, 2018, the Company excluded 1.1 million stock options, 3.3 million restricted stock units, and 5.6 million Emergence Date Warrants to purchase common shares from the diluted earnings per share calculation as their effect would be anti-dilutive. For the period from December 16, 2017 through June 30, 2018, the Company excluded 1.1 million stock options, and 5.6 million Emergence Date Warrants to purchase common shares from the diluted earnings per share calculation as their effect would be anti-dilutive.

For purposes of considering the Convertible Notes in determining diluted earnings per share, it is the current intent of the Company to settle conversions of the Convertible Notes through combination settlement by repaying the principal portion in cash and any excess of the conversion value over the principal amount (the “Conversion Premium”) in shares of the Company's common stock. Therefore, only the impact of the Conversion Premium will be included in diluted weighted average shares outstanding using the treasury stock method. Since the Convertible Notes were out of the money and anti-dilutive as of June 30, 2018, they were excluded from the diluted earnings per share calculation for the three months ended June 30, 2018 and the period from December 16, 2017 through June 30, 2018. The Call Spread Warrants sold in connection with the issuance of the Convertible Notes will not be considered in calculating diluted weighted average shares outstanding until the price per share of the Company’s common stock exceeds the strike price of $37.3625 per share. When the price per share of the Company’s common stock exceeds the strike price per share of the Call Spread Warrants, the effect of the additional shares that may be

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issued upon exercise of the Call Spread Warrants will be included in diluted weighted average shares outstanding using the treasury stock method. The Bond Hedge purchased in connection with the issuance of the Convertible Notes is considered to be anti-dilutive and therefore does not impact the Company’s calculation of diluted earnings per share. Refer to Note 9, "Financing Arrangements”,for further discussion regarding the Convertible Notes.

17. Operating Segments

The GCS segment primarily develops, markets, and sells unified communications and contact center solutions, offered on premises, in the cloud, or as a hybrid solution. These integrate multiple forms of communications, including telephony, email, instant messaging and video. The AGS segment develops, markets and sells comprehensive end-to-end global service offerings that enable customers to evaluate, plan, design, implement, monitor, manage and optimize complex enterprise communications networks. The Networking segment portfolio of software and hardware products offered integrated networking products.

On July 14, 2017, the Company sold its Networking business to Extreme. Prior to the sale, the Company had three separate operating segments. After the sale, the Company has two operating segments, GCS consisting of the Company's products portfolio and AGS consisting of the Company's services portfolio. Both GCS and Networking made up the Company’s Enterprise Collaboration Solutions ("ECS") products portfolio.

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 fair value adjustments recognized upon emergence from bankruptcy, charges relating to restructuring actions, impairment charges, and merger-related costs as these costs are not core to the measurement of segment performance, but rather are controlled at the corporate level.

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Summarized financial information relating to the Company’s operating segments is shown in the following table for the periods indicated:

	Successor			Predecessor			Successor			Predecessor
(In millions)	Three months ended June 30, 2018			Three months ended June 30, 2017			Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
REVENUE
Global Communications Solutions	$	322		$	302		$	716		$	253		$	957
Avaya Networking (1)	—			43			—			—			137
Enterprise Collaboration Solutions	322			345			716			253			1,094
Avaya Global Services	433			458			967			351			1,388
Unallocated amounts (2)	(63		)	—			(171		)	—			—
	$	692		$	803		$	1,512		$	604		$	2,482
GROSS PROFIT
Global Communications Solutions	$	210		$	210		$	473		$	169		$	653
Avaya Networking (1)	—			14			—			—			47
Enterprise Collaboration Solutions	210			224			473			169			700
Avaya Global Services	257			274			582			196			828
Unallocated amounts (3)	(115		)	(5		)	(302		)	(3		)	(16		)
	352			493			753			362			1,512
OPERATING EXPENSES
Selling, general and administrative	281			295			613			264			923
Research and development	51			59			110			38			178
Amortization of intangible assets	39			57			86			10			170
Impairment of indefinite-lived intangible assets	—			65			—			—			65
Goodwill impairment	—			52			—			—			52
Restructuring charges, net	30			8			80			14			22
	401			536			889			326			1,410
OPERATING (LOSS) INCOME	(49		)	(43		)	(136		)	36			102
INTEREST EXPENSE, OTHER INCOME (EXPENSE), NET AND REORGANIZATION ITEMS, NET	(19		)	(61		)	(80		)	3,400			(333		)
(LOSS) INCOME BEFORE INCOME TAXES	$	(68	)	$	(104	)	$	(216	)	$	3,436		$	(231	)

⁽¹⁾ The Networking business was sold on July 14, 2017.

⁽²⁾ Unallocated amounts in Revenue represent the fair value adjustment to deferred revenue recognized upon emergence from bankruptcy and excluded from segment revenue.

⁽³⁾ Unallocated amounts in Gross Profit include the fair value adjustments recognized upon emergence from bankruptcy and excluded from segment gross profit; the effect of the amortization of technology intangibles; and costs that are not core to the measurement of segment management’s performance, but rather are controlled at the corporate level.

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18. Accumulated Other Comprehensive Loss

Changes in Accumulated other comprehensive loss for the periods indicated were as follows:

(In millions)	Foreign Currency Translation			Interest Rate Swaps			Total
Balance at March 31, 2018 (Successor)	$	(25	)	$	—		$	(25	)
Other comprehensive income (loss) before reclassifications	(4		)	(17		)	(21		)
Amounts reclassified to earnings	—			2			2
Benefit from income taxes	—			3			3
Balance at June 30, 2018 (Successor)	$	(29	)	$	(12	)	$	(41	)

(In millions)	Unamortized pension, post-retirement and postemployment benefit-related items			Foreign Currency Translation			Interest Rate Swaps			Other			Total
Balance at September 30, 2017 (Predecessor)	$	(1,375	)	$	(72	)	$	—		$	(1	)	$	(1,448	)
Other comprehensive (loss) income before reclassifications	(24		)	3			—			—			(21		)
Amounts reclassified to earnings	16			—			—			—			16
Pension settlement	721			—			—			—			721
Provision for income taxes	(58		)	—			—			—			(58		)
Balance at December 15, 2017 (Predecessor)	(720		)	(69		)	—			(1		)	(790		)
Elimination of Predecessor Company accumulated other comprehensive loss	720			69			—			1			790
Balance at December 15, 2017 (Predecessor)	$	—		$	—		$	—		$	—		$	—
Balance at December 16, 2017 (Successor)	$	—		$	—		$	—		$	—		$	—
Other comprehensive loss before reclassifications	—			(29		)	(17		)	—			(46		)
Amounts reclassified to earnings	—			—			2			—			2
Benefit from income taxes	—			—			3			—			3
Balance at June 30, 2018 (Successor)	$	—		$	(29	)	$	(12	)	$	—		$	(41	)

(In millions)	Unamortized pension, postretirement and postemployment benefit-related items			Foreign Currency Translation			Other			Total
Balance at March 31, 2017 (Predecessor)	$	(1,598	)	$	(7	)	$	(1	)	$	(1,606	)
Other comprehensive loss before reclassifications	—			(42		)	—			(42		)
Amounts reclassified to earnings	26			—			—			26
Provision for income taxes	(1		)	(2		)	—			(3		)
Balance at June 30, 2017 (Predecessor)	$	(1,573	)	$	(51	)	$	(1	)	$	(1,625	)

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(In millions)	Unamortized pension, post-retirement and postemployment benefit-related items			Foreign Currency Translation			Other			Total
Balance at September 30, 2016 (Predecessor)	$	(1,627	)	$	(33	)	$	(1	)	$	(1,661	)
Other comprehensive income before reclassifications	—			(17		)	—			(17		)
Amounts reclassified to earnings	70			—			—			70
Provision for income taxes	(16		)	(1		)	—			(17		)
Balance at June 30, 2017 (Predecessor)	$	(1,573	)	$	(51	)	$	(1	)	$	(1,625	)

The amounts reclassified out of Accumulated other comprehensive loss for the unamortized pension, post-retirement and postemployment benefit-related items are recorded in Other income (expense), net in the Condensed Consolidated Statement of Operations. The amounts reclassified out of Accumulated other comprehensive loss for the interest rate swaps are recorded in Interest expense in the Condensed Consolidated Statements of Operations.

19. Related Party Transactions

Pursuant to the Plan of Reorganization confirmed by the Bankruptcy Court, the Successor Company's Board of Directors is comprised of seven directors, including the Successor Company's Chief Executive Officer, James M. Chirico, Jr., and six non-employee directors, William D. Watkins, Ronald A. Rittenmeyer, Stephan Scholl, Susan L. Spradley, Stanley J. Sutula, III and Scott D. Vogel. With the resignation of Mr. Rittenmeyer effective April 29, 2018, the Company's Board of Directors currently has one vacancy.

Specific Arrangements Involving the Company’s Directors and Executive Officers

Laurent Philonenko is a Senior Vice President of Avaya Holdings and he served as an Advisor to Koopid, Inc., a software development company specializing in mobile communications, from February 2017 through February 2018. For the period from December 16, 2017 through June 30, 2018, the Company purchased goods and services from Koopid, Inc. of $1 million.

Ronald A. Rittenmeyer was a Director of Avaya Holdings through April 29, 2018. While he was a Director of Avaya Holdings, Mr. Rittenmeyer served on the board of directors of American International Group, Inc. (“AIG”), a global insurance organization. For the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor), sales of the Company’s products and services to AIG were $5 million and $2 million, respectively.

William D. Watkins is a director and Chair of the Board of Directors of Avaya Holdings. Mr. Watkins currently serves on the board of directors of Flex Ltd., an electronics design manufacturer. For the period from December 16, 2017 through June 30, 2018 (Successor), the period from October 1, 2017 through December 15, 2017 (Predecessor) and for fiscal 2017, the Company purchased goods and services from subsidiaries of Flex Ltd. of $13 million, $6 million and $38 million, respectively.

Specific Arrangements Among the Predecessor Company, Silver Lake Partners and TPG Capital and their Affiliates

In connection with the Plan of Reorganization, all agreements between the Predecessor Company and Silver Lake Partners, TPG Capital and their respective affiliates (collectively, the "Predecessor Sponsors") were terminated on the Emergence Date, including the stockholders' agreement, registration rights agreement and management services agreement. In addition, all Predecessor Company equity held by the Predecessor Sponsors was cancelled. No fees were paid to the Predecessor Sponsors in the period from October 1, 2017 through December 15, 2017 (Predecessor).

20. Commitments and Contingencies

Legal Proceedings

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 below 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

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(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.

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.

The Company believes that it has meritorious defenses in connection with its current lawsuits and material claims and disputes, and intends to vigorously contest each of them.

Based on the Company's experience, management believes that the damages amounts claimed in a case are not a meaningful indicator of the potential liability. Claims, suits, investigations and proceedings are inherently uncertain and it is not possible to predict the ultimate outcome of cases.

Other than as described below, in the opinion of the Company's management based upon information currently available to the Company, while the outcome of these lawsuits, claims and disputes is uncertain, the likely results of these lawsuits, claims and disputes are not expected, either individually or in the aggregate, to have a material adverse effect on the Company's financial position, results of operations or cash flows, although the effect could be material to the Company's consolidated results of operations or consolidated cash flows for any interim reporting period.

During the period from December 16, 2017 through June 30, 2018 (Successor), the period from October 1, 2017 through December 15, 2017 (Predecessor) and the nine months ended June 30, 2017 (Predecessor), costs incurred in connection with certain legal matters were $0 million, $37 million and $0 million, respectively.

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. (“TLI/Continuant”) 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 asserted in its amended complaint that, among other things, defendants, or each of them, engaged in tortious conduct 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. TLI/Continuant filed counterclaims against the Company 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. TLI/Continuant sought to recover the profits they claim they would have earned from maintaining Avaya's products, and asked for injunctive relief prohibiting the conduct they claim is anticompetitive. 

The trial commenced on September 9, 2013. On January 7, 2014, the Court issued an order dismissing the Company's affirmative claims. With respect to TLI/Continuant’s counterclaims, on March 27, 2014, a jury found against the Company on two of eight claims and awarded damages of $20 million. Under the federal antitrust laws, the jury’s award is subject to automatic trebling, or $60 million.

Following the jury verdict, TLI/Continuant sought an injunction regarding the Company’s ongoing business operations. On June 30, 2014, a federal judge rejected the demands of TLI/Continuant’s proposed injunction and stated that “only a narrow injunction is appropriate.” Instead, the judge issued an order relating to customers who purchased an Avaya PBX system between January 1, 1990 and April 30, 2008 only. Those customers and their agents will have free access to the on demand maintenance commands that were installed on their systems at the time of the purchase transaction. The court specified that this right “does not extend to access on a system purchased after April 30, 2008.” Consequently, the injunction affected only systems sold prior to April 30, 2008. The judge denied all other requests TLI/Continuant made in its injunction filing. The Company complied with the injunction although it has now been vacated by the September 30, 2016 decision discussed below.

The Company and TLI/Continuant filed post-trial motions seeking to overturn the jury’s verdict, which motions were denied. In September 2014, the Court entered judgment in the amount of $63 million, which included the jury's award of $20 million, subject to automatic trebling, or $60 million, plus prejudgment interest in the amount of $3 million. On October 10, 2014, the Company filed a Notice of Appeal, and on October 23, 2014, TLI/Continuant filed a Notice of Conditional Cross-Appeal. On October 23, 2014, the Company filed its supersedeas bond with the Court in the amount of $63 million. The Company secured posting of the bond through the issuance of a letter of credit under its then existing credit facilities.

On November 10, 2014, TLI/Continuant made an application for attorney's fees, expenses and costs, which the Company contested. TLI/Continuant’s application for attorneys’ fees, expenses and costs was approximately $71 million and represented activity through February 28, 2015. On February 22, 2016, the Company posted a bond in the amount of $8 million in connection with TLC/Continuant's attorneys' fees application.

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In September 2016, a Special Master appointed by the trial court to assist in evaluating TLI/Continuant's application rendered a Recommendation, finding that TLI/Continuant should receive approximately $61 million in attorneys' fees, expenses and costs. Subsequently, the parties submitted letters to the Special Master seeking an Amended Recommendation. However, in light of the Third Circuit's favorable opinion, outlined below, the trial court proceedings relating to TLI/Continuant's application have not proceeded. TLI/Continuant is no longer entitled to attorneys' fees, expenses and costs, because it no longer is a prevailing party, subject to further proceedings on appeal or retrial.

On September 30, 2016, the Third Circuit issued a favorable ruling for the Company, which included: (1) reversing the mid-trial decision to dismiss four of the Company’s affirmative claims and reinstated them; (2) vacating the jury verdict on the two claims decided in TLI/Continuant’s favor; (3) entering judgment in the Company’s favor on a portion of TLI/Continuant’s claim relating to attempted monopolization; (4) dismissing TLI/Continuant’s PDS patches claim as a matter of law; (5) vacating the damages award to TLI/Continuant; (6) vacating the award of prejudgment interest to TLI/Continuant; and (7) vacating the injunction. On October 28, 2016, TLI/Continuant sought panel rehearing or rehearing en banc review of the opinion, which was denied on November 16, 2016. On November 22, 2016, TLI/Continuant filed a Motion for Stay of Mandate, which was denied. On December 5, 2016, the Third Circuit issued a certified judgment in lieu of a formal mandate, returning jurisdiction to the trial court.

As a result of the Third Circuit’s opinion, on November 23, 2016, the Company filed a Notice of Motion to Release the Supersedeas Bonds, which the court granted on December 23, 2016. On December 12, 2016, the Court issued an Order Upon Mandate and For Status Conference, which i) vacated the Court’s January 7, 2014 order dismissing Avaya’s claims against TLI/Continuant and the order of judgment entered on September 17, 2014 and ii) scheduled a status conference for January 6, 2017 to discuss the Joint Plan for Retrial. On January 13, 2017, the Court entered an Order staying the matter pending mediation.

On January 20, 2017, the Company filed a Notice of Suggestion on Pendency of Bankruptcy For Avaya Inc., et. al. and Automatic Stay of Proceedings. TLI/Continuant filed a proof of claim in the Bankruptcy Court. On November 30, 2017, the Company filed a motion in the Bankruptcy Court seeking to estimate TLI/Continuant’s claim. On June 21, 2018, the Company entered into a settlement resolving this litigation, and on June 28, 2018, the parties filed a Stipulation of Dismissal in the U.S. District Court, District of New Jersey. The Company considers this matter closed, except for distribution of the pre-petition allowed claim in accordance with the general unsecured claims procedure in the Company's Plan of Reorganization.

Patent Infringement

In July 2016, BlackBerry Limited (“BlackBerry”) filed a complaint for patent infringement against the Company in the Northern District of Texas, alleging infringement of multiple patents with respect to a variety of technologies including user interface design, encoding/decoding and call routing. In September 2016, the Company filed a motion to dismiss these claims and in October 2016, the Company also filed a motion to transfer this matter to the Northern District of California. In January 2017, the Company filed a notice of Suggestion of Pendency of Bankruptcy, which initially stayed the proceedings. The stay was partially lifted to allow the court in Texas to rule on the two pending motions. The Company’s motion to transfer the case from Texas to California has been denied. The Company’s motion to dismiss BlackBerry’s indirect infringement and willfulness claims was granted, although BlackBerry was provided an opportunity to file an Amended Complaint to cure the deficiencies, which it did on October 19, 2017. BlackBerry filed a proof of claim in the Bankruptcy Court. On February 20, 2018, the Company and BlackBerry entered into a settlement agreement resolving this dispute, and on February 23, 2018, the parties jointly filed a Stipulation of Dismissal with Prejudice with the Court in the Northern District of Texas. The Company considers this matter closed, except for distribution of the pre-petition allowed claim in accordance with the general unsecured claims procedure pursuant to the Company's Plan of Reorganization.

In September 2011, Network-1 Security Solutions, Inc. (“Network-1”) filed a complaint for patent infringement against the Company and other corporations in the Eastern District of Texas (Tyler Division), alleging infringement of its patent with respect to power over Ethernet technology. Network-1 seeks to recover for alleged reasonable royalties, enhanced damages and attorneys’ fees. In January 2017, the Company filed a Notice of Suggestion of Pendency of Bankruptcy, which informed the Court of the Company’s voluntary bankruptcy petition filing and stay of proceedings. On October 16, 2017, the Bankruptcy Court entered an order approving a settlement agreement with Network-1 and on November 7, 2017 the Tyler Division district court entered an order dismissing the lawsuit, with prejudice. The Company considers this matter closed, except for distribution of the pre-petition allowed claim in accordance with the general unsecured claims procedure in the Company's Plan of Reorganization.

Intellectual Property and Commercial Disputes

In January 2010, SAE Power Incorporated and SAE Power Company (“SAE”) filed a complaint in the New Jersey Superior Court asserting various claims including breach of contract, unjust enrichment, promissory estoppel, and breach of the covenant of good faith and fair dealing arising out of Avaya’s relationship with SAE as a supplier of various power supply products. SAE has since asserted additional claims against Avaya for fraud, negligent misrepresentation, misappropriation of trade secrets, and

48

civil conspiracy. SAE seeks to recover for alleged losses stemming from Avaya’s termination of its power supply purchases from SAE, including for Avaya’s alleged disclosure of SAE’s alleged trade secret and/or confidential information to another power supply vendor. On July 19, 2016, the Court entered an order granting Avaya’s motion for partial summary judgment, dismissing certain of SAE’s claims regarding the alleged disclosure of trade secrets. In January 2017, the Company filed a Notice of Suggestion of Pendency of Bankruptcy, which informed the Court of the Company’s voluntary bankruptcy petition filing and stay of proceedings. SAE filed a proof of claim in the Bankruptcy Court. On September 28, 2017, the Company filed a motion in the Bankruptcy Court seeking to estimate SAE’s claim, and the estimation hearing took place on February 15, 2018. On June 12, 2018, the Bankruptcy Court entered an Order estimating SAE’s pre-petition misappropriation claim in the amount of $1.21 million plus interest, its fraud claim at $0 million and declined to estimate SAE’s breach of contract claim, leaving it to be resolved through the bankruptcy claims allowance process. Once the stay of proceedings is lifted, SAE may pursue its liability claims against Avaya in the New Jersey state court action, subject to the estimation Order of the Bankruptcy Court. On June 22, 2018, SAE filed a Notice of Appeal and Motion for Stay of Estimation Order Pending Appeal. This matter, although not yet closed, will receive distribution in accordance with the general unsecured claims procedure in the Company's Plan of Reorganization.

In the ordinary course of business, the Company is involved in litigation alleging it has infringed upon third parties’ intellectual property rights, including patents and copyrights; some litigation may involve claims for infringement against customers, distributors and resellers by third parties relating to the use of Avaya’s products, as to which the Company may provide indemnifications of varying scope to certain parties. The Company is also involved in litigation pertaining to general commercial disputes with customers, suppliers, vendors and other third parties including royalty disputes. Much of the pending litigation against the Debtors has been stayed as result of the Chapter 11 filing and will be subject to resolution in accordance with the Bankruptcy Code and the orders of the Bankruptcy Court. Based on discussions with parties that have filed claims against the Debtors, the Company provided loss provisions for certain matters. However, 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.

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 Condensed Consolidated Balance Sheets, for actual experience. As of June 30, 2018 and September 30, 2017, the amount reserved was $2 million and $2 million, respectively.

Guarantees of Indebtedness and Other Off-Balance Sheet Arrangements

Letters of Credit and Guarantees

The Company provides guarantees, letters of credit and surety bonds to various parties as required for certain transactions initiated during the ordinary course of business to guarantee the Company's performance in accordance with contractual or legal obligations. As of June 30, 2018 (Successor), the maximum potential payment obligation with regards to letters of credit, guarantees and surety bonds was $63 million. The outstanding letters of credit are collateralized by restricted cash of $4 million included in other assets on the Condensed Consolidated Balance Sheets as of June 30, 2018 (Successor).

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 automatically renew in July and September 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

49

requirements or specifications and product designs furnished by the Company, and is subject to rigorous quality control standards.

Long-Term Incentive Cash Bonus Plan

The Predecessor Company had established a long-term incentive cash bonus plan (“LTIP”). Under the LTIP, the Predecessor Company would pay cash awards and recognize compensation expense to certain key employees upon specific triggering events. As of the Emergence Date, no triggering event had occurred, therefore no cash awards were paid and no compensation expense recognized. Upon emergence from bankruptcy, all awards to persons deemed "insiders" for purposes of Chapter 11 proceedings were cancelled.

Credit Facility Indemnification

In connection with the Successor Company's obligations under its post-emergence credit facilities, the Company has agreed to indemnify the third-party lending institutions for costs incurred by the institutions related to non-compliance with environmental law and other liabilities that may arise with respect to the execution, delivery, enforcement, performance and administration of the financing documentation. As of June 30, 2018 (Successor), no amounts were paid or accrued pursuant to this indemnity.

Transactions with Nokia

Pursuant to the Contribution and Distribution Agreement effective October 1, 2000, Lucent Technologies, Inc. (now Nokia) 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 Nokia for all liabilities including certain pre-distribution tax obligations of Nokia 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 Nokia 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.

In addition, in connection with the distribution, the Company and Lucent entered into a Tax Sharing Agreement that governs Nokia’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 Nokia.

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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 Holdings Corp. and its consolidated subsidiaries. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the unaudited interim Condensed Consolidated Financial Statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and our Consolidated Financial Statements and other financial information for the fiscal year ended September 30, 2017, which were included in Amendment No. 3 to our Registration Statement on Form 10 filed with the SEC on January 10, 2018.

Our accompanying unaudited interim Condensed Consolidated Financial Statements as of June 30, 2018 (Successor) and for the three months ended June 30, 2018 (Successor), the period from December 16, 2017 through June 30, 2018 (Successor), the period from October 1, 2017 through December 15, 2017 (Predecessor) and the three and nine months endedJune 30, 2017 (Predecessor) 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 ("SEC") for interim financial statements. In our opinion, the unaudited interim Condensed Consolidated Financial Statements reflect all adjustments, consisting of normal and recurring adjustments, as well as fresh start and reorganization adjustments, necessary to state fairly the financial position, results of operations and cash flows for the periods indicated.

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.

Overview

Avaya is a global leader in digital communications software, services and devices for businesses of all sizes. Our open, intelligent and customizable solutions for contact centers and unified communications offer the flexibility of Cloud, on-premises and hybrid deployments. Avaya shapes intelligent connections and creates seamless communication experiences for our customers, and their customers. Our professional planning, support and management services teams help optimize solutions, for highly reliable and efficient deployments. Our solutions fall under two operating segments:

Global Communication Solutions ("GCS") encompasses our real-time collaboration solutions for unified communications and contact center offerings to drive exceptional customer experiences. We take a cloud-first approach with a fully open architecture and multitenant platform that supports flexibility, reliability, security and scaling so customers can move to the cloud in a way that best meets their specific needs. Avaya omnichannel contact center solutions enable customers to build a customized portfolio of applications to drive stronger customer engagement and promote higher customer lifetime value. Our highly reliable, scalable communications-centric solutions include voice, email, chat, social media, video, performance management and ease of third-party integration that can improve customer service and help companies compete more effectively.

Our unified communications solutions help companies increase employee productivity, improve customer service and reduce costs by integrating multiple forms of communications, including telephony, email, instant messaging and video. Avaya embeds communications directly into the applications, browsers and devices employees use every day to create a single, powerful gateway for voice, video, messaging, conferencing and collaboration. We free people from their desktop and give them a more natural and efficient way to connect, communicate and share when, where and how they want. 

This operating segment also includes an open, extensible development platform, so that our customers and third parties can easily adapt our technology by creating custom applications and automated workflows for their unique needs, integrating Avaya’s capabilities into their existing infrastructure and business applications.

Avaya Global Services ("AGS") includes professional and support services designed to help our customers maximize the benefits of our solutions. Our global, experienced professional services team helps maximize customer investments in collaborative communications, with services from initial planning and design, to seamless implementation, to integration and ongoing optimization. We help customers use communications to help minimize risk, enable people, and deliver a differentiated customer experience.

Avaya also offers every level of support for communications solutions, with award-winning services for implementation, deployment, training, monitoring, troubleshooting and optimization, and more. Our pro-active, preventative monitoring of system performance and the ability to quickly find and fix problems help keep customer communications running optimally. Remote diagnostics and resolutions help us rapidly resolve potential problems, saving time and reducing risk of an outage.

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This operating segment also includes our private cloud and managed services, which enable customers to take advantage of our technology on-premises or in a private, public or hybrid (i.e., mix of on-premises, private and/or public) cloud environment, depending on solution and customer needs. The majority of our revenue in this reporting segment is recurring in nature and based on multi-year services contracts.

Recent Developments

On March 9, 2018, the Company acquired Intellisist, Inc. (“Spoken”), a United States-based private technology company, which provides cloud-based Contact Center as a Service ("CCaaS") solutions and customer experience management and automation applications. The total purchase price was $172 million, consisting of $157 million in cash, $14 million in contingent consideration and settlement of Spoken’s net payable to the Company of $1 million. Prior to the acquisition, the Company and Spoken had been working in a co-development partnership for more than a year pursuant to which the Company had recorded a net receivable from Spoken for services provided.

Spoken became a wholly-owned subsidiary of the Company, whose unaudited interim Condensed Consolidated Financial Statements reflect the financial results of the operations of Spoken, beginning on March 9, 2018. Spoken’s revenue and operating loss included in the Company’s results for the three months ended June 30, 2018 was $4 million and $12 million, respectively, including $2 million of compensation expense for the accelerated vesting of certain Spoken stock option awards and $3 million of amortization for acquired technology intangible assets. Spoken’s revenue and operating loss included in the Company’s results for the period from December 16, 2017 through June 30, 2018 (Successor) was $5 million and $19 million, respectively, including $7 million of compensation expense for the accelerated vesting of certain Spoken stock option awards and $4 million of amortization for acquired technology intangible assets.

In July 2017, the Company sold its networking business to Extreme Networks, Inc. (“Extreme”). Prior to the sale, the networking business was a separate operating segment comprised of certain assets of the Company’s Networking segment, along with the maintenance and professional services of the networking business, which were part of the AGS segment. Networking included advanced fabric networking technology, which offered a unique end-to-end virtualized architecture network designed to be simple to deploy. This operating segment also included software and hardware products such as ethernet switches, wireless networking, access control, and unified management and orchestration solutions, which provided network and device management. After the sale of the networking business, our operating segments consist solely of GCS and AGS.

Factors and Trends Affecting Our Results of Operations

There are a number of trends and uncertainties affecting our business. For example, we are dependent on general economic conditions and the willingness of our customers to invest in technology. In addition, instability in the geopolitical environment of our customers, instability in the global credit markets and other disruptions put pressure on the global economy causing uncertainties. We are also affected by the impact of foreign currency exchange rates on our business. We believe these uncertainties have impacted our customers’ willingness to spend on IT and the manner in which they procure such technologies and services. This includes delays or rejection of capital projects, including the implementation of our products and services. In addition, as further explained below, we believe there is a growing market trend around cloud consumption preferences with more customers exploring operating expense models as opposed to capital expenditure (“CapEx”) models for procuring technology.

As a result of a growing market trend preferring cloud consumption, more customers are exploring subscription and pay-per-use based models, rather than CapEx models, for procuring technology. The shift to subscription and pay-per-use models enables customers to manage costs and efficiencies by paying a subscription or a per minute or per message fee for business communications services rather than purchasing the underlying products and services, infrastructure and personnel, which are owned and managed by the equipment vendor or a cloud and managed services provider. We believe the market trend toward these flexible consumption models will continue as we see an increasing number of opportunities and requests for proposals based on subscription and pay-per-use models. This trend has driven an increase in the proportion of total Company revenues attributable to software and services. In addition, we believe customers are moving away from owned and operated infrastructure, preferring cloud offerings and virtualized server defined networks, which provide us with reduced associated maintenance support opportunities.

We continue to evolve into a software and services business and focus our go-to-market efforts by introducing new solutions and innovations, particularly on workflow automation, multi-channel customer engagement and cloud-enabled communications applications.

Despite the benefits of a robust indirect channel, which include expanding our sales reach, our channel partners have direct contact with our customers that may foster independent relationships between them and a loss of certain services agreements for us. We have been able to offset these impacts by focusing on utilizing partners in a sales agent relationship, whereby partners perform selling activities but the contract remains with Avaya. We are also offering higher-value services in support of

52

our software offerings, such as professional services and cloud-managed services, which are not traditionally provided by our channel partners.

The Company has maintained its focus on profitability levels and investing in future results. As the Company continues its transformation to a software and service-led organization, it has implemented programs designed to streamline its operations, generate cost savings and eliminate overlapping processes and resources. These cost savings programs include: (1) reducing headcount, (2) eliminating real estate costs associated with unused or under-utilized facilities and (3) implementing gross margin improvement and other cost reduction initiatives. The Company continues to evaluate opportunities to streamline its operations and identify cost savings globally and may take additional restructuring actions in the future. The costs of those actions could be material.

Emergence from Bankruptcy

On January 19, 2017 (the "Petition Date"), Avaya Holdings Corp., together with certain of its affiliates (collectively, the "Debtors"), filed voluntary petitions for relief (the "Bankruptcy Filing") under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court").

On November 28, 2017, the Bankruptcy Court entered an order confirming the Second Amended Joint Plan of Reorganization filed by the Debtors on October 24, 2017 (the "Plan of Reorganization"). On December 15, 2017 (the "Emergence Date"), the Plan of Reorganization became effective and the Debtors emerged from bankruptcy.

In accordance with the Plan of Reorganization, the following significant transactions occurred on the Emergence Date:

• The Company paid in full amounts outstanding under the debtor-in-possession credit agreement (the "DIP Credit Agreement");

• The Debtors' obligations under stock certificates, equity interests, and / or any other instrument or document directly or indirectly evidencing or creating any indebtedness or obligation of, or ownership interest in, the Debtors or giving rise to any claim or equity interest were cancelled, except as provided under the Plan of Reorganization and as noted below;

• The Company's certificate of incorporation was amended and restated to authorize the issuance of 605.0 million shares of stock, consisting of 55.0 million shares of preferred stock, par value $0.01 per share, and 550.0 million shares of common stock, par value $0.01 per share;

• The Company entered into a term loan credit agreement (the "Term Loan Credit Agreement") with a principal amount of $2,925 million and a $300 million asset-based revolving credit facility (the "ABL Credit Agreement");

• The Company issued 99.3 million shares of common stock to the holders of the Predecessor's first lien obligations that were extinguished in the bankruptcy. In addition, these holders received $2,061 million in cash;

• The Company issued 4.4 million shares of common stock to the holders of the Predecessor's second lien obligations that were extinguished in the bankruptcy. In addition, these holders received warrants to purchase 5.6 million shares of common stock at an exercise price of $25.55 per warrant (the "Emergence Date Warrants");

• The Company issued 6.1 million shares of common stock to the Pension Benefit Guaranty Corporation ("PBGC"). In addition, the PBGC received $340 million in cash; and

• The Debtors established a liquidating trust in the amount of $58 million for the benefit of general unsecured creditors. In addition, the Company issued 0.2 million additional shares of common stock for the benefit of its former general unsecured creditors. The general unsecured creditors will receive a total of $58 million in cash and these shares of common stock. Any excess cash and / or common stock not distributed to the general unsecured creditors will be distributed to the holders of the Predecessor first lien obligations.

Upon emergence from bankruptcy on December 15, 2017, the Company applied fresh start accounting, which resulted in a new basis of accounting and the Company becoming a new entity for financial reporting purposes. As a result of the application of fresh start accounting and the effects of the implementation of the Plan of Reorganization, the consolidated financial statements after December 15, 2017 are not comparable with the consolidated financial statements on or prior to that date. Refer to Note 4, "Fresh Start Accounting," to our unaudited interim Condensed Consolidated Financial Statements for further details.

Financial Results Summary

Our financial results for the period from October 1, 2017 through December 15, 2017 are referred to as those of the “Predecessor” period. Our financial results for the period from December 16, 2017 through June 30, 2018 and for the three months ended June 30, 2018 are referred to as those of the “Successor” period or periods. Our results of operations as reported in our Condensed Consolidated Financial Statements for these periods are in accordance with accounting principles generally

53

accepted in the United States of America (“GAAP”). Although GAAP requires that we report on our results for the period from October 1, 2017 through December 15, 2017 and the period from December 16, 2017 through June 30, 2018 separately, management views the Company’s operating results for the nine months ended June 30, 2018 by combining the results of the Predecessor and Successor periods because such presentation provides the most meaningful comparison of our results to prior periods.

The Company cannot adequately benchmark the operating results of the 197-day period from December 16, 2017 through June 30, 2018 against any of the previous periods reported in its Condensed Consolidated Financial Statements and does not believe that reviewing the results of this period in isolation would be useful in identifying any trends in or reaching any conclusions regarding the Company’s overall operating performance. Management believes that the key performance metrics such as revenue, gross margin and operating (loss) income for the Successor period when combined with the Predecessor period provides more meaningful comparisons to other periods and are useful in identifying current business trends. Accordingly, in addition to presenting our results of operations as reported in our Condensed Consolidated Financial Statements in accordance with GAAP, the table below also presents the combined results for the nine months ended June 30, 2018.

The combined results for the nine months ended June 30, 2018 represent the sum of the reported amounts for the Predecessor period from October 1, 2017 through December 15, 2017 and the Successor period from December 16, 2017 through June 30, 2018. These combined results are not considered to be prepared in accordance with GAAP and have not been prepared as pro forma results under applicable regulations. The combined operating results may not reflect the actual results we would have achieved absent our emergence from bankruptcy and may not be indicative of future results.

54

The following table displays our consolidated net (loss) income for the periods indicated:

	Successor			Predecessor			Successor			Predecessor			Non-GAAP Combined			Predecessor
(In millions)	Three months ended June 30, 2018			Three months ended June 30, 2017			Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2018			Nine months ended June 30, 2017
REVENUE
Products	$	300		$	345		$	664		$	253		$	917		$	1,094
Services	392			458			848			351			1,199			1,388
	692			803			1,512			604			2,116			2,482
COSTS
Products:
Costs	114			121			257			84			341			394
Amortization of technology intangible assets	44			5			92			3			95			16
Services	182			184			410			155			565			560
	340			310			759			242			1,001			970
GROSS PROFIT	352			493			753			362			1,115			1,512
OPERATING EXPENSES
Selling, general and administrative	281			295			613			264			877			923
Research and development	51			59			110			38			148			178
Amortization of intangible assets	39			57			86			10			96			170
Impairment of indefinite-lived intangible assets	—			65			—			—			—			65
Goodwill impairment	—			52			—			—			—			52
Restructuring charges, net	30			8			80			14			94			22
	401			536			889			326			1,215			1,410
OPERATING (LOSS) INCOME	(49		)	(43		)	(136		)	36			(100		)	102
Interest expense	(56		)	(17		)	(112		)	(14		)	(126		)	(229		)
Other income (expense), net	37			(9		)	32			(2		)	30			(27		)
Reorganization items, net	—			(35		)	—			3,416			3,416			(77		)
(LOSS) INCOME BEFORE INCOME TAXES	(68		)	(104		)	(216		)	3,436			3,220			(231		)
(Provision for) benefit from income taxes	(20		)	6			235			(459		)	(224		)	22
NET (LOSS) INCOME	$	(88	)	$	(98	)	$	19		$	2,977		$	2,996		$	(209	)

55

The following table displays the impact of the fair value adjustments resulting from fresh start accounting (See Note 4, “Fresh Start Accounting,” to our unaudited interim Condensed Consolidated Financial Statements), excluding those related to the amortization of intangible assets, on the Company's operating loss for the periods indicated:

(In millions)	Three months ended June 30, 2018			Period from December 16, 2017 through June 30, 2018
REVENUE
Products	$	(22	)	$	(52	)
Services	(41		)	(119		)
	(63		)	(171		)
COSTS
Products	2			16
Services	4			23
	6			39
GROSS PROFIT	(69		)	(210		)
OPERATING EXPENSES
Selling, general and administrative	2			1
OPERATING LOSS	$	(71	)	$	(211	)

Three Months Ended June 30, 2018 Results Compared to the Three Months Ended June 30, 2017

Revenue

Revenue for the three months ended June 30, 2018 was $692 million compared to $803 million for the three months ended June 30, 2017. The decrease was primarily attributable to the recognition of deferred revenue at fair value upon emergence from bankruptcy, which results in lower revenue in subsequent periods; the sale of the Networking business in July 2017; and lower maintenance services revenue as a result of lower product sales related to customers moving away from owned infrastructure, partially offset by an increase in demand for our unified communications products and the favorable impact of foreign currency exchange rates.

The following table displays revenue and the percentage of revenue to total sales by operating segment for the periods indicated:

	Successor			Predecessor		Percentage of Total Revenue
(In millions)	Three months ended June 30, 2018			Three months ended June 30, 2017		Three months ended June 30, 2018		Three months ended June 30, 2017		Yr. to Yr. Percentage Change		Yr. to Yr. Percentage Change, net of Foreign Currency Impact
GCS	$	322		$	302	46	%	38	%	7	%	5	%
Networking	—			43		0	%	5	%	(100	)%	(100	)%
Total ECS product revenue	322			345		46	%	43	%	(7	)%	(8	)%
AGS	433			458		63	%	57	%	(5	)%	(6	)%
Unallocated amounts	(63		)	—		(9	)%	0	%	(1)		(1)
Total revenue	$	692		$	803	100	%	100	%	(14	)%	(15	)%

⁽¹⁾ Not meaningful

GCS revenue for the three months ended June 30, 2018 was $322 million compared to $302 million for the three months ended June 30, 2017. The increase in GCS revenue was primarily attributable to an increase in demand for our unified communications products; incremental revenue from the Spoken acquisition; and the favorable impact of foreign currency exchange rates, partially offset by a decline in contact center products revenue.

Networking revenue for the three months ended June 30, 2017 was $43 million. The Networking business was sold to Extreme in July 2017.

AGS revenue for the three months ended June 30, 2018 was $433 million compared to $458 million for the three months ended June 30, 2017. The decrease in AGS revenue was primarily due to a decrease in maintenance services revenue and the sale of the

56

Networking business, partially offset by the favorable impact of foreign currency exchange rates and an increase in private cloud services.

Unallocated amounts for the three months ended June 30, 2018 represent the fair value adjustment to deferred revenue recognized upon emergence from bankruptcy and excluded from segment revenue.

The following table displays revenue and the percentage of revenue to total sales by location for the periods indicated:

	Successor		Predecessor		Percentage of Total Revenue
(In millions)	Three months ended June 30, 2018		Three months ended June 30, 2017		Three months ended June 30, 2018		Three months ended June 30, 2017		Yr. to Yr. Percentage Change		Yr. to Yr. Percentage Change, net of Foreign Currency Impact
U.S.	$	356	$	435	51	%	54	%	(18	)%	(18	)%
International:
EMEA	193		204		28	%	25	%	(5	)%	(9	)%
APAC - Asia Pacific	81		88		12	%	11	%	(8	)%	(9	)%
Americas International - Canada and Latin America	62		76		9	%	10	%	(18	)%	(20	)%
Total International	336		368		49	%	46	%	(9	)%	(11	)%
Total revenue	$	692	$	803	100	%	100	%	(14	)%	(15	)%

Revenue in the U.S. for the three months ended June 30, 2018 was $356 million compared to $435 million for the three months ended June 30, 2017. The decrease in U.S. revenue was primarily attributable to the recognition of deferred revenue at fair value upon emergence from bankruptcy, which results in lower revenue in subsequent periods; a decrease in maintenance services revenue; and the impact of the sale of the Networking business in July 2017. Revenue in Europe, Middle East and Africa ("EMEA") for the three months ended June 30, 2018 was $193 million compared to $204 million for the three months ended June 30, 2017. The decrease in EMEA revenue was primarily attributable to the impact of the sale of the Networking business and the recognition of deferred revenue at fair value upon emergence from bankruptcy, partially offset by an increase in demand for our unified communications products and the favorable impact of foreign currency exchange rates. Revenue in Asia-Pacific ("APAC") for the three months ended June 30, 2018 was $81 million compared to $88 million for the three months ended June 30, 2017. The decrease in APAC revenue was primarily attributable to the recognition of deferred revenue at fair value upon emergence from bankruptcy and the impact of the sale of the Networking business. Revenue in Americas International for the three months ended June 30, 2018 was $62 million compared to $76 million for the three months ended June 30, 2017. The decrease in Americas International revenue was primarily attributable to the recognition of deferred revenue at fair value upon emergence from bankruptcy and the impact of the sale of the Networking business.

We sell our products 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 and the percentage of product revenue from sales of products by channel for the periods indicated:

	Successor		Predecessor		Percentage of Total ECS Revenue						Yr. to Yr. Percentage Change, net of Foreign Currency Impact
(In millions)	Three months ended June 30, 2018		Three months ended June 30, 2017		Three months ended June 30, 2018		Three months ended June 30, 2017		Yr. to Yr. Percentage Change
Direct	$	88	$	98	27	%	28	%	(10	)%	(12	)%
Indirect	234		247		73	%	72	%	(5	)%	(6	)%
Total ECS product revenue	$	322	$	345	100	%	100	%	(7	)%	(8	)%

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Gross Profit

The following table sets forth gross profit and gross margin by operating segment for the periods indicated:

	Successor			Predecessor			Gross Margin				Change
(In millions)	Three months ended June 30, 2018			Three months ended June 30, 2017			Three months ended June 30, 2018		Three months ended June 30, 2017		Amount			Percent
GCS	$	210		$	210		65.4	%	69.5	%	$	—		—	%
Networking	—			14			—		32.6	%	(14		)	(100	)%
ECS	210			224			65.4	%	64.9	%	(14		)	(6	)%
AGS	257			274			59.2	%	59.8	%	(17		)	(6	)%
Unallocated amounts	(115		)	(5		)	(1)		(1)		(110		)	(1)
Total	$	352		$	493		50.9	%	61.4	%	$	(141	)	(29	)%

⁽¹⁾ Not meaningful

Gross profit for the three months ended June 30, 2018 was $352 million compared to $493 million for the three months ended June 30, 2017. The decrease was primarily attributable to the impact of applying fresh start accounting upon emergence from bankruptcy, including the effect of amortization of technology intangibles with higher asset values and the recognition of deferred revenue at fair value, which resulted in lower revenue in subsequent periods; the sale of the Networking business; and the decrease in sales of maintenance services, partially offset by the favorable impact of foreign currency exchange rates.

GCS gross profit was $210 million for both the three months ended June 30, 2018 and 2017. The favorable impact of foreign currency exchange rates and an increase in demand for our unified communications products was offset by a decline in contact center products revenue.

Networking gross profit for the three months ended June 30, 2017 was $14 million. The Networking business was sold to Extreme in July 2017.

AGS gross profit for the three months ended June 30, 2018 was $257 million compared to $274 million for the three months ended June 30, 2017. The decrease in AGS gross profit was due to a decrease in sales of maintenance services and the sale of the Networking business, partially offset by an increase in private cloud services and professional services gross profits.

Unallocated amounts for the three months ended June 30, 2018 include the fair value adjustments recognized upon emergence from bankruptcy and excluded from segment gross profit; the effect of the amortization of technology intangibles; and costs that are not core to the measurement of segment performance, but rather are controlled at the corporate level. Unallocated amounts for the three months ended June 30, 2017 included the effect of the amortization of technology intangibles and costs that are not core to the measurement of segment performance, but rather are controlled at the corporate level.

Operating Expenses

The following table sets forth operating expenses and the percentage of operating expenses to total revenue for the periods indicated:

	Successor		Predecessor		Percentage of Total Revenue				Change
(In millions)	Three months ended June 30, 2018		Three months ended June 30, 2017		Three months ended June 30, 2018		Three months ended June 30, 2017		Amount			Percent
Selling, general and administrative	$	281	$	295	40.6	%	36.7	%	$	(14	)	(5	)%
Research and development	51		59		7.4	%	7.3	%	(8		)	(14	)%
Amortization of intangible assets	39		57		5.6	%	7.1	%	(18		)	(32	)%
Impairment of indefinite-lived intangible assets	—		65		0.0	%	8.1	%	(65		)	(100	)%
Goodwill impairment	—		52		0.0	%	6.5	%	(52		)	(100	)%
Restructuring charges, net	30		8		4.3	%	1.0	%	22			275	%
Total operating expenses	$	401	$	536	57.9	%	66.7	%	$	(135	)	(25	)%

Selling, general and administrative expenses for the three months ended June 30, 2018 were $281 million compared to $295 million for the three months ended June 30, 2017. The decrease was primarily attributable to expenses associated with advisory fees incurred in the prior year period to assist in the assessment of strategic and financial alternatives to improve the Company’s capital structure and the Networking business that was sold in July 2017, partially offset by Spoken acquisition-related costs; the

58

unfavorable impact of foreign currency exchange rates; and the impact of fair value adjustments recognized upon emergence from bankruptcy.

Research and development expenses for the three months ended June 30, 2018 were $51 million compared to $59 million for the three months ended June 30, 2017. The decrease was primarily attributable to expenses associated with the Networking business that was sold in July 2017, partially offset by incremental costs from the Spoken acquisition in March 2018.

Amortization of intangible assets for the three months ended June 30, 2018 was $39 million compared to $57 million for the three months ended June 30, 2017. The carrying value of intangible assets was adjusted upon the application of fresh start accounting resulting in higher asset values and longer remaining useful lives. See Note 6, “Goodwill and Intangible Assets - Intangible Assets” to our unaudited interim Condensed Consolidated Financial Statements for further details.

Impairment of indefinite-lived intangible assets for the three months ended June 30, 2017 was $65 million. Due to the Company filing for bankruptcy and also experiencing a decline in revenues, a revision of its five year forecast was completed in the quarter ended June 30, 2017. Due to the decline in revenue in the five year forecast, the Company tested its intangible assets with indefinite lives and other long-lived assets for impairment. The Company estimated the fair values of its indefinite-lived intangible assets using the royalty savings method, which values an asset by estimating the royalties saved through ownership of the asset. As a result of the impairment test, the Company estimated the fair value of its trademarks and trade names to be $190 million as compared to a carrying amount of $255 million and recorded the impairment charge of $65 million.

Goodwill impairment for the three months ended June 30, 2017 was $52 million. As a result of the sale of certain assets and liabilities of the Company's former Networking business to Extreme in July 2017, it was determined that the fair value of the Networking services component was less than its carrying value. As a result, the Company recorded a goodwill impairment charge of $52 million. No impairments have been recognized in fiscal 2018.

Restructuring charges, net, for the three months ended June 30, 2018 were $30 million compared to $8 million for the three months ended June 30, 2017. Restructuring charges recorded during the three months ended June 30, 2018 included employee separation costs of $29 million primarily associated with employee severance actions in EMEA and the U.S. Restructuring charges recorded during the three months ended June 30, 2017 included employee separation costs of $7 million primarily associated with employee severance actions in the U.S. and EMEA and lease obligations of $1 million primarily in EMEA.

Operating Loss

Operating loss for the three months ended June 30, 2018 was $49 million compared to $43 million for the three months ended June 30, 2017. Our operating results for the three months ended June 30, 2018 as compared to the three months ended June 30, 2017 reflect, among other things:

• the impact of applying fresh start accounting upon emergence from bankruptcy on December 15, 2017;

• impairment charges for indefinite-lived intangible assets and goodwill recognized during the three months ended June 30, 2017;

• higher restructuring charges for the three months ended June 30, 2018, primarily related to employee separation charges in Europe and the U.S.;

• operating results from the Networking business for the three months ended June 30, 2017; and

• operating results from the Spoken acquisition completed in March 2018.

Interest Expense

Interest expense for the three months ended June 30, 2018 was $56 million as compared to $17 million for the three months ended June 30, 2017, an increase of $39 million. Our Bankruptcy Filing, which constituted an event of default under our Predecessor first lien obligations and Predecessor second lien obligations, accelerated the Company's payment obligations under those instruments. Consequently, all debt outstanding under our Predecessor first lien obligations and Predecessor second lien obligations were classified as Liabilities subject to compromise. Effective January 19, 2017, the Company ceased recording interest expense on outstanding pre-petition debt classified as Liabilities subject to compromise. Contractual interest expense represented amounts due under the contractual terms of outstanding debt, including debt subject to compromise. For the three months ended June 30, 2017, contractual interest expense related to debt subject to compromise of $113 million was not recorded as interest expense, as it was not an allowed claim under the Bankruptcy Filing.

Other Income (Expense), Net

Other income, net for the three months ended June 30, 2018 was $37 million as compared to other expense, net of $9 million for the three months ended June 30, 2017. Other income, net for the three months ended June 30, 2018 includes a net foreign currency gain of $25 million, principally due to the strengthening of the U.S. dollar compared to certain foreign exchange rates on U.S. dollar denominated receivables maintained in non-U.S. locations, mainly Argentina, India and Mexico; a gain due to the change in fair value of the Emergence Date Warrants of $6 million (see Note 10, “Derivative Instruments and Hedging

59

Activities” to our unaudited interim Condensed Consolidated Financial Statements for further details); pension and post-retirement benefit credits of $4 million; and other, net of $2 million. Other expense, net for the three months ended June 30, 2017 includes other pension and post-retirement benefit costs of $12 million, partially offset by a net foreign currency gain of $2 million and other, net of $1 million.

On October 1, 2017, the Company adopted ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost." This amendment requires that the service cost component be disaggregated from the other components of net benefit costs on the income statement. The service cost component is reported in the same line items as other compensation costs and the other components of net benefit costs are reported in Other expense, net in the Company's Condensed Consolidated Financial Statements. Changes to the Company's Condensed Financial Statements have been applied retrospectively. As a result, the Company reclassified $12 million of other pension and post-retirement benefit costs to Other income (expense), net for the three months ended June 30, 2017. For the three months ended June 30, 2018, the Company recorded $4 million of other pension and post-retirement benefit credits in Other income (expense), net. See Note 2, "Recent Accounting Pronouncements - Recently Adopted Accounting Pronouncements," to our unaudited interim Condensed Consolidated Financial Statements for further details.

Reorganization Items, Net

Reorganization items, net for the three months ended June 30, 2017 was $35 million. Reorganization items, net represented amounts incurred subsequent to the Bankruptcy Filing as a direct result of the Bankruptcy Filing and were comprised of professional service fees and DIP Credit Agreement financing costs.

(Provision for) Benefit from Income Taxes

The provision for income taxes was $20 million for the three months ended June 30, 2018 compared with a benefit from income taxes of $6 million for the three months ended June 30, 2017.

For the three months ended June 30, 2018, the difference between the Company’s recorded provision and the benefit that would result from applying the new U.S. statutory rate of 24.5%, was primarily attributable to: (1) income and losses taxed at different foreign tax rates, (2) losses generated within certain foreign jurisdictions for which no benefit was recorded because it is more likely than not that the tax benefits would not be realized, (3) non-U.S. withholding taxes on foreign earnings, (4) current period changes to unrecognized tax positions, (5) U.S. state and local income taxes, and (6) an increase in estimated current year tax loss, which is eliminated as part of the attribute reduction related to the cancellation of indebtedness income (“CODI”).

The effective income tax rate for the three months ended June 30, 2017 differs from the statutory U.S. Federal income tax rate of 35% in effect during the period 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) current period changes to unrecognized tax positions.

Net Loss

Net loss was $88 million for the three months ended June 30, 2018 compared to $98 million for the three months ended June 30, 2017, principally as a result of the items discussed above.

Nine Months Ended June 30, 2018 Combined Results Compared to the Nine Months Ended June 30, 2017

Revenue

Revenue for the nine months ended June 30, 2018 was $2,116 million compared to $2,482 million for the nine months ended June 30, 2017. The decrease was primarily the result of the recognition of deferred revenue at fair value upon emergence from bankruptcy, which results in lower revenue in subsequent periods; the sale of the Networking business in July 2017; and lower demand for products and services due to extended procurement cycles resulting from the Bankruptcy Filing. The lower demand for our products in prior periods has also contributed, in part, to lower maintenance services revenue. The decrease was partially offset by the favorable impact of foreign currency exchange rates.

60

The following table displays revenue and the percentage of revenue to total sales by operating segment for the periods indicated:

											Percentage of Total Revenue
	Successor			Predecessor		Non-GAAP Combined			Predecessor		Non-GAAP Combined		Predecessor				Yr. to Yr. Percentage Change, net of Foreign Currency Impact
(In millions)	Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017		Nine months ended June 30, 2018			Nine months ended June 30, 2017		Nine months ended June 30, 2018		Nine months ended June 30, 2017		Yr. to Yr. Percentage Change
GCS	$	716		$	253	$	969		$	957	46	%	39	%	1	%	0	%
Networking	—			—		—			137		0	%	5	%	(100	)%	(100	)%
Total ECS product revenue	716			253		969			1,094		46	%	44	%	(11	)%	(13	)%
AGS	967			351		1,318			1,388		62	%	56	%	(5	)%	(7	)%
Unallocated amounts	(171		)	—		(171		)	—		(8	)%	0	%	(1)		(1)
Total revenue	$	1,512		$	604	$	2,116		$	2,482	100	%	100	%	(15	)%	(16	)%

⁽¹⁾ Not meaningful

GCS revenue for the nine months ended June 30, 2018 was $969 million compared to $957 million for the nine months ended June 30, 2017. The increase in GCS revenue was primarily attributable to the favorable impact of foreign currency exchange rates and incremental revenue from the Spoken acquisition, partially offset by lower contact center products revenue.

Networking revenue for the nine months ended June 30, 2017 was $137 million. The Networking business was sold to Extreme in July 2017.

AGS revenue for the nine months ended June 30, 2018 was $1,318 million compared to $1,388 million for the nine months ended June 30, 2017. The decrease in AGS revenue was primarily due to lower maintenance services revenue and the sale of the Networking business, partially offset by the favorable impact of foreign currency exchange rates.

Unallocated amounts for the nine months ended June 30, 2018 represent the fair value adjustment to deferred revenue recognized upon emergence from bankruptcy and excluded from segment revenue.

The following table displays revenue and the percentage of revenue to total sales by location for the periods indicated:

									Percentage of Total Revenue
	Successor		Predecessor		Non-GAAP Combined		Predecessor		Non-GAAP Combined		Predecessor
(In millions)	Period from December 16, 2017 through June 30, 2018		Period from October 1, 2017 through December 15, 2017		Nine months ended June 30, 2018		Nine months ended June 30, 2017		Nine months ended June 30, 2018		Nine months ended June 30, 2017		Yr. to Yr. Percentage Change		Yr. to Yr. Percentage Change, net of Foreign Currency Impact
U.S.	$	791	$	331	$	1,122	$	1,351	53	%	54	%	(17	)%	(17	)%
International:
EMEA	407		166		573		640		27	%	26	%	(10	)%	(15	)%
APAC - Asia Pacific	178		57		235		255		11	%	10	%	(8	)%	(9	)%
Americas International - Canada and Latin America	136		50		186		236		9	%	10	%	(21	)%	(23	)%
Total International	721		273		994		1,131		47	%	46	%	(12	)%	(15	)%
Total revenue	$	1,512	$	604	$	2,116	$	2,482	100	%	100	%	(15	)%	(16	)%

Revenue in the U.S. for the nine months ended June 30, 2018 was $1,122 million compared to $1,351 million for the nine months ended June 30, 2017. The decrease in U.S. revenue was primarily attributable to the recognition of deferred revenue at fair value upon emergence from bankruptcy, which results in lower revenue in subsequent periods; the impact of the sale of the Networking business in July 2017; a decrease in maintenance services; and lower sales of unified communications and contact center products. Revenue in EMEA for the nine months ended June 30, 2018 was $573 million compared to $640 million for the nine months ended June 30, 2017. The decrease in EMEA revenue was primarily attributable to the impact of the sale of the

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Networking business and the recognition of deferred revenue at fair value upon emergence from bankruptcy, partially offset by the favorable impact of foreign currency exchange rates. Revenue in APAC for the nine months ended June 30, 2018 was $235 million compared to $255 million for the nine months ended June 30, 2017. The decrease in APAC revenue was primarily attributable to the impact of the sale of the Networking business and the recognition of deferred revenue at fair value upon emergence from bankruptcy, partially offset by higher sales of unified communications products and the favorable impact of foreign currency exchange rates. Revenue in Americas International for the nine months ended June 30, 2018 was $186 million compared to $236 million for the nine months ended June 30, 2017. The decrease in Americas International revenue was primarily attributable to the sale of the Networking business; the recognition of deferred revenue at fair value upon emergence from bankruptcy; and lower sales of unified communications products, partially offset by the favorable impact of foreign currency exchange rates.

We sell our products 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 and the percentage of product revenue from sales of products by channel for the periods indicated:

									Percentage of Total ECS Revenue
	Successor		Predecessor		Non-GAAP Combined		Predecessor		Non-GAAP Combined		Predecessor				Yr. to Yr. Percentage Change, net of Foreign Currency Impact
(In millions)	Period from December 16, 2017 through June 30, 2018		Period from October 1, 2017 through December 15, 2017		Nine months ended June 30, 2018		Nine months ended June 30, 2017		Nine months ended June 30, 2018		Nine months ended June 30, 2017		Yr. to Yr. Percentage Change
Direct	$	204	$	80	$	284	$	294	29	%	27	%	(3	)%	(6	)%
Indirect	512		173		685		800		71	%	73	%	(14	)%	(15	)%
Total ECS product revenue	$	716	$	253	$	969	$	1,094	100	%	100	%	(11	)%	(13	)%

Gross Profit

The following table sets forth gross profit and gross margin by operating segment for the periods indicated:

													Gross Margin
	Successor			Predecessor			Non-GAAP Combined			Predecessor			Non-GAAP Combined		Predecessor		Change
(In millions)	Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2018			Nine months ended June 30, 2017			Nine months ended June 30, 2018		Nine months ended June 30, 2017		Amount			Percent
GCS	$	473		$	169		$	642		$	653		66.3	%	68.2	%	$	(11	)	(2	)%
Networking	—			—			—			47			—		34.3	%	(47		)	(100	)%
ECS	473			169			642			700			66.3	%	64.0	%	(58		)	(8	)%
AGS	582			196			778			828			59.0	%	59.7	%	(50		)	(6	)%
Unallocated amounts	(302		)	(3		)	(305		)	(16		)	(1)		(1)		(289		)	(1)
Total	$	753		$	362		$	1,115		$	1,512		52.7	%	60.9	%	$	(397	)	(26	)%

⁽¹⁾ Not meaningful

Gross profit for the nine months ended June 30, 2018 was $1,115 million compared to $1,512 million for the nine months ended June 30, 2017. The decrease was primarily attributable to the impact of applying fresh start accounting upon emergence from bankruptcy, including the effect of the recognition of deferred revenue at fair value, which resulted in lower revenue in subsequent periods and amortization of technology intangibles with higher asset values; the impact of the sale of the Networking business; a decrease in sales of maintenance services; and lower sales of unified communications and contact center products, partially offset by an increase in professional services gross profit and the favorable impact of foreign currency exchange rates.

GCS gross profit for the nine months ended June 30, 2018 was $642 million compared to $653 million for the nine months ended June 30, 2017. The decrease was attributable to lower sales of unified communications and contact center products, partially offset by the favorable impact of foreign currency exchange rates.

Networking gross profit for the nine months ended June 30, 2017 was $47 million. The Networking business was sold to Extreme in July 2017.

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AGS gross profit for the nine months ended June 30, 2018 was $778 million compared to $828 million for the nine months ended June 30, 2017. The decrease in AGS gross profit was due to a decrease in sales of maintenance services and sale of the Networking business, partially offset by an increase in professional services gross profit and the favorable impact of foreign currency exchange rates.

Unallocated amounts for the nine months ended June 30, 2018 include the fair value adjustments recognized upon emergence from bankruptcy and excluded from segment gross profit; the effect of the amortization of technology intangibles; and costs that are not core to the measurement of segment performance, but rather are controlled at the corporate level. Unallocated amounts for the nine months ended June 30, 2017 included the effect of the amortization of technology intangibles and costs that are not core to the measurement of segment performance, but rather are controlled at the corporate level.

Operating Expenses

The following table sets forth operating expenses and the percentage of operating expenses to total revenue for the periods indicated:

									Percentage of Total Revenue
	Successor		Predecessor		Non-GAAP Combined		Predecessor		Non-GAAP Combined		Predecessor		Change
(In millions)	Period from December 16, 2017 through June 30, 2018		Period from October 1, 2017 through December 15, 2017		Nine months ended June 30, 2018		Nine months ended June 30, 2017		Nine months ended June 30, 2018		Nine months ended June 30, 2017		Amount			Percent
Selling, general and administrative	$	613	$	264	$	877	$	923	41.4	%	37.2	%	$	(46	)	(5	)%
Research and development	110		38		148		178		7.0	%	7.2	%	(30		)	(17	)%
Amortization of intangible assets	86		10		96		170		4.5	%	6.8	%	(74		)	(44	)%
Impairment of indefinite-lived intangible assets	—		—		—		65		0.0	%	2.6	%	(65		)	(100	)%
Goodwill impairment	—		—		—		52		0.0	%	2.1	%	(52		)	(100	)%
Restructuring charges, net	80		14		94		22		4.5	%	0.9	%	72			327	%
Total operating expenses	$	889	$	326	$	1,215	$	1,410	57.4	%	56.8	%	$	(195	)	(14	)%

Selling, general and administrative expenses for the nine months ended June 30, 2018 were $877 million compared to $923 million for the nine months ended June 30, 2017. The decrease was primarily attributable to advisory fees incurred in the prior year period to assist in the assessment of strategic and financial alternatives to improve the Company’s capital structure and expenses associated with the Networking business that was sold in July 2017, partially offset by costs incurred in connection with certain legal matters; the unfavorable impact of foreign currency exchange rates; and Spoken acquisition-related costs.

Research and development expenses for the nine months ended June 30, 2018 were $148 million compared to $178 million for the nine months ended June 30, 2017. The decrease was primarily attributable to expenses associated with the Networking business that was sold in July 2017, partially offset by the unfavorable impact of foreign currency exchange rates and incremental costs from the Spoken acquisition in March 2018.

Amortization of intangible assets for the nine months ended June 30, 2018 was $96 million compared to $170 million for the nine months ended June 30, 2017. The carrying value of intangible assets was adjusted upon the application of fresh start accounting resulting in higher asset values and longer remaining useful lives.

Impairment of indefinite-lived intangible assets for the nine months ended June 30, 2017 was $65 million. Due to the Company filing for bankruptcy and also experiencing a decline in revenues, a revision of its five year forecast was completed in the quarter ended June 30, 2017. Due to the decline in revenue in the five year forecast, the Company tested its intangible assets with indefinite lives and other long-lived assets for impairment. The Company estimated the fair values of its indefinite-lived intangible assets using the royalty savings method, which values an asset by estimating the royalties saved through ownership of the asset. As a result of the impairment test, the Company estimated the fair value of its trademarks and trade names to be $190 million as compared to a carrying amount of $255 million and recorded the impairment charge of $65 million.

Goodwill impairment for the nine months ended June 30, 2017 was $52 million. As a result of the sale of certain assets and liabilities of the Company's former Networking business to Extreme in July 2017, it was determined that the fair value of the Networking services component was less than its carrying value. As a result, the Company recorded a goodwill impairment charge of $52 million. No impairments have been recognized in fiscal 2018.

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Restructuring charges, net, for the nine months ended June 30, 2018 were $94 million compared to $22 million for the nine months ended June 30, 2017. Restructuring charges recorded during the nine months ended June 30, 2018 included employee separation costs of $82 million primarily associated with employee severance actions in EMEA and the U.S. and lease obligations of $12 million primarily in the U.S. and EMEA. The increase was primarily related to charges for employee separation costs and payments made under lease termination agreements associated with vacated facilities, particularly in EMEA and the U.S. Restructuring charges recorded during the nine months ended June 30, 2017 included employee separation costs of $18 million primarily associated with employee severance actions in the U.S. and EMEA and lease obligations of $4 million, primarily in EMEA.

Operating (Loss) Income

Operating loss for the nine months ended June 30, 2018 was $100 million compared to operating income of $102 million for the nine months ended June 30, 2017. Our operating results for the nine months ended June 30, 2018 as compared to the nine months ended June 30, 2017 reflect, among other things:

• the impact of applying fresh start accounting upon emergence from bankruptcy on December 15, 2017;

• impairment charges for indefinite-lived intangible assets and goodwill recognized during the nine months ended June 30, 2017;

• higher restructuring charges for the nine months ended June 30, 2018, primarily related to employee separation charges and lease termination agreements associated with vacated facilities particularly in Europe and the U.S.;

• lower advisory fees incurred to assist in the assessment of strategic and financial alternatives to improve the Company’s capital structure during the nine months ended June 30, 2018 of $62 million;

• costs incurred in connection with certain legal matters of $37 million for the nine months ended June 30, 2018;

• operating results from the Networking business for the nine months ended June 30, 2017; and

• operating results from the Spoken acquisition completed in March 2018.

Interest Expense

Interest expense for the nine months ended June 30, 2018 was $126 million as compared to $229 million for the nine months ended June 30, 2017. The nine months ended June 30, 2017 included non-cash interest expense of $61 million related to the accelerated amortization of debt issuance costs and accretion of debt discount. Our Bankruptcy Filing, which constituted an event of default under our Predecessor first lien obligations and Predecessor second lien obligations, accelerated the Company's payment obligations under those instruments. Consequently, all debt outstanding under our Predecessor first lien obligations and Predecessor second lien obligations were classified as Liabilities subject to compromise, and related unamortized deferred financing costs and debt discounts in the amount of $61 million were expensed during the nine months ended June 30, 2017. Effective January 19, 2017, the Company ceased recording interest expense on outstanding pre-petition debt classified as Liabilities subject to compromise. Contractual interest expense represented amounts due under the contractual terms of outstanding debt, including debt subject to compromise. For the period from October 1, 2017 through December 15, 2017 and the period from January 19, 2017 through June 30, 2017, contractual interest expense of $94 million and $201 million, respectively, was not recorded as interest expense, as it was not an allowed claim under the Bankruptcy Filing. Contractual interest expense recorded for the nine months ended June 30, 2018 and 2017 was $123 million and $168 million, respectively, a decrease of $45 million.

Other Income (Expense), Net

Other income, net for the nine months ended June 30, 2018 was $30 million as compared to other expense, net of $27 million for the nine months ended June 30, 2017. Other income, net for the nine months ended June 30, 2018 included net foreign currency gains of $24 million, principally due to the strengthening of the U.S. dollar compared to certain foreign exchange rates on U.S. dollar denominated receivables maintained in non-U.S. locations, mainly Argentina, India and Mexico; income from a transition services agreement entered into in connection with the sale of Extreme of $8 million; interest income of $4 million; and other, net of $3 million, partially offset by a loss due to the change in fair value of the Emergence Date Warrants of $9 million. Other expense, net for the nine months ended June 30, 2017 includes other pension and post-retirement benefit costs of $29 million, partially offset by other, net of $2 million.

As a result of adopting ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost," the Company reclassified $29 million of other pension and post-retirement benefit costs to Other expense, net for the nine months ended June 30, 2017. For the nine months ended June 30, 2018, the Company recorded $1 million of other pension and post-retirement benefit credits in Other income, net.

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Reorganization Items, Net

Reorganization items, net for the nine months ended June 30, 2018 and 2017 were $3,416 million and $(77) million, respectively. Reorganization items, net for the nine months ended June 30, 2018 primarily consists of the net gain from the consummation of the Plan of Reorganization and the related settlement of liabilities. Reorganization items, net for the nine months ended June 30, 2018 and 2017 also include amounts incurred subsequent to the Bankruptcy Filing as a direct result of the Bankruptcy Filing and are comprised of professional service fees and contract rejection fees.

(Provision for) Benefit from Income Taxes

The provision for income taxes was $224 million for the nine months ended June 30, 2018 compared with a benefit from income taxes of $22 million for the nine months ended June 30, 2017.

For the nine months ended June 30, 2018, the difference between the Company’s recorded provision and the provision that would result from applying the new U.S. statutory rate of 24.5%, was primarily attributable to: (1) income and losses taxed at different foreign tax rates, (2) losses generated within certain foreign jurisdictions for which no benefit was recorded because it is more likely than not that the tax benefits would not be realized, (3) non-U.S. withholding taxes on foreign earnings, (4) current period changes to unrecognized tax positions, (5) U.S. state and local income taxes, (6) the impact of the Tax Cuts and Jobs Act, and (7) an increase in estimated current year tax loss, which is eliminated as part of the attribute reduction related to CODI.

For the nine months ended June 30, 2017, the difference between the Company’s recorded provision and the provision that would result from applying the U.S. statutory rate of 35% in effect during the period was primarily attributable to: (1) income and losses taxed at different foreign tax rates, (2) losses generated within certain foreign jurisdictions for which no benefit was recorded because it is more likely than not that the tax benefits would not be realized, (3) non-U.S. withholding taxes on foreign earnings, (4) current period changes to unrecognized tax positions, (5) U.S. state and local income taxes, and (6) changes in the valuation allowance established against the Company’s deferred tax assets.

Net Income (Loss)

Net income was $2,996 million for the nine months ended June 30, 2018 compared to a net loss of $209 million for the nine months ended June 30, 2017, primarily due to the reorganization gain of $3,416 million resulting from our emergence from bankruptcy and the items discussed above.

Liquidity and Capital Resources

We expect our cash balances, cash generated by operations and borrowings available under our ABL Credit Agreement to be 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 twelve 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. There can be no assurance that our business will generate sufficient cash flow 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.

Cash Flow Activity

The following table provides the condensed statements of cash flows for the periods indicated:

	Successor			Predecessor			Non-GAAP Combined			Predecessor
				Revised
(In millions)	Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2018			Nine months ended June 30, 2017
Net cash provided by (used for):
Operating activities	$	177		$	(414	)	$	(237	)	$	125
Investing activities	(137		)	8			(129		)	(120		)
Financing activities	284			(102		)	182			387
Effect of exchange rate changes on cash and cash equivalents	(5		)	(2		)	(7		)	1
Net increase (decrease) in cash and cash equivalents	319			(510		)	(191		)	393
Cash and cash equivalents at beginning of period	366			876			876			336
Cash and cash equivalents at end of period	$	685		$	366		$	685		$	729

65

Operating Activities

Cash (used for) provided by operating activities was $(237) million and $125 million for the nine months ended June 30, 2018 and 2017, respectively. The change was primarily due to payments related to the Company's reorganization and emergence from bankruptcy, which included payments to the PBGC ($340 million), general unsecured creditor claims ($58 million) and the APP pension trust ($49 million). These payments were partially offset by lower payments under the Company's restructuring programs; lower interest payments; lower payments for pension and other post-retirement benefits; lower income tax payments; an increase in deferred revenue as a result of advance payments for products and services; and the timing of vendor and customer payments.

Investing Activities

Cash used for investing activities for the nine months ended June 30, 2018 and 2017 was $129 million and $120 million, respectively. During the nine months ended June 30, 2018, cash used for investing activities included the acquisition of Spoken for $157 million and capital expenditures of $49 million, partially offset by the release of restricted cash of $76 million related to the Company's emergence from bankruptcy. During the nine months ended June 30, 2017, cash used for investing activities included an increase in restricted cash of $77 million, capital expenditures of $40 million and acquisitions of businesses, net of cash acquired of $4 million. The increase in capital expenditures was mainly driven by higher capital spending on facility downsizing and relocation and investments in technology.

Financing Activities

Cash provided by financing activities was $182 million and $387 million for the nine months ended June 30, 2018 and 2017, respectively.

Cash provided by financing activities for the nine months ended June 30, 2018 included:

• proceeds of $2,896 million from the Term Loan Credit Agreement entered into on the Company's Emergence Date;

• proceeds of $350 million from the issuance of 2.25% Convertible Notes; and

• proceeds from the issuance of call spread warrants (the "Call Spread Warrants") of $58 million; partially offset by

• repayment of the Company's Term Loan Credit Agreement of $2,918 million as part of the refinancing discussed below, net of proceeds received under the refinancing of $2,911 million;

• repayments to the Predecessor Company first lien debt holders of $2,061 million;

• repayment of the Predecessor Company DIP Credit Agreement of $725 million;

• adequate protection payments related to the bankruptcy of $111 million;

• payment of debt issuance costs of $107 million;

• the purchase of a bond hedge of $84 million;

• scheduled debt repayments under the Term Loan Credit Agreement of $15 million; and

• repayments in connection with financing the use of equipment for the performance of services under our agreement with HP Enterprise Services, LLC ("HP") of $11 million.

Cash provided by financing activities for the nine months ended June 30, 2017 included:

• proceeds from the Predecessor Company DIP Credit Agreement of $712 million, partially offset by

• scheduled debt repayments of $155 million, inclusive of adequate protection payments;

• repayments in excess of borrowings under the Predecessor Company revolving credit facilities of $150 million; and

• repayments under our agreement with HP of $15 million.

Term Loan Credit Agreement Refinancing

On June 18, 2018, the Company amended its Term Loan Credit Agreement to reduce interest rates and to reduce the London Inter-bank Offered Rate ("LIBOR") floor that existed under the original agreement from 1.00% to 0.00%. After the amendment, the Term Loan Credit Agreement, (a) in the case of alternative base rate ("ABR") Loans, bears interest at a rate per annum equal to 3.25% plus the highest of (i) the Federal Funds Rate plus 0.50%, (ii) the U.S. prime rate as publicly announced in the Wall Street Journal and (iii) the LIBOR Rate for an interest period of one month and (b) in the case of LIBOR Loans, bears interest at a rate per annum equal to 4.25% plus the applicable LIBOR rate, subject to a 0.00% floor. Prior to the amendment, the Term

66

Loan Credit Agreement, in the case of ABR Loans, bore interest at a rate per annum equal to 3.75% plus the highest of (i) the Federal Funds Rate plus 0.50%, (ii) the U.S. prime rate as publicly announced in the Wall Street Journal and (iii) the LIBOR Rate for an interest period of one month and in the case of LIBOR Loans, bore interest at a rate per annum equal to 4.75% plus the applicable LIBOR rate, subject to a 1.00% floor. As a result of the amendment, outstanding loan balances under the original Term Loan Credit Agreement were paid in full and new debt was issued for the same outstanding principal amount.

Interest Rate Contracts

On May 16, 2018, the Company entered into interest rate swap agreements with six counterparties, which fixed a portion of the variable interest due on its Term Loan Credit Agreement. Under the terms of the interest rate swap agreements, which mature on December 15, 2022, the Company pays a fixed rate of 2.935% and receives a variable rate of interest based on one-month LIBOR. As of June 30, 2018, the total notional amount of the six interest rate swap agreements was $1,800 million.

Convertible Notes

On June 11, 2018, the Company issued 2.25% Convertible Notes in an aggregate principal of $350 million (including the underwriters’ exercise in full of an over-allotment option of $50 million), which mature on June 15, 2023 (“Convertible Notes”). The Convertible Notes were issued under an indenture, by and between the Company and the Bank of New York Mellon Trust Company N.A., as Trustee. The Company received net proceeds from the offering of $314 million after giving effect to debt issuance costs, including the underwriting discount, the net cash used to purchase a bond hedge and the proceeds from the issuance of warrants are discussed below.

Bond Hedge and Call Spread Warrants

In connection with the issuance of the Convertible Notes, the Company also entered into privately negotiated transactions to purchase hedge instruments (“Bond Hedge”), covering 12.6 million shares of its common stock at a cost of $84 million. The Bond Hedge is subject to anti-dilution provisions substantially similar to those of the Convertible Notes, has a strike price of $27.76 per share, is exercisable by the Company upon any conversion under the Convertible Notes, and expires on June 15, 2023.

The Company also sold Call Spread Warrants for the purchase of up to 12.6 million shares of its common stock for aggregate proceeds of $58 million. The Call Spread Warrants have a strike price of $37.3625 per share and are subject to customary anti-dilution provisions. The Call Spread Warrants will expire in ratable portions on a series of expiration dates commencing on September 15, 2023.

The Bond Hedge and Call Spread Warrants are intended to reduce the potential dilution with respect to the Company’s common stock and/or reduce the Company’s exposure to potential cash payments that the Company may be required to make upon conversion of the Convertible Notes by, in effect, increasing the conversion price, from the Company’s economic standpoint, to $37.3625 per share. However, the Call Spread Warrants could have a dilutive effect with respect to the Company's common stock or, if the Company so elects, obligate the Company to make cash payments to the extent that the market price per share of common stock exceeds $37.3625 per share on any date upon which the Call Spread Warrants are exercised.

As of June 30, 2018, the Company was not in default under any of its debt agreements.

See Note 9, “Financing Arrangements,” to our unaudited interim Condensed Consolidated Financial Statements for further discussion.

Future Cash Requirements

Our primary future cash requirements will be to fund debt service, restructuring payments, capital expenditures and benefit obligations. 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 2018 to be as follows:

• Debt service—We expect to make payments of $57 million during the remainder of fiscal 2018 in principal and interest associated with the Term Loan Credit Agreement and interest and fees associated with our ABL Credit Agreement and 2.25% Convertible Notes due 2023. In the ordinary course of business, we may from time to time borrow and repay amounts under our ABL Credit Agreement.

• Restructuring payments—We expect to make payments of approximately $18 million to $20 million during the remainder of fiscal 2018 for employee separation costs and lease termination obligations associated with restructuring actions we have taken through June 30, 2018. The Company continues to evaluate opportunities to streamline its operations and identify additional cost savings globally.

• Capital expenditures—We expect to spend approximately $25 million to $35 million for capital expenditures and capitalized software development costs during the remainder of fiscal 2018.

67

• Benefit obligations—We estimate we will make payments in respect of our pension and post-retirement benefit obligations totaling $29 million during the remainder of fiscal 2018. These payments include $20 million for the Avaya Pension Plan for represented employees; $6 million for our non-U.S. benefit plans, which are predominately not pre-funded; and $3 million for represented retiree post-retirement health trusts. See discussion in Note 13, “Benefit Obligations” to our unaudited interim Condensed Consolidated Financial Statements for further details of our benefit obligations.

In addition to the matters identified above, 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 in Note 20, "Commitments and Contingencies," to our unaudited interim Condensed Consolidated Financial Statements, relating to intellectual property, commercial, employment, environmental and regulatory matters, which may require us to make cash payments.

These and other legal matters could have a material adverse effect on the manner in which the Company does business and the Company's financial position, results of operations, cash flows and liquidity.

For the nine months ended June 30, 2018, the Company recognized $37 million of costs incurred in connection with the resolution of certain legal matters.

Future Sources of Liquidity

We expect our cash balances, cash generated by operations and borrowings available under our ABL Credit Agreement to be our primary sources of short-term liquidity.

As of June 30, 2018 and September 30, 2017, our cash and cash equivalent balances held outside the U.S. were $114 million and $246 million, respectively. As of June 30, 2018, cash and cash equivalents held outside the U.S. in excess of in-country needs and, which could not be distributed to the U.S. without restriction, were not material.

Under the terms of the ABL Credit Agreement, the Company can issue letters of credit up to $150 million. At June 30, 2018, the Company had issued and outstanding letters of credit and guarantees of $48 million. The aggregate additional principal amount that may be borrowed under the ABL Credit Agreement, based on the borrowing base less $48 million of outstanding letters of credit and guarantees, was $195 million at June 30, 2018.

We believe that our existing cash and cash equivalents of $685 million as of June 30, 2018, future cash provided by operating activities and borrowings available under the ABL Credit Agreement will be sufficient to meet our future cash requirements for at least the next twelve months. Our ability to meet these 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.

Off-Balance Sheet Arrangements

See discussion in Note 20, “Commitments and Contingencies,” to our unaudited interim Condensed Consolidated Financial Statements for further details.

Debt Ratings

On the Emergence Date, the Company obtained ratings from Moody’s Investors Service (“Moody’s”), Standard and Poor's ("S&P") and Fitch Ratings Inc. (“Fitch”). Moody’s issued a corporate family rating of “B2” with a stable outlook and a rating of the 7-year $2,925 million Term Loan Credit Agreement of “B2”. S&P issued a definitive corporate credit rating of "B" with a stable outlook and a rating of the Term Loan Credit Agreement of "B". Fitch issued a Long-Term Issuer Default Rating of “B” with a stable outlook and a rating of the Term Loan Credit Agreement of “B+”.

Our ability to obtain additional external financing and the related cost of borrowing may be affected by our 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 Registration Statement on Form 10 Amendment No. 3 filed with the SEC on January 10, 2018 and determined that there were no significant changes to our critical accounting policies for the period from December 16, 2017 through June 30, 2018 and the period from October 1, 2017 through December 15, 2017, except for recently adopted accounting policy changes as discussed in the Notes to our unaudited interim Condensed Consolidated Financial Statements.

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New Accounting Pronouncements

See discussion in Note 2, "Recent Accounting Pronouncements," to our unaudited interim Condensed Consolidated Financial Statements for further details.

EBITDA and Adjusted EBITDA

EBITDA is defined as net income (loss) before income taxes, interest expense, interest income and depreciation and amortization and excludes the results of discontinued operations. 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.

Adjusted EBITDA is EBITDA as further adjusted by the items noted in the reconciliation table below. We believe Adjusted EBITDA provides a measure of our financial performance based on operational factors that management can impact in the short-term, such as our pricing strategies, volume, costs and expenses of the organization, and therefore presents our financial performance in a way that can be more easily compared to prior quarters or fiscal years. In addition, Adjusted EBITDA serves as a basis for determining certain management and employee compensation. We also present EBITDA and Adjusted EBITDA because we believe analysts and investors utilize these measures in analyzing our results.

EBITDA and Adjusted EBITDA have limitations as analytical tools. EBITDA measures do not represent net income (loss) or cash flow from operations as those terms are defined by GAAP and do not necessarily indicate whether cash flows will be sufficient to fund cash needs. While EBITDA 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. Further, Adjusted EBITDA excludes the impact of earnings or charges resulting from matters that we consider not to be indicative of our ongoing operations. In particular, our formulation of Adjusted EBITDA allows adjustment for certain amounts that are included in calculating net income (loss) as set forth in the following table including, but not limited to, restructuring charges, impairment charges, certain fees payable to our Predecessor private equity sponsors and other advisors, resolution of certain legal matters and a portion of our pension costs and post-employment benefits costs, which represents the amortization of pension service costs and actuarial gain (loss) associated with these benefits. However, these are expenses that may recur, may vary and/or may be difficult to predict.

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The unaudited reconciliation of net income (loss), which is a GAAP measure, to EBITDA and Adjusted EBITDA for the periods indicated, is presented below:

	Successor			Predecessor			Successor			Predecessor
(In millions)	Three months ended June 30, 2018			Three months ended June 30, 2017			Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
Net (loss) income	$	(88	)	$	(98	)	$	19		$	2,977		$	(209	)
Interest expense (a)	56			17			112			14			229
Interest income	(1		)	(1		)	(2		)	(2		)	(2		)
(Benefit from) provision for income taxes	20			(6		)	(235		)	459			(22		)
Depreciation and amortization	119			85			264			31			263
EBITDA	106			(3		)	158			3,479			259
Impact of fresh start accounting adjustments (b)	54			—			167			—			—
Restructuring charges, net	30			8			80			14			22
Advisory fees (c)	3			17			15			3			82
Acquisition-related costs (d)	4			1			11			—			1
Reorganization items, net	—			35			—			(3,416		)	77
Non-cash share-based compensation	7			4			13			—			10
Impairment of indefinite-lived intangible assets	—			65			—			—			65
Goodwill impairment	—			52			—			—			52
Impairment of long-lived assets	—			3			—			—			3
Loss on disposal of long-lived assets, net	2			—			4			1			—
Resolution of certain legal matters (e)	—			—			—			37			—
Change in fair value of Emergence Date Warrants	(6		)	—			9			—			—
Gain on foreign currency transactions	(25		)	(2		)	(24		)	—			(1		)
Pension/OPEB/nonretirement postemployment benefits and long-term disability costs (f)	—			24			—			17			70
Other	—			—			—			—			1
Adjusted EBITDA	$	175		$	204		$	433		$	135		$	641

^(a)  Effective January 19, 2017, the Company ceased recording interest expense on outstanding pre-petition debt classified as liabilities subject to compromise. Contractual interest expense represents amounts due under the contractual terms of outstanding debt, including debt subject to compromise. For the periods from October 1, 2017 through December 15, 2017 and January 19, 2017 through June 30, 2017, contractual interest expense related to debt subject to compromise of $94 million and $201 million, respectively, had not been recorded as interest expense, as it was not expected to be an allowed claim under the Bankruptcy Filing.

^(b)  The impact of fresh start accounting adjustments in connection with the Company's emergence from bankruptcy.

^(c)  Advisory fees represent costs incurred to assist in the assessment of strategic and financial alternatives to improve the Company's capital structure. Also included in advisory fees for the prior year period are sponsors’ fees which represent monitoring fees payable to affiliates of two private equity firms, Silver Lake Partners (“Silver Lake”) and TPG Capital (“TPG”, together with Silver Lake, the “Sponsors”) that each had an ownership interest in the Predecessor Company and their designees pursuant to a management services agreement. Effective as of emergence from bankruptcy, the Company no longer has affiliations with the Sponsors.

^(d)  Acquisition-related costs include investment banking, legal and other costs related to the acquisition of Spoken, including the accelerated vesting of certain Spoken stock options in connection with the acquisition.

^(e)  Costs in connection with certain legal matters include reserves and settlements, as well as associated legal costs.

^(f)  Represents that portion of our pension and post-employment benefit costs which represent the amortization of prior service costs and net actuarial gain (loss) associated with these benefits.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this quarterly report, including statements containing words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “target,” “can,” “could,” “may,” “should,” “will,” “would” or similar words, constitute “forward-looking statements.” These forward-looking statements, which are based on our current plans, expectations and projections about future events, should not be unduly relied upon. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements to materially differ from any future results, performance and achievements expressed or implied by such forward-looking statements. We caution you therefore against relying on any of these forward-looking statements.

The forward-looking statements included herein are based upon our assumptions, estimates and beliefs and involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements and may be affected by a variety of risks and other factors, which 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:

• we face formidable competition from providers of unified communications and contact center products and related services;

• market opportunity for business communications products and services may not develop in the ways that we anticipate;

• our ability to rely on our indirect sales channel;

• our products and services may fail to keep pace with rapidly changing technology and evolving industry standards;

• we rely on third-party contract manufacturers and component suppliers, some of which are sole source and limited source suppliers, as well as warehousing and distribution logistics providers;

• recently completed bankruptcy proceedings may adversely affect our operations in the future;

• our actual financial results may vary significantly from the financial projections filed with the Bankruptcy Court;

• our historical financial information may not be indicative of our future financial performance;

• our quarterly and annual revenues and operating results have historically fluctuated and the results of one period may not provide a reliable indicator of our future performance;

• operational and logistical challenges as well as changes in economic or political conditions, in a specific country or region;

• our revenues are dependent on general economic conditions and the willingness of enterprises to invest in technology;

• the potential that we may not be able to protect our proprietary rights or that those rights may be invalidated or circumvented;

• certain software we use is from open source code sources, which, under certain circumstances, may lead to unintended consequences;

• changes in our tax rates, the adoption of new U.S. or international tax legislation or exposure to additional tax liabilities;

• cancellation of indebtedness income is expected to result in material reductions in, or elimination of, tax attributes;

• tax examinations and audits;

• fluctuations in foreign currency exchange rates;

• business communications products are complex, and design defects, errors, failures or “bugs” may be difficult to detect and correct;

• if we are unable to integrate acquired businesses effectively;

• failure to realize the benefits we expect from our cost-reduction initiatives;

• liabilities incurred as a result of our obligation to indemnify, and to share certain liabilities with, Lucent Technologies, Inc. ("Lucent") (now Nokia Corporation) in connection with our spin-off from Lucent in September 2000;

• transfers or issuances of our equity may impair or reduce our ability to utilize our net operating loss carryforwards and certain other tax attributes in the future;

• our ability to retain and attract key personnel;

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• our ability to establish and maintain proper and effective internal control over financial reporting;

• if we do not adequately remediate our material weaknesses, or if we experience additional material weaknesses in the future;

• potential litigation in connection with our emergence from bankruptcy;

• breach of the security of our information systems, products or services or of the information systems of our third-party providers;

• business interruptions, whether due to catastrophic disasters or other events;

• claims that were not discharged in the Plan of Reorganization could have a material adverse effect on our results of operations and profitability;

• potential litigation and infringement claims, which could cause us to incur significant expenses or prevent us from selling our products or services;

• the composition of our board of directors has changed significantly;

• we have entered into many related party transactions with a significant number of our foreign subsidiaries, which could adversely affect us in the event of their bankruptcy or similar insolvency proceeding; and

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

Any of the assumptions underlying forward-looking statements could be inaccurate. All forward-looking statements are made as of the date of this quarterly report and the risk that actual results will differ materially from the expectations expressed in this quarterly report will increase with the passage of time. Except as otherwise required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements after the date of this quarterly report, whether as a result of new information, future events, changed circumstances or any other reason. In light of the significant uncertainties inherent in the forward-looking statements included in this quarterly report, the inclusion of such forward-looking statements should not be regarded as a representation by us or any other person that the objectives and plans set forth in this quarterly report will be achieved.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There are no other material changes to the disclosures included in Amendment No. 3 to our Registration Statement on Form 10 filed with the SEC on January 10, 2018 other than those discussed below.

Interest Rate Risk

The Company has exposure to changing interest rates primarily under the Term Loan Credit Agreement and ABL Credit Agreement, each of which bears interest at variable rates based on LIBOR. The Company had $2,910 million of variable rate loans outstanding as of June 30, 2018.

On May 16, 2018, the Company entered into interest rate swaps agreements with six counterparties, which fixed a portion of the variable interest due on its Term Loan Credit Agreement. Under the terms of the interest rate swap agreements, which mature on December 15, 2022, the Company pays a fixed rate of 2.935% and receives a variable rate of interest based on one-month LIBOR. As of June 30, 2018, the total notional amount of the six interest rate swap agreements was $1,800 million.

It is management’s intention that the notional amount of interest rate swaps be less than the variable rate loans outstanding during the life of the derivatives. For both the three and nine months ended June 30, 2018, the Company recognized a loss on its hedge contracts of approximately $2 million, which is reflected in Interest expense in the Condensed Consolidated Statements of Operations. At June 30, 2018, the fair value of the outstanding interest rate swap agreements was a deferred loss of $16 million. Based on the maturity dates of the contracts, $11 million and $5 million was recorded in Other current liabilities and Other non-current liabilities, respectively. On an annual basis, a hypothetical one percent change in interest rates for the $1,110 million of unhedged variable rate debt as of June 30, 2018 would affect net income and cash flow by approximately $8 million.

Foreign Currency Risk

Foreign currency risk is the potential change in value, income and cash flow arising from adverse changes in foreign currency exchange rates. Each of our non-U.S. ("foreign") operations maintains capital in the currency of the country of its geographic location consistent with local regulatory guidelines. Each foreign operation may conduct business in its local currency, as well as the currency of other countries in which it operates. The primary foreign currency exposures for these foreign operations are Euros, Canadian Dollars, British Pound Sterling and Chinese Renminbi.

Non-U.S. denominated revenue was $159 million and $468 million for the three and nine months endedJune 30, 2018 (Successor and Predecessor combined), respectively. We estimate a 10% change in the value of the U.S. dollar relative to all

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foreign currencies would affect our revenue for the three and nine months endedJune 30, 2018 by $16 million and $47 million, respectively.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures.

As of the end of the period covered by this report, management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s 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.) Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2018, solely because of the material weaknesses in the Company's internal control over financial reporting described below.

Material Weaknesses in Internal Control Over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

In connection with the preparation of the Company’s consolidated financial statements for the quarter ended June 30, 2017, the Company identified control deficiencies that constituted material weaknesses in its internal control over financial reporting:

• The appropriate complement of resources in its tax department commensurate with the volume and complexity of accounting for income taxes subsequent to the Company’s Bankruptcy Filing were not maintained, which contributed to the following control deficiencies, each of which are individually considered to be material weaknesses, relating to the completeness and accuracy of the Company’s accounting for income taxes, including the related tax assets and liabilities:

◦ Control activities over the completeness and accuracy of interim forecasts by tax jurisdiction used in accounting for the Company’s interim income tax provision were not performed at the appropriate level of precision. This control deficiency resulted in an adjustment to the Company’s income tax provision for the quarter ended June 30, 2017.

◦ Control activities over the completeness and accuracy of the allocation of the tax provision calculations (the “intraperiod allocation”) were insufficient to ensure that the intraperiod allocation balances were accurately determined. This control deficiency resulted in an adjustment to the Company’s income tax provision for the quarter ended June 30, 2017.

These control deficiencies resulted in material adjustments to our income tax provision for the quarter ended June 30, 2017. These adjustments were detected and corrected prior to the release of the related financial statements. However, the existence of these control deficiencies could result in misstatement of the aforementioned accounts and disclosures in the future that could result in a material misstatement of the annual or interim consolidated financial statements that would not be prevented or detected. Accordingly, our management has determined that these control deficiencies constitute material weaknesses.

Management has implemented a remediation plan to address the control deficiencies that led to the material weaknesses referenced above. The remediation plan includes the following:

• Implemented specific additional review procedures over the income tax provision calculations for interim quarters to ensure that the results of such calculations are not inconsistent with the actual results and trends being observed in the business. The deficiency, and the related remediation, applies only to interim quarters in which the income tax provision is based on forecast results for the year. The controls and processes related to the income tax provision for our fiscal year-end are not affected as they are based on actual results for the year.

• Hired additional personnel, including a Vice President of Tax, with the appropriate experience and technical expertise in income taxes.

The Company identified an additional material weakness in connection with the preparation of the Company's Condensed Consolidated Financial Statements for the quarter ended March 31, 2018 related to the reconciliation of United States cash and accounts receivable upon the adoption of fresh start accounting. Specifically, the Company's internal controls with respect to the mid-month reconciliation of United States cash receipts and accounts receivable required in connection with the adoption of fresh start accounting, in accordance with GAAP, did not operate effectively to record certain cash receipts that were received on December 15, 2017, the date the Company emerged from bankruptcy.

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This control deficiency resulted in an adjustment in the financial statements of our cash and accounts receivable as of December 15, 2017, our cash flow statements, and the revision of our consolidated financial statements for the predecessor period ended December 15, 2017 and the successor period ended December 31, 2017. Additionally, if not remediated this control deficiency could result in a future misstatement of the aforementioned account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected. Accordingly, we determined that this control deficiency constitutes a material weakness.

In order to remediate this material weakness, management has provided additional training for employees involved in the cash and accounts receivable reconciliation processes, as well as certain other reconciliation processes, and supplemented existing reviewers with higher skilled resources.

Notwithstanding the above identified material weaknesses, management believes the Condensed Consolidated Financial Statements as included in Part I of this Quarterly Report on Form 10-Q fairly represent, in all material respects, the Company's financial condition, results of operations and cash flows as of and for the periods presented in accordance with generally accepted accounting principles in the United States.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company's internal control over financial reporting during the most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

The information included in Note 20, “Commitments and Contingencies,” to the unaudited interim Condensed Consolidated Financial Statements is incorporated herein by reference.

Item 1A. Risk Factors.

There have been no material changes during the quarterly period ended June 30, 2018 to the risk factors previously disclosed in Amendment No. 3 to the Company’s Registration Statement on Form 10 filed with the SEC on January 10, 2018 and the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 15, 2018 other than as set forth below:

Changes in U.S. trade policy, including the imposition of tariffs and the resulting consequences, may have a material adverse impact on our business and results of operations.

The U.S. government has indicated its intent to adopt a new approach to trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements, such as the North American Free Trade Agreement (“NAFTA”).  It has also initiated tariffs on certain foreign goods and has raised the possibility of imposing significant, additional tariff increases or expanding the tariffs to capture other types of goods. In response, certain foreign governments have imposed retaliatory tariffs on goods that their countries import from the U.S. Changes in U.S. trade policy could result in one or more foreign governments adopting responsive trade policy making it more difficult or costly for us to import our products from those countries.  This in turn could require us to increase prices to our customers which may reduce demand, or, if we are unable to increases prices, result in lowering our margin on products sold.

We cannot predict the extent to which the U.S. or other countries will impose quotas, duties, tariffs, taxes or other similar restrictions upon the import or export of our products in the future, nor can we predict future trade policy or the terms of any renegotiated trade agreements and their impact on our business.  The adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs or trade agreements or policies has the potential to adversely impact demand for our products, our costs, our customers, our suppliers, and the U.S. economy, which in turn could have a material adverse effect on our business, financial condition and results of operations.

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

Issuer Purchases of Equity Securities

This table provides information with respect to purchases by the Company of shares of common stock during the quarter ended June 30, 2018.

Issuer Purchases of Equity Securities
	(a)	(b)		(c)	(d)
Period	Total number of shares (or units) purchased(1)	Average price paid per share (or unit)		Total number of shares (or units) purchased as part of publicly announced plans or programs	Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
April 1 - 30, 2018	—	$	—	—	—
May 1 - 31, 2018	—	$	—	—	—
June 1 - 30, 2018	74,118	$	21.0487	—	—
Total	74,118	$	21.0487	—	—

⁽¹⁾ Amounts purchased represent shares of common stock withheld for taxes on restricted stock units that vested on June 15 and June 30, 2018.

Item 3. Defaults Upon Senior Securities.

Not Applicable.

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Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

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Item 6. Exhibits.

Exhibit Number
4.1	Indenture, dated June 11, 2018, by and between Avaya Holdings Corp. and The Bank of New York Mellon Trust Company, N.A. (previously filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 12, 2018)
10.1	Form of Restricted Stock Unit Award Agreement pursuant to the Avaya Holdings Corp. 2017 Equity Incentive Plan
10.2	Form of Nonqualified Stock Option Award Agreement pursuant to the Avaya Holdings Corp. 2017 Equity Incentive Plan
10.3	Avaya Inc. Involuntary Separation Plan for Senior Executives, dated May 16, 2018 (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 18, 2018)
10.4	Avaya Inc. Change in Control Severance Plan, dated May 16, 2018 (previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on May 18, 2018)
10.5	Base Convertible Bond Hedge Confirmation, by and between Avaya Holdings Corp. and Barclays Bank PLC, dated June 6, 2018 (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 12, 2018)
10.6	Base Convertible Bond Hedge Confirmation, by and between Avaya Holdings Corp. and Credit Suisse Capital LLC, dated June 6, 2018 (previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on June 12, 2018)
10.7	Base Convertible Bond Hedge Confirmation, by and between Avaya Holdings Corp. and JPMorgan Chase Bank, National Association, dated June 6, 2018 (previously filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on June 12, 2018)
10.8	Base Warrant Confirmation, by and between Avaya Holdings Corp. and Barclays Bank PLC, dated June 6, 2018 (previously filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on June 12, 2018)
10.9	Base Warrant Confirmation, by and between Avaya Holdings Corp. and Credit Suisse Capital LLC, dated June 6, 2018 (previously filed as Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on June 12, 2018)
10.10	Base Warrant Confirmation, by and between Avaya Holdings Corp. and JPMorgan Chase Bank, National Association, dated June 6, 2018 (previously filed as Exhibit 10.6 to the Company’s Current Report on Form 8-K filed with the SEC on June 12, 2018)
10.11	Amendment No. 1, dated as of June 18, 2018, to the Term Loan Credit Agreement, dated as of December 15, 2017, among Avaya Inc., as borrower, Avaya Holdings Corp., the lenders from time to time party thereto, Goldman Sachs Bank USA, as the Administrative Agent and the Collateral Agent, and the other parties from time to time party thereto (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 20, 2018)
10.12	Additional Convertible Bond Hedge Confirmation, by and between Avaya Holdings Corp. and Barclays Bank PLC, dated June 26, 2018 (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 28, 2018)
10.13	Additional Convertible Bond Hedge Confirmation, by and between Avaya Holdings Corp. and Credit Suisse Capital LLC, dated June 26, 2018 (previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on June 28, 2018)
10.14	Additional Convertible Bond Hedge Confirmation, by and between Avaya Holdings Corp. and JPMorgan Chase Bank, National Association, dated June 26, 2018 (previously filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on June 28, 2018)
10.15	Additional Warrant Confirmation, by and between Avaya Holdings Corp. and Barclays Bank PLC, dated June 26, 2018 (previously filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on June 28, 2018)
10.16	Additional Warrant Confirmation, by and between Avaya Holdings Corp. and Credit Suisse Capital LLC, dated June 26, 2018 (previously filed as Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on June 28, 2018)
10.17	Additional Warrant Confirmation, by and between Avaya Holdings Corp. and JPMorgan Chase Bank, National Association, dated June 26, 2018 (previously filed as Exhibit 10.6 to the Company’s Current Report on Form 8-K filed with the SEC on June 28, 2018)
31.1	Certification of James M. Chirico, Jr. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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31.2	Certification of Patrick J. O'Malley, III pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of James M. Chirico, Jr. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Patrick J. O'Malley, III pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Labels Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

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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 HOLDINGS CORP.
By:	/s/    L. DAVID DELL'Osso
	L. David Dell'Osso Vice President, Corporate Controller & Chief Accounting Officer (Principal Accounting Officer)

August 14, 2018

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EX-10.1

Exhibit 10.1

RESTRICTED STOCK UNIT AWARD AGREEMENT
PURSUANT TO THE
AVAYA HOLDINGS CORP. 2017 EQUITY INCENTIVE PLAN

*    *    *

Participant:        [Participant Name]    

Grant Date:        [Grant Date]        

Grant Number:     [Client Grant ID]    

Number of Restricted Stock Units (“RSUs”) Granted:    [RSUs Granted]    

*    *    *

ThisRESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”), dated as of the Grant Date specified above, is entered into by and between Avaya Holdings Corp., a corporation organized in the State of Delaware (the “Company”), and the Participant specified above, pursuant to the Avaya Holdings Corp. 2017 Equity Incentive Plan, as in effect and as amended from time to time (the “Plan”), which is administered by the Committee; and

WHEREAS, the Committee has determined under the Plan that it would be in the best interests of the Company to grant the Participant an Other Stock-Based Award in the form of the RSUs provided herein, each of which represents the right to receive one share of Common Stock upon vesting of such RSU, subject to the terms and conditions contained herein and in the Plan.

NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:

1.Incorporation by Reference; Plan Document Receipt. This Agreement is subject in all respects to the terms, conditions and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the Award provided hereunder), all of which terms, conditions and provisions are made a part of and incorporated into this Agreement as if they were each expressly set forth herein. Except as provided otherwise herein, any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan. The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its content and agrees to be bound thereby and hereby. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.

2.Grant of RSUs. The Company hereby grants to the Participant, as of the Grant Date specified above, the number of RSUs specified above, subject to adjustment as provided for in the Plan, on the terms and conditions set forth in this Agreement, including, without limitation, in Appendix I attached hereto, and otherwise provided for in the Plan. Except as otherwise provided by the Plan, the Participant agrees and understands that nothing contained in this Agreement

provides, or is intended to provide, the Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of the shares of Common Stock underlying the RSUs, except as otherwise specifically provided for in the Plan or this Agreement. The RSUs shall be credited to a separate book-entry account maintained for the Participant on the books of the Company. The Participant’s interest in the book-entry account shall be that of a general, unsecured creditor of the Company.

3.Vesting.

(a)General. Except as set forth in Section 3(b) or Section 3(c), as applicable, the RSUs subject to this Award shall vest as follows, provided that the Participant has not incurred a Termination of Employment prior to each such vesting date, and provided, further, that there shall be no proportionate or partial vesting in the periods prior to each such vesting date.

Vesting Dates	Percentage of RSUs
On the date listed below which is closest to the one year anniversary of the grant date (whether before or after such anniversary date): oFebruary 15 oMay 15 oAugust 15 oNovember 15	33.34%
Quarterly thereafter on each February 15, May 15, August 15 and November 15	8.33%

Notwithstanding the foregoing, if the number of RSUs is not evenly divisible, then no fractional RSUs shall vest and the smaller installments shall vest first, and upon vesting of the last installment in accordance with the terms and conditions hereof, 100% of the RSUs subject to this Award shall be fully vested.

(b)Accelerated Vesting Upon a Qualifying Termination (Change in Control). In the event the Participant incurs a Termination of Employment prior to the last vesting date provided for in Section 3(a) as a result of the Participant’s Termination of Employment by the Company or the Company Entity that is the Participant’s actual employing entity without Cause, by the Participant for Good Reason, or due to the Participant’s death or Disability (any such Termination of Employment, a “Qualifying Termination”), and such Qualifying Termination occurs (i) only to the extent the Participant is also a participant in the Avaya Inc. Change in Control Severance Plan, during a Potential Change in Control Period, as such term is defined in the Avaya Inc. Change in Control Severance Plan or (ii) within the twenty-four (24) month period immediately following a Change in Control, subject to the Participant’s (or the Participant’s estate’s, if applicable) execution, delivery and non-revocation of a customary release of claims in favor of the Company and its subsidiaries and affiliates within sixty (60) days of such Termination of Employment and, except in the event of a Termination of Employment due to death, continued compliance with Appendix I to this Agreement, all outstanding and unvested RSUs shall fully vest effective as of the date of such Termination of Employment.

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(c)Forfeiture. Except as otherwise expressly provided for in Section 3(b) or as otherwise determined by the Committee or its designee, all outstanding and unvested RSUs shall be immediately forfeited upon the Participant’s Termination of Employment for any reason. For the avoidance of doubt, in the event that the Participant fails to execute, deliver and not revoke the release of claims provided for in Section 3(b), any RSUs that remain outstanding and unvested as of the sixtieth (60^th) day following the date on which the Qualifying Termination occurs shall be forfeited and cancelled as of such sixtieth (60^th) day without consideration therefor. Additionally, in the event of the Participant’s Termination of Employment by the Company or the Company Entity that is the Participant’s actual employing entity for Cause, all of the Participant’s outstanding RSUs, whether or not vested, shall be forfeited and cancelled without consideration therefor effective as of the date of such Termination of Employment.

4.Delivery of Shares. Except as otherwise expressly provided for in Section 23, promptly following the vesting of the RSUs (but in no event more than sixty (60) days thereafter) (or, in the event of a Qualifying Termination pursuant to Section 3(b) above, on the sixtieth (60th) day following the date on which the Participant’s Termination of Employment occurs, provided the conditions set forth in Section 3(b) above have been met), the Participant shall receive the number of shares of Common Stock (or any consideration paid in respect of such Common Stock in connection with a Change in Control) that correspond to the number of RSUs that have become vested on the applicable vesting date, less any shares of Common Stock withheld by the Company pursuant to Section 13.4 of the Plan, and such vested RSUs shall be cancelled upon receipt of the shares of Common Stock (or any consideration paid in respect of such Common Stock in connection with a Change in Control).

5.Non-Transferability. No portion of the RSUs may be sold, assigned, transferred, encumbered, hypothecated or pledged by the Participant, other than to the Company as a result of forfeiture of the RSUs as provided herein.

6.Governing Law. All questions concerning the construction, validity and interpretation of this Agreement, including but not limited to Appendix I hereto, shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the choice of law principles thereof. Any suit, action or proceeding with respect to this Agreement shall be governed by Section 13.9 of the Plan.

7.Legend. The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates, if any, representing shares of Common Stock issued pursuant to this Agreement. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates, if any, representing shares of Common Stock acquired pursuant to this Agreement in the possession of the Participant in order to carry out the provisions of this Section 7.

8.Securities Representations. This Agreement is being entered into by the Company in reliance upon the following express representations and warranties of the Participant. The Participant hereby acknowledges, represents and warrants that:

    3

(a)The Participant has been advised that the Participant may be an “affiliate” within the meaning of Rule 144 under the Securities Act and in this connection the Company is relying in part on the Participant’s representations set forth in this Section 8.

(b)If the Participant is deemed an affiliate within the meaning of Rule 144 of the Securities Act, the shares of Common Stock issuable hereunder must be held indefinitely unless an exemption from any applicable resale restrictions is available or the Company files an additional registration statement (or a “re-offer prospectus”) with regard to such shares of Common Stock and the Company is under no obligation to register such shares of Common Stock (or to file a “re-offer prospectus”).

(c)If the Participant is deemed an affiliate within the meaning of Rule 144 of the Securities Act, the Participant understands that (i) the exemption from registration under Rule 144 shall not be available unless (A) a public trading market then exists for the Common Stock, (B) adequate information concerning the Company is then available to the public, and (C) other terms and conditions of Rule 144 or any exemption therefrom are complied with, and (ii) any sale of the shares of Common Stock issuable hereunder may be made only in limited amounts in accordance with the terms and conditions of Rule 144 or any exemption therefrom.

9.Entire Agreement; Amendment. This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter; provided however, that the restrictive covenants contained in Appendix I hereto are in addition to and not in lieu of any other restrictive covenants by which the Participant may be bound. The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan. The Company shall give written notice to the Participant of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.

10.Notices; Electronic Delivery and Acceptance. Any notice hereunder by the Participant shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the General Counsel of the Company. Any notice hereunder by the Company shall be given to the Participant in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Participant may have on file with the Company. The Company may, in its sole discretion, decide to deliver any documents related to RSUs awarded under the Plan or future RSUs that may be awarded under the Plan by electronic means or request the Participant’s consent to participate in the Plan by electronic means. By accepting this RSU Award, the Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

11.No Right to Employment or Service. Any questions as to whether and when there has been a Termination of Employment and the cause of such Termination of Employment shall be determined in the sole discretion of the Committee. Nothing in this Agreement shall interfere with or limit in any way the right of the Company, its Subsidiaries or its Affiliates to terminate the Participant’s employment or service at any time, for any reason and with or without Cause.

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12.Transfer of Personal Data. The Participant authorizes, agrees and unambiguously consents to the transmission by the Company (or any Subsidiary) of any personal data information related to the RSUs awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan). This authorization and consent is freely given by the Participant.

13.Compliance with Laws. The grant of RSUs and the issuance of shares of Common Stock hereunder shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law, rule regulation or exchange requirement applicable thereto. The Company shall not be obligated to issue the RSUs or any shares of Common Stock pursuant to this Agreement if any such issuance would violate any such requirements. As a condition to the settlement of the RSUs, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation.

14.Binding Agreement. This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns.

15.Headings. The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.

16.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.

17.Further Assurances. Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.

18.Severability. The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

19.Acquired Rights. The Participant acknowledges and agrees that: (a) the Company may terminate or amend the Plan at any time; (b) the award of RSUs made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company; (c) no past grants or awards (including, without limitation, the RSUs awarded hereunder) give the Participant any right to any grants or awards in the future whatsoever; and (d) any benefits

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granted under this Agreement are not part of the Participant’s ordinary compensation and shall not be considered as part of such compensation in the event of severance, redundancy or resignation.

20.Acceptance of Agreement. Notwithstanding anything herein to the contrary, in order for this Award to become effective, the Participant must acknowledge acceptance of this Agreement no later than the sixtieth (60^th) day following the Grant Date (the “Final Acceptance Date”). If the Participant’s acceptance of this Agreement does not occur by the Final Acceptance Date, then the entire Award will be forfeited and cancelled without any consideration therefor, except as otherwise determined in the Committee’s sole and absolute discretion.

21.No Waiver. No waiver or non-action by either party hereto with respect to any breach by the other party of any provision of this Agreement shall be deemed or construed to be a waiver of any succeeding breach of such provision or as a waiver of the provision itself.

22.No Rights as a Stockholder. The Participant’s interest in the RSUs shall not entitle the Participant to any rights as a stockholder of the Company. The Participant shall not be deemed to be the holder of, or have any of the rights and privileges of a stockholder of the Company in respect of, the shares of Common Stock unless and until such shares have been issued to the Participant in accordance with this Agreement and the Plan.

23.Withholding. Notwithstanding the withholding provision in the Plan or anything else in this Agreement:

(a)If in the tax jurisdiction in which the Participant resides, a tax withholding obligation arises upon vesting of the RSUs (regardless of when the Common Stock underlying the RSUs are delivered to the Participant), on each date that all or a portion of the RSUs actually vests, if (1) the Company does not have in place an effective registration statement under the Securities Act and there is not a Securities Act exemption available under which the Participant may sell Common Stock or (2) the Participant is subject to a Company-imposed trading blackout, then unless the Participant has made other arrangements satisfactory to the Company, the Company will withhold from the shares of Common Stock to be delivered to the Participant such number of shares of Common Stock as are sufficient in value (as determined by the Company in its sole discretion) to cover the amount of the tax withholding obligation.

(b)If in the tax jurisdiction in which the Participant resides, a tax withholding obligation arises upon delivery of the Common Stock underlying the RSUs (regardless of when vesting occurs), then following each date that all or a portion of the RSUs actually vests, the Company will defer the delivery of the Common Stock otherwise deliverable to the Participant until the earliest of: (1) the date of the Participant’s Termination of Employment, (2) the date that the short-term deferral period under Section 409A of the Code expires with respect to such vested RSUs, or (3) the date on which the Company has in place an effective registration statement under the Securities Act or there is a Securities Act exemption available under which the Participant may sell Common Stock and on which the Participant is not subject to a Company-imposed trading blackout (the earliest of such dates, the “Delivery Date”). If on the Delivery Date (x) the Company does not have in place an effective registration statement under the Securities Act and there is not a Securities Act exemption available under which the Participant may sell shares of Common Stock or (y) the

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Participant is subject to a Company-imposed trading blackout, then unless the Participant has made other arrangements satisfactory to the Company, the Company will withhold from the shares of Common Stock to be delivered to the Participant such number of shares of Common Stock as are sufficient in value (as determined by the Company in its sole discretion) to cover the amount of the tax withholding obligation.

24.Section 409A. Notwithstanding anything herein or in the Plan to the contrary, the RSUs are intended to be exempt from the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of [●].

AVAYA HOLDINGS CORP.

By: /s/ Patrick J. O’Malley, III

Name: Patrick J. O’Malley, III

Title: Senior Vice President and Chief Financial Officer

PARTICIPANT

[To be executed electronically.]

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EX-10.2

Exhibit 10.2

NONQUALIFIED STOCK OPTION AWARD AGREEMENT

PURSUANT TO THE

AVAYA HOLDINGS CORP. 2017 EQUITY INCENTIVE PLAN

* * * * *

Participant:        [Participant Name]        

Grant Date:        [Grant Date]        

Grant Number:     [Client Grant ID]        

Per Share Exercise Price:    [Grant Date FMV]

Number of shares of Common Stock subject to this Non‑Qualified Stock Option(“Option”):     [Options Granted]            

* * * * *

This NON-QUALIFIED STOCK OPTION AWARD AGREEMENT (this “Agreement”), dated as of the Grant Date specified above, is entered into by and between Avaya Holdings Corp., a corporation organized in the State of Delaware (the “Company”), and the Participant specified above, pursuant to the Avaya Holdings Corp. 2017 Equity Incentive Plan, as in effect and as amended from time to time (the “Plan”), which is administered by the Committee; and

WHEREAS, the Committee has determined under the Plan that it would be in the best interests of the Company to grant the Participant the Option provided herein, subject to the terms and conditions contained herein and in the Plan.

NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:

1.Incorporation by Reference; Plan Document Receipt. This Agreement is subject in all respects to the terms, conditions and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the Award provided hereunder), all of which terms, conditions and provisions are made a part of and incorporated into this Agreement as if they were each expressly set forth herein. Except as provided otherwise herein, any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan. The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its content and agrees to be bound thereby and hereby. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control. No part of the Option granted hereby is intended to qualify as an “incentive stock option” under Section 422 of the Code.

2.Grant of Option. The Company hereby grants to the Participant, as of the Grant Date specified above, the Option to acquire from the Company at the Per Share Exercise Price specified above, subject to adjustment as provided for in the Plan, on the terms and conditions set forth in this Agreement, including, without limitation, in Appendix I attached hereto, and otherwise provided for in the Plan, the aggregate number of shares of Common Stock specified above subject to adjustment as provided for in the Plan (the “Option Shares”). Except as otherwise provided by the Plan, the Participant agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason. The Participant shall have no rights as a stockholder with respect to any shares of Common Stock covered by the Option unless and until the Participant has become the holder of record of such shares, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of the shares of Common Stock underlying the Option, except as otherwise specifically provided for in the Plan or this Agreement.

3.Vesting and Exercisability.

(a)General. Except as set forth in Section 3(b) or Section 3(c), as applicable, the Option shall vest and become exercisable as follows, provided that the Participant has not incurred a Termination of Employment prior to each such vesting date, and provided, further, that there shall be no proportionate or partial vesting in the periods prior to each such vesting date:

Vesting Dates	Percentage of Option
On the date listed below which is closest to the one year anniversary of the grant date (whether before or after such anniversary date): •February 15 •May 15 •August 15 •November 15	33.34%
Quarterly thereafter on each February 15, May 15, August 15 and November 15	8.33%

Notwithstanding the foregoing, if the number of Option Shares is not evenly divisible, then the portion of the Option represented by any fractional Option Shares shall not vest and the smaller installments shall vest first, and upon vesting of the last installment in accordance with the terms and conditions hereof, 100% of the Option subject to this Award shall be fully vested.

(b)Accelerated Vesting Upon a Qualifying Termination (Change in Control). In the event the Participant incurs a Termination of Employment prior to the last vesting date provided for in Section 3(a) as a result of the Participant’s Termination of Employment by the Company or the Company Entity that is the Participant’s actual employing entity without Cause, by the Participant for Good Reason, or due to the Participant’s death or Disability (any such Termination of Employment, a “Qualifying Termination”), and such Qualifying Termination occurs (i) only to the extent the Participant is also a participant in the Avaya Inc. Change in Control Severance Plan, during a Potential Change in Control Period, as such term is defined in

2

the Avaya Inc. Change in Control Severance Plan or (ii) within the twenty-four (24) month period immediately following a Change in Control, subject to the Participant’s (or the Participant’s estate’s, if applicable) execution, delivery and non-revocation of a customary release of claims in favor of the Company and its subsidiaries and affiliates within sixty (60) days of such Termination of Employment and, except in the event of a Termination of Employment due to death, continued compliance with Appendix I to this Agreement, any outstanding and unvested portion of the Option shall fully vest effective as of the date of such Termination of Employment.

(c)Expiration. Unless earlier terminated in accordance with the terms and provisions of the Plan and/or this Agreement, all outstanding portions of the Option (whether vested or not vested) shall expire and shall no longer be exercisable immediately following the tenth (10th) anniversary of the Grant Date (such date, the “Option Expiration Date”).

(d)Forfeiture. Except as otherwise expressly provided for in Section 3(b) or as otherwise determined by the Committee or its designee, any outstanding and unvested portion of the Option shall be immediately forfeited upon the Participant’s Termination of Employment for any reason. For the avoidance of doubt, in the event that the Participant fails to execute, deliver and not revoke the release of claims provided for in Section 3(b), any portion of the Option that remains outstanding and unvested as of the sixtieth (60^th) day following the date on which the Qualifying Termination occurs shall be forfeited and cancelled as of such sixtieth (60^th) day without consideration therefor. Additionally, in the event of the Participant’s Termination of Employment by the Company or the Company Entity that is the Participant’s actual employing entity for Cause, all outstanding portions of the Option, whether or not vested, shall be forfeited and cancelled without consideration therefor effective as of the date of such Termination of Employment.

4.Exercise Following Termination. Subject to the terms of the Plan and this Agreement, the Option, to the extent vested and non-forfeitable at the time of the Participant’s Termination, shall remain exercisable as follows:

(a)Qualifying Termination. In the event of a Qualifying Termination, the vested portion of the Option, including any portion that vests pursuant to and subject to the terms and conditions of Section 3(b)above, shall remain exercisable until:

(i)For a Qualifying Termination due to the Participant’s death or Disability, the earlier of (A) one (1) year after the date of such Termination of Employment and (B) the Option Expiration Date; and

(ii)For any other Qualifying Termination, the earlier of (A) ninety (90) days after the date of such Termination of Employment and (B) the Option Expiration Date.

(b)Resignation without Good Reason. In the event of the Participant’s Termination of Employment by the Participant without Good Reason, the vested portion of the Option shall remain exercisable until the earlier of (i) ninety (90) days from the date of such Termination of Employment, and (ii) the Option Expiration Date.

3

5.Method of Exercise and Payment. Subject to Section 13.4 of the Plan and the terms and conditions of the Plan and this Agreement, to the extent that the Option has become vested and exercisable with respect to a number of shares of Common Stock as provided herein, the Option may thereafter be exercised by the Participant, in whole or in part, at any time or from time to time prior to the expiration of the Option as provided herein and in accordance with Section 6.4(d) of the Plan.

6.Non-Transferability. The Option, and any rights and interests with respect thereto, issued under this Agreement and the Plan shall not be sold, exchanged, transferred, assigned, pledged, encumbered or otherwise disposed of or hypothecated in any way by the Participant (or any beneficiary of the Participant who holds the Option as a result of a Transfer by will or by the laws of descent and distribution), other than by testamentary disposition by the Participant or the laws of descent and distribution. Notwithstanding the foregoing, in accordance with Section 6.4(e) of the Plan, the Committee may, in its sole discretion, permit the Option to be Transferred to a Family Member for no value, provided that such Transfer shall only be valid upon execution of a written instrument in form and substance acceptable to the Committee in its sole discretion evidencing such Transfer and the transferee’s acceptance thereof signed by the Participant and the transferee, and provided, further, that the Option may not be subsequently Transferred other than by will or by the laws of descent and distribution or to another Family Member (as permitted by the Committee in its sole discretion) in accordance with the terms of the Plan and this Agreement, and shall remain subject to the terms of the Plan and this Agreement.Any attempt to sell, exchange, transfer, assign, pledge, encumber or otherwise dispose of or hypothecate in any way the Option, or the levy of any execution, attachment or similar legal process upon the Option, contrary to the terms and provisions of this Agreement and/or the Plan shall be null and void and without legal force or effect.

7.Governing Law. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the choice of law principles thereof. Any suit, action or proceeding with respect to this Agreement shall be governed by Section 13.9 of the Plan.

8.Entire Agreement; Amendment. This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter; provided however, that the restrictive covenants contained in Appendix I hereto are in addition to and not in lieu of any other restrictive covenants by which the Participant may be bound. The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan. The Company shall give written notice to the Participant of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.

9.Notices; Electronic Delivery and Acceptance. Any notice hereunder by the Participant shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the General Counsel of the Company. Any notice hereunder by the Company shall be given to the Participant in writing and such notice shall be deemed duly given

4

only upon receipt thereof at such address as the Participant may have on file with the Company. The Company may, in its sole discretion, decide to deliver any documents related to the Option awarded under the Plan or future Options that may be awarded under the Plan by electronic means or request the Participant’s consent to participate in the Plan by electronic means. By accepting this Option Award, the Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

10.No Right to Employment or Service. Any questions as to whether and when there has been a Termination of Employment and the cause of such Termination of Employment shall be determined in the sole discretion of the Committee. Nothing in this Agreement shall interfere with or limit in any way the right of the Company, its Subsidiaries or its Affiliates to terminate the Participant’s employment or service at any time, for any reason and with or without Cause.

11.Transfer of Personal Data. The Participant authorizes, agrees and unambiguously consents to the transmission by the Company (or any Subsidiary) of any personal data information related to the Option awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan). This authorization and consent is freely given by the Participant.

12.Compliance with Laws. The grant of the Option (and the issuance of the Option Shares upon exercise of the Option) pursuant to this Agreement shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law, rule, regulation or exchange requirement applicable thereto. The Company shall not be obligated to grant the Option or issue any of the Option Shares pursuant to this Agreement if any such issuance would violate any such requirements. As a condition to the issuance of any Option Shares, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation.

13.Binding Agreement. This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns.

14.Headings. The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.

15.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.

16.Further Assurances. Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to

5

carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.

17.Severability. The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

18.Acquired Rights. The Participant acknowledges and agrees that: (a) the Company may terminate or amend the Plan at any time; (b) the award of the Option made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company; (c) no past grants or awards (including, without limitation, the Option awarded hereunder) give the Participant any right to any grants or awards in the future whatsoever; and (d) any benefits granted under this Agreement are not part of the Participant’s ordinary compensation, and shall not be considered as part of such compensation in the event of severance, redundancy or resignation.

19.Acceptance of Agreement. Notwithstanding anything herein to the contrary, in order for this Award to become effective, the Participant must acknowledge acceptance of this Agreement no later than the sixtieth (60^th) day following the Grant Date (the “Final Acceptance Date”). If the Participant’s acceptance of this Agreement does not occur by the Final Acceptance Date, then the entire Award will be forfeited and cancelled without any consideration therefor, except as otherwise determined in the Committee’s sole and absolute discretion.

20.No Waiver. No waiver or non-action by either party hereto with respect to any breach by the other party of any provision of this Agreement shall be deemed or construed to be a waiver of any succeeding breach of such provision or as a waiver of the provision itself.

21.No Rights as a Stockholder. The Participant’s interest in the Option shall not entitle the Participant to any rights as a stockholder of the Company. The Participant shall not be deemed to be the holder of, or have any of the rights and privileges of a stockholder of the Company in respect of, the shares of Common Stock unless and until such shares have been issued to the Participant upon exercise in accordance with this Agreement and the Plan.

22.Section 409A. Notwithstanding anything herein or in the Plan to the contrary, the Option is intended to be exempt from the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent.

[Remainder of Page Intentionally Left Blank]

6

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of [l].

AVAYA HOLDINGS CORP.

By: /s/ Patrick J. O’Malley, III

Name: Patrick J. O’Malley, III

Title: Senior Vice President and Chief Financial Officer

PARTICIPANT

[To be executed electronically.]

7

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, James M. Chirico, Jr., certify that:

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

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)) 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)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

(c)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: August 14, 2018

/s/    JAMES M. CHIRICO, JR.

James M. Chirico, Jr.

Director, President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Patrick J. O'Malley, III, certify that:

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

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)) 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)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

(c)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: August 14, 2018

/s/    PATRICK J. O'MALLEY, III

Patrick J. O'Malley, III

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 Holdings Corp. (the “Company”) on Form 10-Q for the period ending June 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James M. Chirico, Jr., Director, 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/    JAMES M. CHIRICO, JR.

James M. Chirico, Jr.

Director, President and Chief Executive Officer

(Principal Executive Officer)

August 14, 2018

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 Holdings Corp. (the “Company”) on Form 10-Q for the period ending June 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Patrick J. O'Malley, III, 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/    PATRICK J. O'MALLEY, III

Patrick J. O'Malley, III

Senior Vice President and Chief Financial Officer

(Principal Financial Officer)

August 14, 2018

XML

Document And Entity Information - shares	9 Months Ended
	Jun. 30, 2018	Jul. 31, 2018
Document And Entity Information [Abstract]
Entity Registrant Name	Avaya Holdings Corp.
Entity Central Index Key	0001418100
Current Fiscal Year End Date	--09-30
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		109,954,972

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
REVENUE
Products		$ 300,000,000		$ 664,000,000
Services		392,000,000		848,000,000
TOTAL REVENUES		692,000,000		1,512,000,000
Products:
Costs		114,000,000		257,000,000
Amortization of technology intangible assets		44,000,000		92,000,000
Services		182,000,000		410,000,000
TOTAL COST OF REVENUE		340,000,000		759,000,000
GROSS PROFIT		352,000,000		753,000,000
OPERATING EXPENSES
Selling, general and administrative		281,000,000		613,000,000
Research and development		51,000,000		110,000,000
Amortization of intangible assets		39,000,000		86,000,000
Intangible asset impairment		0		0
Goodwill impairment		0		0
Restructuring charges, net		30,000,000		80,000,000
TOTAL OPERATING EXPENSES		401,000,000		889,000,000
OPERATING (LOSS) INCOME		(49,000,000)		(136,000,000)
Interest expense		(56,000,000)		(112,000,000)
Other income (expense), net		37,000,000		32,000,000
Reorganization items, net	$ 0	0		0
(LOSS) INCOME BEFORE INCOME TAXES		(68,000,000)		(216,000,000)
(Provision for) benefit from income taxes		(20,000,000)		235,000,000
NET (LOSS) INCOME		$ (88,000,000)		$ 19,000,000
Net (loss) income per share:
Basic (USD per share)		$ (0.80)		$ 0.17
Diluted (USD per share)		$ (0.80)		$ 0.17
Weighted average shares outstanding:
Basic (shares)		109.8		109.8
Diluted (shares)		109.8		111.0
Predecessor
REVENUE
Products	253,000,000		$ 345,000,000		$ 1,094,000,000
Services	351,000,000		458,000,000		1,388,000,000
TOTAL REVENUES	604,000,000		803,000,000		2,482,000,000
Products:
Costs	84,000,000		121,000,000		394,000,000
Amortization of technology intangible assets	3,000,000		5,000,000		16,000,000
Services	155,000,000		184,000,000		560,000,000
TOTAL COST OF REVENUE	242,000,000		310,000,000		970,000,000
GROSS PROFIT	362,000,000		493,000,000		1,512,000,000
OPERATING EXPENSES
Selling, general and administrative	264,000,000		295,000,000		923,000,000
Research and development	38,000,000		59,000,000		178,000,000
Amortization of intangible assets	10,000,000		57,000,000		170,000,000
Intangible asset impairment	0		65,000,000		65,000,000
Goodwill impairment	0		52,000,000		52,000,000
Restructuring charges, net	14,000,000		8,000,000		22,000,000
TOTAL OPERATING EXPENSES	326,000,000		536,000,000		1,410,000,000
OPERATING (LOSS) INCOME	36,000,000		(43,000,000)		102,000,000
Interest expense	(14,000,000)		(17,000,000)		(229,000,000)
Other income (expense), net	(2,000,000)		(9,000,000)		(27,000,000)
Reorganization items, net	3,416,000,000		(35,000,000)		(77,000,000)
(LOSS) INCOME BEFORE INCOME TAXES	3,436,000,000		(104,000,000)		(231,000,000)
(Provision for) benefit from income taxes	(459,000,000)		6,000,000		22,000,000
NET (LOSS) INCOME	$ 2,977,000,000		$ (98,000,000)		$ (209,000,000)
Net (loss) income per share:
Basic (USD per share)	$ 5.19		$ (0.22)		$ (0.47)
Diluted (USD per share)	$ 5.19		$ (0.22)		$ (0.47)
Weighted average shares outstanding:
Basic (shares)	497.3		497.2		497.0
Diluted (shares)	497.3		497.2		497.0

XML

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Net income (loss)		$ (88)		$ 19
Other comprehensive (loss) income:
Pension, post-retirement and postemployment benefit-related items, net of income taxes of $58 for the period from October 1, 2017 through December 15, 2017 and $1 and $16 for the three and nine months ended June 30, 2017, respectively		0		0
Cumulative translation adjustment, net of income taxes of $2 and $1 for the three and nine months ended June 30, 2017, respectively		(4)		(29)
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax	$ 0	(12)	$ 0	(12)	$ 0
Other comprehensive (loss) income		(16)		(41)
Cancellation of Predecessor equity		0		0
Total comprehensive (loss) income		$ (104)		$ (22)
Predecessor
Net income (loss)	2,977		(98)		(209)
Other comprehensive (loss) income:
Pension, post-retirement and postemployment benefit-related items, net of income taxes of $58 for the period from October 1, 2017 through December 15, 2017 and $1 and $16 for the three and nine months ended June 30, 2017, respectively	655		25		54
Cumulative translation adjustment, net of income taxes of $2 and $1 for the three and nine months ended June 30, 2017, respectively	3		(44)		(18)
Other comprehensive (loss) income	658		(19)		36
Cancellation of Predecessor equity	(790)		0		0
Total comprehensive (loss) income	$ 4,425		$ (117)		$ (173)

XML

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) $ in Millions	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax		$ (3)		$ (3)
Predecessor
Pension, post-retirement and postemployment benefit-related items, net of income taxes	$ 58		$ 1		$ 16
Cumulative translation adjustment, net of income taxes			$ 2		$ 1

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions	Jun. 30, 2018	Sep. 30, 2017
Current assets:
Cash and cash equivalents	$ 685
Accounts receivable, net	367
Inventory	102
Other current assets	238
TOTAL CURRENT ASSETS	1,392
Property, plant and equipment, net	260
Deferred income taxes, net	21
Intangible assets, net	3,318
Goodwill	2,771
Other assets	64
TOTAL ASSETS	7,826
Current liabilities:
Debt maturing within one year	0
Long-term debt, current portion	29
Accounts payable	326
Payroll and benefit obligations	119
Deferred revenue	479
Business restructuring reserve	57
Other current liabilities	129
TOTAL CURRENT LIABILITIES	1,139
Non-current liabilities:
Long-term debt, net of current portion	3,099
Pension obligations	731
Other post-retirement obligations	213
Deferred income taxes, net	486
Business restructuring reserve	52
Other liabilities	388
TOTAL NON-CURRENT LIABILITIES	4,969
LIABILITIES SUBJECT TO COMPROMISE	0
TOTAL LIABILITIES	6,108
Commitments and contingencies (Note 20)
Preferred stock
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock	1
Additional paid-in capital	1,739
Retained earnings (accumulated deficit)	19
Accumulated other comprehensive loss	(41)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)	1,718
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$ 7,826
Predecessor
Current assets:
Cash and cash equivalents		$ 876
Accounts receivable, net		536
Inventory		96
Other current assets		269
TOTAL CURRENT ASSETS		1,777
Property, plant and equipment, net		200
Deferred income taxes, net		0
Intangible assets, net		311
Goodwill		3,542
Other assets		68
TOTAL ASSETS		5,898
Current liabilities:
Debt maturing within one year		725
Long-term debt, current portion		0
Accounts payable		282
Payroll and benefit obligations		127
Deferred revenue		614
Business restructuring reserve		35
Other current liabilities		90
TOTAL CURRENT LIABILITIES		1,873
Non-current liabilities:
Long-term debt, net of current portion		0
Pension obligations		513
Other post-retirement obligations		0
Deferred income taxes, net		32
Business restructuring reserve		34
Other liabilities		170
TOTAL NON-CURRENT LIABILITIES		749
LIABILITIES SUBJECT TO COMPROMISE		7,705
TOTAL LIABILITIES		10,327
Commitments and contingencies (Note 20)
Predecessor equity awards on redeemable shares		7
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock		0
Additional paid-in capital		2,389
Retained earnings (accumulated deficit)		(5,954)
Accumulated other comprehensive loss		(1,448)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)		(5,013)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)		5,898
Predecessor | Convertible Series B preferred stock
Non-current liabilities:
Preferred stock		393
Predecessor | Series A preferred stock
Non-current liabilities:
Preferred stock		$ 184

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2018	Sep. 30, 2017
Preferred stock, par value (in usd per share)	$ 0.01
Preferred stock, shares authorized	55,000,000
Convertible preferred stock, shares issued	0
Convertible preferred stock, shares outstanding	0
Common stock, par value (in usd per share)	$ 0.01
Common stock, shares authorized	550,000,000
Common stock, shares issued	110,160,835
Common stock, share outstanding	109,954,972
Predecessor
Preferred stock, par value (in usd per share)		$ 0.001
Preferred stock, shares authorized		250,000
Common stock, par value (in usd per share)		$ 0.01
Common stock, shares authorized		750,000,000
Common stock, shares issued		494,768,243
Common stock, share outstanding		494,768,243
Convertible Series B preferred stock | Predecessor
Convertible preferred stock, shares issued		48,922
Convertible preferred stock, shares outstanding		48,922
Series A preferred stock | Predecessor
Convertible preferred stock, shares issued		125,000
Convertible preferred stock, shares outstanding		125,000

XML

Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited) - USD ($) shares in Millions, $ in Millions	Total	Series A preferred stock	Series B preferred stock	Common Stock	Additional Paid-in Capital	Additional Paid-in Capital Series A preferred stock	Additional Paid-in Capital Series B preferred stock	(Accumulated Deficit) Retained Earnings	Accumulated Other Comprehensive (Loss) Income
Beginning balance (Predecessor) at Sep. 30, 2016	$ (1,661)
Increase (Decrease) in Stockholders' Equity
Net income (loss) | Predecessor	(209)
Other comprehensive (loss) income | Predecessor	36
Cancellation of Predecessor equity | Predecessor	0
Ending balance (Predecessor) at Jun. 30, 2017	(1,625)
Beginning balance (Predecessor) at Mar. 31, 2017	(1,606)
Increase (Decrease) in Stockholders' Equity
Net income (loss) | Predecessor	(98)
Other comprehensive (loss) income | Predecessor	(19)
Cancellation of Predecessor equity | Predecessor	0
Ending balance (Predecessor) at Jun. 30, 2017	(1,625)
Beginning balance (in shares) (Predecessor) at Sep. 30, 2017				494.8
Beginning balance (Predecessor) at Sep. 30, 2017	(5,013)			$ 0	$ 2,389			$ (5,954)	$ (1,448)
Increase (Decrease) in Stockholders' Equity
Amortization of share-based compensation | Predecessor	3				3
Accrued dividends | Predecessor		$ (2)	$ (4)			$ (2)	$ (4)
Reclassifications to equity awards on redeemable shares | Predecessor	1				1
Net income (loss) | Predecessor	2,977							2,977
Other comprehensive (loss) income | Predecessor	658								658
Cancellation of Predecessor equity | Predecessor	790
Ending balance (in shares) (Predecessor) at Dec. 15, 2017				110.0
Ending balance (in shares) at Dec. 15, 2017				110.0
Ending balance (Predecessor) at Dec. 15, 2017	1,668			$ 1	1,667			0	0
Ending balance at Dec. 15, 2017	1,668			$ 1	1,667			0	0
Increase (Decrease) in Stockholders' Equity
Common stock issued for debt (in shares) | Predecessor				103.9
Common stock issued for settlement of Predecessor debt | Predecessor	1,576			$ 1	1,575
Common stock issued for PBGC (in shares) | Predecessor				6.1
Common stock issued to Pension Benefit Guaranty Corporation | Predecessor	92				92
Balance as of December 15, 2017 (Predecessor) (in shares) | Predecessor				494.8
Balance as of December 15, 2017 (Predecessor) | Predecessor	(1,380)				2,387			(2,977)	(790)
Balance as of December 15, 2017 (Predecessor)									0
Issuance of common stock under the equity incentive plan (in shares)				0.2
Issuance of common stock under the equity incentive plan	0
Amortization of share-based compensation	13				13
Net income (loss)	19
Other comprehensive (loss) income	(41)								(41)
Shares repurchased and retired for tax withholding on vesting of restricted stock units	(2)				(2)
Equity component of convertible notes, net of issuance costs and income taxes	67				67
Purchase of convertible note bond hedge, net of income taxes	(64)				(64)
Issuance of call spread warrants	58				58
Cancellation of Predecessor equity	0
Ending balance (in shares) at Jun. 30, 2018				110.2
Ending balance at Jun. 30, 2018	1,718			$ 1	1,739			19	(41)
Beginning balance at Mar. 31, 2018									(25)
Increase (Decrease) in Stockholders' Equity
Net income (loss)	(88)
Other comprehensive (loss) income	(16)
Cancellation of Predecessor equity	0
Ending balance (in shares) at Jun. 30, 2018				110.2
Ending balance at Jun. 30, 2018	$ 1,718			$ 1	$ 1,739			$ 19	$ (41)

XML

Consolidated Statements of Cash Flows - USD ($) $ in Millions	2 Months Ended	7 Months Ended	9 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017
OPERATING ACTIVITIES:
Net income (loss)		$ 19
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization		264
Share-based compensation		13
Amortization of debt issuance costs		1
Accretion of debt discount		2
Impairment of long-lived asset		0
Impairment of indefinite-lived intangible assets		0
Goodwill impairment		0
Provision for uncollectible receivables		0
Deferred income taxes, net		(207)
Post-retirement curtailment		0
Loss on disposal/sale of long-lived assets, net		3
Change in fair value of emergence date warrants		9
Unrealized (gain) loss on foreign currency transactions		(33)
Reorganization items:
Net gain on settlement of liabilities subject to compromise	$ 26	0
Payment to Pension Benefit Guaranty Corporation		0
Payment to pension trust		0
Payment of unsecured claims		0
Fresh start adjustments, net	(26)	0
Non-cash and financing related reorganization items, net		0
Changes in operating assets and liabilities:
Accounts receivable		23
Inventory		24
Accounts payable		42
Payroll and benefit obligations		(73)
Business restructuring reserve		39
Deferred revenue		149
Other assets and liabilities		(98)
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES		177
INVESTING ACTIVITIES:
Capital expenditures		(36)
Capitalized software development costs		0
Acquisition of businesses, net of cash acquired		(157)
Proceeds from sale of long-lived assets		1
Restricted cash		55
Other investing activities, net		0
NET CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES		(137)
FINANCING ACTIVITIES:
Repayment of debtor-in-possession financing		0
Proceeds from debtor-in-possession financing		0
Proceeds from issuance of call spread warrants		58
Debt issuance costs		(10)
Repayments of borrowings under sale-leaseback transaction		(7)
Other financing activities, net		(1)
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES		284
Effect of exchange rate changes on cash and cash equivalents		(5)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		319
Cash and cash equivalents at beginning of period		366
Cash and cash equivalents at end of period	366	685
Term Loan Credit Agreement due December 15, 2024
FINANCING ACTIVITIES:
Proceeds from long term debt		0
First lien debt
FINANCING ACTIVITIES:
Repayment of long-term debt		0
Term Loan Credit Agreement, Due To Refinancing
FINANCING ACTIVITIES:
Proceeds from long term debt		2,911
Repayment of long-term debt		(2,918)
Convertible Notes
FINANCING ACTIVITIES:
Proceeds from long term debt		350
Purchase of convertible note bond hedge		(84)
Foreign ABL
FINANCING ACTIVITIES:
Repayments of lines of credit		0
Domestic ABL
FINANCING ACTIVITIES:
Repayments of lines of credit		0
Long-term debt, including adequate protection payments
FINANCING ACTIVITIES:
Repayment of long-term debt		(15)
Senior Secured Credit Agreement
FINANCING ACTIVITIES:
Repayments of lines of credit		0
Predecessor
OPERATING ACTIVITIES:
Net income (loss)	2,977		$ (209)
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization	31		263
Share-based compensation	0		10
Amortization of debt issuance costs	0		36
Accretion of debt discount	0		25
Impairment of long-lived asset	0		3
Impairment of indefinite-lived intangible assets	0		65
Goodwill impairment	0		52
Provision for uncollectible receivables	(1)		1
Deferred income taxes, net	455		(38)
Post-retirement curtailment	0		(4)
Loss on disposal/sale of long-lived assets, net	1		0
Change in fair value of emergence date warrants	0		0
Unrealized (gain) loss on foreign currency transactions	0		4
Reorganization items:
Net gain on settlement of liabilities subject to compromise	(1,778)		0
Payment to Pension Benefit Guaranty Corporation	(340)		0
Payment to pension trust	(49)		0
Payment of unsecured claims	(58)		0
Fresh start adjustments, net	(1,697)		0
Non-cash and financing related reorganization items, net	26		39
Changes in operating assets and liabilities:
Accounts receivable	40		85
Inventory	(2)		20
Accounts payable	(40)		(62)
Payroll and benefit obligations	16		(50)
Business restructuring reserve	(7)		(40)
Deferred revenue	28		(59)
Other assets and liabilities	(16)		(16)
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES	(414)		125
INVESTING ACTIVITIES:
Capital expenditures	(13)		(40)
Capitalized software development costs	0		(2)
Acquisition of businesses, net of cash acquired	0		(4)
Proceeds from sale of long-lived assets	0		0
Restricted cash	21		(77)
Other investing activities, net	0		3
NET CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES	8		(120)
FINANCING ACTIVITIES:
Repayment of debtor-in-possession financing	(725)		0
Proceeds from debtor-in-possession financing	0		712
Proceeds from issuance of call spread warrants	0		0
Debt issuance costs	(97)		(1)
Repayments of borrowings under sale-leaseback transaction	(4)		(15)
Other financing activities, net	0		(4)
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES	(102)		387
Effect of exchange rate changes on cash and cash equivalents	(2)		1
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(510)		393
Cash and cash equivalents at beginning of period	876	$ 366	336
Cash and cash equivalents at end of period	366		729
Predecessor | Term Loan Credit Agreement due December 15, 2024
FINANCING ACTIVITIES:
Proceeds from long term debt	2,896		0
Predecessor | First lien debt
FINANCING ACTIVITIES:
Repayment of long-term debt	(2,061)		0
Predecessor | Term Loan Credit Agreement, Due To Refinancing
FINANCING ACTIVITIES:
Proceeds from long term debt	0		0
Repayment of long-term debt	0		0
Predecessor | Convertible Notes
FINANCING ACTIVITIES:
Proceeds from long term debt	0		0
Purchase of convertible note bond hedge	0		0
Predecessor | Foreign ABL
FINANCING ACTIVITIES:
Repayments of lines of credit	0		(55)
Predecessor | Domestic ABL
FINANCING ACTIVITIES:
Repayments of lines of credit	0		(77)
Predecessor | Long-term debt, including adequate protection payments
FINANCING ACTIVITIES:
Repayment of long-term debt	(111)		(155)
Predecessor | Senior Secured Credit Agreement
FINANCING ACTIVITIES:
Repayments of lines of credit	$ 0		$ (18)

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Background and Basis of Presentation

9 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Background and Basis Of Presentation

Background and Basis of Presentation

Background

Avaya Holdings Corp. (the "Parent" or "Avaya Holdings"), together with its consolidated subsidiaries (collectively, the “Company” or “Avaya”), is a leading global provider of software and associated hardware and services for contact center and unified communications, offered on-premises, in the cloud, or as a hybrid solution. Avaya provides the mission-critical, real-time communication applications for small businesses to large multinational enterprises and government organizations. Currently, the Company manages its business operations in two segments, Global Communication Solutions ("GCS"), representing the Company's products portfolio, and Avaya Global Services ("AGS"), representing the Company's services portfolio. The Company sells directly through its worldwide sales force and indirectly through its global network of channel partners, including distributors, service providers, dealers, value-added resellers, system integrators and business partners that provide sales and services support.

Basis of Presentation

Avaya Holdings has no material assets or standalone operations other than its ownership of Avaya Inc. and its subsidiaries. The accompanying unaudited interim Condensed Consolidated Financial Statements as of June 30, 2018 and for the period from December 16, 2017 through June 30, 2018, the period from October 1, 2017 through December 15, 2017 and the nine months endedJune 30, 2017, reflect the operating results of Avaya Holdings and its consolidated subsidiaries, and 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, 2017, included in Amendment No. 3 to the Company’s Form 10 filed with the SEC on January 10, 2018. In management’s opinion, these unaudited interim Condensed Consolidated Financial Statements reflect all adjustments, consisting of normal and recurring adjustments, necessary to state fairly the results of operations, financial position and cash flows for the periods indicated. The condensed consolidated results of operations for the interim periods reported are not necessarily indicative of the results for the entire fiscal year.

Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenue and expenses during the periods reported. These estimates include assessing the collectability of accounts receivable, sales returns and allowances, the use and recoverability of inventory, the realization of deferred tax assets, business restructuring reserves, pension and post-retirement benefit costs, the fair value of equity compensation, the fair value of assets and liabilities in connection with fresh start accounting as well as those acquired in business combinations, the recoverability of long-lived assets, useful lives and impairment of tangible and intangible assets including goodwill, the amount of exposure from potential loss contingencies, and fair value measurements, among others. The markets for the Company’s products are characterized by intense competition, rapid technological development and frequent new product introductions, all of which could affect the future recoverability of the Company’s assets. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Actual results could differ from these estimates.

On January 19, 2017 (the “Petition Date”), Avaya Holdings, together with certain of its affiliates, namely Avaya CALA Inc., Avaya EMEA Ltd., Avaya Federal Solutions, Inc., Avaya Holdings LLC, Avaya Holdings Two, LLC, Avaya Inc., Avaya Integrated Cabinet Solutions Inc., Avaya Management Services Inc., Avaya Services Inc., Avaya World Services Inc., Octel Communications LLC, Sierra Asia Pacific Inc., Sierra Communication International LLC, Technology Corporation of America, Inc., Ubiquity Software Corporation, VPNet Technologies, Inc., and Zang, Inc. (the “Debtors”), filed voluntary petitions for relief (the “Bankruptcy Filing”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court"). The cases were jointly administered as Case No. 17-10089 (SMB). The Debtors operated their businesses as "debtors-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of Chapter 11 of the Bankruptcy Code and the orders of the Bankruptcy Court until their emergence from bankruptcy on December 15, 2017.

During Chapter 11 proceedings, all expenses, gains and losses directly associated with the reorganization proceedings were reported as Reorganization items, net in the accompanying Condensed Consolidated Statements of Operations. In addition, Liabilities subject to compromise during Chapter 11 proceedings were distinguished from liabilities of the non-debtors and from post-petition liabilities in the accompanying Condensed Consolidated Balance Sheets. The Company's other subsidiaries that were not part of the Bankruptcy Filing ("non-debtors") continued to operate in the ordinary course of business.

Upon emergence from bankruptcy on December 15, 2017 (the "Emergence Date"), the Company applied fresh start accounting, which resulted in a new basis of accounting and the Company becoming a new entity for financial reporting purposes. As a result of the application of fresh start accounting and the effects of the implementation of the Second Amended Joint Plan of Reorganization filed by the Debtors on October 24, 2017 and approved by the Bankruptcy Court on November 28, 2017 (the "Plan of Reorganization"), the consolidated financial statements after the Emergence Date, are not comparable with the consolidated financial statements on or before that date. Upon emergence, income and expense on non-U.S. dollar functional currency subsidiaries are translated into U.S. dollars using an average rate for the period rather than the applicable spot rate. Refer to Note 4, "Fresh Start Accounting," for additional information.

The accompanying Condensed Consolidated Financial Statements of the Company have been prepared on a basis that assumes that the Company will continue as a going concern and contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. During the Chapter 11 proceedings, the Company's ability to continue as a going concern was contingent upon its ability to comply with the financial and other covenants contained in its debtor-in-possession credit agreement, the Bankruptcy Court's approval of the Company's Plan of Reorganization and the Company's ability to successfully implement the Plan of Reorganization, among other factors. As a result of the execution of the Plan of Reorganization, there is no longer substantial doubt about the Company's ability to continue as a going concern.

References to "Successor" or "Successor Company" relate to the financial position and results of operations of the reorganized Avaya Holdings after the Emergence Date. References to "Predecessor" or "Predecessor Company" refer to the financial position and results of operations of Avaya Holdings on or before the Emergence Date.

Revision of Prior Period Amounts

Subsequent to filing the first quarter fiscal 2018 Form 10-Q, the Company identified certain amounts that should have been recorded in the Predecessor Company's consolidated financial statements as of December 15, 2017, the Emergence Date. Such errors resulted in a $26 million understatement of cash and cash equivalents and cash flows from operating activities with a corresponding overstatement of accounts receivable. Because of the application of fresh start accounting as of December 15, 2017, Stockholders’ Equity and Goodwill were also each understated by the same amount at December 15, 2017 and December 31, 2017. These errors had no effect on the reported consolidated net income (loss) for the Predecessor and Successor periods. The Company assessed the materiality of the above errors individually and in the aggregate on the December 31, 2017 interim Condensed Consolidated Financial Statements in accordance with SEC Staff Accounting Bulletin No. 99 and, based on an analysis of quantitative and qualitative factors, determined that the errors were not material to the Company's Predecessor and Successor periods in the interim Condensed Consolidated Financial Statements for the quarter ended December 31, 2017.

The Condensed Consolidated Balance Sheet as of December 16, 2017, the Condensed Consolidated Statement of Cash Flows for the Predecessor period from October 1, 2017 through December 15, 2017, and the notes thereto have been revised to include the effects of these errors and the cash flow reclassification as follows:

	December 16, 2017 (Successor)
(In millions, except per share amounts)	As Previously Reported		Adjustments			Revised
Condensed Consolidated Balance Sheet:
Cash	$	340	$	26		$	366
Accounts receivable	417		(26		)	391
Goodwill	2,632		26			2,658
Total Assets	7,583		26			7,609
Additional paid-in capital (Successor)	1,641		26			1,667
Total Stockholders' Equity	1,642		26			1,668
Total Liabilities and Stockholders' Equity	7,583		26			7,609
Successor common stock value per share	$	14.93	$	0.23		$	15.16

	Period from October 1, 2017 through December 15, 2017 (Predecessor)
(In millions)	As Previously Reported			Adjustments			Revised
Condensed Consolidated Statement of Cash Flows:
Change in Accounts receivable	$	14		$	26		$	40
Net gain on settlement of Liabilities subject to compromise	(1,804		)	26			(1,778		)
Fresh start adjustments	(1,671		)	(26		)	(1,697		)
Net Cash Used from Operating Activities	(440		)	26			(414		)
Net decrease in cash and cash equivalents	(536		)	26			(510		)

For additional information refer to Notes: 4. “Fresh Start Accounting”; 6. “Goodwill and Intangible Assets”; 7. “Supplementary Financial Information”; and 10. “Derivative Instruments and Hedging Activities”.

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Recent Accounting Pronouncements

9 Months Ended

Jun. 30, 2018

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In August 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” This standard sets forth targeted improvements to accounting for hedging activities and will make more financial and non-financial hedging strategies eligible for hedge accounting. It also modifies the presentation and disclosure requirements for hedging activities and changes how companies assess hedge effectiveness. The Company elected to early adopt this standard as of April 1, 2018, applying the updated provisions retrospectively to the beginning of the current fiscal year. As the Company did not maintain any hedging instruments prior to April 1, 2018, there was no retrospective impact due to this interim adoption. The new guidance will be applied to all hedging transactions entered into on or after April 1, 2018.

In March 2017, the FASB issued ASU No. 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost." This standard changes how employers that sponsor defined benefit pension and other post-retirement benefit plans present net periodic benefit cost in the income statement. This amendment requires that the service cost component be disaggregated from the other components of pension and post-retirement benefit costs on the income statement. The service cost component is reported in the same line items as other compensation costs and the other components of pension and post-retirement benefit costs (including interest cost, expected return on plan assets, amortization and curtailments and settlements) are reported in Other income (expense), net in the Company's Condensed Consolidated Financial Statements. The Company early adopted this accounting standard as of October 1, 2017. Changes to the Condensed Consolidated Financial Statements have been applied retrospectively. As a result, the Company reclassified $12 million and $29 million of other pension and post-retirement benefit costs to Other income (expense), net for the three and nine months endedJune 30, 2017 (Predecessor), respectively. For the three months ended June 30, 2018 (Successor), the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor), the Company recorded $4 million, $9 million and $(8) million, respectively, of other pension and post-retirement benefit credits (costs) in Other income (expense), net.

In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." This standard simplifies the accounting for share-based payments and their presentation in the statements of cash flows as well as the income tax effects of share-based payments. The Company adopted this standard as of October 1, 2017 on a prospective basis. The adoption of this standard did not have a material impact on the Company's Condensed Consolidated Financial Statements.

Recent Standards Not Yet Effective

In February 2018, the FASB issued ASU No. 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." This new standard allows companies to reclassify from accumulated other comprehensive income to retained earnings any stranded tax benefits resulting from the enactment of the Tax Cuts and Jobs Act. This standard is effective for the Company beginning in the first quarter of fiscal 2020. The Company is currently evaluating the impact that the adoption of this standard may have on its Condensed Consolidated Financial Statements.

In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." The standard requires the recognition of assets and liabilities for all leases with lease terms of more than 12 months. Subsequently, the FASB issued other standards that clarified certain aspects of the standard. This standard is effective for the Company in the first quarter of fiscal 2020 with early adoption permitted. The Company is currently evaluating the method of adoption and the effect that the adoption of the standard may have on its Condensed Consolidated Financial Statements.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” This standard supersedes most of the current revenue recognition guidance under GAAP and is intended to improve and converge with international standards the financial reporting requirements for revenue recognition. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. Subsequently, the FASB issued several standards that clarified certain aspects of the standard but did not change the original standard. This new guidance is effective for the Company beginning in the first quarter of fiscal 2019. The ASU may be applied retrospectively (a) to each reporting period presented or (b) with the cumulative effect in retained earnings at the beginning of the adoption period.

The Company will adopt the new standard effective October 1, 2018 using the modified retrospective method whereby the cumulative effect is recorded to retained earnings at the beginning of the adoption period. Adoption of the standard is dependent on completion of a detailed accounting assessment, the success of the design and implementation phase for changes to the Company's processes, internal controls and system functionality and the completion of the analysis of information necessary to assess the overall impact of adoption of this guidance on its Condensed Consolidated Financial Statements.

The Company continues to make progress on its accounting assessment phase and the design and implementation phases to implement the required business process and system changes to comply with the new accounting policies and disclosures in the consolidated financial statements. The Company will continue to monitor and assess the impact of changes to the standard and interpretations as they become available. The Company expects revenue recognition related to stand-alone product shipments and maintenance services to remain substantially unchanged. However, the Company continues to evaluate its preliminary conclusion and assess the impact on other sources of revenue recognition.

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Emergence from Voluntary Reorganization under Chapter 11 Proceedings

9 Months Ended

Jun. 30, 2018

Reorganizations [Abstract]

Emergence From Voluntary Reorganization Under Chapter 11 Proceedings

Emergence from Voluntary Reorganization under Chapter 11 Proceedings

Plan of Reorganization

On November 28, 2017, the Bankruptcy Court entered an order confirming the Plan of Reorganization. On the Emergence Date, the Plan of Reorganization became effective and the Debtors emerged from bankruptcy.

On or following the Emergence Date and pursuant to the terms of the Plan of Reorganization, the following occurred:

• Debtor-in-Possession Credit Agreement. The Company paid in full the debtor-in-possession credit agreement (the "DIP Credit Agreement") in the amount of $725 million;

• Predecessor Equity and Indebtedness. The Debtors' obligations under stock certificates, equity interests, and / or any other instrument or document directly or indirectly evidencing or creating any indebtedness or obligation of, or ownership interest in, the Debtors or giving rise to any claim or equity interest were cancelled, except as provided under the Plan of Reorganization;

• Successor Equity. The Company's certificate of incorporation was amended and restated to authorize the issuance of 605.0 million shares of Successor Company stock, consisting of 55.0 million shares of preferred stock, par value $0.01 per share, and 550.0 million shares of common stock, par value $0.01 per share, of which 110.0 million shares of common stock were issued (as discussed below);

• Exit Financing. The Successor Company entered into (1) a term loan credit agreement (the "Term Loan Credit Agreement") for a principal amount of $2,925 million maturing on December 15, 2024, and (2) a $300 million asset-based revolving credit facility (the "ABL Credit Agreement") maturing on December 15, 2022;

• First Lien Debt Claims. All the Predecessor Company's outstanding obligations under the variable rate term B-3, B-4, B-6, and B-7 loans and the 7% and 9% senior secured notes (collectively, the "Predecessor first lien obligations") were cancelled, and the holders of claims under the Predecessor first lien obligations received 99.3 million shares of Successor Company common stock. In addition, the holders of the Predecessor first lien obligations received cash in the amount of $2,061 million;

• Second Lien Debt Claims. All the Predecessor Company's outstanding obligations under the 10.50% senior secured notes (the "Predecessor second lien obligations") were cancelled, and the holders of claims under the Predecessor second lien obligations received 4.4 million shares of Successor Company common stock. In addition, holders of the Predecessor second lien obligations received warrants to purchase 5.6 million shares of Successor Company common stock at an exercise price of $25.55 per warrant (the "Emergence Date Warrants");

• Claims of Pension Benefit Guaranty Corporation ("PBGC"). The Predecessor Company's outstanding obligations under the Avaya Inc. Pension Plan for Salaried Employees ("APPSE") were terminated and transferred to the PBGC. The PBGC received 6.1 million shares of Successor Company common stock and $340 million in cash; and

• General Unsecured Claims. Holders of the Predecessor Company's general unsecured claims will receive their pro rata share of the general unsecured recovery pool. A liquidating trust was established in the amount of $58 million for the benefit of the general unsecured claims. Included in the 110.0 million Successor Company common stock issued are 0.2 million additional shares of common stock that have been issued (but are not outstanding) for the benefit of the general unsecured creditors. The general unsecured creditors will receive a total of $58 million in cash and common stock. Any excess cash and / or common stock not distributed to the general unsecured creditors will be distributed to the holders of the Predecessor first lien obligations.

Section 363 Asset Sale

In July 2017, the Company sold its networking business ("Networking" or the "Networking business") to Extreme Networks, Inc. ("Extreme"). The Networking business was comprised primarily of certain assets of the Company's Networking segment (which prior to the sale was a separate operating segment), along with the maintenance and professional services of the Networking business, which were part of the AGS segment. Under a Transition Services Agreement ("TSA"), the Company provides administrative services to Extreme for process support, maintenance services and product logistics on a fee basis. Substantially all activities required to be provided under the TSA have been completed as of June 30, 2018.

Fresh Start Accounting

In connection with the Company's emergence from bankruptcy and in accordance with FASB Accounting Standards Codification ("ASC") 852, "Reorganizations" ("ASC 852"), the Company applied the provisions of fresh start accounting to its Condensed Consolidated Financial Statements on the Emergence Date. The Company was required to use fresh start accounting since (i) the holders of existing voting shares of the Predecessor Company received less than 50% of the voting shares of the emerging entity and (ii) the reorganization value of the Company's assets immediately prior to confirmation of the Plan of Reorganization was less than the post-petition liabilities and allowed claims.

ASC 852 prescribes that with the application of fresh start accounting, the Company allocated its reorganization value to its individual assets based on their estimated fair values in conformity with ASC 805, "Business Combinations". The reorganization value represents the fair value of the Successor Company's assets before considering liabilities. The excess reorganization value over the fair value of identified tangible and intangible assets is reported as goodwill. As a result of the application of fresh start accounting and the effects of the implementation of the Plan of Reorganization, the consolidated financial statements after December 15, 2017 are not comparable with the consolidated financial statements as of or prior to that date.

As discussed in Note 1, "Revision of Prior Period Amounts", prior period amounts as reported have been revised, where applicable.

Reorganization Value

As set forth in the Plan of Reorganization, the agreed upon enterprise value of the Company was $5,721 million. This value is within the initial range calculated by the Company of approximately $5,100 million to approximately $7,100 million using an income approach. The $5,721 million enterprise value was selected as it was the transaction price agreed to in the global settlement agreement with the Company’s creditor constituencies, including the PBGC. The reorganization value was then determined by adding liabilities other than interest bearing debt, pension obligations, and the deferred tax impact of the reorganization and fresh start adjustments.

The following table reconciles the enterprise value to the estimated fair value of the Successor stockholders' equity as of the Emergence Date:

(In millions, except per share amount)	As Previously Reported			Adjustments		Revised
Enterprise value	$	5,721		$	—	$	5,721
Plus:
Cash and cash equivalents	340			26		366
Less:
Minimum cash required for operations	(120		)	—		(120		)
Fair value of Term Loan Credit Agreement(1)	(2,896		)	—		(2,896		)
Fair value of capitalized leases	(20		)	—		(20		)
Fair value of pension and other post-retirement obligations, net of tax(2)	(856		)	—		(856		)
Change in net deferred tax liabilities from reorganization	(510		)	—		(510		)
Fair value of Successor Emergence Date Warrants(3)	(17		)	—		(17		)
Fair value of Successor common stock	$	1,642		$	26	$	1,668
Shares issued at December 15, 2017 upon emergence	110.0			—		110.0
Successor common stock value per share	$	14.93		$	0.23	$	15.16

⁽¹⁾  The fair value of the Term Loan Credit Agreement was determined based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices and was estimated to be 99% of par value.

⁽²⁾  The following assumptions were used when measuring the fair value of the U.S. pension, non-U.S. pension, and post-retirement benefit plans: weighted-average return on assets of 7.75%, 3.80% and 5.90%, and weighted-average discount rate to measure plan obligations of 3.70%, 1.52% and 3.77%, respectively.

⁽³⁾  The fair value of the Emergence Date Warrants was estimated using the Black-Scholes-Merton ("Black-Scholes") pricing model.

The following table reconciles the enterprise value to the estimated reorganization value as of the Emergence Date:

(In millions)	As Previously Reported			Adjustments		Revised
Enterprise value	$	5,721		$	—	$	5,721
Plus:
Non-debt current liabilities	955			—		955
Non-debt non-current liabilities	2,090			—		2,090
Excess cash and cash equivalents	220			26		246
Less:
Pension and other post-retirement obligations, net of deferred taxes	(856		)	—		(856		)
Capital lease obligations	(20		)	—		(20		)
Change in net deferred tax liabilities from reorganization	(510		)	—		(510		)
Emergence Date Warrants issued	(17		)	—		(17		)
Reorganization value of Successor assets	$	7,583		$	26	$	7,609

Consolidated Balance Sheet

The reorganization and fresh start adjustments set forth in the following consolidated balance sheet as of December 16, 2017 reflect the effect of the consummation of the transactions contemplated by the Plan of Reorganization (reflected in the column "Reorganization Adjustments") as well as fair value adjustments as a result of applying fresh start accounting (reflected in the column "Fresh Start Adjustments"). The explanatory notes highlight methods used to determine fair values or other amounts of the assets and liabilities, as well as significant assumptions or inputs.

	As Previously Reported
(In millions)	Predecessor Company December 15, 2017			Reorganization Adjustments				Fresh Start Adjustments				Successor Company December 16, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	744		$	(404	)	(1)	$	—			$	340
Accounts receivable, net	523			—				(106		)	(21)	417
Inventory	98			—				29			(22)	127
Other current assets	366			(58		)	(2)	(66		)	(23)	242
TOTAL CURRENT ASSETS	1,731			(462		)		(143		)		1,126
Property, plant and equipment, net	194			—				116			(24)	310
Deferred income taxes, net	—			48			(3)	(17		)	(25)	31
Intangible assets, net	298			—				3,137			(26)	3,435
Goodwill	3,541			—				(909		)	(27)	2,632
Other assets	70			6			(4)	(27		)	(28)	49
TOTAL ASSETS	$	5,834		$	(408	)		$	2,157			$	7,583
LIABILITIES
Current liabilities:
Debt maturing within one year	$	725		$	(696	)	(5)	$	—			$	29
Accounts payable	325			(49		)	(6)	—				276
Payroll and benefit obligations	123			23			(7)	—				146
Deferred revenue	627			50			(8)	(341		)	(29)	336
Business restructuring reserve	35			3			(9)	—				38
Other current liabilities	97			65			(6,10)	(3		)	(30)	159
TOTAL CURRENT LIABILITIES	1,932			(604		)		(344		)		984
Non-current liabilities:
Long-term debt, net of current portion	—			2,771			(11)	96			(31)	2,867
Pension obligations	539			246			(12)	—				785
Other post-retirement obligations	—			212			(13)	—				212
Deferred income taxes, net	28			113			(14)	548			(32)	689
Business restructuring reserve	26			4			(9)	4			(33)	34
Other liabilities	180			233			(8,15)	(43		)	(29,34)	370
TOTAL NON-CURRENT LIABILITIES	773			3,579				605				4,957
LIABILITIES SUBJECT TO COMPROMISE	7,585			(7,585		)	(16)	—				—
TOTAL LIABILITIES	10,290			(4,610		)		261				5,941
Commitments and contingencies
Equity awards on redeemable shares	6			(6		)	(17)	—				—
Preferred stock:
Series B	397			(397		)	(17)	—				—
Series A	186			(186		)	(17)	—				—
STOCKHOLDERS' (DEFICIT) EQUITY
Common stock (Successor)	—			1			(18)	—				1
Additional paid-in capital (Successor)	—			1,641			(18)	—				1,641
Common stock (Predecessor)	—			—				—				—
Additional paid-in capital (Predecessor)	2,387			(2,387		)	(17)	—				—
(Accumulated deficit) retained earnings	(5,978		)	4,872			(19)	1,106			(36)	—
Accumulated other comprehensive (loss) income	(1,454		)	664			(20)	790			(35)	—
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY	(5,045		)	4,791				1,896				1,642
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$	5,834		$	(408	)		$	2,157			$	7,583

	Adjustments
(In millions)	Predecessor Company December 15, 2017			Reorganization Adjustments				Fresh Start Adjustments			Successor Company December 16, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	26		$	—			$	—		$	26
Accounts receivable, net	(26		)	—				—			(26		)
Inventory	—			—				—			—
Other current assets	—			—				—			—
TOTAL CURRENT ASSETS	—			—				—			—
Property, plant and equipment, net	—			—				—			—
Deferred income taxes, net	—			—				—			—
Intangible assets, net	—			—				—			—
Goodwill	—			—				26		(27)	26
Other assets	—			—				—			—
TOTAL ASSETS	$	—		$	—			$	26		$	26
LIABILITIES
Current liabilities:
Debt maturing within one year	$	—		$	—			$	—		$	—
Accounts payable	—			—				—			—
Payroll and benefit obligations	—			—				—			—
Deferred revenue	—			—				—			—
Business restructuring reserve	—			—				—			—
Other current liabilities	—			—				—			—
TOTAL CURRENT LIABILITIES	—			—				—			—
Non-current liabilities:
Long-term debt	—			—				—			—
Pension obligations	—			—				—			—
Other postretirement obligations	—			—				—			—
Deferred income taxes, net	—			—				—			—
Business restructuring reserve	—			—				—			—
Other liabilities	—			—				—			—
TOTAL NON-CURRENT LIABILITIES	—			—				—			—
LIABILITIES SUBJECT TO COMPROMISE	—			—				—			—
TOTAL LIABILITIES	—			—				—			—
Commitments and contingencies
Equity awards on redeemable shares	—			—				—			—
Preferred stock:
Series B	—			—				—			—
Series A	—			—				—			—
STOCKHOLDERS' (DEFICIT) EQUITY
Common stock (Successor)	—			—				—			—
Additional paid-in capital (Successor)	—			26			(18)	—			26
Common stock (Predecessor)	—			—				—			—
Additional paid-in capital (Predecessor)	—			—				—			—
(Accumulated deficit) retained earnings	—			(26		)	(19)	26		(36)	—
Accumulated other comprehensive (loss) income	—			—				—			—
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY	—			—				26			26
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$	—		$	—			$	26		$	26

	Revised
(In millions)	Predecessor Company December 15,  2017			Reorganization Adjustments				Fresh Start Adjustments				Successor Company December 16,  2017
ASSETS
Current assets:
Cash and cash equivalents	$	770		$	(404	)	(1)	$	—			$	366
Accounts receivable, net	497			—				(106		)	(21)	391
Inventory	98			—				29			(22)	127
Other current assets	366			(58		)	(2)	(66		)	(23)	242
TOTAL CURRENT ASSETS	1,731			(462		)		(143		)		1,126
Property, plant and equipment, net	194			—				116			(24)	310
Deferred income taxes, net	—			48			(3)	(17		)	(25)	31
Intangible assets, net	298			—				3,137			(26)	3,435
Goodwill	3,541			—				(883		)	(27)	2,658
Other assets	70			6			(4)	(27		)	(28)	49
TOTAL ASSETS	$	5,834		$	(408	)		$	2,183			$	7,609
LIABILITIES
Current liabilities:
Debt maturing within one year	$	725		$	(696	)	(5)	$	—			$	29
Accounts payable	325			(49		)	(6)	—				276
Payroll and benefit obligations	123			23			(7)	—				146
Deferred revenue	627			50			(8)	(341		)	(29)	336
Business restructuring reserve	35			3			(9)	—				38
Other current liabilities	97			65			(6,10)	(3		)	(30)	159
TOTAL CURRENT LIABILITIES	1,932			(604		)		(344		)		984
Non-current liabilities:
Long-term debt, net of current portion	—			2,771			(11)	96			(31)	2,867
Pension obligations	539			246			(12)	—				785
Other post-retirement obligations	—			212			(13)	—				212
Deferred income taxes, net	28			113			(14)	548			(32)	689
Business restructuring reserve	26			4			(9)	4			(33)	34
Other liabilities	180			233			(8,15)	(43		)	(29,34)	370
TOTAL NON-CURRENT LIABILITIES	773			3,579				605				4,957
LIABILITIES SUBJECT TO COMPROMISE	7,585			(7,585		)	(16)	—				—
TOTAL LIABILITIES	10,290			(4,610		)		261				5,941
Commitments and contingencies
Equity awards on redeemable shares	6			(6		)	(17)	—				—
Preferred stock:
Series B	397			(397		)	(17)	—				—
Series A	186			(186		)	(17)	—				—
STOCKHOLDERS' (DEFICIT) EQUITY
Common stock (Successor)	—			1			(18)	—				1
Additional paid-in capital (Successor)	—			1,667			(18)	—				1,667
Common stock (Predecessor)	—			—				—				—
Additional paid-in capital (Predecessor)	2,387			(2,387		)	(17)	—				—
(Accumulated deficit) retained earnings	(5,978		)	4,846			(19)	1,132			(36)	—
Accumulated other comprehensive (loss) income	(1,454		)	664			(20)	790			(35)	—
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY	(5,045		)	4,791				1,922				1,668
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$	5,834		$	(408	)		$	2,183			$	7,609

Reorganization Adjustments

In accordance with the Plan of Reorganization, the following adjustments were made:

1.Sources and Uses of Cash. The following reflects the net cash payments recorded as of the Emergence Date as a result of implementing the Plan of Reorganization:

(In millions)
Sources:
Proceeds from Term Loan Credit Agreement, net of original issue discount	$	2,896
Release of restricted cash	76
Total sources of cash	2,972
Uses:
Repayment of DIP Credit Agreement	(725		)
Payment of DIP Credit Agreement accrued interest	(1		)
Cash paid to Predecessor first lien debt-holders	(2,061		)
Cash paid to PBGC	(340		)
Payment for professional fees escrow account	(56		)
Funding payment for Avaya represented employee pension plan	(49		)
Payment of accrued professional & administrative fees	(27		)
Costs incurred for Term Loan Credit Agreement and ABL Credit Agreement	(59		)
Payment for general unsecured claims	(58		)
Total uses of cash	(3,376		)
Net uses of cash	$	(404	)

2. Other Current Assets.

(In millions)
Release of restricted cash	$	(76	)
Reclassification of prepaid debt issuance costs related to the Term Loan Credit Agreement	(42		)
Payment of fees related to the ABL Credit Agreement	5
Restricted cash for bankruptcy related professional fees	55
Total other current assets	$	(58	)

3. Deferred Income Taxes. The adjustment represents the release of the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of the bankruptcy reorganization.

4. Other Assets. The adjustment represents the re-establishment of foreign prepaid taxes.

5. Debt Maturing Within One Year. The adjustment represents the net effect of the Company’s repayment of $725 million for the DIP Credit Agreement and Term Loan Credit Agreement principal payments of $29 million due over the next year.

6. Accounts Payable. The net decrease of $49 million includes $50 million for professional fees that were reclassified to Other current liabilities for accrued bankruptcy related professional fees that will be paid from an escrow account and a payment of $3 million for bankruptcy related professional fees, partially offset by reinstatement of $4 million contract cure costs from liabilities subject to compromise.

7. Payroll and Benefit Obligations. The Company reinstated $23 million of liabilities subject to compromise related to the post-employment and post-retirement benefit obligations.

8. Deferred Revenue. The reinstatement of liabilities subject to compromise was $79 million of which $50 million is included in deferred revenue and $29 million in other liabilities.

9. Business Restructuring Reserve. The reinstatement of liabilities subject to compromise was $7 million, of which $3 million is current and $4 million is non-current.

10.Other Current Liabilities.

(In millions)
Reclassification of accrued bankruptcy related professional fees	$	50
Reinstatement of other current liabilities	16
Payment of accrued interest on the DIP Credit Agreement	(1		)
Total other current liabilities	$	65

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

(In millions)
Term Loan Credit Agreement	$	2,925
Less:
Discount	(29		)
Upfront and underwriting fees	(54		)
Cash received upon emergence from bankruptcy	2,842
Reclassification of debt issuance cost incurred prior to emergence from bankruptcy	(42		)
Current portion of Long-term debt	(29		)
Long-term debt, net of current portion	$	2,771

12. Pension Obligations. In accordance with the Plan of Reorganization, the Company reinstated from liabilities subject to compromise $295 million related to the Avaya Pension Plan for represented employees and also contributed $49 million to the related pension trust.

13. Other Post-retirement Obligations. Other post-retirement benefit obligations of $212 million were reinstated from liabilities subject to compromise.

14. Deferred Income Taxes. The adjustment represents the reinstatement of the deferred tax liability that was included in liabilities subject to compromise.

15. Other Liabilities. The increase of $233 million primarily relates to the reinstatement of employee benefits, tax liabilities and deferred revenue from liabilities subject to compromise. Also included is the value of the Emergence Date Warrants issued to the holders of the Predecessor second lien obligations.

16.Liabilities Subject to Compromise. Liabilities subject to compromise were reinstated or settled as follows in accordance with the Plan of Reorganization:

(In millions)
Liabilities subject to compromise			$	7,585
Less amounts settled per the Plan of Reorganization
Pre-petition first lien debt			(4,281		)
Pre-petition second lien debt			(1,440		)
Avaya Pension Plan for Salaried Employees			(620		)
Amounts reinstated:
Accounts payable	(4	)
Payroll and benefit obligations	(23	)
Deferred revenue	(50	)
Business restructuring reserves	(7	)
Other current liabilities	(16	)
Pension obligations	(295	)
Other post-retirement obligations	(212	)
Deferred income taxes, net	(118	)
Other liabilities	(216	)
Total liabilities reinstated at emergence			(941		)
General unsecured credit claims(1)			(303		)
Liabilities subject to compromise			$	—

⁽¹⁾ In settlement of allowed general unsecured claims, each claimant will receive a pro-rata distribution of $58 million of the general unsecured claims account.

The following table displays the detail on the gain on settlement of liabilities subject to compromise:

(In millions)	As Previously Reported			Adjustments			Revised
Pre-petition first lien debt	$	734		$	(23	)	$	711
Pre-petition second lien debt	1,357			(1		)	1,356
Avaya pension plan for salaried employees	(514		)	(2		)	(516		)
General unsecured creditors' claims	227			—			227
Net gain on settlement of Liabilities subject to compromise	$	1,804		$	(26	)	$	1,778

17. Cancellation of Predecessor Preferred and Common Stock. All common stock, Series A and B preferred stock and all other equity awards of the Predecessor Company were cancelled on the Emergence Date without any recovery on account thereof.

18. Issuance of Successor Common Stock and Emergence Date Warrants. In settlement of the Company's $5,721 million Predecessor first lien obligations and Predecessor second lien obligations, the holders of the Predecessor first lien obligations received a total of 99.3 million shares of common stock (fair value of $1,509 million) and $2,061 million in cash and the holders of the Predecessor second lien obligations received a total of 4.4 million shares of common stock (fair value of $67 million) and 5.6 million Emergence Date Warrants to purchase a like amount of common shares (fair value of $17 million). In addition, as part of the Plan of Reorganization, the Company completed a distressed termination of the APPSE in accordance with the Stipulation Settlement with the PBGC, the PBGC received $340 million in cash and 6.1 million shares of common stock (fair value of $92 million).

19. Accumulated Deficit.

(In millions)	As Previously Reported			Adjustments			Revised
Accumulated deficit:
Net gain on settlement of liabilities subject to compromise	$	1,804		$	(26	)	$	1,778
Expense for certain professional fees	(26		)	—			(26		)
Benefit from income taxes	118			—			118
Cancellation of Predecessor equity awards	6			—			6
Cancellation of Predecessor Preferred stock Series B	397			—			397
Cancellation of Predecessor Preferred stock Series A	186			—			186
Cancellation of Predecessor Common stock	2,387			—			2,387
Total	$	4,872		$	(26	)	$	4,846

20. Accumulated Comprehensive Loss. The changes to Accumulated comprehensive loss relate to the settlement of the APPSE and the Avaya Supplemental Pension Plan ("ASPP") and associated taxes.

Fresh Start Adjustments

At the Emergence Date, the Company met the requirements under ASC 852 for the adoption of fresh start accounting. These adjustments reflect actual amounts recorded as of the Emergence Date.

21. Accounts Receivable. This adjustment relates to a change in accounting policy for the way the Company will present uncollected deferred revenue upon emergence from bankruptcy. The Company will offset such deferred revenue against the related account receivable.

22. Inventory. This adjustment relates to the write-up of inventory to fair value based on estimated selling prices, less costs of disposal.

23. Other Current Assets. This adjustment reflects the write-off of certain prepaid commissions, deferred installation costs and debt issuance costs that do not meet the definition of an asset upon emergence.

24. Property, Plant and Equipment. An adjustment of $116 million was recorded to increase the net book value of property, plant and equipment to its estimated fair value based on estimated current acquisition price, plus costs to make the property fully operational.

The following table reflects the components of property, plant and equipment, net as of December 15, 2017:

(In millions)
Buildings and improvements	$	82
Machinery and equipment	38
Rental equipment	85
Assets under construction	13
Internal use software	92
Total property, plant and equipment	310
Less: accumulated depreciation and amortization	—
Property, plant and equipment, net	$	310

25. Deferred Income Tax.The adjustment represents the release of the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of future taxable income from the reversal of deferred tax liabilities that were established as part of fresh start accounting.

26. Intangible Assets. The Company recorded an adjustment to intangible assets for $3,137 million as follows:

	Successor		Predecessor
(In millions)	December 16, 2017 Post-emergence		December 15, 2017 Pre-emergence		Difference
Customer relationships and other intangible assets	$	2,155	$	96	$	2,059
Technology and patents	905		12		893
Trademarks and trade names	375		190		185
Total	$	3,435	$	298	$	3,137

The fair value of customer relationships was determined using the excess earnings method, a derivation of the income approach that calculates residual profit attributable to an asset after proper returns are paid to complementary or contributory assets.

The fair value of technology and patents and trademarks and trade names determined using the royalty savings method, a derivation of the income approach that estimates the royalties saved through ownership of the assets.

27. Goodwill. Predecessor goodwill of $3,541 million was eliminated and Successor goodwill of $2,658 million was established based on the calculated reorganization value.

(In millions)	As Previously Reported			Adjustments		Revised
Reorganization value of Successor Company	$	7,583		$	26	$	7,609
Less: Fair value of Successor Company assets	(4,951		)	—		(4,951		)
Reorganization value of Successor Company assets in excess of fair value - goodwill	$	2,632		$	26	$	2,658

28. Other Assets. The $27 million decrease to other assets is related to prepaid commissions that do not meet the definition of an asset upon emergence as there is no future benefit to the Successor Company.

29. Deferred Revenue. The fair value of deferred revenue, which principally relates to payments on annual maintenance contracts, was determined by deducting selling costs and associated profit from the Predecessor deferred revenue balance to arrive at the costs and profit associated with fulfilling the liability. Additionally, the decrease includes the impact of an accounting policy change whereby the Successor Company no longer recognizes deferred revenue relating to sales transactions that have been billed, but for which the related account receivable has not yet been collected.

30. Other Current Liabilities. The decrease of $3 million to other current liabilities is related to the fair value of real estate leases determined to be above or below market using the income approach based on the difference between the contractual rental rate and the estimated market rental rate, discounted utilizing a risk-related discount rate.

31. Long-term Debt. The fair value of the Term Loan Credit Agreement was determined based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices.

32. Deferred Income Taxes. The adjustment represents the establishment of deferred tax liabilities related to book/tax differences created by fresh start accounting adjustments. The amount is net of the release of the valuation allowance on deferred tax assets, which management believes more likely than not will be realized as a result of future taxable income from the reversal of such deferred tax liabilities.

33. Business Restructuring Reserve. The Company recorded an increase to its non-current business restructuring reserves based on estimated future cash flows applied to a current discount rate at emergence.

34. Other Liabilities. A decrease in other liabilities of $43 million relates to deferred revenue and real estate leases as previously discussed.

35. Accumulated Other Comprehensive Loss. The remaining balance in Accumulated comprehensive loss was reversed to Reorganization expenses, net.

36. Fresh Start Adjustments. The following table reflects the cumulative impact of the fresh start adjustments as discussed above, the elimination of the Predecessor Company's accumulated other comprehensive loss and the adjustments required to eliminate accumulated deficit:

(In millions)	As Previously Reported			Adjustments		Revised
Eliminate Predecessor Intangible assets	$	(298	)	$	—	$	(298	)
Eliminate Predecessor Goodwill	(3,541		)	—		(3,541		)
Establish Successor Intangible assets	3,435			—		3,435
Establish Successor Goodwill	2,632			26		2,658
Fair value adjustment to Inventory	29			—		29
Fair value adjustment to Other current assets	(66		)	—		(66		)
Fair value adjustment to Property, plant and equipment	116			—		116
Fair value adjustment to Other assets	(27		)	—		(27		)
Fair value adjustment to Deferred revenue	235			—		235
Fair value adjustment to Business restructuring reserves	(4		)	—		(4		)
Fair value adjustment to Other current liabilities	3			—		3
Fair value adjustment to Long-term debt	(96		)			(96		)
Fair value adjustment to Other liabilities	43			—		43
Release Predecessor Accumulated comprehensive loss	(790		)	—		(790		)
Fresh start adjustments included in Reorganization items, net	1,671			26		1,697
Tax impact of fresh start adjustments	(565		)	—		(565		)
Gain on fresh start accounting, net	$	1,106		$	26	$	1,132

XML

Fresh Start Accounting

9 Months Ended

Jun. 30, 2018

Reorganizations [Abstract]

Fresh Start Accounting

Emergence from Voluntary Reorganization under Chapter 11 Proceedings

Plan of Reorganization

On November 28, 2017, the Bankruptcy Court entered an order confirming the Plan of Reorganization. On the Emergence Date, the Plan of Reorganization became effective and the Debtors emerged from bankruptcy.

On or following the Emergence Date and pursuant to the terms of the Plan of Reorganization, the following occurred:

• Debtor-in-Possession Credit Agreement. The Company paid in full the debtor-in-possession credit agreement (the "DIP Credit Agreement") in the amount of $725 million;

• Predecessor Equity and Indebtedness. The Debtors' obligations under stock certificates, equity interests, and / or any other instrument or document directly or indirectly evidencing or creating any indebtedness or obligation of, or ownership interest in, the Debtors or giving rise to any claim or equity interest were cancelled, except as provided under the Plan of Reorganization;

• Successor Equity. The Company's certificate of incorporation was amended and restated to authorize the issuance of 605.0 million shares of Successor Company stock, consisting of 55.0 million shares of preferred stock, par value $0.01 per share, and 550.0 million shares of common stock, par value $0.01 per share, of which 110.0 million shares of common stock were issued (as discussed below);

• Exit Financing. The Successor Company entered into (1) a term loan credit agreement (the "Term Loan Credit Agreement") for a principal amount of $2,925 million maturing on December 15, 2024, and (2) a $300 million asset-based revolving credit facility (the "ABL Credit Agreement") maturing on December 15, 2022;

• First Lien Debt Claims. All the Predecessor Company's outstanding obligations under the variable rate term B-3, B-4, B-6, and B-7 loans and the 7% and 9% senior secured notes (collectively, the "Predecessor first lien obligations") were cancelled, and the holders of claims under the Predecessor first lien obligations received 99.3 million shares of Successor Company common stock. In addition, the holders of the Predecessor first lien obligations received cash in the amount of $2,061 million;

• Second Lien Debt Claims. All the Predecessor Company's outstanding obligations under the 10.50% senior secured notes (the "Predecessor second lien obligations") were cancelled, and the holders of claims under the Predecessor second lien obligations received 4.4 million shares of Successor Company common stock. In addition, holders of the Predecessor second lien obligations received warrants to purchase 5.6 million shares of Successor Company common stock at an exercise price of $25.55 per warrant (the "Emergence Date Warrants");

• Claims of Pension Benefit Guaranty Corporation ("PBGC"). The Predecessor Company's outstanding obligations under the Avaya Inc. Pension Plan for Salaried Employees ("APPSE") were terminated and transferred to the PBGC. The PBGC received 6.1 million shares of Successor Company common stock and $340 million in cash; and

• General Unsecured Claims. Holders of the Predecessor Company's general unsecured claims will receive their pro rata share of the general unsecured recovery pool. A liquidating trust was established in the amount of $58 million for the benefit of the general unsecured claims. Included in the 110.0 million Successor Company common stock issued are 0.2 million additional shares of common stock that have been issued (but are not outstanding) for the benefit of the general unsecured creditors. The general unsecured creditors will receive a total of $58 million in cash and common stock. Any excess cash and / or common stock not distributed to the general unsecured creditors will be distributed to the holders of the Predecessor first lien obligations.

Section 363 Asset Sale

In July 2017, the Company sold its networking business ("Networking" or the "Networking business") to Extreme Networks, Inc. ("Extreme"). The Networking business was comprised primarily of certain assets of the Company's Networking segment (which prior to the sale was a separate operating segment), along with the maintenance and professional services of the Networking business, which were part of the AGS segment. Under a Transition Services Agreement ("TSA"), the Company provides administrative services to Extreme for process support, maintenance services and product logistics on a fee basis. Substantially all activities required to be provided under the TSA have been completed as of June 30, 2018.

Fresh Start Accounting

In connection with the Company's emergence from bankruptcy and in accordance with FASB Accounting Standards Codification ("ASC") 852, "Reorganizations" ("ASC 852"), the Company applied the provisions of fresh start accounting to its Condensed Consolidated Financial Statements on the Emergence Date. The Company was required to use fresh start accounting since (i) the holders of existing voting shares of the Predecessor Company received less than 50% of the voting shares of the emerging entity and (ii) the reorganization value of the Company's assets immediately prior to confirmation of the Plan of Reorganization was less than the post-petition liabilities and allowed claims.

ASC 852 prescribes that with the application of fresh start accounting, the Company allocated its reorganization value to its individual assets based on their estimated fair values in conformity with ASC 805, "Business Combinations". The reorganization value represents the fair value of the Successor Company's assets before considering liabilities. The excess reorganization value over the fair value of identified tangible and intangible assets is reported as goodwill. As a result of the application of fresh start accounting and the effects of the implementation of the Plan of Reorganization, the consolidated financial statements after December 15, 2017 are not comparable with the consolidated financial statements as of or prior to that date.

As discussed in Note 1, "Revision of Prior Period Amounts", prior period amounts as reported have been revised, where applicable.

Reorganization Value

As set forth in the Plan of Reorganization, the agreed upon enterprise value of the Company was $5,721 million. This value is within the initial range calculated by the Company of approximately $5,100 million to approximately $7,100 million using an income approach. The $5,721 million enterprise value was selected as it was the transaction price agreed to in the global settlement agreement with the Company’s creditor constituencies, including the PBGC. The reorganization value was then determined by adding liabilities other than interest bearing debt, pension obligations, and the deferred tax impact of the reorganization and fresh start adjustments.

The following table reconciles the enterprise value to the estimated fair value of the Successor stockholders' equity as of the Emergence Date:

(In millions, except per share amount)	As Previously Reported			Adjustments		Revised
Enterprise value	$	5,721		$	—	$	5,721
Plus:
Cash and cash equivalents	340			26		366
Less:
Minimum cash required for operations	(120		)	—		(120		)
Fair value of Term Loan Credit Agreement(1)	(2,896		)	—		(2,896		)
Fair value of capitalized leases	(20		)	—		(20		)
Fair value of pension and other post-retirement obligations, net of tax(2)	(856		)	—		(856		)
Change in net deferred tax liabilities from reorganization	(510		)	—		(510		)
Fair value of Successor Emergence Date Warrants(3)	(17		)	—		(17		)
Fair value of Successor common stock	$	1,642		$	26	$	1,668
Shares issued at December 15, 2017 upon emergence	110.0			—		110.0
Successor common stock value per share	$	14.93		$	0.23	$	15.16

⁽¹⁾  The fair value of the Term Loan Credit Agreement was determined based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices and was estimated to be 99% of par value.

⁽²⁾  The following assumptions were used when measuring the fair value of the U.S. pension, non-U.S. pension, and post-retirement benefit plans: weighted-average return on assets of 7.75%, 3.80% and 5.90%, and weighted-average discount rate to measure plan obligations of 3.70%, 1.52% and 3.77%, respectively.

⁽³⁾  The fair value of the Emergence Date Warrants was estimated using the Black-Scholes-Merton ("Black-Scholes") pricing model.

The following table reconciles the enterprise value to the estimated reorganization value as of the Emergence Date:

(In millions)	As Previously Reported			Adjustments		Revised
Enterprise value	$	5,721		$	—	$	5,721
Plus:
Non-debt current liabilities	955			—		955
Non-debt non-current liabilities	2,090			—		2,090
Excess cash and cash equivalents	220			26		246
Less:
Pension and other post-retirement obligations, net of deferred taxes	(856		)	—		(856		)
Capital lease obligations	(20		)	—		(20		)
Change in net deferred tax liabilities from reorganization	(510		)	—		(510		)
Emergence Date Warrants issued	(17		)	—		(17		)
Reorganization value of Successor assets	$	7,583		$	26	$	7,609

Consolidated Balance Sheet

The reorganization and fresh start adjustments set forth in the following consolidated balance sheet as of December 16, 2017 reflect the effect of the consummation of the transactions contemplated by the Plan of Reorganization (reflected in the column "Reorganization Adjustments") as well as fair value adjustments as a result of applying fresh start accounting (reflected in the column "Fresh Start Adjustments"). The explanatory notes highlight methods used to determine fair values or other amounts of the assets and liabilities, as well as significant assumptions or inputs.

	As Previously Reported
(In millions)	Predecessor Company December 15, 2017			Reorganization Adjustments				Fresh Start Adjustments				Successor Company December 16, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	744		$	(404	)	(1)	$	—			$	340
Accounts receivable, net	523			—				(106		)	(21)	417
Inventory	98			—				29			(22)	127
Other current assets	366			(58		)	(2)	(66		)	(23)	242
TOTAL CURRENT ASSETS	1,731			(462		)		(143		)		1,126
Property, plant and equipment, net	194			—				116			(24)	310
Deferred income taxes, net	—			48			(3)	(17		)	(25)	31
Intangible assets, net	298			—				3,137			(26)	3,435
Goodwill	3,541			—				(909		)	(27)	2,632
Other assets	70			6			(4)	(27		)	(28)	49
TOTAL ASSETS	$	5,834		$	(408	)		$	2,157			$	7,583
LIABILITIES
Current liabilities:
Debt maturing within one year	$	725		$	(696	)	(5)	$	—			$	29
Accounts payable	325			(49		)	(6)	—				276
Payroll and benefit obligations	123			23			(7)	—				146
Deferred revenue	627			50			(8)	(341		)	(29)	336
Business restructuring reserve	35			3			(9)	—				38
Other current liabilities	97			65			(6,10)	(3		)	(30)	159
TOTAL CURRENT LIABILITIES	1,932			(604		)		(344		)		984
Non-current liabilities:
Long-term debt, net of current portion	—			2,771			(11)	96			(31)	2,867
Pension obligations	539			246			(12)	—				785
Other post-retirement obligations	—			212			(13)	—				212
Deferred income taxes, net	28			113			(14)	548			(32)	689
Business restructuring reserve	26			4			(9)	4			(33)	34
Other liabilities	180			233			(8,15)	(43		)	(29,34)	370
TOTAL NON-CURRENT LIABILITIES	773			3,579				605				4,957
LIABILITIES SUBJECT TO COMPROMISE	7,585			(7,585		)	(16)	—				—
TOTAL LIABILITIES	10,290			(4,610		)		261				5,941
Commitments and contingencies
Equity awards on redeemable shares	6			(6		)	(17)	—				—
Preferred stock:
Series B	397			(397		)	(17)	—				—
Series A	186			(186		)	(17)	—				—
STOCKHOLDERS' (DEFICIT) EQUITY
Common stock (Successor)	—			1			(18)	—				1
Additional paid-in capital (Successor)	—			1,641			(18)	—				1,641
Common stock (Predecessor)	—			—				—				—
Additional paid-in capital (Predecessor)	2,387			(2,387		)	(17)	—				—
(Accumulated deficit) retained earnings	(5,978		)	4,872			(19)	1,106			(36)	—
Accumulated other comprehensive (loss) income	(1,454		)	664			(20)	790			(35)	—
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY	(5,045		)	4,791				1,896				1,642
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$	5,834		$	(408	)		$	2,157			$	7,583

	Adjustments
(In millions)	Predecessor Company December 15, 2017			Reorganization Adjustments				Fresh Start Adjustments			Successor Company December 16, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	26		$	—			$	—		$	26
Accounts receivable, net	(26		)	—				—			(26		)
Inventory	—			—				—			—
Other current assets	—			—				—			—
TOTAL CURRENT ASSETS	—			—				—			—
Property, plant and equipment, net	—			—				—			—
Deferred income taxes, net	—			—				—			—
Intangible assets, net	—			—				—			—
Goodwill	—			—				26		(27)	26
Other assets	—			—				—			—
TOTAL ASSETS	$	—		$	—			$	26		$	26
LIABILITIES
Current liabilities:
Debt maturing within one year	$	—		$	—			$	—		$	—
Accounts payable	—			—				—			—
Payroll and benefit obligations	—			—				—			—
Deferred revenue	—			—				—			—
Business restructuring reserve	—			—				—			—
Other current liabilities	—			—				—			—
TOTAL CURRENT LIABILITIES	—			—				—			—
Non-current liabilities:
Long-term debt	—			—				—			—
Pension obligations	—			—				—			—
Other postretirement obligations	—			—				—			—
Deferred income taxes, net	—			—				—			—
Business restructuring reserve	—			—				—			—
Other liabilities	—			—				—			—
TOTAL NON-CURRENT LIABILITIES	—			—				—			—
LIABILITIES SUBJECT TO COMPROMISE	—			—				—			—
TOTAL LIABILITIES	—			—				—			—
Commitments and contingencies
Equity awards on redeemable shares	—			—				—			—
Preferred stock:
Series B	—			—				—			—
Series A	—			—				—			—
STOCKHOLDERS' (DEFICIT) EQUITY
Common stock (Successor)	—			—				—			—
Additional paid-in capital (Successor)	—			26			(18)	—			26
Common stock (Predecessor)	—			—				—			—
Additional paid-in capital (Predecessor)	—			—				—			—
(Accumulated deficit) retained earnings	—			(26		)	(19)	26		(36)	—
Accumulated other comprehensive (loss) income	—			—				—			—
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY	—			—				26			26
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$	—		$	—			$	26		$	26

	Revised
(In millions)	Predecessor Company December 15,  2017			Reorganization Adjustments				Fresh Start Adjustments				Successor Company December 16,  2017
ASSETS
Current assets:
Cash and cash equivalents	$	770		$	(404	)	(1)	$	—			$	366
Accounts receivable, net	497			—				(106		)	(21)	391
Inventory	98			—				29			(22)	127
Other current assets	366			(58		)	(2)	(66		)	(23)	242
TOTAL CURRENT ASSETS	1,731			(462		)		(143		)		1,126
Property, plant and equipment, net	194			—				116			(24)	310
Deferred income taxes, net	—			48			(3)	(17		)	(25)	31
Intangible assets, net	298			—				3,137			(26)	3,435
Goodwill	3,541			—				(883		)	(27)	2,658
Other assets	70			6			(4)	(27		)	(28)	49
TOTAL ASSETS	$	5,834		$	(408	)		$	2,183			$	7,609
LIABILITIES
Current liabilities:
Debt maturing within one year	$	725		$	(696	)	(5)	$	—			$	29
Accounts payable	325			(49		)	(6)	—				276
Payroll and benefit obligations	123			23			(7)	—				146
Deferred revenue	627			50			(8)	(341		)	(29)	336
Business restructuring reserve	35			3			(9)	—				38
Other current liabilities	97			65			(6,10)	(3		)	(30)	159
TOTAL CURRENT LIABILITIES	1,932			(604		)		(344		)		984
Non-current liabilities:
Long-term debt, net of current portion	—			2,771			(11)	96			(31)	2,867
Pension obligations	539			246			(12)	—				785
Other post-retirement obligations	—			212			(13)	—				212
Deferred income taxes, net	28			113			(14)	548			(32)	689
Business restructuring reserve	26			4			(9)	4			(33)	34
Other liabilities	180			233			(8,15)	(43		)	(29,34)	370
TOTAL NON-CURRENT LIABILITIES	773			3,579				605				4,957
LIABILITIES SUBJECT TO COMPROMISE	7,585			(7,585		)	(16)	—				—
TOTAL LIABILITIES	10,290			(4,610		)		261				5,941
Commitments and contingencies
Equity awards on redeemable shares	6			(6		)	(17)	—				—
Preferred stock:
Series B	397			(397		)	(17)	—				—
Series A	186			(186		)	(17)	—				—
STOCKHOLDERS' (DEFICIT) EQUITY
Common stock (Successor)	—			1			(18)	—				1
Additional paid-in capital (Successor)	—			1,667			(18)	—				1,667
Common stock (Predecessor)	—			—				—				—
Additional paid-in capital (Predecessor)	2,387			(2,387		)	(17)	—				—
(Accumulated deficit) retained earnings	(5,978		)	4,846			(19)	1,132			(36)	—
Accumulated other comprehensive (loss) income	(1,454		)	664			(20)	790			(35)	—
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY	(5,045		)	4,791				1,922				1,668
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$	5,834		$	(408	)		$	2,183			$	7,609

Reorganization Adjustments

In accordance with the Plan of Reorganization, the following adjustments were made:

1.Sources and Uses of Cash. The following reflects the net cash payments recorded as of the Emergence Date as a result of implementing the Plan of Reorganization:

(In millions)
Sources:
Proceeds from Term Loan Credit Agreement, net of original issue discount	$	2,896
Release of restricted cash	76
Total sources of cash	2,972
Uses:
Repayment of DIP Credit Agreement	(725		)
Payment of DIP Credit Agreement accrued interest	(1		)
Cash paid to Predecessor first lien debt-holders	(2,061		)
Cash paid to PBGC	(340		)
Payment for professional fees escrow account	(56		)
Funding payment for Avaya represented employee pension plan	(49		)
Payment of accrued professional & administrative fees	(27		)
Costs incurred for Term Loan Credit Agreement and ABL Credit Agreement	(59		)
Payment for general unsecured claims	(58		)
Total uses of cash	(3,376		)
Net uses of cash	$	(404	)

2. Other Current Assets.

(In millions)
Release of restricted cash	$	(76	)
Reclassification of prepaid debt issuance costs related to the Term Loan Credit Agreement	(42		)
Payment of fees related to the ABL Credit Agreement	5
Restricted cash for bankruptcy related professional fees	55
Total other current assets	$	(58	)

3. Deferred Income Taxes. The adjustment represents the release of the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of the bankruptcy reorganization.

4. Other Assets. The adjustment represents the re-establishment of foreign prepaid taxes.

5. Debt Maturing Within One Year. The adjustment represents the net effect of the Company’s repayment of $725 million for the DIP Credit Agreement and Term Loan Credit Agreement principal payments of $29 million due over the next year.

6. Accounts Payable. The net decrease of $49 million includes $50 million for professional fees that were reclassified to Other current liabilities for accrued bankruptcy related professional fees that will be paid from an escrow account and a payment of $3 million for bankruptcy related professional fees, partially offset by reinstatement of $4 million contract cure costs from liabilities subject to compromise.

7. Payroll and Benefit Obligations. The Company reinstated $23 million of liabilities subject to compromise related to the post-employment and post-retirement benefit obligations.

8. Deferred Revenue. The reinstatement of liabilities subject to compromise was $79 million of which $50 million is included in deferred revenue and $29 million in other liabilities.

9. Business Restructuring Reserve. The reinstatement of liabilities subject to compromise was $7 million, of which $3 million is current and $4 million is non-current.

10.Other Current Liabilities.

(In millions)
Reclassification of accrued bankruptcy related professional fees	$	50
Reinstatement of other current liabilities	16
Payment of accrued interest on the DIP Credit Agreement	(1		)
Total other current liabilities	$	65

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

(In millions)
Term Loan Credit Agreement	$	2,925
Less:
Discount	(29		)
Upfront and underwriting fees	(54		)
Cash received upon emergence from bankruptcy	2,842
Reclassification of debt issuance cost incurred prior to emergence from bankruptcy	(42		)
Current portion of Long-term debt	(29		)
Long-term debt, net of current portion	$	2,771

12. Pension Obligations. In accordance with the Plan of Reorganization, the Company reinstated from liabilities subject to compromise $295 million related to the Avaya Pension Plan for represented employees and also contributed $49 million to the related pension trust.

13. Other Post-retirement Obligations. Other post-retirement benefit obligations of $212 million were reinstated from liabilities subject to compromise.

14. Deferred Income Taxes. The adjustment represents the reinstatement of the deferred tax liability that was included in liabilities subject to compromise.

15. Other Liabilities. The increase of $233 million primarily relates to the reinstatement of employee benefits, tax liabilities and deferred revenue from liabilities subject to compromise. Also included is the value of the Emergence Date Warrants issued to the holders of the Predecessor second lien obligations.

16.Liabilities Subject to Compromise. Liabilities subject to compromise were reinstated or settled as follows in accordance with the Plan of Reorganization:

(In millions)
Liabilities subject to compromise			$	7,585
Less amounts settled per the Plan of Reorganization
Pre-petition first lien debt			(4,281		)
Pre-petition second lien debt			(1,440		)
Avaya Pension Plan for Salaried Employees			(620		)
Amounts reinstated:
Accounts payable	(4	)
Payroll and benefit obligations	(23	)
Deferred revenue	(50	)
Business restructuring reserves	(7	)
Other current liabilities	(16	)
Pension obligations	(295	)
Other post-retirement obligations	(212	)
Deferred income taxes, net	(118	)
Other liabilities	(216	)
Total liabilities reinstated at emergence			(941		)
General unsecured credit claims(1)			(303		)
Liabilities subject to compromise			$	—

⁽¹⁾ In settlement of allowed general unsecured claims, each claimant will receive a pro-rata distribution of $58 million of the general unsecured claims account.

The following table displays the detail on the gain on settlement of liabilities subject to compromise:

(In millions)	As Previously Reported			Adjustments			Revised
Pre-petition first lien debt	$	734		$	(23	)	$	711
Pre-petition second lien debt	1,357			(1		)	1,356
Avaya pension plan for salaried employees	(514		)	(2		)	(516		)
General unsecured creditors' claims	227			—			227
Net gain on settlement of Liabilities subject to compromise	$	1,804		$	(26	)	$	1,778

17. Cancellation of Predecessor Preferred and Common Stock. All common stock, Series A and B preferred stock and all other equity awards of the Predecessor Company were cancelled on the Emergence Date without any recovery on account thereof.

18. Issuance of Successor Common Stock and Emergence Date Warrants. In settlement of the Company's $5,721 million Predecessor first lien obligations and Predecessor second lien obligations, the holders of the Predecessor first lien obligations received a total of 99.3 million shares of common stock (fair value of $1,509 million) and $2,061 million in cash and the holders of the Predecessor second lien obligations received a total of 4.4 million shares of common stock (fair value of $67 million) and 5.6 million Emergence Date Warrants to purchase a like amount of common shares (fair value of $17 million). In addition, as part of the Plan of Reorganization, the Company completed a distressed termination of the APPSE in accordance with the Stipulation Settlement with the PBGC, the PBGC received $340 million in cash and 6.1 million shares of common stock (fair value of $92 million).

19. Accumulated Deficit.

(In millions)	As Previously Reported			Adjustments			Revised
Accumulated deficit:
Net gain on settlement of liabilities subject to compromise	$	1,804		$	(26	)	$	1,778
Expense for certain professional fees	(26		)	—			(26		)
Benefit from income taxes	118			—			118
Cancellation of Predecessor equity awards	6			—			6
Cancellation of Predecessor Preferred stock Series B	397			—			397
Cancellation of Predecessor Preferred stock Series A	186			—			186
Cancellation of Predecessor Common stock	2,387			—			2,387
Total	$	4,872		$	(26	)	$	4,846

20. Accumulated Comprehensive Loss. The changes to Accumulated comprehensive loss relate to the settlement of the APPSE and the Avaya Supplemental Pension Plan ("ASPP") and associated taxes.

Fresh Start Adjustments

At the Emergence Date, the Company met the requirements under ASC 852 for the adoption of fresh start accounting. These adjustments reflect actual amounts recorded as of the Emergence Date.

21. Accounts Receivable. This adjustment relates to a change in accounting policy for the way the Company will present uncollected deferred revenue upon emergence from bankruptcy. The Company will offset such deferred revenue against the related account receivable.

22. Inventory. This adjustment relates to the write-up of inventory to fair value based on estimated selling prices, less costs of disposal.

23. Other Current Assets. This adjustment reflects the write-off of certain prepaid commissions, deferred installation costs and debt issuance costs that do not meet the definition of an asset upon emergence.

24. Property, Plant and Equipment. An adjustment of $116 million was recorded to increase the net book value of property, plant and equipment to its estimated fair value based on estimated current acquisition price, plus costs to make the property fully operational.

The following table reflects the components of property, plant and equipment, net as of December 15, 2017:

(In millions)
Buildings and improvements	$	82
Machinery and equipment	38
Rental equipment	85
Assets under construction	13
Internal use software	92
Total property, plant and equipment	310
Less: accumulated depreciation and amortization	—
Property, plant and equipment, net	$	310

25. Deferred Income Tax.The adjustment represents the release of the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of future taxable income from the reversal of deferred tax liabilities that were established as part of fresh start accounting.

26. Intangible Assets. The Company recorded an adjustment to intangible assets for $3,137 million as follows:

	Successor		Predecessor
(In millions)	December 16, 2017 Post-emergence		December 15, 2017 Pre-emergence		Difference
Customer relationships and other intangible assets	$	2,155	$	96	$	2,059
Technology and patents	905		12		893
Trademarks and trade names	375		190		185
Total	$	3,435	$	298	$	3,137

The fair value of customer relationships was determined using the excess earnings method, a derivation of the income approach that calculates residual profit attributable to an asset after proper returns are paid to complementary or contributory assets.

The fair value of technology and patents and trademarks and trade names determined using the royalty savings method, a derivation of the income approach that estimates the royalties saved through ownership of the assets.

27. Goodwill. Predecessor goodwill of $3,541 million was eliminated and Successor goodwill of $2,658 million was established based on the calculated reorganization value.

(In millions)	As Previously Reported			Adjustments		Revised
Reorganization value of Successor Company	$	7,583		$	26	$	7,609
Less: Fair value of Successor Company assets	(4,951		)	—		(4,951		)
Reorganization value of Successor Company assets in excess of fair value - goodwill	$	2,632		$	26	$	2,658

28. Other Assets. The $27 million decrease to other assets is related to prepaid commissions that do not meet the definition of an asset upon emergence as there is no future benefit to the Successor Company.

29. Deferred Revenue. The fair value of deferred revenue, which principally relates to payments on annual maintenance contracts, was determined by deducting selling costs and associated profit from the Predecessor deferred revenue balance to arrive at the costs and profit associated with fulfilling the liability. Additionally, the decrease includes the impact of an accounting policy change whereby the Successor Company no longer recognizes deferred revenue relating to sales transactions that have been billed, but for which the related account receivable has not yet been collected.

30. Other Current Liabilities. The decrease of $3 million to other current liabilities is related to the fair value of real estate leases determined to be above or below market using the income approach based on the difference between the contractual rental rate and the estimated market rental rate, discounted utilizing a risk-related discount rate.

31. Long-term Debt. The fair value of the Term Loan Credit Agreement was determined based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices.

32. Deferred Income Taxes. The adjustment represents the establishment of deferred tax liabilities related to book/tax differences created by fresh start accounting adjustments. The amount is net of the release of the valuation allowance on deferred tax assets, which management believes more likely than not will be realized as a result of future taxable income from the reversal of such deferred tax liabilities.

33. Business Restructuring Reserve. The Company recorded an increase to its non-current business restructuring reserves based on estimated future cash flows applied to a current discount rate at emergence.

34. Other Liabilities. A decrease in other liabilities of $43 million relates to deferred revenue and real estate leases as previously discussed.

35. Accumulated Other Comprehensive Loss. The remaining balance in Accumulated comprehensive loss was reversed to Reorganization expenses, net.

36. Fresh Start Adjustments. The following table reflects the cumulative impact of the fresh start adjustments as discussed above, the elimination of the Predecessor Company's accumulated other comprehensive loss and the adjustments required to eliminate accumulated deficit:

(In millions)	As Previously Reported			Adjustments		Revised
Eliminate Predecessor Intangible assets	$	(298	)	$	—	$	(298	)
Eliminate Predecessor Goodwill	(3,541		)	—		(3,541		)
Establish Successor Intangible assets	3,435			—		3,435
Establish Successor Goodwill	2,632			26		2,658
Fair value adjustment to Inventory	29			—		29
Fair value adjustment to Other current assets	(66		)	—		(66		)
Fair value adjustment to Property, plant and equipment	116			—		116
Fair value adjustment to Other assets	(27		)	—		(27		)
Fair value adjustment to Deferred revenue	235			—		235
Fair value adjustment to Business restructuring reserves	(4		)	—		(4		)
Fair value adjustment to Other current liabilities	3			—		3
Fair value adjustment to Long-term debt	(96		)			(96		)
Fair value adjustment to Other liabilities	43			—		43
Release Predecessor Accumulated comprehensive loss	(790		)	—		(790		)
Fresh start adjustments included in Reorganization items, net	1,671			26		1,697
Tax impact of fresh start adjustments	(565		)	—		(565		)
Gain on fresh start accounting, net	$	1,106		$	26	$	1,132

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Goodwill And Intangible Assets

9 Months Ended

Jun. 30, 2018

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 Company performs impairment testing annually 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.

The Company determined that no events occurred or circumstances changed during the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor) that would more likely than not reduce the fair value of any of the Company's reporting units below their respective carrying amounts. However, if conditions deteriorate or there is a change in the business, it may be necessary to record impairment charges in the future.

The Company adjusted the carrying value of goodwill upon application of fresh start accounting.

As discussed in Note 1, "Revision of Prior Period Amounts", prior period amounts as reported have been revised, where applicable.

The carrying value of goodwill by operating segments for the periods indicated was as follows:

	As Previously Reported
(In millions)	Global Communications Solutions			Avaya Global Services			Total
Cost	$	2,669		$	2,501		$	5,170
Accumulated impairment	(1,576		)	(52		)	(1,628		)
September 30, 2017 (Predecessor)	$	1,093		$	2,449		$	3,542
Adjustments	(1		)	—			(1		)
Impact of fresh start accounting	68			(977		)	(909		)
December 15, 2017 (Predecessor)	$	1,160		$	1,472		$	2,632
December 16, 2017 (Successor)	$	1,160		$	1,472		$	2,632

	Adjustments
(In millions)	Global Communications Solutions		Avaya Global Services		Total
Cost	$	—	$	—	$	—
Accumulated impairment	—		—		—
September 30, 2017 (Predecessor)	$	—	$	—	$	—
Adjustments	—		—		—
Impact of fresh start accounting	11		15		26
December 15, 2017 (Predecessor)	$	11	$	15	$	26
December 16, 2017 (Successor)	$	11	$	15	$	26

	Revised
(In millions)	Global Communications Solutions			Avaya Global Services			Total
Cost	$	2,669		$	2,501		$	5,170
Accumulated impairment	(1,576		)	(52		)	(1,628		)
September 30, 2017 (Predecessor)	1,093			2,449			3,542
Adjustments	(1		)	—			(1		)
Impact of fresh start accounting	79			(962		)	(883		)
December 15, 2017 (Predecessor)	$	1,171		$	1,487		$	2,658
December 16, 2017 (Successor)	$	1,171		$	1,487		$	2,658
Spoken acquisition	120			—			120
Impact of foreign currency fluctuations	(3		)	(4		)	(7		)
June 30, 2018 (Successor)	$	1,288		$	1,483		$	2,771

As a result of the sale of certain assets and liabilities of the Company's former Networking business to Extreme in July 2017, it was determined that the fair value of the Networking services component was less than its carrying value. As a result, the Company recorded a goodwill impairment charge of $52 million in the third quarter of fiscal year 2017.

Intangible Assets

Intangible assets include 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 one year to nineteen years.

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. The Company performs impairment testing annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired.

The Company determined that no events had occurred or circumstances changed during the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor) that would indicate that its long-lived assets, including intangible assets with finite lives, may not be recoverable or that it is more likely than not that its intangible assets with indefinite lives are impaired. However, if conditions deteriorate or there is a change in the business, it may be necessary to record impairment charges in the future.

The Company adjusted the carrying value of intangible assets upon application of fresh start accounting.

The gross carrying amount and accumulated amortization by major intangible asset category as of June 30, 2018 (Successor) and September 30, 2017 (Predecessor) were as follows:

	Successor
	As of June 30, 2018
(In millions)	Technology and patents			Customer relationships and other intangibles			Trademarks and trade names			Total
Finite-lived intangible assets:
Cost	$	960		$	2,156		$	43		$	3,159
Accumulated amortization	(92		)	(84		)	(2		)	(178		)
Finite-lived intangible assets, net	868			2,072			41			2,981
Indefinite-lived intangible assets	5			—			332			337
Intangible assets, net	$	873		$	2,072		$	373		$	3,318
	Predecessor
	As of September 30, 2017
(In millions)	Technology and patents			Customer relationships and other intangibles			Trademarks and trade names			Total
Finite-lived intangible assets:
Cost	$	1,427		$	2,196		$	—		$	3,623
Accumulated amortization	(1,411		)	(2,091		)	—			(3,502		)
Finite-lived intangible assets, net	16			105			—			121
Indefinite-lived intangible assets:
Cost	—			—			545			545
Accumulated impairment	—			—			(355		)	(355		)
Indefinite-lived intangible assets, net	—			—			190			190
Intangible assets, net	$	16		$	105		$	190		$	311

Due to the Company filing for bankruptcy and also experiencing a decline in revenues, a revision of its five year forecast was completed in the third quarter ended June 30, 2017. Due to the decline in revenue in the five year forecast, the Company tested its intangible assets with indefinite lives and other long-lived assets for impairment. The Company estimated the fair values of its indefinite-lived intangible assets using the royalty savings method, which values an asset by estimating the royalties saved through ownership of the asset. As a result of the impairment test, the Company estimated the fair value of its trademarks and trade names to be $190 million as compared to a carrying amount of $255 million and recorded an impairment charge of $65 million in the third quarter of fiscal year 2017. No impairments have been recognized in fiscal 2018.

Amortization expense related to intangible assets was $83 million, $178 million and $13 million for the three months ended June 30, 2018 (Successor), the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor), respectively. Amortization expense related to intangible assets was $62 million and $186 million for the three and nine months endedJune 30, 2017 (Predecessor), respectively.

Amortizable technology and patents have useful lives that range between 1 year and 10 years with a weighted average remaining useful life of 5.2 years. IPR&D activities are considered indefinite-lived until projects are completed or abandoned. Customer relationships have useful lives that range between 1 year and 19 years with a weighted average remaining useful life of 14.1 years. Amortizable product trade names have useful lives of 10 years with a weighted average remaining useful life of 9.5 years. The Avaya trade name is expected to generate cash flows indefinitely and, consequently, this asset is classified as an indefinite-lived intangible.

Future amortization expense related to amortizable intangible assets as of June 30, 2018 is as follows:

(In millions)
Remainder of fiscal 2018	$	84
2019	333
2020	333
2021	332
2022	305
2023 and thereafter	1,594
Total	$	2,981

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Supplementary Financial Information

9 Months Ended

Jun. 30, 2017

Supplementary Financial Information [Abstract]

Supplementary Financial Information

Supplementary Financial Information

Supplemental Operations Information

A summary of other expense, net for the periods indicated is presented in the following table:

	Successor		Predecessor			Successor			Predecessor
(In millions)	Three months ended June 30, 2018		Three months ended June 30, 2017			Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
OTHER INCOME (EXPENSE), NET
Interest income	$	1	$	1		$	2		$	2		$	2
Foreign currency gains, net	25		2			24			—			1
Income from TSA, net	1		—			5			3			—
Other pension and post-retirement benefit credits (costs), net	4		(12		)	9			(8		)	(29		)
Change in fair value of Emergence Date Warrants	6		—			(9		)	—			—
Gain on sale of long-lived assets	—		—			1			—			—
Other, net	—		—			—			1			(1		)
Total other income (expense), net	$	37	$	(9	)	$	32		$	(2	)	$	(27	)

As discussed in Note 2, “Recent Accounting Pronouncements - Recently Adopted Accounting Pronouncements”, the adoption of ASU 2017-07 resulted in the recognition of Other pension and post-retirement benefit credits (costs), net (including the interest cost, expected return on plan assets, amortization and curtailments and settlements) in Other income (expense), net. Prior period amounts have been reclassified to conform to the current period presentation.

The Foreign currency gains, net for both the three months ended June 30, 2018 (Successor) and the period from December 16, 2017 through June 30, 2018 (Successor) were principally due to the strengthening of the U.S. dollar compared to certain foreign exchange rates on U.S. dollar denominated receivables maintained in non-U.S. locations, mainly Argentina, India and Mexico.

A summary of reorganization items, net for the periods indicated is presented in the following tables:

	Successor		Predecessor
(In millions)	Three months ended June 30, 2018		Three months ended June 30, 2017
REORGANIZATION ITEMS, NET
Bankruptcy-related professional fees	$	—	$	(31	)
DIP Credit Agreement financing costs	—		—
Contract rejection fees	—		(4		)
Net gain on settlement of liabilities subject to compromise	—		—
Net gain on fresh start adjustments	—		—
Other items, net	—		—
Reorganization items, net	$	—	$	(35	)
Cash payments for reorganization items	$	—	$	33

	Successor		Predecessor
			As Previously Reported			Adjustments			Revised
(In millions)	Period from December 16, 2017 through June 30, 2018		Period from October 1, 2017 through December 15, 2017			Period from October 1, 2017 through December 15, 2017			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
REORGANIZATION ITEMS, NET
Bankruptcy-related professional fees	$	—	$	(56	)	$	—		$	(56	)	$	(59	)
DIP Credit Agreement financing costs	—		—			—			—			(14		)
Contract rejection fees	—		—			—			—			(4		)
Net gain on settlement of liabilities subject to compromise	—		1,804			(26		)	1,778			—
Net gain on fresh start adjustments	—		1,671			26			1,697			—
Other items, net	—		(3		)	—			(3		)	—
Reorganization items, net	$	—	$	3,416		$	—		$	3,416		$	(77	)
Cash payments for reorganization items	$	1	$	2,524		$	—		$	2,524		$	39

Costs directly attributable to the implementation of the Plan of Reorganization were reported as reorganization items, net. The cash payments for reorganization items for the period from October 1, 2017 through December 15, 2017 (Predecessor) included$2,468 million of claims paid related to liabilities subject to compromise and $56 million for bankruptcy-related professional fees, including emergence and success fees paid on the Emergence Date.

As discussed in Note 1, "Revision of Prior Period Amounts", prior period amounts as reported have been revised, where applicable.

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Business Restructuring Reserves And Programs

9 Months Ended

Jun. 30, 2018

Restructuring Reserve [Abstract]

Business Restructuring Reserves and Programs

Business Restructuring Reserves and Programs

For the three months ended June 30, 2018 and 2017, the Company recognized restructuring charges of $30 million and $8 million, respectively. For the period from December 16, 2017 through June 30, 2018 (Successor), the period from October 1, 2017 through December 15, 2017 (Predecessor) and the nine months ended June 30, 2017 (Predecessor), the Company recognized restructuring charges of $80 million, $14 million and $22 million, respectively. The restructuring charges include adjustments to the restructuring programs of prior fiscal years consisting of the termination/buyout of leases and employee separation costs. As the Company continues to evaluate opportunities to streamline its operations, it may identify cost savings globally and take additional restructuring actions in the future and the costs of those actions could be material.

Fiscal 2018 Restructuring Program

Recognized restructuring charges for fiscal 2018 restructuring programs included employee separation costs associated with employee severance actions primarily in Europe, Middle East and Africa ("EMEA"), the U.S. and Asia-Pacific ("APAC"), for which the related payments are expected to be completed by the beginning of fiscal 2025. The separation charges include, but are not limited to, termination payments, pension fund payments, and health care and unemployment insurance costs to be paid to, or on behalf of, the affected employees. Lease obligation charges were also incurred in connection with the termination of certain U.S. real estate leases.

The following table summarizes the components of the fiscal 2018 restructuring program for the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor):

(In millions)	Employee Separation Costs			Lease Obligations			Total
2018 restructuring charges	$	12		$	—		$	12
Cash payments	(3		)	—			(3		)
Balance as of December 15, 2017 (Predecessor)	$	9		$	—		$	9
Balance as of December 16, 2017 (Successor)	$	9		$	—		$	9
2018 restructuring charges	68			10			78
Cash payments	(16		)	(10		)	(26		)
Impact of foreign currency fluctuations	(2		)	—			(2		)
Balance as of June 30, 2018 (Successor)	$	59		$	—		$	59

Fiscal 2017 Restructuring Program

During fiscal 2017, the Company identified opportunities to streamline operations and generate costs savings, which included eliminating employee positions. These obligations are primarily for employee separation costs associated with fiscal 2017 employee severance actions in the U.S. and EMEA, for which the related payments are expected to be completed in fiscal 2023. The separation charges include, but are not limited to, pension fund payments and health care and unemployment insurance costs to be paid to, or on behalf of, the affected employees.

The following table summarizes the components of the fiscal 2017 restructuring program for the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor):

(In millions)	Employee Separation Costs			Lease Obligations			Total
Balance as of September 30, 2017 (Predecessor)	$	4		$	1		$	5
Cash payments	(1		)	(1		)	(2		)
Balance as of December 15, 2017 (Predecessor)	$	3		$	—		$	3
Balance as of December 16, 2017 (Successor)	$	3		$	—		$	3
Cash payments	(1		)	—			(1		)
Balance as of June 30, 2018 (Successor)	$	2		$	—		$	2

Fiscal 2008 through 2016 Restructuring Programs

During fiscal years 2008 through 2016, the Company identified opportunities to streamline operations and generate cost savings, which included eliminating employee positions and exiting facilities. The remaining obligations related to these restructuring programs are for employee severance costs and are primarily associated with EMEA plans expected to be completed by fiscal 2023.

The following table aggregates the components of the fiscal 2008 through 2016 restructuring programs for the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor):

(In millions)	Employee Separation Costs			Lease Obligations			Total
Balance as of September 30, 2017 (Predecessor)	$	51		$	24		$	75
Cash payments	(3		)	(17		)	(20		)
Expense	1			1			2
Adjustments - fresh start and reorganization items	$	4		$	(1	)	$	3
Balance as of December 15, 2017 (Predecessor)	$	53		$	7		$	60
Balance as of December 16, 2017 (Successor)	$	53		$	7		$	60
Expense	1			1			2
Cash payments	(12		)	(2		)	(14		)
Impact of foreign currency fluctuations	—			—			—
Balance as of June 30, 2018 (Successor)	$	42		$	6		$	48

As of September 30, 2017, the Business restructuring reserve of $80 million included $11 million that was recorded in Liabilities subject to compromise in the Condensed Consolidated Balance Sheets.

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Financing Arrangements

9 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Financing Arrangements

Financing Arrangements

The following table reflects principal amounts of debt and debt net of discounts and issuance costs as of June 30, 2018 (Successor) and September 30, 2017 (Predecessor), which includes the impact of adequate protection payments and accrued interest as of January 19, 2017, the date the Company filed for bankruptcy:

	Successor					Predecessor
	June 30, 2018					September 30, 2017
(In millions)	Principal amount		Net of discounts and issuance costs			Principal amount		Net of discounts and issuance costs
Term Loan Credit Agreement	$	2,910	$	2,876		$	—	$	—
Convertible 2.25% senior notes due June 15, 2023	350		252			—		—
DIP Credit Agreement due January 19, 2018	—		—			725		725
First lien debt:
Senior secured term B-3 loans	—		—			594		594
Senior secured term B-4 loans	—		—			1		1
Senior secured term B-6 loans	—		—			519		519
Senior secured term B-7 loans	—		—			2,012		2,012
7% senior secured notes	—		—			982		982
9% senior secured notes	—		—			284		284
Second lien debt:
10.50% senior secured notes	—		—			1,440		1,440
Total debt	$	3,260	3,128			$	6,557	6,557
Debt maturing within one year			(29		)			(725		)
Long-term debt, net of current portion(1)			$	3,099				$	5,832

⁽¹⁾ Pre-petition long-term debt as of September 30, 2017 (Predecessor) was included in liabilities subject to compromise.

On the Emergence Date:

1. the Successor Company entered into the Term Loan Credit Agreement and the ABL Credit Agreement;

2. the DIP Credit Agreement was paid in full;

3. the holders of the Predecessor first lien obligations received cash and Successor Company common stock (aggregate fair value of $3,570 million) and the Company cancelled $4,281 million of the Predecessor first lien obligations; and

4. the holders of the Predecessor second lien obligations received Successor Company common stock and Emergence Date Warrants to purchase common stock (aggregate fair value of $84 million) and the Company cancelled $1,440 million of the Predecessor second lien obligations.

Successor Financing

Term Loan and ABL Credit Agreements

On the Emergence Date, Avaya Inc. entered into (i) the Term Loan Credit Agreement among Avaya Inc., as borrower, Avaya Holdings, the lending institutions from time to time party thereto, and Goldman Sachs Bank USA, as administrative agent and collateral agent, which provided a $2,925 million term loan facility maturing on December 15, 2024 and (ii) the ABL Credit Agreement maturing on December 15, 2022, among Avaya Inc., as borrower, Avaya Holdings, the several other borrowers party thereto, the several lenders from time to time party thereto, and Citibank, N.A., as administrative agent and collateral agent, which provided a revolving credit facility consisting of a U.S. tranche and a foreign tranche allowing for borrowings of up to an aggregate principal amount of $300 million from time to time, subject to borrowing base availability (the ABL Credit Agreement together with the Term Loan Credit Agreement, the “Credit Agreements”). 

On June 18, 2018, the Company amended the Term Loan Credit Agreement to reduce interest rates and to reduce the London Inter-bank Offered Rate ("LIBOR") floor that existed under the original agreement from 1.00% to 0.00%. After the amendment, the Term Loan Credit Agreement (a) in the case of alternative base rate ("ABR") Loans, bears interest at a rate per annum equal to 3.25% plus the highest of (i) the Federal Funds Rate plus 0.50%, (ii) the U.S. prime rate as publicly announced in the Wall Street Journal and (iii) the LIBOR Rate for an interest period of one month and (b) in the case of LIBOR Loans, bears interest at a rate per annum equal to 4.25% plus the applicable LIBOR rate, subject to a 0.00% floor. Prior to the amendment, the Term Loan Credit Agreement, in the case of ABR Loans, bore interest at a rate per annum equal to 3.75% plus the highest of (i) the Federal Funds Rate plus 0.50%, (ii) the U.S. prime rate as publicly announced in the Wall Street Journal and (iii) the LIBOR Rate for an interest period of one month and in the case of LIBOR Loans, bore interest at a rate per annum equal to 4.75% plus the applicable LIBOR rate, subject to a 1.00% floor. As a result of the amendment, outstanding loan balances under the original Term Loan Credit Agreement were paid in full and new debt was issued for the same outstanding principal amount. The amendment was accounted for as a loan modification under ASC 470, "Debt".

The ABL Credit Agreement bears interest:

1. In the case of Base Rate Loans denominated in U.S. dollars, at a rate per annum equal to 0.75% (subject to a 0.25% step-up or step-down based on availability) plus the highest of (i) the Federal Funds Rate plus 0.50%, (ii) the U.S. prime rate as publicly announced by Citibank, N.A. and (iii) the LIBOR Rate for an interest period of one month;    

2. In the case of LIBOR Rate Loans denominated in U.S. dollars, at a rate per annum equal to 1.75% (subject to a 0.25% step-up or step-down based on availability) plus the applicable LIBOR Rate;

3. In the case of Canadian Prime Rate Loans denominated in Canadian dollars, at a rate per annum equal to 0.75% (subject to a 0.25% step-up or step-down based on availability) plus the highest of (i) the “Base Rate” as publicly announced by Citibank, N.A., Canadian branch and (ii) the rate of interest per annum equal to the average rate applicable to Canadian Dollar Bankers Rate ("CDOR Rate") for an interest period of 30 days;

4. In the case of CDOR Rate Loans denominated in Canadian dollars, at a rate per annum equal to 1.75% (subject to a 0.25% step-up or step-down based on availability) plus the applicable CDOR Rate;

5. In the case of LIBOR Rate Loans denominated in Sterling, at a rate per annum equal to 1.75% (subject to a 0.25% step-up or step-down based on availability) plus the applicable LIBOR Rate;

6. In the case of Euro Interbank Offered Rate ("EURIBOR Rate") Loans denominated in Euro, at a rate per annum equal to 1.75% (subject to a 0.25% step-up or step-down based on availability) plus the applicable LIBOR Rate; and

7. In the case of Overnight LIBOR Rate Loans, at a rate per annum equal to 1.75% (subject to a 0.25% step-up or step-down based on availability) plus the applicable Overnight LIBOR Rate.

The Credit Agreements limit, among other things, Avaya Inc.’s ability to (i) incur indebtedness, (ii) incur liens, (iii) dispose of assets, (iv) make investments, (v) make dividends, or conduct redemptions and repurchases of capital stock, (vi) prepay junior indebtedness or amend junior indebtedness documents, (vii) enter into restricted agreements, (viii) enter into transactions with affiliates and (ix) modify the terms of any of its organizational documents.

The Term Loan Credit Agreement does not contain any financial covenants. The ABL Credit Agreement does not contain any financial covenants other than a requirement to maintain a minimum fixed charge coverage ratio of 1:1 that becomes applicable only in the event that the net borrowing availability under the ABL Credit Agreement is less than the greater of $25 million and 10% of the lesser of the total borrowing base and the ABL commitments (commonly known as the "line cap").

As of June 30, 2018, the Company was not in default under any of its debt agreements.

Under the terms of the ABL Credit Agreement, the Company can issue letters of credit up to $150 million. At June 30, 2018, the Company had issued and outstanding letters of credit and guarantees of $48 million. The aggregate additional principal amount that may be borrowed under the ABL Credit Agreement, based on the borrowing base less $48 million of outstanding letters of credit and guarantees, was $195 million at June 30, 2018.

The weighted average contractual interest rate of the Company’s outstanding debt as of June 30, 2018 was 6.4%.

Convertible Notes

On June 11, 2018, the Company issued its 2.25% Convertible Notes in an aggregate principal of $350 million (including the underwriters’ exercise in full of an over-allotment option of $50 million), which mature on June 15, 2023 (“Convertible Notes”). The Convertible Notes were issued under an indenture (“Indenture”), by and between the Company and the Bank of New York Mellon Trust Company N.A., as Trustee. The Company received net proceeds from the offering of $314 million after giving effect to debt issuance costs, including the underwriting discount, the net cash used to purchase a bond hedge and the proceeds from the issuance of warrants, which are discussed below.

The Convertible Notes accrue interest at a rate of 2.25% per annum, payable semi-annually on June 15 and December 15 of each year beginning on December 15, 2018. On or after March 15, 2023, and until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert the Convertible Notes at the holders' option. The Convertible Notes are convertible at an initial rate of 36.0295 shares per $1,000 of principal (equivalent to an initial conversion price of $27.76 per share of the Company's common stock). The conversion rate is subject to customary adjustments for certain events as described in the Indenture. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company's election. It is the Company’s current intent to settle conversions of the Convertible Notes through combination settlement, which involves repayment of the principal portion in cash and any excess of the conversion value over the principal amount in shares of its common stock.

Holders may convert the Convertible Notes, at the holders' option, prior to March 15, 2023 only under the following circumstances:

• during any calendar quarter commencing after the calendar quarter ending on September 30, 2018 (and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

• during the five business day period after any five consecutive trading day period (the “Measurement Period”) in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sales price of the Company's common stock and the conversion rate on each such trading day; or

• upon the occurrence of specified corporate events.

The Company may not redeem the Convertible Notes prior to their maturity date, and no sinking fund is provided for them. If the Company undergoes a fundamental change, as described in the Indenture, subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of the Convertible Notes. The fundamental change repurchase price is equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest up to, but excluding, the fundamental change repurchase date. If holders elect to convert the Convertible Notes in connection with a make-whole fundamental change, as described in the Indenture, the Company will, to the extent provided in the Indenture, increase the conversion rate applicable to the Convertible Notes.

The Convertible Notes are senior unsecured obligations and rank senior in right of payment to any of the Company's indebtedness that is expressly subordinated in right of payment to the Convertible Notes and equal in right of payment to any of its existing and future unsecured indebtedness that is not subordinated. The Convertible Notes are effectively junior in right of payment to any of the Company's secured indebtedness (to the extent of the value of assets securing such indebtedness) and structurally junior to all existing and future indebtedness and other liabilities, including trade payables, of its subsidiaries. The Indenture does not limit the amount of debt that the Company or its subsidiaries may incur. The Convertible Notes are not guaranteed by any of the Company's subsidiaries.

The Indenture does not contain any financial or operating covenants or restrictions on the payment of dividends, the incurrence of indebtedness, or the issuance or repurchase of securities by the Company or any of its subsidiaries. The Indenture contains customary events of default with respect to the Convertible Notes and provides that upon certain events of default occurring and continuing, the Trustee may, and the Trustee at the request of holders of at least 25% in principal amount of the Convertible Notes shall, declare all principal and accrued and unpaid interest, if any, of the Convertible Notes to be due and payable. In case of certain events of bankruptcy, insolvency or reorganization, all of the principal of and accrued and unpaid interest on the Convertible Notes will automatically become due and payable.

In accounting for the issuance of the Convertible Notes, the Company separated the Convertible Notes into liability and equity components. The Company allocated $258 million of the Convertible Notes to the liability component, and $92 million to the equity component. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component, which represents the conversion option and does not meet the criteria for separate accounting as a derivative as it is indexed to the Company's own stock, was determined by deducting the fair value of the liability component from the par value of the Convertible Notes. The excess of the principal amount of the liability component over its carrying amount represents a debt discount, which is recorded as a direct deduction from the related debt liability in the Condensed Consolidated Balance Sheets and is amortized to interest expense over the term of the Convertible Notes using the effective interest method. The equity component is included in Additional paid-in capital in the Condensed Consolidated Balance Sheets and will not be remeasured as long as it continues to meet the conditions for equity classification.

The Company incurred issuance costs of $10 million related to the Convertible Notes. Issuance costs were allocated to the liability and equity components based on the same proportion used to allocate the proceeds. Issuance costs attributable to the liability component are being amortized to interest expense over the term of the Convertible Notes, and issuance costs attributable to the equity component are included along with the equity component in stockholders' equity.

For the three months ended June 30, 2018, the Company recognized interest expense of $1 million related to the Convertible Notes, which mainly consisted of amortization of the underwriting discount.

The net carrying amount of the Convertible Notes for the period indicated was as follows:

(In millions)	June 30, 2018
Principal	$	350
Less:
Unamortized debt discount	(91		)
Unamortized issuance costs	(7		)
Net carrying amount	$	252

The net carrying amount of the equity component of the Convertible Notes for the period indicated was as follows:

(In millions)	June 30, 2018
Debt discount for conversion option	$	92
Less:
Issuance costs	(3		)
Net carrying amount	$	89

Bond Hedge and Call Spread Warrants

In connection with the issuance of the Convertible Notes, the Company also entered into privately negotiated transactions to purchase hedge instruments (“Bond Hedge”), covering 12.6 million shares of its common stock at a cost of $84 million. The Bond Hedge is subject to anti-dilution provisions substantially similar to those of the Convertible Notes, has a strike price of $27.76 per share, is exercisable by the Company upon any conversion under the Convertible Notes, and expires on June 15, 2023. The Bond Hedge was recorded in equity and the cost of the Bond Hedge was recorded as a reduction of Additional paid-in capital in the accompanying Condensed Consolidated Balance Sheets.

The Company also sold warrants for the purchase of up to 12.6 million shares of its common stock for aggregate proceeds of $58 million (“Call Spread Warrants”). The Call Spread Warrants have a strike price of $37.3625 per share and are subject to customary anti-dilution provisions. The Call Spread Warrants will expire in ratable portions on a series of expiration dates commencing on September 15, 2023. The Call Spread Warrants were recorded in equity and the proceeds from the issuance of the Call Spread Warrants were recorded as an increase to Additional paid-in capital.

The Bond Hedge and Call Spread Warrants are intended to reduce the potential dilution with respect to the Company’s common stock and/or reduce the Company’s exposure to potential cash payments that the Company may be required to make upon conversion of the Convertible Notes by, in effect, increasing the conversion price, from the Company’s economic standpoint, to $37.3625 per share. However, the Call Spread Warrants could have a dilutive effect with respect to the Company's common stock or, if the Company so elects, obligate the Company to make cash payments to the extent that the market price of common stock exceeds $37.3625 per share on any date upon which the Call Spread Warrants are exercised.

Predecessor Financing

The Bankruptcy Filing constituted an event of default that accelerated the Predecessor’s payment obligations under the senior secured credit agreements and the senior secured notes. As a result of the Bankruptcy Filing, the principal and interest due under the Predecessor’s debt agreements became due and payable. However, any efforts to enforce such payment obligations were automatically stayed as a result of the Bankruptcy Filing, and the creditors’ rights of enforcement were subject to the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. Consequently, all debt outstanding was classified as liabilities subject to compromise and all unamortized debt issuance costs and unaccreted debt discounts were expensed.

DIP Credit Agreement. In connection with the Bankruptcy Filing, on the Petition Date, the Predecessor entered into the DIP Credit Agreement, which provided a $725 million term loan facility due January 2018, and a cash collateralized letter of credit facility in an aggregate amount equal to $150 million. All letters of credit were cash collateralized in an amount equal to 101.5% of the face amount of such letters of credit denominated in U.S. dollars and 103% of the face amount of letters of credit denominated in alternative currencies. The DIP Credit Agreement, in the case of the Base Rate Loans, bore interest at a rate per annum equal to 6.5% plus the highest of (i) Citibank, N.A.’s prime rate, (ii) the Federal Funds Rate plus 0.5% and (iii) the Eurocurrency Rate for an interest period of one month, subject to a 2% floor, and in the case of the Eurocurrency Loans, bore interest at a rate per annum equal to 7.5% plus the applicable Eurocurrency Rate, subject to a 1% floor.

Capital Lease Obligations

Included in Other liabilities is $15 million and $14 million of capital lease obligations, net of imputed interest as of June 30, 2018 (Successor) and September 30, 2017 (Predecessor), respectively, and excluded amounts included in Liabilities subject to compromise of $12 million as of September 30, 2017.

The Company outsources certain delivery services associated with the Avaya Private Cloud Services business. That agreement also included the sale of specified assets owned by the Company, which are being leased-back by the Company and accounted for as a capital lease. As of June 30, 2018 (Successor) and September 30, 2017 (Predecessor), capital lease obligations associated with this agreement were $14 million and $24 million, respectively, and include $10 million within Liabilities subject to compromise as of September 30, 2017.

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Derivative Instruments and Hedging Activities

9 Months Ended

Jun. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

The Company accounts for derivative financial instruments in accordance with ASC 815, "Derivatives and Hedging" ("ASC 815") and does not enter into derivatives for trading or speculative purposes.

Interest Rate Contracts

The Company, from time-to-time, enters into interest rate swap contracts as a hedge against changes in interest rates on its variable rate loans outstanding.

On May 16, 2018, the Company entered into interest rate swap agreements with six counterparties, which fixed a portion of the variable interest due on its Term Loan Credit Agreement. Under the terms of the interest rate swap agreements, which mature on December 15, 2022, the Company pays a fixed rate of 2.935% and receives a variable rate of interest based on one-month LIBOR. As of June 30, 2018, the total notional amount of the six interest rate swap agreements was $1,800 million.

The interest rate swaps are designated as cash flow hedges as defined under ASC 815. As a result, the unrealized gains or losses on these contracts are initially recorded in Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets. As interest expense is recognized on the Term Loan Credit Agreement, the corresponding deferred gain or loss on the interest rate swaps is reclassified from Accumulated other comprehensive loss to Interest expense in the Condensed Consolidated Statements of Operations. Based on the amount in Accumulated other comprehensive loss at June 30, 2018, approximately $10 million would be reclassified into net income in the next twelve months.

It is management's intention that the notional amount of interest rate swaps be less than the variable rate loans outstanding during the life of the derivatives.

Emergence Date Warrants

In accordance with the Plan of Reorganization, the Company issued Emergence Date Warrants to purchase 5,645,200 shares of Successor Company common stock to the holders of the Predecessor second lien obligations pursuant to a warrant agreement. Each Emergence Date Warrant has an exercise price of $25.55 per share and expires December 15, 2022. The Emergence Date Warrants contain certain derivative features that require them to be classified as a liability and for changes in fair value of the liability to be recognized in earnings each reporting period. None of the Emergence Date Warrants have been exercised as of June 30, 2018.

As discussed in Note 1, "Revision of Prior Period Amounts", prior period amounts as reported have been revised, where applicable.

The fair value of the Emergence Date Warrants was determined using a probability weighted Black-Scholes option pricing model. This model requires certain input assumptions including risk-free interest rates, volatility, expected life and dividend rates. Selection of these inputs involves significant judgment.

The fair value of the Emergence Date Warrants upon emergence and as of June 30, 2018 was recorded in Non-current liabilities - Other liabilities in the Condensed Consolidated Balance Sheets, and was determined by using the Black-Scholes option pricing model with the input assumptions summarized below:

			As Previously Reported		Revised
	June 30, 2018		December 15, 2017		December 15, 2017
Expected volatility	50.96	%	54.57	%	54.38	%
Risk-free interest rates	2.68	%	2.20	%	2.20	%
Expected remaining life (in years)	4.46		5.00		5.00
Price per share of common stock	$20.08		$14.93		$15.16

In determining the fair value of the Emergence Date Warrants, the dividend yield was assumed to be zero as the Company does not anticipate paying dividends.

The following table summarizes the fair value of the Company's derivatives on a gross basis segregated between those that are designated as hedging instruments and those that are not designated as hedging instruments:

		Successor				Predecessor
		June 30, 2018				September 30, 2017
(In millions)	Balance Sheet Caption	Asset		Liability		Asset		Liability
Derivatives Designated as Hedging Instruments:
Interest rate contracts	Other current liabilities	$	—	$	11	$	—	$	—
Interest rate contracts	Other liabilities	—		5		—		—
		—		16		—		—
Derivatives Not Designated as Hedging Instruments:
Emergence Date Warrants	Other liabilities	—		26		—		—
Total derivative fair value		$	—	$	42	$	—	$	—

The following table provides information regarding the location and amount of pre-tax gains (losses) for derivatives designated as cash flow hedges:

	Successor												Predecessor
	Three months ended June 30, 2018						Period from December 16, 2017 through June 30, 2018						Period from October 1, 2017 through December 15, 2017
(In millions)	Interest Expense			Other Comprehensive Income (Loss)			Interest Expense			Other Comprehensive Income (Loss)			Interest Expense			Other Comprehensive Income (Loss)
Financial Statement Line Item in which Cash Flow Hedges are Recorded	$	(56	)	$	(16	)	$	(112	)	$	(41	)	$	(14	)	$	658
Impact of cash flow hedging relationships:
Loss recognized in AOCI - on interest rate swaps	—			(17		)	—			(17		)	—			—
Interest expense reclassified from AOCI	(2		)	2			(2		)	2			—			—

The following table provides information regarding the pre-tax effects for derivatives not designated as hedging instruments on the Condensed Consolidated Statements of Operations:

		Successor					Predecessor
(In millions)	Location of Derivative Pre-tax Gain (Loss)	Three months ended June 30, 2018		Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017
Emergence Date Warrants	Other income (expense), net	$	6	$	(9	)	$	—

The Company records its derivatives on a gross basis in the Condensed Consolidated Balance Sheets. The Company has master netting agreements with several of its financial institution counterparties. The following table provides information on the Company's derivative positions as if those subject to master netting arrangements were presented on a net basis, allowing for the right to offset by counterparty per the master netting agreements:

	Successor				Predecessor
	June 30, 2018				September 30, 2017
(In millions)	Asset		Liability		Asset		Liability
Gross amounts recognized in the consolidated balance sheet	$	—	$	42	$	—	$	—
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet	—		—		—		—
Net amounts	$	—	$	42	$	—	$	—

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Fair Value Measures

9 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measures

Fair Value Measures

Pursuant to the accounting guidance for fair value measurements, fair value is 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 June 30, 2018 (Successor) and September 30, 2017 (Predecessor) were as follows:

	Successor
	June 30, 2018
	Fair Value Measurements Using
(In millions)	Total		Level 1		Level 2		Level 3
Other Non-Current Assets:
Investments	$	2	$	2	$	—	$	—
Liabilities:
Interest rate contracts	$	16	$	—	$	16	$	—
Spoken acquisition Earn-outs	15		—		—		15
Emergence Date Warrants	26		—		—		26
Total liabilities	$	57	$	—	$	16	$	41

	Predecessor
	September 30, 2017
	Fair Value Measurements Using
(In millions)	Total		Level 1		Level 2		Level 3
Other Non-Current Assets:
Investments	$	1	$	1	$	—	$	—

Investments

Investments classified as Level 1 assets are priced using quoted market prices for identical assets in active markets that are observable.

Interest rate contracts

Interest rate contracts classified as Level 2 liabilities are not actively traded and are valued using pricing models that use observable inputs.

Spoken acquisition Earn-outs

The Spoken acquisition Earn-outs classified as Level 3 liabilities are measured using a probability-weighted discounted cash flow model. Significant unobservable inputs, which included probability of the achievement of the earn out targets and discount rate assumption, reflected the assumptions market participants would use in valuing these liabilities.

Emergence Date Warrants

Emergence Date Warrants classified as Level 3 liabilities are priced using the Black-Scholes option pricing model. The change in fair value of the Emergence Date Warrants is recognized in Other income (expense), net in the Condensed Consolidated Statements of Operations.

During fiscal 2018, there were no transfers between Level 1 and Level 2, or into and out of Level 3.

The following table summarizes the activity for the Company's Level 3 liabilities measured at fair value on a recurring basis:

(In millions)	Emergence Date Warrants			Spoken Acquisition Earn-outs		Total
September 30, 2017 (Predecessor)	$	—		$	—	$	—
Issuance of Emergence Date Warrants	17			—		17
December 15, 2017 (Predecessor)	$	17		$	—	$	17
December 16, 2017 (Successor)	$	17		$	—	$	17
Contingent consideration	—			14		14
Change in fair value(1)	15			—		15
March 31, 2018 (Successor)	32			14		46
Accretion of interest(1)	—			1		1
Change in fair value(1)	(6		)	—		(6		)
June 30, 2018 (Successor)	$	26		$	15	$	41

⁽¹⁾ Changes in fair value of the Emergence Date Warrants and accretion of interest on the Spoken acquisition earn-outs are included in Other income (expense), net.

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.

As of June 30, 2018 (Successor), the estimated fair value of the Convertible Notes was determined based on the quoted price of the Convertible Notes in an inactive market on the last trading day of the reporting period and has been classified as Level 2.

The estimated fair values of amounts borrowed under the Company’s other financing arrangements at June 30, 2018 (Successor) and September 30, 2017 (Predecessor) were estimated based on a Level 2 input based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices.

The estimated fair values of the amounts borrowed under the Company’s financing agreements at June 30, 2018 (Successor) and September 30, 2017 (Predecessor) are as follows:

	Successor				Predecessor
	June 30, 2018				September 30, 2017
(In millions)	Principal Amount		Fair Value		Principal Amount		Fair Value
Term Loan Credit Agreement due December 15, 2024	$	2,910	$	2,919	$	—	$	—
Convertible 2.25% senior notes due June 15, 2023	350		342		—		—
DIP Credit Agreement due January 19, 2018	—		—		725		732
Variable rate Term B-3 Loans due October 26, 2017	—		—		594		503
Variable rate Term B-4 Loans due October 26, 2017	—		—		1		1
Variable rate Term B-6 Loans due March 31, 2018	—		—		519		440
Variable rate Term B-7 Loans due May 29, 2020	—		—		2,012		1,709
7% senior secured notes due April 1, 2019	—		—		982		832
9% senior secured notes due April 1, 2019	—		—		284		241
10.50% senior secured notes due March 1, 2021	—		—		1,440		67
Total	$	3,260	$	3,261	$	6,557	$	4,525

The Company adjusted the carrying value of debt to fair value upon application of fresh start accounting.

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Income Taxes

9 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For the period from October 1, 2017 through December 15, 2017 (Predecessor), the difference between the Company’s recorded provision and the provision that would result from applying the U.S. statutory rate of 35% was primarily attributable to: (1) income and losses taxed at different foreign tax rates, (2) losses generated within certain foreign jurisdictions for which no benefit was recorded because it is more likely than not that the tax benefits would not be realized, (3) non-U.S. withholding taxes on foreign earnings, (4) current period changes to unrecognized tax positions, (5) U.S. state and local income taxes, and (6) the impact of reorganization and fresh start adjustments.

For the three months ended June 30, 2018 (Successor) and the period from December 16, 2017 through June 30, 2018 (Successor), the difference between the Company’s recorded (provision) benefit and the benefit that would result from applying the new U.S. statutory rate of 24.5%, was primarily attributable to: (1) income and losses taxed at different foreign tax rates, (2) losses generated within certain foreign jurisdictions for which no benefit was recorded because it is more likely than not that the tax benefits would not be realized, (3) non-U.S. withholding taxes on foreign earnings, (4) current period changes to unrecognized tax positions, (5) U.S. state and local income taxes, (6) an increase in estimated current year tax loss, which is eliminated as part of the attribute reduction related to the cancellation of indebtedness income (“CODI”), and (7) the impact of the Tax Cuts and Jobs Act (“the Act”), which only affects the December 16, 2017 through June 30, 2018 (Successor) period. The Act and CODI are more fully described below.

For the three months ended June 30, 2017 (Predecessor) and the nine months ended June 30, 2017 (Predecessor), the difference between the Company’s recorded benefit and the benefit that would result from applying the U.S. statutory rate of 35% was primarily attributable to: (1) income and losses taxed at different foreign tax rates, (2) losses generated within certain foreign jurisdictions for which no benefit was recorded because it is more likely than not that the tax benefits would not be realized, (3) non-U.S. withholding taxes on foreign earnings, (4) current period changes to unrecognized tax positions, (5) U.S. state and local income taxes, and (6) changes in the valuation allowance established against the Company’s deferred tax assets.

Under the Plan of Reorganization, a substantial amount of the Company’s debt was extinguished. Absent an exception, a debtor recognizes CODI upon discharge of its outstanding indebtedness for an amount of consideration that is less than its adjusted issue price. The Internal Revenue Code of 1986, as amended, provides that a debtor in a bankruptcy case may exclude CODI from taxable income but must reduce certain of its tax attributes by the amount of any CODI recognized as a result of the consummation of the Plan of Reorganization. The amount of CODI recognized by a taxpayer is the adjusted issue price of any indebtedness discharged less the sum of (i) the amount of cash paid, (ii) the issue price of any new indebtedness issued and (iii) the fair market value of any other consideration, including equity, issued. The reduction in tax attributes does not occur until the first day of the Company’s first tax year subsequent to the date of emergence, which is October 1, 2018. The Company estimates that the U.S. federal net operating loss (“NOL”) and tax credits disclosed in its September 30, 2017 Consolidated Financial Statements and the tax loss generated during the September 30, 2018 tax year will be eliminated on October 1, 2018. The Company estimates that $92 million of the tax loss generated during the period from October 1, 2017 through December 15, 2017 (Predecessor) will be absorbed by taxable income generated during the period from December 16, 2017 through September 30, 2018 (Successor). These estimates are subject to revision and any changes in the estimates will affect income or loss from continuing operations in the fiscal year ending September 30, 2018.

Prior to September 30, 2017, a full valuation allowance was established in any jurisdiction that had a net deferred tax asset. A portion of the U.S. valuation allowance in the amount of $787 million was reversed as part of the reorganization adjustments as it was previously established against (i) the NOL and tax credits, which will be eliminated as a result of the CODI rules and (ii) other deferred tax assets that were previously established for liabilities that were discharged in the Plan of Reorganization and eliminated as part of the reorganization adjustments. The valuation allowance in the amount of $47 million was reversed in certain non-U.S. jurisdictions as part of the reorganization adjustments as management concluded it is more likely than not that the related deferred tax assets will be realized. The remaining U.S. valuation allowance in the amount of $461 million was reversed as part of the fresh start adjustments because management concluded it is more likely than not that the deferred tax assets will be realized primarily due to future sources of taxable income that will be generated by the reversal of deferred tax liabilities established in the fresh start adjustments.

On December 22, 2017, the Act was signed into law. The Act lowered the U.S. federal corporate tax rate from 35% to 21% effective January 1, 2018. Corporations with a fiscal year-end that is not a calendar year but includes January 1, 2018 are subject to a blended tax rate based on the number of days in the fiscal year before and after January 1, 2018. The Company has a September 30^th tax year-end and therefore the U.S. federal tax rate for the fiscal year ending September 30, 2018 is 24.5%.

The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) on December 22, 2017, which provided guidance to registrants on the accounting for tax related impacts under the Act.  The guidance provides a measurement period of up to one year after the enactment date for companies to complete the tax accounting implications of the Act.  As of the first quarter, the Company has provided a provisional estimate related to the revaluation of its deferred taxes and the deemed repatriation of unremitted foreign earnings. The Company will continue to refine its estimate, which could result in a material adjustment, given additional guidance under the Act, interpretations, available information and assumptions made by the Company. As a fiscal year-end tax filer, we are subject to various provisions under the Act for fiscal 2018, including the change to the U.S. federal statutory tax rate and the mandatory deemed repatriation of unremitted foreign earnings. Beginning in the Company's 2019 fiscal year, various other newly enacted provisions will become effective, including provisions that may result in the current U.S. taxation of certain income earned by the Company’s foreign subsidiaries. The FASB has published guidance (Topic 740, No. 5), regarding how to account for the Global Intangible Low-Taxed Income (“GILTI”) provisions included in the Act. The guidance states that a company may make a policy decision with respect to the accounting for taxes related to GILTI and whether deferred taxes should be established. The Company estimates that it will generate income that may be taxed as GILTI beginning in fiscal 2019. On a provisional basis, no deferred taxes have been established for GILTI as of June 30, 2018.

The Company does not expect to incur a cash tax liability with respect to the one-time tax on foreign earnings due to historical foreign deficits. The Company previously established a deferred tax liability for non-U.S. withholding taxes to be incurred upon the remittance of foreign earnings. The Condensed Consolidated Financial Statements for the Predecessor and Successor periods include an adjustment for such withholding taxes attributable to current period earnings. In prior periods, the Company established a U.S. deferred income tax liability for certain foreign earnings under the assumption that such earnings would be remitted to the U.S. This deferred tax liability has been adjusted in the Successor period based on the taxation of such earnings under the Act.

A net deferred tax liability was established at the U.S. federal tax rates in effect on December 15, 2017 as part of fresh start accounting for U.S. book-to-tax differences. These deferred taxes are primarily related to differences arising from recording intangible and other assets at fair market value. As of the December 22, 2017 enactment date of the Act, deferred taxes were adjusted to reflect the new tax rates in effect as of the date the deferred tax amounts are expected to be realized.

The provisional amount of the reduction to the net deferred tax liability as a result of the Act is $242 million and has been recorded as an income tax benefit from continuing operations in the period from December 16, 2017 through June 30, 2018 (Successor).

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Benefit Obligations

9 Months Ended

Jun. 30, 2018

Retirement Benefits [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 post-retirement 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.

Effective January 25, 2018, the Company and the Communications Workers of America (“CWA”) and the International Brotherhood of Electrical Workers (“IBEW”), agreed to extend the 2009 Collective Bargaining Agreement (“CBA”), previously extended through June 14, 2018, until September 21, 2019. The contract extensions did not affect the Company’s obligation for pension and post-retirement benefits available to U.S. employees of the Company who are represented by the CWA or IBEW (“represented employees”).

In September 2015, the Company amended the post-retirement medical plan for represented retirees effective January 1, 2017, to replace medical coverage through the Company’s group plan for represented retirees who are retired as of October 15, 2015 and their eligible dependents, with medical coverage through the private and public insurance marketplace. The change allows the existing retirees to choose insurance from the marketplace and receive financial support from the Company toward the cost of coverage through a Health Reimbursement Arrangement ("HRA").

On December 15, 2017, the APPSE, a qualified pension plan, was settled with the PBGC. At that time, the Company and the PBGC executed a termination and trusteeship agreement to terminate the APPSE and to appoint the PBGC as the statutory trustee of the plan. The Company also paid settlement consideration to the PBGC consisting of $340 million in cash and 6.1 million shares of Successor Company common stock (fair value of $92 million). With this payment, any accrued but unpaid minimum funding contributions due were deemed to have been paid in full. As a result of the plan termination on December 15, 2017, the Company's projected benefit obligation and pension trust assets were reduced by $2,192 million and $1,573 million, respectively. Including the settlement consideration and $703 million of Accumulated other comprehensive loss recorded in the Condensed Consolidated Balance Sheet, a settlement loss of $516 million was recorded in Reorganization items, net in the Condensed Consolidated Statement of Operations for the period from October 1, 2017 through December 15, 2017 (Predecessor).

On December 15, 2017, the unfunded ASPP, a non-qualified excess benefit pension plan, was also terminated and settled. Benefit liabilities for ASPP participants were included as allowed claims in the general unsecured recovery pool. Settlement consideration of $17 million in the form of allowed claims payable to ASPP participants was estimated based upon claims data as of the Emergence Date as amounts due to individual general unsecured creditors had not been finalized and paid. As a result of the termination, the Company's projected benefit obligation was reduced by $88 million. Including the settlement consideration and $18 million of Accumulated other comprehensive loss recorded in the Condensed Consolidated Balance Sheet, a settlement gain of $53 million was recorded in Reorganization items, net in the Condensed Consolidated Statements of Operations for the period from October 1, 2017 through December 15, 2017 (Predecessor).

The components of the pension and post-retirement net periodic benefit (credit) cost for the periods indicated are provided in the tables below:

	Successor			Predecessor			Successor			Predecessor
(In millions)	Three months ended June 30, 2018			Three months ended June 30, 2017			Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
Pension Benefits - U.S.
Components of Net Periodic Benefit (Credit) Cost
Service cost	$	1		$	1		$	2		$	1		$	3
Interest cost	9			24			19			22			73
Expected return on plan assets	(17		)	(44		)	(35		)	(38		)	(134		)
Amortization of unrecognized prior service cost	—			—			—			—			1
Amortization of previously unrecognized net actuarial loss	—			26			—			20			77
Settlement loss(1)	—			—			—			—			—
Net periodic benefit (credit) cost	$	(7	)	$	7		$	(14	)	$	5		$	20

⁽¹⁾ Excludes Plan of Reorganization related settlements that were recorded in Reorganization items, net in the Condensed Consolidated Statements of Operations.

	Successor		Predecessor		Successor		Predecessor
(In millions)	Three months ended June 30, 2018		Three months ended June 30, 2017		Period from December 16, 2017 through June 30, 2018		Period from October 1, 2017 through December 15, 2017		Nine months ended June 30, 2017
Pension Benefits - Non-U.S.
Components of Net Periodic Benefit Cost
Service cost	$	1	$	1	$	3	$	2	$	5
Interest cost	3		2		5		3		6
Expected return on plan assets	—		—		—		—		(1		)
Amortization of previously unrecognized net actuarial loss	—		4		—		1		12
Net periodic benefit cost	$	4	$	7	$	8	$	6	$	22

	Successor			Predecessor			Successor			Predecessor
(In millions)	Three months ended June 30, 2018			Three months ended June 30, 2017			Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
Post-retirement Benefits - U.S.
Components of Net Periodic Benefit Cost (Credit)
Service cost	$	1		$	—		$	1		$	—		$	1
Interest cost	4			4			7			3			10
Expected return on plan assets	(3		)	(2		)	(5		)	(2		)	(7		)
Amortization of unrecognized prior service cost	—			(5		)	—			(3		)	(13		)
Amortization of previously unrecognized net actuarial loss	—			3			—			2			9
Curtailment	—			—			—			—			(4		)
Net periodic benefit cost (credit)	$	2		$	—		$	3		$	—		$	(4	)

The service components of net periodic benefit cost (credit) are recorded similar to compensation expense, while all other components are recorded in Other income (expense), net.

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 laws and regulations, or to directly pay benefits where appropriate. As a result of the Bankruptcy Filing in January 2017, there was an automatic stay on the Company's contributions to the U.S. pension plans during fiscal 2017. Therefore, the minimum funding requirements for the U.S. pension plans were not met during fiscal 2017.

The Plan of Reorganization included contributions to or settlements of all U.S. pension plans, which are the Avaya Pension Plan for Represented Employees ("APP"), the APPSE and the ASPP. On December 15, 2017, the Company paid the aggregate unpaid required minimum funding for the APP, a qualified plan, of $49 million.

Remeasurement as a result of fresh start accounting increased the APP and other post-retirement benefit plan obligations by $3 million on December 15, 2017.

The Company made $22 million in contributions to satisfy minimum statutory funding requirements for its U.S funded defined benefit pension plans for the period from December 16, 2017 through June 30, 2018 (Successor) and no contributions to satisfy minimum statutory funding requirements for its U.S. funded defined benefit pension plans for the period from October 1, 2017 through December 15, 2017 (Predecessor), exclusive of the payments discussed above as part of the Plan of Reorganization for the APP and settlement consideration to the PBGC for the APPSE. Estimated payments to satisfy minimum statutory funding requirements for the remainder of fiscal 2018 are $20 million.

The Company provides for certain pension benefits for non-U.S. employees, the majority of which are not pre-funded. The Company made payments for these non-U.S. pension benefits for the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor) totaling $19 million and $3 million, respectively. Estimated payments for these non-U.S. pension benefits for the remainder of fiscal 2018 are $6 million.

During the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor), the Company contributed $2 million and $2 million, respectively, to the represented employees’ post-retirement health trust to fund current benefit claims and costs of administration in compliance with the terms of the CBA, as extended through September 21, 2019. It is anticipated that there will be $3 million estimated payments under the terms of the 2009 agreement as extended for the remainder of fiscal 2018.

The Company also provides certain retiree medical benefits for U.S. employees through an HRA, which are not pre-funded. Consequently, the Company makes payments as these benefits are disbursed. For the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor), the Company made payments totaling $1 million and $0 million, respectively, for these retiree medical benefits. It is anticipated that there will be no additional payments made for the remainder of fiscal 2018.

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Share-Based Compensation

9 Months Ended

Jun. 30, 2018

Share-based Compensation [Abstract]

Share-based Compensation

Share-based Compensation

The Predecessor Company's common and preferred stock were cancelled and new common stock was issued on the Emergence Date. Accordingly, the Predecessor Company's then existing share-based compensation awards were also cancelled, which resulted in the recognition of any previously unamortized expense on the date of cancellation. Share-based compensation for the Successor and Predecessor periods are not comparable.

Successor

Pursuant to terms of the Plan of Reorganization, the Avaya Holdings Corp. 2017 Equity Incentive Plan ("2017 Equity Incentive Plan") became effective on the Emergence Date.

The Successor Company's Board of Directors or any committee duly authorized thereby will administer the 2017 Equity Incentive Plan. The administrator has broad authority to, among other things: (i) select participants; (ii) determine the types of awards that participants are to receive and the number of shares that are to be granted under such awards; and (iii) establish the terms and conditions of awards, including the price to be paid for the shares or the award.

Persons eligible to receive awards under the 2017 Equity Incentive Plan include non-employee directors, employees of the Successor Company or any of its affiliates, and certain consultants and advisors to the Successor Company or any of its affiliates. The types of awards that may be granted under the 2017 Equity Incentive Plan include stock options, restricted stock, restricted stock units, performance awards and other forms of awards granted or denominated in shares of Successor common stock, as well as certain cash-based awards.

The maximum number of shares of common stock that may be issued or granted under the 2017 Equity Incentive Plan is 7,381,609 shares. If any option or other stock-based award granted under the 2017 Equity Incentive Plan expires, terminates or is cancelled for any reason without having been exercised in full, the number of shares of common stock underlying any unexercised award will again be available for the purpose of awards under the 2017 Equity Incentive Plan. If any shares of restricted stock, performance awards or other stock-based awards denominated in shares of common stock awarded under the 2017 Equity Incentive Plan to a participant are forfeited for any reason, the number of forfeited shares of restricted stock, performance awards or other stock-based awards denominated in shares of common stock will again be available for purposes of awards under the 2017 Equity Incentive Plan. Any award under the 2017 Equity Incentive Plan settled in cash will not be counted against the foregoing maximum share limitations. Shares withheld by the Company in satisfaction of the applicable exercise price or withholding taxes upon the issuance, vesting or settlement of awards, in each case, shall not be available for future issuance under the 2017 Equity Incentive Plan.

The aggregate grant date fair value of all awards granted to any non-employee director during any calendar year (excluding awards made pursuant to deferred compensation arrangements made in lieu of all or a portion of cash retainers and any dividends payable in respect of outstanding awards) may not exceed $750,000.

On the Emergence Date, share-based compensation awards granted by the Company consisted of 3,440,528 restricted stock units and 1,146,835 non-qualified stock options to executives and other employees. The fair value of the premium-priced stock options granted on the Emergence Date was determined using a lattice option pricing model. The awards are subject to time-based vesting.

The Black-Scholes option pricing model is used to value Successor stock options for all options granted thereafter. The valuation assumptions include the following: (1) expected term based on the vesting terms of the option and a contractual life of ten years; (2) volatility based on peer group companies adjusted for the Company's leverage; (3) risk-free interest rate based on U.S. Treasury yields with a term equal to the expected option term; and (4) dividend yield assumed to be zero as the Company does not anticipate paying dividends.

In addition to the above Emergence Date grants, the Company granted 422,532 restricted stock units and 87,065 non-qualified stock options for the period from December 16, 2017 through June 30, 2018. Cancellations of restricted stock units and non-qualified stock options were 291,725 and 89,281, respectively, for the period from December 16, 2017 through June 30, 2018, which were added back to the 2017 Equity Incentive Plan for future issuance.

The following assumptions were used in calculating the fair value of the options granted for the period from December 16, 2017 through June 30, 2018:

	Range
Exercise price	$	19.46		-	$	21.79
Expected volatility(1)	49.25		%	-	56.59		%
Expected life (in years)(2)	5.86 years			-	6.65 years
Risk-free interest rate(3)	2.35		%	-	2.95		%
Dividend yield(4)					—		%

⁽¹⁾ Expected volatility based on peer group companies adjusted for the Company's leverage.

⁽²⁾ Expected life based on the vesting terms of the option and a contractual life of ten years.

⁽³⁾ Risk-free interest rate based on U.S. Treasury yields with a term equal to the expected option term.

⁽⁴⁾ Dividend yield was assumed to be zero as the Company does not anticipate paying dividends.

As of June 30, 2018, there were 2,665,655 shares remaining under the 2017 Equity Incentive Plan available to be granted.

Share-based compensation expense recorded for the three months ended June 30, 2018 and the period from December 16, 2017 through June 30, 2018 was $7 million and $13 million, respectively. As of the Emergence Date, forfeitures are accounted for as incurred.

Predecessor

Prior to the Emergence Date, the Predecessor Company had granted share-based awards that were cancelled upon emergence from bankruptcy. In conjunction with the cancellation, the Predecessor Company accelerated the unrecognized share-based compensation expense and recorded $3 million of compensation expense in the period from October 1, 2017 through December 15, 2017 principally in reorganization costs.

Share-based compensation expense recorded for the three and nine months endedJune 30, 2017 was $4 million and $10 million, respectively.

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Capital Stock

9 Months Ended

Jun. 30, 2018

Stockholders' Equity Attributable to Parent [Abstract]

Capital Stock

Successor

Preferred Stock. The Successor Company's certificate of incorporation authorizes it to issue up to 55.0 million shares of preferred stock with a par value of $0.01 per share. As of June 30, 2018, there were no preferred shares issued or outstanding.

Common Stock. The Successor Company's certificate of incorporation authorizes it to issue up to 550.0 million shares of common stock with a par value of $0.01 per share. As of June 30, 2018, there were 110.2 million shares issued and 110.0 million outstanding with the remaining 0.2 million shares distributable in accordance with the Plan of Reorganization.

Predecessor

In connection with the Company's Plan of Reorganization and emergence from bankruptcy, all equity interests in the Predecessor Company were cancelled, including preferred and common stock, warrants and equity-based awards.

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Earnings (Loss) Per Common Share

9 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Earnings (Loss) Per Common Share

Earnings (Loss) Per Common Share

Basic earnings per share is calculated by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share reflects the potential dilution that would occur if equity awards granted under the various share-based compensation plans were vested or exercised, if the Company's Convertible Notes or Call Spread Warrants were exercised, and/or if the Emergence Date Warrants were exercised, resulting in the issuance of common shares that would participate in the earnings of the Company.

The following table sets forth the calculation of net (loss) income attributable to common shareholders and the computation of basic and diluted (loss) earnings per share for the periods indicated:

	Successor			Predecessor			Successor			Predecessor
(In millions, except per share amounts)	Three months ended June 30, 2018			Three months ended June 30, 2017			Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
Net (loss) income per share:
Numerator
Net (loss) income	$	(88	)	$	(98	)	$	19		$	2,977		$	(209	)
Dividends to preferred stockholders	—			(8		)	—			(6		)	(23		)
Undistributed earnings	(88		)	(106		)	19			2,971			(232		)
Percentage allocated to common stockholders(1)	100.0		%	100.0		%	100.0		%	86.9		%	100.0		%
Numerator for basic and diluted earnings per common share	$	(88	)	$	(106	)	$	19		$	2,582		$	(232	)
Denominator
Denominator for basic earnings per weighted average common shares	109.8			497.2			109.8			497.3			497.0
Effect of dilutive securities
Restricted stock units	—			—			1.2			—			—
Stock options	—			—			—			—			—
Convertible Notes	—			—			—			—			—
Call Spread Warrants	—			—			—			—			—
Emergence Date Warrants	—			—			—			—			—
Denominator for diluted earnings per weighted average common shares	109.8			497.2			111.0			497.3			497.0
Per common share net (loss) income
Basic	$	(0.80	)	$	(0.22	)	$	0.17		$	5.19		$	(0.47	)
Diluted	$	(0.80	)	$	(0.22	)	$	0.17		$	5.19		$	(0.47	)
(1) Basic weighted average common stock outstanding	109.8			497.2			109.8			497.3			497.0
Basic weighted average common stock and common stock equivalents (preferred shares)	109.8			497.2			109.8			572.4			497.0
Percentage allocated to common stockholders	100.0		%	100.0		%	100.0		%	86.9		%	100.0		%

For the three months ended June 30, 2018, the Company excluded 1.1 million stock options, 3.3 million restricted stock units, and 5.6 million Emergence Date Warrants to purchase common shares from the diluted earnings per share calculation as their effect would be anti-dilutive. For the period from December 16, 2017 through June 30, 2018, the Company excluded 1.1 million stock options, and 5.6 million Emergence Date Warrants to purchase common shares from the diluted earnings per share calculation as their effect would be anti-dilutive.

For purposes of considering the Convertible Notes in determining diluted earnings per share, it is the current intent of the Company to settle conversions of the Convertible Notes through combination settlement by repaying the principal portion in cash and any excess of the conversion value over the principal amount (the “Conversion Premium”) in shares of the Company's common stock. Therefore, only the impact of the Conversion Premium will be included in diluted weighted average shares outstanding using the treasury stock method. Since the Convertible Notes were out of the money and anti-dilutive as of June 30, 2018, they were excluded from the diluted earnings per share calculation for the three months ended June 30, 2018 and the period from December 16, 2017 through June 30, 2018. The Call Spread Warrants sold in connection with the issuance of the Convertible Notes will not be considered in calculating diluted weighted average shares outstanding until the price per share of the Company’s common stock exceeds the strike price of $37.3625 per share. When the price per share of the Company’s common stock exceeds the strike price per share of the Call Spread Warrants, the effect of the additional shares that may be issued upon exercise of the Call Spread Warrants will be included in diluted weighted average shares outstanding using the treasury stock method. The Bond Hedge purchased in connection with the issuance of the Convertible Notes is considered to be anti-dilutive and therefore does not impact the Company’s calculation of diluted earnings per share. Refer to Note 9, "Financing Arrangements”,for further discussion regarding the Convertible Notes.

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Operating Segments

9 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Reportable Segments

Operating Segments

The GCS segment primarily develops, markets, and sells unified communications and contact center solutions, offered on premises, in the cloud, or as a hybrid solution. These integrate multiple forms of communications, including telephony, email, instant messaging and video. The AGS segment develops, markets and sells comprehensive end-to-end global service offerings that enable customers to evaluate, plan, design, implement, monitor, manage and optimize complex enterprise communications networks. The Networking segment portfolio of software and hardware products offered integrated networking products.

On July 14, 2017, the Company sold its Networking business to Extreme. Prior to the sale, the Company had three separate operating segments. After the sale, the Company has two operating segments, GCS consisting of the Company's products portfolio and AGS consisting of the Company's services portfolio. Both GCS and Networking made up the Company’s Enterprise Collaboration Solutions ("ECS") products portfolio.

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 fair value adjustments recognized upon emergence from bankruptcy, charges relating to restructuring actions, impairment charges, and merger-related costs as these costs are not core to the measurement of segment performance, but rather are controlled at the corporate level.

Summarized financial information relating to the Company’s operating segments is shown in the following table for the periods indicated:

	Successor			Predecessor			Successor			Predecessor
(In millions)	Three months ended June 30, 2018			Three months ended June 30, 2017			Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
REVENUE
Global Communications Solutions	$	322		$	302		$	716		$	253		$	957
Avaya Networking (1)	—			43			—			—			137
Enterprise Collaboration Solutions	322			345			716			253			1,094
Avaya Global Services	433			458			967			351			1,388
Unallocated amounts (2)	(63		)	—			(171		)	—			—
	$	692		$	803		$	1,512		$	604		$	2,482
GROSS PROFIT
Global Communications Solutions	$	210		$	210		$	473		$	169		$	653
Avaya Networking (1)	—			14			—			—			47
Enterprise Collaboration Solutions	210			224			473			169			700
Avaya Global Services	257			274			582			196			828
Unallocated amounts (3)	(115		)	(5		)	(302		)	(3		)	(16		)
	352			493			753			362			1,512
OPERATING EXPENSES
Selling, general and administrative	281			295			613			264			923
Research and development	51			59			110			38			178
Amortization of intangible assets	39			57			86			10			170
Impairment of indefinite-lived intangible assets	—			65			—			—			65
Goodwill impairment	—			52			—			—			52
Restructuring charges, net	30			8			80			14			22
	401			536			889			326			1,410
OPERATING (LOSS) INCOME	(49		)	(43		)	(136		)	36			102
INTEREST EXPENSE, OTHER INCOME (EXPENSE), NET AND REORGANIZATION ITEMS, NET	(19		)	(61		)	(80		)	3,400			(333		)
(LOSS) INCOME BEFORE INCOME TAXES	$	(68	)	$	(104	)	$	(216	)	$	3,436		$	(231	)

⁽¹⁾ The Networking business was sold on July 14, 2017.

⁽²⁾ Unallocated amounts in Revenue represent the fair value adjustment to deferred revenue recognized upon emergence from bankruptcy and excluded from segment revenue.

⁽³⁾ Unallocated amounts in Gross Profit include the fair value adjustments recognized upon emergence from bankruptcy and excluded from segment gross profit; the effect of the amortization of technology intangibles; and costs that are not core to the measurement of segment management’s performance, but rather are controlled at the corporate level.

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Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Jun. 30, 2018

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Loss

Changes in Accumulated other comprehensive loss for the periods indicated were as follows:

(In millions)	Foreign Currency Translation			Interest Rate Swaps			Total
Balance at March 31, 2018 (Successor)	$	(25	)	$	—		$	(25	)
Other comprehensive income (loss) before reclassifications	(4		)	(17		)	(21		)
Amounts reclassified to earnings	—			2			2
Benefit from income taxes	—			3			3
Balance at June 30, 2018 (Successor)	$	(29	)	$	(12	)	$	(41	)

(In millions)	Unamortized pension, post-retirement and postemployment benefit-related items			Foreign Currency Translation			Interest Rate Swaps			Other			Total
Balance at September 30, 2017 (Predecessor)	$	(1,375	)	$	(72	)	$	—		$	(1	)	$	(1,448	)
Other comprehensive (loss) income before reclassifications	(24		)	3			—			—			(21		)
Amounts reclassified to earnings	16			—			—			—			16
Pension settlement	721			—			—			—			721
Provision for income taxes	(58		)	—			—			—			(58		)
Balance at December 15, 2017 (Predecessor)	(720		)	(69		)	—			(1		)	(790		)
Elimination of Predecessor Company accumulated other comprehensive loss	720			69			—			1			790
Balance at December 15, 2017 (Predecessor)	$	—		$	—		$	—		$	—		$	—
Balance at December 16, 2017 (Successor)	$	—		$	—		$	—		$	—		$	—
Other comprehensive loss before reclassifications	—			(29		)	(17		)	—			(46		)
Amounts reclassified to earnings	—			—			2			—			2
Benefit from income taxes	—			—			3			—			3
Balance at June 30, 2018 (Successor)	$	—		$	(29	)	$	(12	)	$	—		$	(41	)

(In millions)	Unamortized pension, postretirement and postemployment benefit-related items			Foreign Currency Translation			Other			Total
Balance at March 31, 2017 (Predecessor)	$	(1,598	)	$	(7	)	$	(1	)	$	(1,606	)
Other comprehensive loss before reclassifications	—			(42		)	—			(42		)
Amounts reclassified to earnings	26			—			—			26
Provision for income taxes	(1		)	(2		)	—			(3		)
Balance at June 30, 2017 (Predecessor)	$	(1,573	)	$	(51	)	$	(1	)	$	(1,625	)

(In millions)	Unamortized pension, post-retirement and postemployment benefit-related items			Foreign Currency Translation			Other			Total
Balance at September 30, 2016 (Predecessor)	$	(1,627	)	$	(33	)	$	(1	)	$	(1,661	)
Other comprehensive income before reclassifications	—			(17		)	—			(17		)
Amounts reclassified to earnings	70			—			—			70
Provision for income taxes	(16		)	(1		)	—			(17		)
Balance at June 30, 2017 (Predecessor)	$	(1,573	)	$	(51	)	$	(1	)	$	(1,625	)

The amounts reclassified out of Accumulated other comprehensive loss for the unamortized pension, post-retirement and postemployment benefit-related items are recorded in Other income (expense), net in the Condensed Consolidated Statement of Operations. The amounts reclassified out of Accumulated other comprehensive loss for the interest rate swaps are recorded in Interest expense in the Condensed Consolidated Statements of Operations.

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Related Party Transactions

9 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Pursuant to the Plan of Reorganization confirmed by the Bankruptcy Court, the Successor Company's Board of Directors is comprised of seven directors, including the Successor Company's Chief Executive Officer, James M. Chirico, Jr., and six non-employee directors, William D. Watkins, Ronald A. Rittenmeyer, Stephan Scholl, Susan L. Spradley, Stanley J. Sutula, III and Scott D. Vogel. With the resignation of Mr. Rittenmeyer effective April 29, 2018, the Company's Board of Directors currently has one vacancy.

Specific Arrangements Involving the Company’s Directors and Executive Officers

Laurent Philonenko is a Senior Vice President of Avaya Holdings and he served as an Advisor to Koopid, Inc., a software development company specializing in mobile communications, from February 2017 through February 2018. For the period from December 16, 2017 through June 30, 2018, the Company purchased goods and services from Koopid, Inc. of $1 million.

Ronald A. Rittenmeyer was a Director of Avaya Holdings through April 29, 2018. While he was a Director of Avaya Holdings, Mr. Rittenmeyer served on the board of directors of American International Group, Inc. (“AIG”), a global insurance organization. For the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor), sales of the Company’s products and services to AIG were $5 million and $2 million, respectively.

William D. Watkins is a director and Chair of the Board of Directors of Avaya Holdings. Mr. Watkins currently serves on the board of directors of Flex Ltd., an electronics design manufacturer. For the period from December 16, 2017 through June 30, 2018 (Successor), the period from October 1, 2017 through December 15, 2017 (Predecessor) and for fiscal 2017, the Company purchased goods and services from subsidiaries of Flex Ltd. of $13 million, $6 million and $38 million, respectively.

Specific Arrangements Among the Predecessor Company, Silver Lake Partners and TPG Capital and their Affiliates

In connection with the Plan of Reorganization, all agreements between the Predecessor Company and Silver Lake Partners, TPG Capital and their respective affiliates (collectively, the "Predecessor Sponsors") were terminated on the Emergence Date, including the stockholders' agreement, registration rights agreement and management services agreement. In addition, all Predecessor Company equity held by the Predecessor Sponsors was cancelled. No fees were paid to the Predecessor Sponsors in the period from October 1, 2017 through December 15, 2017 (Predecessor).

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Commitments And Contingencies

9 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings

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 below 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.

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.

The Company believes that it has meritorious defenses in connection with its current lawsuits and material claims and disputes, and intends to vigorously contest each of them.

Based on the Company's experience, management believes that the damages amounts claimed in a case are not a meaningful indicator of the potential liability. Claims, suits, investigations and proceedings are inherently uncertain and it is not possible to predict the ultimate outcome of cases.

Other than as described below, in the opinion of the Company's management based upon information currently available to the Company, while the outcome of these lawsuits, claims and disputes is uncertain, the likely results of these lawsuits, claims and disputes are not expected, either individually or in the aggregate, to have a material adverse effect on the Company's financial position, results of operations or cash flows, although the effect could be material to the Company's consolidated results of operations or consolidated cash flows for any interim reporting period.

During the period from December 16, 2017 through June 30, 2018 (Successor), the period from October 1, 2017 through December 15, 2017 (Predecessor) and the nine months ended June 30, 2017 (Predecessor), costs incurred in connection with certain legal matters were $0 million, $37 million and $0 million, respectively.

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. (“TLI/Continuant”) 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 asserted in its amended complaint that, among other things, defendants, or each of them, engaged in tortious conduct 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. TLI/Continuant filed counterclaims against the Company 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. TLI/Continuant sought to recover the profits they claim they would have earned from maintaining Avaya's products, and asked for injunctive relief prohibiting the conduct they claim is anticompetitive. 

The trial commenced on September 9, 2013. On January 7, 2014, the Court issued an order dismissing the Company's affirmative claims. With respect to TLI/Continuant’s counterclaims, on March 27, 2014, a jury found against the Company on two of eight claims and awarded damages of $20 million. Under the federal antitrust laws, the jury’s award is subject to automatic trebling, or $60 million.

Following the jury verdict, TLI/Continuant sought an injunction regarding the Company’s ongoing business operations. On June 30, 2014, a federal judge rejected the demands of TLI/Continuant’s proposed injunction and stated that “only a narrow injunction is appropriate.” Instead, the judge issued an order relating to customers who purchased an Avaya PBX system between January 1, 1990 and April 30, 2008 only. Those customers and their agents will have free access to the on demand maintenance commands that were installed on their systems at the time of the purchase transaction. The court specified that this right “does not extend to access on a system purchased after April 30, 2008.” Consequently, the injunction affected only systems sold prior to April 30, 2008. The judge denied all other requests TLI/Continuant made in its injunction filing. The Company complied with the injunction although it has now been vacated by the September 30, 2016 decision discussed below.

The Company and TLI/Continuant filed post-trial motions seeking to overturn the jury’s verdict, which motions were denied. In September 2014, the Court entered judgment in the amount of $63 million, which included the jury's award of $20 million, subject to automatic trebling, or $60 million, plus prejudgment interest in the amount of $3 million. On October 10, 2014, the Company filed a Notice of Appeal, and on October 23, 2014, TLI/Continuant filed a Notice of Conditional Cross-Appeal. On October 23, 2014, the Company filed its supersedeas bond with the Court in the amount of $63 million. The Company secured posting of the bond through the issuance of a letter of credit under its then existing credit facilities.

On November 10, 2014, TLI/Continuant made an application for attorney's fees, expenses and costs, which the Company contested. TLI/Continuant’s application for attorneys’ fees, expenses and costs was approximately $71 million and represented activity through February 28, 2015. On February 22, 2016, the Company posted a bond in the amount of $8 million in connection with TLC/Continuant's attorneys' fees application.

In September 2016, a Special Master appointed by the trial court to assist in evaluating TLI/Continuant's application rendered a Recommendation, finding that TLI/Continuant should receive approximately $61 million in attorneys' fees, expenses and costs. Subsequently, the parties submitted letters to the Special Master seeking an Amended Recommendation. However, in light of the Third Circuit's favorable opinion, outlined below, the trial court proceedings relating to TLI/Continuant's application have not proceeded. TLI/Continuant is no longer entitled to attorneys' fees, expenses and costs, because it no longer is a prevailing party, subject to further proceedings on appeal or retrial.

On September 30, 2016, the Third Circuit issued a favorable ruling for the Company, which included: (1) reversing the mid-trial decision to dismiss four of the Company’s affirmative claims and reinstated them; (2) vacating the jury verdict on the two claims decided in TLI/Continuant’s favor; (3) entering judgment in the Company’s favor on a portion of TLI/Continuant’s claim relating to attempted monopolization; (4) dismissing TLI/Continuant’s PDS patches claim as a matter of law; (5) vacating the damages award to TLI/Continuant; (6) vacating the award of prejudgment interest to TLI/Continuant; and (7) vacating the injunction. On October 28, 2016, TLI/Continuant sought panel rehearing or rehearing en banc review of the opinion, which was denied on November 16, 2016. On November 22, 2016, TLI/Continuant filed a Motion for Stay of Mandate, which was denied. On December 5, 2016, the Third Circuit issued a certified judgment in lieu of a formal mandate, returning jurisdiction to the trial court.

As a result of the Third Circuit’s opinion, on November 23, 2016, the Company filed a Notice of Motion to Release the Supersedeas Bonds, which the court granted on December 23, 2016. On December 12, 2016, the Court issued an Order Upon Mandate and For Status Conference, which i) vacated the Court’s January 7, 2014 order dismissing Avaya’s claims against TLI/Continuant and the order of judgment entered on September 17, 2014 and ii) scheduled a status conference for January 6, 2017 to discuss the Joint Plan for Retrial. On January 13, 2017, the Court entered an Order staying the matter pending mediation.

On January 20, 2017, the Company filed a Notice of Suggestion on Pendency of Bankruptcy For Avaya Inc., et. al. and Automatic Stay of Proceedings. TLI/Continuant filed a proof of claim in the Bankruptcy Court. On November 30, 2017, the Company filed a motion in the Bankruptcy Court seeking to estimate TLI/Continuant’s claim. On June 21, 2018, the Company entered into a settlement resolving this litigation, and on June 28, 2018, the parties filed a Stipulation of Dismissal in the U.S. District Court, District of New Jersey. The Company considers this matter closed, except for distribution of the pre-petition allowed claim in accordance with the general unsecured claims procedure in the Company's Plan of Reorganization.

Patent Infringement

In July 2016, BlackBerry Limited (“BlackBerry”) filed a complaint for patent infringement against the Company in the Northern District of Texas, alleging infringement of multiple patents with respect to a variety of technologies including user interface design, encoding/decoding and call routing. In September 2016, the Company filed a motion to dismiss these claims and in October 2016, the Company also filed a motion to transfer this matter to the Northern District of California. In January 2017, the Company filed a notice of Suggestion of Pendency of Bankruptcy, which initially stayed the proceedings. The stay was partially lifted to allow the court in Texas to rule on the two pending motions. The Company’s motion to transfer the case from Texas to California has been denied. The Company’s motion to dismiss BlackBerry’s indirect infringement and willfulness claims was granted, although BlackBerry was provided an opportunity to file an Amended Complaint to cure the deficiencies, which it did on October 19, 2017. BlackBerry filed a proof of claim in the Bankruptcy Court. On February 20, 2018, the Company and BlackBerry entered into a settlement agreement resolving this dispute, and on February 23, 2018, the parties jointly filed a Stipulation of Dismissal with Prejudice with the Court in the Northern District of Texas. The Company considers this matter closed, except for distribution of the pre-petition allowed claim in accordance with the general unsecured claims procedure pursuant to the Company's Plan of Reorganization.

In September 2011, Network-1 Security Solutions, Inc. (“Network-1”) filed a complaint for patent infringement against the Company and other corporations in the Eastern District of Texas (Tyler Division), alleging infringement of its patent with respect to power over Ethernet technology. Network-1 seeks to recover for alleged reasonable royalties, enhanced damages and attorneys’ fees. In January 2017, the Company filed a Notice of Suggestion of Pendency of Bankruptcy, which informed the Court of the Company’s voluntary bankruptcy petition filing and stay of proceedings. On October 16, 2017, the Bankruptcy Court entered an order approving a settlement agreement with Network-1 and on November 7, 2017 the Tyler Division district court entered an order dismissing the lawsuit, with prejudice. The Company considers this matter closed, except for distribution of the pre-petition allowed claim in accordance with the general unsecured claims procedure in the Company's Plan of Reorganization.

Intellectual Property and Commercial Disputes

In January 2010, SAE Power Incorporated and SAE Power Company (“SAE”) filed a complaint in the New Jersey Superior Court asserting various claims including breach of contract, unjust enrichment, promissory estoppel, and breach of the covenant of good faith and fair dealing arising out of Avaya’s relationship with SAE as a supplier of various power supply products. SAE has since asserted additional claims against Avaya for fraud, negligent misrepresentation, misappropriation of trade secrets, and civil conspiracy. SAE seeks to recover for alleged losses stemming from Avaya’s termination of its power supply purchases from SAE, including for Avaya’s alleged disclosure of SAE’s alleged trade secret and/or confidential information to another power supply vendor. On July 19, 2016, the Court entered an order granting Avaya’s motion for partial summary judgment, dismissing certain of SAE’s claims regarding the alleged disclosure of trade secrets. In January 2017, the Company filed a Notice of Suggestion of Pendency of Bankruptcy, which informed the Court of the Company’s voluntary bankruptcy petition filing and stay of proceedings. SAE filed a proof of claim in the Bankruptcy Court. On September 28, 2017, the Company filed a motion in the Bankruptcy Court seeking to estimate SAE’s claim, and the estimation hearing took place on February 15, 2018. On June 12, 2018, the Bankruptcy Court entered an Order estimating SAE’s pre-petition misappropriation claim in the amount of $1.21 million plus interest, its fraud claim at $0 million and declined to estimate SAE’s breach of contract claim, leaving it to be resolved through the bankruptcy claims allowance process. Once the stay of proceedings is lifted, SAE may pursue its liability claims against Avaya in the New Jersey state court action, subject to the estimation Order of the Bankruptcy Court. On June 22, 2018, SAE filed a Notice of Appeal and Motion for Stay of Estimation Order Pending Appeal. This matter, although not yet closed, will receive distribution in accordance with the general unsecured claims procedure in the Company's Plan of Reorganization.

In the ordinary course of business, the Company is involved in litigation alleging it has infringed upon third parties’ intellectual property rights, including patents and copyrights; some litigation may involve claims for infringement against customers, distributors and resellers by third parties relating to the use of Avaya’s products, as to which the Company may provide indemnifications of varying scope to certain parties. The Company is also involved in litigation pertaining to general commercial disputes with customers, suppliers, vendors and other third parties including royalty disputes. Much of the pending litigation against the Debtors has been stayed as result of the Chapter 11 filing and will be subject to resolution in accordance with the Bankruptcy Code and the orders of the Bankruptcy Court. Based on discussions with parties that have filed claims against the Debtors, the Company provided loss provisions for certain matters. However, 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.

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 Condensed Consolidated Balance Sheets, for actual experience. As of June 30, 2018 and September 30, 2017, the amount reserved was $2 million and $2 million, respectively.

Guarantees of Indebtedness and Other Off-Balance Sheet Arrangements

Letters of Credit and Guarantees

The Company provides guarantees, letters of credit and surety bonds to various parties as required for certain transactions initiated during the ordinary course of business to guarantee the Company's performance in accordance with contractual or legal obligations. As of June 30, 2018 (Successor), the maximum potential payment obligation with regards to letters of credit, guarantees and surety bonds was $63 million. The outstanding letters of credit are collateralized by restricted cash of $4 million included in other assets on the Condensed Consolidated Balance Sheets as of June 30, 2018 (Successor).

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 automatically renew in July and September 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.

Long-Term Incentive Cash Bonus Plan

The Predecessor Company had established a long-term incentive cash bonus plan (“LTIP”). Under the LTIP, the Predecessor Company would pay cash awards and recognize compensation expense to certain key employees upon specific triggering events. As of the Emergence Date, no triggering event had occurred, therefore no cash awards were paid and no compensation expense recognized. Upon emergence from bankruptcy, all awards to persons deemed "insiders" for purposes of Chapter 11 proceedings were cancelled.

Credit Facility Indemnification

In connection with the Successor Company's obligations under its post-emergence credit facilities, the Company has agreed to indemnify the third-party lending institutions for costs incurred by the institutions related to non-compliance with environmental law and other liabilities that may arise with respect to the execution, delivery, enforcement, performance and administration of the financing documentation. As of June 30, 2018 (Successor), no amounts were paid or accrued pursuant to this indemnity.

Transactions with Nokia

Pursuant to the Contribution and Distribution Agreement effective October 1, 2000, Lucent Technologies, Inc. (now Nokia) 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 Nokia for all liabilities including certain pre-distribution tax obligations of Nokia 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 Nokia 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.

In addition, in connection with the distribution, the Company and Lucent entered into a Tax Sharing Agreement that governs Nokia’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 Nokia.

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Accounting Policy Changes (Policies)

9 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

Avaya Holdings has no material assets or standalone operations other than its ownership of Avaya Inc. and its subsidiaries. The accompanying unaudited interim Condensed Consolidated Financial Statements as of June 30, 2018 and for the period from December 16, 2017 through June 30, 2018, the period from October 1, 2017 through December 15, 2017 and the nine months endedJune 30, 2017, reflect the operating results of Avaya Holdings and its consolidated subsidiaries, and 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, 2017, included in Amendment No. 3 to the Company’s Form 10 filed with the SEC on January 10, 2018. In management’s opinion, these unaudited interim Condensed Consolidated Financial Statements reflect all adjustments, consisting of normal and recurring adjustments, necessary to state fairly the results of operations, financial position and cash flows for the periods indicated. The condensed consolidated results of operations for the interim periods reported are not necessarily indicative of the results for the entire fiscal year.

Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenue and expenses during the periods reported. These estimates include assessing the collectability of accounts receivable, sales returns and allowances, the use and recoverability of inventory, the realization of deferred tax assets, business restructuring reserves, pension and post-retirement benefit costs, the fair value of equity compensation, the fair value of assets and liabilities in connection with fresh start accounting as well as those acquired in business combinations, the recoverability of long-lived assets, useful lives and impairment of tangible and intangible assets including goodwill, the amount of exposure from potential loss contingencies, and fair value measurements, among others. The markets for the Company’s products are characterized by intense competition, rapid technological development and frequent new product introductions, all of which could affect the future recoverability of the Company’s assets. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Actual results could differ from these estimates.

On January 19, 2017 (the “Petition Date”), Avaya Holdings, together with certain of its affiliates, namely Avaya CALA Inc., Avaya EMEA Ltd., Avaya Federal Solutions, Inc., Avaya Holdings LLC, Avaya Holdings Two, LLC, Avaya Inc., Avaya Integrated Cabinet Solutions Inc., Avaya Management Services Inc., Avaya Services Inc., Avaya World Services Inc., Octel Communications LLC, Sierra Asia Pacific Inc., Sierra Communication International LLC, Technology Corporation of America, Inc., Ubiquity Software Corporation, VPNet Technologies, Inc., and Zang, Inc. (the “Debtors”), filed voluntary petitions for relief (the “Bankruptcy Filing”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court"). The cases were jointly administered as Case No. 17-10089 (SMB). The Debtors operated their businesses as "debtors-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of Chapter 11 of the Bankruptcy Code and the orders of the Bankruptcy Court until their emergence from bankruptcy on December 15, 2017.

During Chapter 11 proceedings, all expenses, gains and losses directly associated with the reorganization proceedings were reported as Reorganization items, net in the accompanying Condensed Consolidated Statements of Operations. In addition, Liabilities subject to compromise during Chapter 11 proceedings were distinguished from liabilities of the non-debtors and from post-petition liabilities in the accompanying Condensed Consolidated Balance Sheets. The Company's other subsidiaries that were not part of the Bankruptcy Filing ("non-debtors") continued to operate in the ordinary course of business.

Upon emergence from bankruptcy on December 15, 2017 (the "Emergence Date"), the Company applied fresh start accounting, which resulted in a new basis of accounting and the Company becoming a new entity for financial reporting purposes. As a result of the application of fresh start accounting and the effects of the implementation of the Second Amended Joint Plan of Reorganization filed by the Debtors on October 24, 2017 and approved by the Bankruptcy Court on November 28, 2017 (the "Plan of Reorganization"), the consolidated financial statements after the Emergence Date, are not comparable with the consolidated financial statements on or before that date. Upon emergence, income and expense on non-U.S. dollar functional currency subsidiaries are translated into U.S. dollars using an average rate for the period rather than the applicable spot rate. Refer to Note 4, "Fresh Start Accounting," for additional information.

The accompanying Condensed Consolidated Financial Statements of the Company have been prepared on a basis that assumes that the Company will continue as a going concern and contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. During the Chapter 11 proceedings, the Company's ability to continue as a going concern was contingent upon its ability to comply with the financial and other covenants contained in its debtor-in-possession credit agreement, the Bankruptcy Court's approval of the Company's Plan of Reorganization and the Company's ability to successfully implement the Plan of Reorganization, among other factors. As a result of the execution of the Plan of Reorganization, there is no longer substantial doubt about the Company's ability to continue as a going concern.

References to "Successor" or "Successor Company" relate to the financial position and results of operations of the reorganized Avaya Holdings after the Emergence Date. References to "Predecessor" or "Predecessor Company" refer to the financial position and results of operations of Avaya Holdings on or before the Emergence Date.

Revision of Prior Period Amounts

Subsequent to filing the first quarter fiscal 2018 Form 10-Q, the Company identified certain amounts that should have been recorded in the Predecessor Company's consolidated financial statements as of December 15, 2017, the Emergence Date. Such errors resulted in a $26 million understatement of cash and cash equivalents and cash flows from operating activities with a corresponding overstatement of accounts receivable. Because of the application of fresh start accounting as of December 15, 2017, Stockholders’ Equity and Goodwill were also each understated by the same amount at December 15, 2017 and December 31, 2017. These errors had no effect on the reported consolidated net income (loss) for the Predecessor and Successor periods. The Company assessed the materiality of the above errors individually and in the aggregate on the December 31, 2017 interim Condensed Consolidated Financial Statements in accordance with SEC Staff Accounting Bulletin No. 99 and, based on an analysis of quantitative and qualitative factors, determined that the errors were not material to the Company's Predecessor and Successor periods in the interim Condensed Consolidated Financial Statements for the quarter ended December 31, 2017.

The Condensed Consolidated Balance Sheet as of December 16, 2017, the Condensed Consolidated Statement of Cash Flows for the Predecessor period from October 1, 2017 through December 15, 2017, and the notes thereto have been revised to include the effects of these errors and the cash flow reclassification as follows:

	December 16, 2017 (Successor)
(In millions, except per share amounts)	As Previously Reported		Adjustments			Revised
Condensed Consolidated Balance Sheet:
Cash	$	340	$	26		$	366
Accounts receivable	417		(26		)	391
Goodwill	2,632		26			2,658
Total Assets	7,583		26			7,609
Additional paid-in capital (Successor)	1,641		26			1,667
Total Stockholders' Equity	1,642		26			1,668
Total Liabilities and Stockholders' Equity	7,583		26			7,609
Successor common stock value per share	$	14.93	$	0.23		$	15.16

	Period from October 1, 2017 through December 15, 2017 (Predecessor)
(In millions)	As Previously Reported			Adjustments			Revised
Condensed Consolidated Statement of Cash Flows:
Change in Accounts receivable	$	14		$	26		$	40
Net gain on settlement of Liabilities subject to compromise	(1,804		)	26			(1,778		)
Fresh start adjustments	(1,671		)	(26		)	(1,697		)
Net Cash Used from Operating Activities	(440		)	26			(414		)
Net decrease in cash and cash equivalents	(536		)	26			(510		)

For additional information refer to Notes: 4. “Fresh Start Accounting”; 6. “Goodwill and Intangible Assets”; 7. “Supplementary Financial Information”; and 10. “Derivative Instruments and Hedging Activities”.

Recently Adopted Accounting Policies

Recently Adopted Accounting Pronouncements

In August 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” This standard sets forth targeted improvements to accounting for hedging activities and will make more financial and non-financial hedging strategies eligible for hedge accounting. It also modifies the presentation and disclosure requirements for hedging activities and changes how companies assess hedge effectiveness. The Company elected to early adopt this standard as of April 1, 2018, applying the updated provisions retrospectively to the beginning of the current fiscal year. As the Company did not maintain any hedging instruments prior to April 1, 2018, there was no retrospective impact due to this interim adoption. The new guidance will be applied to all hedging transactions entered into on or after April 1, 2018.

In March 2017, the FASB issued ASU No. 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost." This standard changes how employers that sponsor defined benefit pension and other post-retirement benefit plans present net periodic benefit cost in the income statement. This amendment requires that the service cost component be disaggregated from the other components of pension and post-retirement benefit costs on the income statement. The service cost component is reported in the same line items as other compensation costs and the other components of pension and post-retirement benefit costs (including interest cost, expected return on plan assets, amortization and curtailments and settlements) are reported in Other income (expense), net in the Company's Condensed Consolidated Financial Statements. The Company early adopted this accounting standard as of October 1, 2017. Changes to the Condensed Consolidated Financial Statements have been applied retrospectively. As a result, the Company reclassified $12 million and $29 million of other pension and post-retirement benefit costs to Other income (expense), net for the three and nine months endedJune 30, 2017 (Predecessor), respectively. For the three months ended June 30, 2018 (Successor), the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor), the Company recorded $4 million, $9 million and $(8) million, respectively, of other pension and post-retirement benefit credits (costs) in Other income (expense), net.

In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." This standard simplifies the accounting for share-based payments and their presentation in the statements of cash flows as well as the income tax effects of share-based payments. The Company adopted this standard as of October 1, 2017 on a prospective basis. The adoption of this standard did not have a material impact on the Company's Condensed Consolidated Financial Statements.

Recent Standards Not Yet Effective

In February 2018, the FASB issued ASU No. 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." This new standard allows companies to reclassify from accumulated other comprehensive income to retained earnings any stranded tax benefits resulting from the enactment of the Tax Cuts and Jobs Act. This standard is effective for the Company beginning in the first quarter of fiscal 2020. The Company is currently evaluating the impact that the adoption of this standard may have on its Condensed Consolidated Financial Statements.

In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." The standard requires the recognition of assets and liabilities for all leases with lease terms of more than 12 months. Subsequently, the FASB issued other standards that clarified certain aspects of the standard. This standard is effective for the Company in the first quarter of fiscal 2020 with early adoption permitted. The Company is currently evaluating the method of adoption and the effect that the adoption of the standard may have on its Condensed Consolidated Financial Statements.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” This standard supersedes most of the current revenue recognition guidance under GAAP and is intended to improve and converge with international standards the financial reporting requirements for revenue recognition. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. Subsequently, the FASB issued several standards that clarified certain aspects of the standard but did not change the original standard. This new guidance is effective for the Company beginning in the first quarter of fiscal 2019. The ASU may be applied retrospectively (a) to each reporting period presented or (b) with the cumulative effect in retained earnings at the beginning of the adoption period.

The Company will adopt the new standard effective October 1, 2018 using the modified retrospective method whereby the cumulative effect is recorded to retained earnings at the beginning of the adoption period. Adoption of the standard is dependent on completion of a detailed accounting assessment, the success of the design and implementation phase for changes to the Company's processes, internal controls and system functionality and the completion of the analysis of information necessary to assess the overall impact of adoption of this guidance on its Condensed Consolidated Financial Statements.

The Company continues to make progress on its accounting assessment phase and the design and implementation phases to implement the required business process and system changes to comply with the new accounting policies and disclosures in the consolidated financial statements. The Company will continue to monitor and assess the impact of changes to the standard and interpretations as they become available. The Company expects revenue recognition related to stand-alone product shipments and maintenance services to remain substantially unchanged. However, the Company continues to evaluate its preliminary conclusion and assess the impact on other sources of revenue recognition.

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Background and Basis of Presentation (Tables)

9 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Prior Period Adjustments

The Condensed Consolidated Balance Sheet as of December 16, 2017, the Condensed Consolidated Statement of Cash Flows for the Predecessor period from October 1, 2017 through December 15, 2017, and the notes thereto have been revised to include the effects of these errors and the cash flow reclassification as follows:

	December 16, 2017 (Successor)
(In millions, except per share amounts)	As Previously Reported		Adjustments			Revised
Condensed Consolidated Balance Sheet:
Cash	$	340	$	26		$	366
Accounts receivable	417		(26		)	391
Goodwill	2,632		26			2,658
Total Assets	7,583		26			7,609
Additional paid-in capital (Successor)	1,641		26			1,667
Total Stockholders' Equity	1,642		26			1,668
Total Liabilities and Stockholders' Equity	7,583		26			7,609
Successor common stock value per share	$	14.93	$	0.23		$	15.16

	Period from October 1, 2017 through December 15, 2017 (Predecessor)
(In millions)	As Previously Reported			Adjustments			Revised
Condensed Consolidated Statement of Cash Flows:
Change in Accounts receivable	$	14		$	26		$	40
Net gain on settlement of Liabilities subject to compromise	(1,804		)	26			(1,778		)
Fresh start adjustments	(1,671		)	(26		)	(1,697		)
Net Cash Used from Operating Activities	(440		)	26			(414		)
Net decrease in cash and cash equivalents	(536		)	26			(510		)

For additional information refer to Notes: 4. “Fresh Start Accounting”; 6. “Goodwill and Intangible Assets”; 7. “Supplementary Financial Information”; and 10. “Derivative Instruments and Hedging Activities”.

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Fresh Start Accounting (Tables)

9 Months Ended

Jun. 30, 2018

Reorganizations [Abstract]

Schedule of Fresh-Start Adjustments

The reorganization and fresh start adjustments set forth in the following consolidated balance sheet as of December 16, 2017 reflect the effect of the consummation of the transactions contemplated by the Plan of Reorganization (reflected in the column "Reorganization Adjustments") as well as fair value adjustments as a result of applying fresh start accounting (reflected in the column "Fresh Start Adjustments"). The explanatory notes highlight methods used to determine fair values or other amounts of the assets and liabilities, as well as significant assumptions or inputs.

	As Previously Reported
(In millions)	Predecessor Company December 15, 2017			Reorganization Adjustments				Fresh Start Adjustments				Successor Company December 16, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	744		$	(404	)	(1)	$	—			$	340
Accounts receivable, net	523			—				(106		)	(21)	417
Inventory	98			—				29			(22)	127
Other current assets	366			(58		)	(2)	(66		)	(23)	242
TOTAL CURRENT ASSETS	1,731			(462		)		(143		)		1,126
Property, plant and equipment, net	194			—				116			(24)	310
Deferred income taxes, net	—			48			(3)	(17		)	(25)	31
Intangible assets, net	298			—				3,137			(26)	3,435
Goodwill	3,541			—				(909		)	(27)	2,632
Other assets	70			6			(4)	(27		)	(28)	49
TOTAL ASSETS	$	5,834		$	(408	)		$	2,157			$	7,583
LIABILITIES
Current liabilities:
Debt maturing within one year	$	725		$	(696	)	(5)	$	—			$	29
Accounts payable	325			(49		)	(6)	—				276
Payroll and benefit obligations	123			23			(7)	—				146
Deferred revenue	627			50			(8)	(341		)	(29)	336
Business restructuring reserve	35			3			(9)	—				38
Other current liabilities	97			65			(6,10)	(3		)	(30)	159
TOTAL CURRENT LIABILITIES	1,932			(604		)		(344		)		984
Non-current liabilities:
Long-term debt, net of current portion	—			2,771			(11)	96			(31)	2,867
Pension obligations	539			246			(12)	—				785
Other post-retirement obligations	—			212			(13)	—				212
Deferred income taxes, net	28			113			(14)	548			(32)	689
Business restructuring reserve	26			4			(9)	4			(33)	34
Other liabilities	180			233			(8,15)	(43		)	(29,34)	370
TOTAL NON-CURRENT LIABILITIES	773			3,579				605				4,957
LIABILITIES SUBJECT TO COMPROMISE	7,585			(7,585		)	(16)	—				—
TOTAL LIABILITIES	10,290			(4,610		)		261				5,941
Commitments and contingencies
Equity awards on redeemable shares	6			(6		)	(17)	—				—
Preferred stock:
Series B	397			(397		)	(17)	—				—
Series A	186			(186		)	(17)	—				—
STOCKHOLDERS' (DEFICIT) EQUITY
Common stock (Successor)	—			1			(18)	—				1
Additional paid-in capital (Successor)	—			1,641			(18)	—				1,641
Common stock (Predecessor)	—			—				—				—
Additional paid-in capital (Predecessor)	2,387			(2,387		)	(17)	—				—
(Accumulated deficit) retained earnings	(5,978		)	4,872			(19)	1,106			(36)	—
Accumulated other comprehensive (loss) income	(1,454		)	664			(20)	790			(35)	—
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY	(5,045		)	4,791				1,896				1,642
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$	5,834		$	(408	)		$	2,157			$	7,583

	Adjustments
(In millions)	Predecessor Company December 15, 2017			Reorganization Adjustments				Fresh Start Adjustments			Successor Company December 16, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	26		$	—			$	—		$	26
Accounts receivable, net	(26		)	—				—			(26		)
Inventory	—			—				—			—
Other current assets	—			—				—			—
TOTAL CURRENT ASSETS	—			—				—			—
Property, plant and equipment, net	—			—				—			—
Deferred income taxes, net	—			—				—			—
Intangible assets, net	—			—				—			—
Goodwill	—			—				26		(27)	26
Other assets	—			—				—			—
TOTAL ASSETS	$	—		$	—			$	26		$	26
LIABILITIES
Current liabilities:
Debt maturing within one year	$	—		$	—			$	—		$	—
Accounts payable	—			—				—			—
Payroll and benefit obligations	—			—				—			—
Deferred revenue	—			—				—			—
Business restructuring reserve	—			—				—			—
Other current liabilities	—			—				—			—
TOTAL CURRENT LIABILITIES	—			—				—			—
Non-current liabilities:
Long-term debt	—			—				—			—
Pension obligations	—			—				—			—
Other postretirement obligations	—			—				—			—
Deferred income taxes, net	—			—				—			—
Business restructuring reserve	—			—				—			—
Other liabilities	—			—				—			—
TOTAL NON-CURRENT LIABILITIES	—			—				—			—
LIABILITIES SUBJECT TO COMPROMISE	—			—				—			—
TOTAL LIABILITIES	—			—				—			—
Commitments and contingencies
Equity awards on redeemable shares	—			—				—			—
Preferred stock:
Series B	—			—				—			—
Series A	—			—				—			—
STOCKHOLDERS' (DEFICIT) EQUITY
Common stock (Successor)	—			—				—			—
Additional paid-in capital (Successor)	—			26			(18)	—			26
Common stock (Predecessor)	—			—				—			—
Additional paid-in capital (Predecessor)	—			—				—			—
(Accumulated deficit) retained earnings	—			(26		)	(19)	26		(36)	—
Accumulated other comprehensive (loss) income	—			—				—			—
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY	—			—				26			26
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$	—		$	—			$	26		$	26

	Revised
(In millions)	Predecessor Company December 15,  2017			Reorganization Adjustments				Fresh Start Adjustments				Successor Company December 16,  2017
ASSETS
Current assets:
Cash and cash equivalents	$	770		$	(404	)	(1)	$	—			$	366
Accounts receivable, net	497			—				(106		)	(21)	391
Inventory	98			—				29			(22)	127
Other current assets	366			(58		)	(2)	(66		)	(23)	242
TOTAL CURRENT ASSETS	1,731			(462		)		(143		)		1,126
Property, plant and equipment, net	194			—				116			(24)	310
Deferred income taxes, net	—			48			(3)	(17		)	(25)	31
Intangible assets, net	298			—				3,137			(26)	3,435
Goodwill	3,541			—				(883		)	(27)	2,658
Other assets	70			6			(4)	(27		)	(28)	49
TOTAL ASSETS	$	5,834		$	(408	)		$	2,183			$	7,609
LIABILITIES
Current liabilities:
Debt maturing within one year	$	725		$	(696	)	(5)	$	—			$	29
Accounts payable	325			(49		)	(6)	—				276
Payroll and benefit obligations	123			23			(7)	—				146
Deferred revenue	627			50			(8)	(341		)	(29)	336
Business restructuring reserve	35			3			(9)	—				38
Other current liabilities	97			65			(6,10)	(3		)	(30)	159
TOTAL CURRENT LIABILITIES	1,932			(604		)		(344		)		984
Non-current liabilities:
Long-term debt, net of current portion	—			2,771			(11)	96			(31)	2,867
Pension obligations	539			246			(12)	—				785
Other post-retirement obligations	—			212			(13)	—				212
Deferred income taxes, net	28			113			(14)	548			(32)	689
Business restructuring reserve	26			4			(9)	4			(33)	34
Other liabilities	180			233			(8,15)	(43		)	(29,34)	370
TOTAL NON-CURRENT LIABILITIES	773			3,579				605				4,957
LIABILITIES SUBJECT TO COMPROMISE	7,585			(7,585		)	(16)	—				—
TOTAL LIABILITIES	10,290			(4,610		)		261				5,941
Commitments and contingencies
Equity awards on redeemable shares	6			(6		)	(17)	—				—
Preferred stock:
Series B	397			(397		)	(17)	—				—
Series A	186			(186		)	(17)	—				—
STOCKHOLDERS' (DEFICIT) EQUITY
Common stock (Successor)	—			1			(18)	—				1
Additional paid-in capital (Successor)	—			1,667			(18)	—				1,667
Common stock (Predecessor)	—			—				—				—
Additional paid-in capital (Predecessor)	2,387			(2,387		)	(17)	—				—
(Accumulated deficit) retained earnings	(5,978		)	4,846			(19)	1,132			(36)	—
Accumulated other comprehensive (loss) income	(1,454		)	664			(20)	790			(35)	—
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY	(5,045		)	4,791				1,922				1,668
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$	5,834		$	(408	)		$	2,183			$	7,609

Reorganization Adjustments

In accordance with the Plan of Reorganization, the following adjustments were made:

1.Sources and Uses of Cash. The following reflects the net cash payments recorded as of the Emergence Date as a result of implementing the Plan of Reorganization:

(In millions)
Sources:
Proceeds from Term Loan Credit Agreement, net of original issue discount	$	2,896
Release of restricted cash	76
Total sources of cash	2,972
Uses:
Repayment of DIP Credit Agreement	(725		)
Payment of DIP Credit Agreement accrued interest	(1		)
Cash paid to Predecessor first lien debt-holders	(2,061		)
Cash paid to PBGC	(340		)
Payment for professional fees escrow account	(56		)
Funding payment for Avaya represented employee pension plan	(49		)
Payment of accrued professional & administrative fees	(27		)
Costs incurred for Term Loan Credit Agreement and ABL Credit Agreement	(59		)
Payment for general unsecured claims	(58		)
Total uses of cash	(3,376		)
Net uses of cash	$	(404	)

2. Other Current Assets.

(In millions)
Release of restricted cash	$	(76	)
Reclassification of prepaid debt issuance costs related to the Term Loan Credit Agreement	(42		)
Payment of fees related to the ABL Credit Agreement	5
Restricted cash for bankruptcy related professional fees	55
Total other current assets	$	(58	)

3. Deferred Income Taxes. The adjustment represents the release of the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of the bankruptcy reorganization.

4. Other Assets. The adjustment represents the re-establishment of foreign prepaid taxes.

5. Debt Maturing Within One Year. The adjustment represents the net effect of the Company’s repayment of $725 million for the DIP Credit Agreement and Term Loan Credit Agreement principal payments of $29 million due over the next year.

6. Accounts Payable. The net decrease of $49 million includes $50 million for professional fees that were reclassified to Other current liabilities for accrued bankruptcy related professional fees that will be paid from an escrow account and a payment of $3 million for bankruptcy related professional fees, partially offset by reinstatement of $4 million contract cure costs from liabilities subject to compromise.

7. Payroll and Benefit Obligations. The Company reinstated $23 million of liabilities subject to compromise related to the post-employment and post-retirement benefit obligations.

8. Deferred Revenue. The reinstatement of liabilities subject to compromise was $79 million of which $50 million is included in deferred revenue and $29 million in other liabilities.

9. Business Restructuring Reserve. The reinstatement of liabilities subject to compromise was $7 million, of which $3 million is current and $4 million is non-current.

10.Other Current Liabilities.

(In millions)
Reclassification of accrued bankruptcy related professional fees	$	50
Reinstatement of other current liabilities	16
Payment of accrued interest on the DIP Credit Agreement	(1		)
Total other current liabilities	$	65

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

(In millions)
Term Loan Credit Agreement	$	2,925
Less:
Discount	(29		)
Upfront and underwriting fees	(54		)
Cash received upon emergence from bankruptcy	2,842
Reclassification of debt issuance cost incurred prior to emergence from bankruptcy	(42		)
Current portion of Long-term debt	(29		)
Long-term debt, net of current portion	$	2,771

12. Pension Obligations. In accordance with the Plan of Reorganization, the Company reinstated from liabilities subject to compromise $295 million related to the Avaya Pension Plan for represented employees and also contributed $49 million to the related pension trust.

13. Other Post-retirement Obligations. Other post-retirement benefit obligations of $212 million were reinstated from liabilities subject to compromise.

14. Deferred Income Taxes. The adjustment represents the reinstatement of the deferred tax liability that was included in liabilities subject to compromise.

15. Other Liabilities. The increase of $233 million primarily relates to the reinstatement of employee benefits, tax liabilities and deferred revenue from liabilities subject to compromise. Also included is the value of the Emergence Date Warrants issued to the holders of the Predecessor second lien obligations.

16.Liabilities Subject to Compromise. Liabilities subject to compromise were reinstated or settled as follows in accordance with the Plan of Reorganization:

(In millions)
Liabilities subject to compromise			$	7,585
Less amounts settled per the Plan of Reorganization
Pre-petition first lien debt			(4,281		)
Pre-petition second lien debt			(1,440		)
Avaya Pension Plan for Salaried Employees			(620		)
Amounts reinstated:
Accounts payable	(4	)
Payroll and benefit obligations	(23	)
Deferred revenue	(50	)
Business restructuring reserves	(7	)
Other current liabilities	(16	)
Pension obligations	(295	)
Other post-retirement obligations	(212	)
Deferred income taxes, net	(118	)
Other liabilities	(216	)
Total liabilities reinstated at emergence			(941		)
General unsecured credit claims(1)			(303		)
Liabilities subject to compromise			$	—

⁽¹⁾ In settlement of allowed general unsecured claims, each claimant will receive a pro-rata distribution of $58 million of the general unsecured claims account.

The following table displays the detail on the gain on settlement of liabilities subject to compromise:

(In millions)	As Previously Reported			Adjustments			Revised
Pre-petition first lien debt	$	734		$	(23	)	$	711
Pre-petition second lien debt	1,357			(1		)	1,356
Avaya pension plan for salaried employees	(514		)	(2		)	(516		)
General unsecured creditors' claims	227			—			227
Net gain on settlement of Liabilities subject to compromise	$	1,804		$	(26	)	$	1,778

17. Cancellation of Predecessor Preferred and Common Stock. All common stock, Series A and B preferred stock and all other equity awards of the Predecessor Company were cancelled on the Emergence Date without any recovery on account thereof.

18. Issuance of Successor Common Stock and Emergence Date Warrants. In settlement of the Company's $5,721 million Predecessor first lien obligations and Predecessor second lien obligations, the holders of the Predecessor first lien obligations received a total of 99.3 million shares of common stock (fair value of $1,509 million) and $2,061 million in cash and the holders of the Predecessor second lien obligations received a total of 4.4 million shares of common stock (fair value of $67 million) and 5.6 million Emergence Date Warrants to purchase a like amount of common shares (fair value of $17 million). In addition, as part of the Plan of Reorganization, the Company completed a distressed termination of the APPSE in accordance with the Stipulation Settlement with the PBGC, the PBGC received $340 million in cash and 6.1 million shares of common stock (fair value of $92 million).

19. Accumulated Deficit.

(In millions)	As Previously Reported			Adjustments			Revised
Accumulated deficit:
Net gain on settlement of liabilities subject to compromise	$	1,804		$	(26	)	$	1,778
Expense for certain professional fees	(26		)	—			(26		)
Benefit from income taxes	118			—			118
Cancellation of Predecessor equity awards	6			—			6
Cancellation of Predecessor Preferred stock Series B	397			—			397
Cancellation of Predecessor Preferred stock Series A	186			—			186
Cancellation of Predecessor Common stock	2,387			—			2,387
Total	$	4,872		$	(26	)	$	4,846

20. Accumulated Comprehensive Loss. The changes to Accumulated comprehensive loss relate to the settlement of the APPSE and the Avaya Supplemental Pension Plan ("ASPP") and associated taxes.

Fresh Start Adjustments

At the Emergence Date, the Company met the requirements under ASC 852 for the adoption of fresh start accounting. These adjustments reflect actual amounts recorded as of the Emergence Date.

21. Accounts Receivable. This adjustment relates to a change in accounting policy for the way the Company will present uncollected deferred revenue upon emergence from bankruptcy. The Company will offset such deferred revenue against the related account receivable.

22. Inventory. This adjustment relates to the write-up of inventory to fair value based on estimated selling prices, less costs of disposal.

23. Other Current Assets. This adjustment reflects the write-off of certain prepaid commissions, deferred installation costs and debt issuance costs that do not meet the definition of an asset upon emergence.

24. Property, Plant and Equipment. An adjustment of $116 million was recorded to increase the net book value of property, plant and equipment to its estimated fair value based on estimated current acquisition price, plus costs to make the property fully operational.

The following table reflects the components of property, plant and equipment, net as of December 15, 2017:

(In millions)
Buildings and improvements	$	82
Machinery and equipment	38
Rental equipment	85
Assets under construction	13
Internal use software	92
Total property, plant and equipment	310
Less: accumulated depreciation and amortization	—
Property, plant and equipment, net	$	310

25. Deferred Income Tax.The adjustment represents the release of the valuation allowance on deferred tax assets for certain non-U.S. subsidiaries which management believes more likely than not will be realized as a result of future taxable income from the reversal of deferred tax liabilities that were established as part of fresh start accounting.

26. Intangible Assets. The Company recorded an adjustment to intangible assets for $3,137 million as follows:

	Successor		Predecessor
(In millions)	December 16, 2017 Post-emergence		December 15, 2017 Pre-emergence		Difference
Customer relationships and other intangible assets	$	2,155	$	96	$	2,059
Technology and patents	905		12		893
Trademarks and trade names	375		190		185
Total	$	3,435	$	298	$	3,137

The fair value of customer relationships was determined using the excess earnings method, a derivation of the income approach that calculates residual profit attributable to an asset after proper returns are paid to complementary or contributory assets.

The fair value of technology and patents and trademarks and trade names determined using the royalty savings method, a derivation of the income approach that estimates the royalties saved through ownership of the assets.

27. Goodwill. Predecessor goodwill of $3,541 million was eliminated and Successor goodwill of $2,658 million was established based on the calculated reorganization value.

(In millions)	As Previously Reported			Adjustments		Revised
Reorganization value of Successor Company	$	7,583		$	26	$	7,609
Less: Fair value of Successor Company assets	(4,951		)	—		(4,951		)
Reorganization value of Successor Company assets in excess of fair value - goodwill	$	2,632		$	26	$	2,658

28. Other Assets. The $27 million decrease to other assets is related to prepaid commissions that do not meet the definition of an asset upon emergence as there is no future benefit to the Successor Company.

29. Deferred Revenue. The fair value of deferred revenue, which principally relates to payments on annual maintenance contracts, was determined by deducting selling costs and associated profit from the Predecessor deferred revenue balance to arrive at the costs and profit associated with fulfilling the liability. Additionally, the decrease includes the impact of an accounting policy change whereby the Successor Company no longer recognizes deferred revenue relating to sales transactions that have been billed, but for which the related account receivable has not yet been collected.

30. Other Current Liabilities. The decrease of $3 million to other current liabilities is related to the fair value of real estate leases determined to be above or below market using the income approach based on the difference between the contractual rental rate and the estimated market rental rate, discounted utilizing a risk-related discount rate.

31. Long-term Debt. The fair value of the Term Loan Credit Agreement was determined based on a market approach utilizing market-clearing data on the valuation date in addition to bid/ask prices.

32. Deferred Income Taxes. The adjustment represents the establishment of deferred tax liabilities related to book/tax differences created by fresh start accounting adjustments. The amount is net of the release of the valuation allowance on deferred tax assets, which management believes more likely than not will be realized as a result of future taxable income from the reversal of such deferred tax liabilities.

33. Business Restructuring Reserve. The Company recorded an increase to its non-current business restructuring reserves based on estimated future cash flows applied to a current discount rate at emergence.

34. Other Liabilities. A decrease in other liabilities of $43 million relates to deferred revenue and real estate leases as previously discussed.

35. Accumulated Other Comprehensive Loss. The remaining balance in Accumulated comprehensive loss was reversed to Reorganization expenses, net.

36. Fresh Start Adjustments. The following table reflects the cumulative impact of the fresh start adjustments as discussed above, the elimination of the Predecessor Company's accumulated other comprehensive loss and the adjustments required to eliminate accumulated deficit:

(In millions)	As Previously Reported			Adjustments		Revised
Eliminate Predecessor Intangible assets	$	(298	)	$	—	$	(298	)
Eliminate Predecessor Goodwill	(3,541		)	—		(3,541		)
Establish Successor Intangible assets	3,435			—		3,435
Establish Successor Goodwill	2,632			26		2,658
Fair value adjustment to Inventory	29			—		29
Fair value adjustment to Other current assets	(66		)	—		(66		)
Fair value adjustment to Property, plant and equipment	116			—		116
Fair value adjustment to Other assets	(27		)	—		(27		)
Fair value adjustment to Deferred revenue	235			—		235
Fair value adjustment to Business restructuring reserves	(4		)	—		(4		)
Fair value adjustment to Other current liabilities	3			—		3
Fair value adjustment to Long-term debt	(96		)			(96		)
Fair value adjustment to Other liabilities	43			—		43
Release Predecessor Accumulated comprehensive loss	(790		)	—		(790		)
Fresh start adjustments included in Reorganization items, net	1,671			26		1,697
Tax impact of fresh start adjustments	(565		)	—		(565		)
Gain on fresh start accounting, net	$	1,106		$	26	$	1,132

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Goodwill And Intangible Assets (Tables)

9 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

he carrying value of goodwill by operating segments for the periods indicated was as follows:

	As Previously Reported
(In millions)	Global Communications Solutions			Avaya Global Services			Total
Cost	$	2,669		$	2,501		$	5,170
Accumulated impairment	(1,576		)	(52		)	(1,628		)
September 30, 2017 (Predecessor)	$	1,093		$	2,449		$	3,542
Adjustments	(1		)	—			(1		)
Impact of fresh start accounting	68			(977		)	(909		)
December 15, 2017 (Predecessor)	$	1,160		$	1,472		$	2,632
December 16, 2017 (Successor)	$	1,160		$	1,472		$	2,632

	Adjustments
(In millions)	Global Communications Solutions		Avaya Global Services		Total
Cost	$	—	$	—	$	—
Accumulated impairment	—		—		—
September 30, 2017 (Predecessor)	$	—	$	—	$	—
Adjustments	—		—		—
Impact of fresh start accounting	11		15		26
December 15, 2017 (Predecessor)	$	11	$	15	$	26
December 16, 2017 (Successor)	$	11	$	15	$	26

	Revised
(In millions)	Global Communications Solutions			Avaya Global Services			Total
Cost	$	2,669		$	2,501		$	5,170
Accumulated impairment	(1,576		)	(52		)	(1,628		)
September 30, 2017 (Predecessor)	1,093			2,449			3,542
Adjustments	(1		)	—			(1		)
Impact of fresh start accounting	79			(962		)	(883		)
December 15, 2017 (Predecessor)	$	1,171		$	1,487		$	2,658
December 16, 2017 (Successor)	$	1,171		$	1,487		$	2,658
Spoken acquisition	120			—			120
Impact of foreign currency fluctuations	(3		)	(4		)	(7		)
June 30, 2018 (Successor)	$	1,288		$	1,483		$	2,771

Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class

The gross carrying amount and accumulated amortization by major intangible asset category as of June 30, 2018 (Successor) and September 30, 2017 (Predecessor) were as follows:

	Successor
	As of June 30, 2018
(In millions)	Technology and patents			Customer relationships and other intangibles			Trademarks and trade names			Total
Finite-lived intangible assets:
Cost	$	960		$	2,156		$	43		$	3,159
Accumulated amortization	(92		)	(84		)	(2		)	(178		)
Finite-lived intangible assets, net	868			2,072			41			2,981
Indefinite-lived intangible assets	5			—			332			337
Intangible assets, net	$	873		$	2,072		$	373		$	3,318
	Predecessor
	As of September 30, 2017
(In millions)	Technology and patents			Customer relationships and other intangibles			Trademarks and trade names			Total
Finite-lived intangible assets:
Cost	$	1,427		$	2,196		$	—		$	3,623
Accumulated amortization	(1,411		)	(2,091		)	—			(3,502		)
Finite-lived intangible assets, net	16			105			—			121
Indefinite-lived intangible assets:
Cost	—			—			545			545
Accumulated impairment	—			—			(355		)	(355		)
Indefinite-lived intangible assets, net	—			—			190			190
Intangible assets, net	$	16		$	105		$	190		$	311

Schedule of Future Amortization Expense

Future amortization expense related to amortizable intangible assets as of June 30, 2018 is as follows:

(In millions)
Remainder of fiscal 2018	$	84
2019	333
2020	333
2021	332
2022	305
2023 and thereafter	1,594
Total	$	2,981

XML

Supplementary Financial Information (Tables)

9 Months Ended

Jun. 30, 2018

Supplementary Financial Information [Abstract]

Schedule of Additional Financial Information

A summary of other expense, net for the periods indicated is presented in the following table:

	Successor		Predecessor			Successor			Predecessor
(In millions)	Three months ended June 30, 2018		Three months ended June 30, 2017			Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
OTHER INCOME (EXPENSE), NET
Interest income	$	1	$	1		$	2		$	2		$	2
Foreign currency gains, net	25		2			24			—			1
Income from TSA, net	1		—			5			3			—
Other pension and post-retirement benefit credits (costs), net	4		(12		)	9			(8		)	(29		)
Change in fair value of Emergence Date Warrants	6		—			(9		)	—			—
Gain on sale of long-lived assets	—		—			1			—			—
Other, net	—		—			—			1			(1		)
Total other income (expense), net	$	37	$	(9	)	$	32		$	(2	)	$	(27	)

As discussed in Note 2, “Recent Accounting Pronouncements - Recently Adopted Accounting Pronouncements”, the adoption of ASU 2017-07 resulted in the recognition of Other pension and post-retirement benefit credits (costs), net (including the interest cost, expected return on plan assets, amortization and curtailments and settlements) in Other income (expense), net. Prior period amounts have been reclassified to conform to the current period presentation.

The Foreign currency gains, net for both the three months ended June 30, 2018 (Successor) and the period from December 16, 2017 through June 30, 2018 (Successor) were principally due to the strengthening of the U.S. dollar compared to certain foreign exchange rates on U.S. dollar denominated receivables maintained in non-U.S. locations, mainly Argentina, India and Mexico.

A summary of reorganization items, net for the periods indicated is presented in the following tables:

	Successor		Predecessor
(In millions)	Three months ended June 30, 2018		Three months ended June 30, 2017
REORGANIZATION ITEMS, NET
Bankruptcy-related professional fees	$	—	$	(31	)
DIP Credit Agreement financing costs	—		—
Contract rejection fees	—		(4		)
Net gain on settlement of liabilities subject to compromise	—		—
Net gain on fresh start adjustments	—		—
Other items, net	—		—
Reorganization items, net	$	—	$	(35	)
Cash payments for reorganization items	$	—	$	33

	Successor		Predecessor
			As Previously Reported			Adjustments			Revised
(In millions)	Period from December 16, 2017 through June 30, 2018		Period from October 1, 2017 through December 15, 2017			Period from October 1, 2017 through December 15, 2017			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
REORGANIZATION ITEMS, NET
Bankruptcy-related professional fees	$	—	$	(56	)	$	—		$	(56	)	$	(59	)
DIP Credit Agreement financing costs	—		—			—			—			(14		)
Contract rejection fees	—		—			—			—			(4		)
Net gain on settlement of liabilities subject to compromise	—		1,804			(26		)	1,778			—
Net gain on fresh start adjustments	—		1,671			26			1,697			—
Other items, net	—		(3		)	—			(3		)	—
Reorganization items, net	$	—	$	3,416		$	—		$	3,416		$	(77	)
Cash payments for reorganization items	$	1	$	2,524		$	—		$	2,524		$	39

XML

Business Restructuring Reserves And Programs (Tables)

9 Months Ended

Jun. 30, 2018

Fiscal 2018 Restructuring Program

Restructuring Cost and Reserve [Line Items]

Schedule of Restructuring and Related Costs

The following table summarizes the components of the fiscal 2018 restructuring program for the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor):

(In millions)	Employee Separation Costs			Lease Obligations			Total
2018 restructuring charges	$	12		$	—		$	12
Cash payments	(3		)	—			(3		)
Balance as of December 15, 2017 (Predecessor)	$	9		$	—		$	9
Balance as of December 16, 2017 (Successor)	$	9		$	—		$	9
2018 restructuring charges	68			10			78
Cash payments	(16		)	(10		)	(26		)
Impact of foreign currency fluctuations	(2		)	—			(2		)
Balance as of June 30, 2018 (Successor)	$	59		$	—		$	59

Fiscal 2017 Restructuring Program

Restructuring Cost and Reserve [Line Items]

Schedule of Restructuring and Related Costs

The following table summarizes the components of the fiscal 2017 restructuring program for the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor):

(In millions)	Employee Separation Costs			Lease Obligations			Total
Balance as of September 30, 2017 (Predecessor)	$	4		$	1		$	5
Cash payments	(1		)	(1		)	(2		)
Balance as of December 15, 2017 (Predecessor)	$	3		$	—		$	3
Balance as of December 16, 2017 (Successor)	$	3		$	—		$	3
Cash payments	(1		)	—			(1		)
Balance as of June 30, 2018 (Successor)	$	2		$	—		$	2

Fiscal 2008-2016 Restructuring Programs

Restructuring Cost and Reserve [Line Items]

Schedule of Restructuring and Related Costs

The following table aggregates the components of the fiscal 2008 through 2016 restructuring programs for the period from December 16, 2017 through June 30, 2018 (Successor) and the period from October 1, 2017 through December 15, 2017 (Predecessor):

(In millions)	Employee Separation Costs			Lease Obligations			Total
Balance as of September 30, 2017 (Predecessor)	$	51		$	24		$	75
Cash payments	(3		)	(17		)	(20		)
Expense	1			1			2
Adjustments - fresh start and reorganization items	$	4		$	(1	)	$	3
Balance as of December 15, 2017 (Predecessor)	$	53		$	7		$	60
Balance as of December 16, 2017 (Successor)	$	53		$	7		$	60
Expense	1			1			2
Cash payments	(12		)	(2		)	(14		)
Impact of foreign currency fluctuations	—			—			—
Balance as of June 30, 2018 (Successor)	$	42		$	6		$	48

As of September 30, 2017, the Business restructuring reserve of $80 million included $11 million that was recorded in Liabilities subject to compromise in the Condensed Consolidated Balance Sheets.

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Financing Arrangements (Tables)

9 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

The following table reflects principal amounts of debt and debt net of discounts and issuance costs as of June 30, 2018 (Successor) and September 30, 2017 (Predecessor), which includes the impact of adequate protection payments and accrued interest as of January 19, 2017, the date the Company filed for bankruptcy:

	Successor					Predecessor
	June 30, 2018					September 30, 2017
(In millions)	Principal amount		Net of discounts and issuance costs			Principal amount		Net of discounts and issuance costs
Term Loan Credit Agreement	$	2,910	$	2,876		$	—	$	—
Convertible 2.25% senior notes due June 15, 2023	350		252			—		—
DIP Credit Agreement due January 19, 2018	—		—			725		725
First lien debt:
Senior secured term B-3 loans	—		—			594		594
Senior secured term B-4 loans	—		—			1		1
Senior secured term B-6 loans	—		—			519		519
Senior secured term B-7 loans	—		—			2,012		2,012
7% senior secured notes	—		—			982		982
9% senior secured notes	—		—			284		284
Second lien debt:
10.50% senior secured notes	—		—			1,440		1,440
Total debt	$	3,260	3,128			$	6,557	6,557
Debt maturing within one year			(29		)			(725		)
Long-term debt, net of current portion(1)			$	3,099				$	5,832

⁽¹⁾ Pre-petition long-term debt as of September 30, 2017 (Predecessor) was included in liabilities subject to compromise.

Convertible Debt

The net carrying amount of the Convertible Notes for the period indicated was as follows:

(In millions)	June 30, 2018
Principal	$	350
Less:
Unamortized debt discount	(91		)
Unamortized issuance costs	(7		)
Net carrying amount	$	252

The net carrying amount of the equity component of the Convertible Notes for the period indicated was as follows:

(In millions)	June 30, 2018
Debt discount for conversion option	$	92
Less:
Issuance costs	(3		)
Net carrying amount	$	89

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Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Jun. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Assumptions Used

The fair value of the Emergence Date Warrants upon emergence and as of June 30, 2018 was recorded in Non-current liabilities - Other liabilities in the Condensed Consolidated Balance Sheets, and was determined by using the Black-Scholes option pricing model with the input assumptions summarized below:

			As Previously Reported		Revised
	June 30, 2018		December 15, 2017		December 15, 2017
Expected volatility	50.96	%	54.57	%	54.38	%
Risk-free interest rates	2.68	%	2.20	%	2.20	%
Expected remaining life (in years)	4.46		5.00		5.00
Price per share of common stock	$20.08		$14.93		$15.16

Schedule of Derivative Liabilities at Fair Value

The following table summarizes the fair value of the Company's derivatives on a gross basis segregated between those that are designated as hedging instruments and those that are not designated as hedging instruments:

		Successor				Predecessor
		June 30, 2018				September 30, 2017
(In millions)	Balance Sheet Caption	Asset		Liability		Asset		Liability
Derivatives Designated as Hedging Instruments:
Interest rate contracts	Other current liabilities	$	—	$	11	$	—	$	—
Interest rate contracts	Other liabilities	—		5		—		—
		—		16		—		—
Derivatives Not Designated as Hedging Instruments:
Emergence Date Warrants	Other liabilities	—		26		—		—
Total derivative fair value		$	—	$	42	$	—	$	—

Derivatives Designated as Cash Flow Hedges

The following table provides information regarding the location and amount of pre-tax gains (losses) for derivatives designated as cash flow hedges:

	Successor												Predecessor
	Three months ended June 30, 2018						Period from December 16, 2017 through June 30, 2018						Period from October 1, 2017 through December 15, 2017
(In millions)	Interest Expense			Other Comprehensive Income (Loss)			Interest Expense			Other Comprehensive Income (Loss)			Interest Expense			Other Comprehensive Income (Loss)
Financial Statement Line Item in which Cash Flow Hedges are Recorded	$	(56	)	$	(16	)	$	(112	)	$	(41	)	$	(14	)	$	658
Impact of cash flow hedging relationships:
Loss recognized in AOCI - on interest rate swaps	—			(17		)	—			(17		)	—			—
Interest expense reclassified from AOCI	(2		)	2			(2		)	2			—			—

Derivatives Not Designated as Hedging Instruments

The following table provides information regarding the pre-tax effects for derivatives not designated as hedging instruments on the Condensed Consolidated Statements of Operations:

		Successor					Predecessor
(In millions)	Location of Derivative Pre-tax Gain (Loss)	Three months ended June 30, 2018		Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017
Emergence Date Warrants	Other income (expense), net	$	6	$	(9	)	$	—

Schedule of Outstanding Derivative Positions Presented on a Net Basis

The following table provides information on the Company's derivative positions as if those subject to master netting arrangements were presented on a net basis, allowing for the right to offset by counterparty per the master netting agreements:

	Successor				Predecessor
	June 30, 2018				September 30, 2017
(In millions)	Asset		Liability		Asset		Liability
Gross amounts recognized in the consolidated balance sheet	$	—	$	42	$	—	$	—
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet	—		—		—		—
Net amounts	$	—	$	42	$	—	$	—

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Fair Value Measures (Tables)

9 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes the activity for the Company's Level 3 liabilities measured at fair value on a recurring basis:

(In millions)	Emergence Date Warrants			Spoken Acquisition Earn-outs		Total
September 30, 2017 (Predecessor)	$	—		$	—	$	—
Issuance of Emergence Date Warrants	17			—		17
December 15, 2017 (Predecessor)	$	17		$	—	$	17
December 16, 2017 (Successor)	$	17		$	—	$	17
Contingent consideration	—			14		14
Change in fair value(1)	15			—		15
March 31, 2018 (Successor)	32			14		46
Accretion of interest(1)	—			1		1
Change in fair value(1)	(6		)	—		(6		)
June 30, 2018 (Successor)	$	26		$	15	$	41

⁽¹⁾ Changes in fair value of the Emergence Date Warrants and accretion of interest on the Spoken acquisition earn-outs are included in Other income (expense), net.

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2018 (Successor) and September 30, 2017 (Predecessor) were as follows:

	Successor
	June 30, 2018
	Fair Value Measurements Using
(In millions)	Total		Level 1		Level 2		Level 3
Other Non-Current Assets:
Investments	$	2	$	2	$	—	$	—
Liabilities:
Interest rate contracts	$	16	$	—	$	16	$	—
Spoken acquisition Earn-outs	15		—		—		15
Emergence Date Warrants	26		—		—		26
Total liabilities	$	57	$	—	$	16	$	41

	Predecessor
	September 30, 2017
	Fair Value Measurements Using
(In millions)	Total		Level 1		Level 2		Level 3
Other Non-Current Assets:
Investments	$	1	$	1	$	—	$	—

Carry Values and Estimated Fair Value of Debt Instruments

The estimated fair values of the amounts borrowed under the Company’s financing agreements at June 30, 2018 (Successor) and September 30, 2017 (Predecessor) are as follows:

	Successor				Predecessor
	June 30, 2018				September 30, 2017
(In millions)	Principal Amount		Fair Value		Principal Amount		Fair Value
Term Loan Credit Agreement due December 15, 2024	$	2,910	$	2,919	$	—	$	—
Convertible 2.25% senior notes due June 15, 2023	350		342		—		—
DIP Credit Agreement due January 19, 2018	—		—		725		732
Variable rate Term B-3 Loans due October 26, 2017	—		—		594		503
Variable rate Term B-4 Loans due October 26, 2017	—		—		1		1
Variable rate Term B-6 Loans due March 31, 2018	—		—		519		440
Variable rate Term B-7 Loans due May 29, 2020	—		—		2,012		1,709
7% senior secured notes due April 1, 2019	—		—		982		832
9% senior secured notes due April 1, 2019	—		—		284		241
10.50% senior secured notes due March 1, 2021	—		—		1,440		67
Total	$	3,260	$	3,261	$	6,557	$	4,525

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Benefit Obligations (Tables)

9 Months Ended

Jun. 30, 2018

Retirement Benefits [Abstract]

Schedule of Net Benefit Costs

The components of the pension and post-retirement net periodic benefit (credit) cost for the periods indicated are provided in the tables below:

	Successor			Predecessor			Successor			Predecessor
(In millions)	Three months ended June 30, 2018			Three months ended June 30, 2017			Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
Pension Benefits - U.S.
Components of Net Periodic Benefit (Credit) Cost
Service cost	$	1		$	1		$	2		$	1		$	3
Interest cost	9			24			19			22			73
Expected return on plan assets	(17		)	(44		)	(35		)	(38		)	(134		)
Amortization of unrecognized prior service cost	—			—			—			—			1
Amortization of previously unrecognized net actuarial loss	—			26			—			20			77
Settlement loss(1)	—			—			—			—			—
Net periodic benefit (credit) cost	$	(7	)	$	7		$	(14	)	$	5		$	20

⁽¹⁾ Excludes Plan of Reorganization related settlements that were recorded in Reorganization items, net in the Condensed Consolidated Statements of Operations.

	Successor		Predecessor		Successor		Predecessor
(In millions)	Three months ended June 30, 2018		Three months ended June 30, 2017		Period from December 16, 2017 through June 30, 2018		Period from October 1, 2017 through December 15, 2017		Nine months ended June 30, 2017
Pension Benefits - Non-U.S.
Components of Net Periodic Benefit Cost
Service cost	$	1	$	1	$	3	$	2	$	5
Interest cost	3		2		5		3		6
Expected return on plan assets	—		—		—		—		(1		)
Amortization of previously unrecognized net actuarial loss	—		4		—		1		12
Net periodic benefit cost	$	4	$	7	$	8	$	6	$	22

	Successor			Predecessor			Successor			Predecessor
(In millions)	Three months ended June 30, 2018			Three months ended June 30, 2017			Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
Post-retirement Benefits - U.S.
Components of Net Periodic Benefit Cost (Credit)
Service cost	$	1		$	—		$	1		$	—		$	1
Interest cost	4			4			7			3			10
Expected return on plan assets	(3		)	(2		)	(5		)	(2		)	(7		)
Amortization of unrecognized prior service cost	—			(5		)	—			(3		)	(13		)
Amortization of previously unrecognized net actuarial loss	—			3			—			2			9
Curtailment	—			—			—			—			(4		)
Net periodic benefit cost (credit)	$	2		$	—		$	3		$	—		$	(4	)

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Share-Based Compensation (Tables)

9 Months Ended

Jun. 30, 2018

Share-based Compensation [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The following assumptions were used in calculating the fair value of the options granted for the period from December 16, 2017 through June 30, 2018:

	Range
Exercise price	$	19.46		-	$	21.79
Expected volatility(1)	49.25		%	-	56.59		%
Expected life (in years)(2)	5.86 years			-	6.65 years
Risk-free interest rate(3)	2.35		%	-	2.95		%
Dividend yield(4)					—		%

⁽¹⁾ Expected volatility based on peer group companies adjusted for the Company's leverage.

⁽²⁾ Expected life based on the vesting terms of the option and a contractual life of ten years.

⁽³⁾ Risk-free interest rate based on U.S. Treasury yields with a term equal to the expected option term.

⁽⁴⁾ Dividend yield was assumed to be zero as the Company does not anticipate paying dividends.

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Earnings (Loss) Per Common Share (Tables)

9 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Earnings Per Share

The following table sets forth the calculation of net (loss) income attributable to common shareholders and the computation of basic and diluted (loss) earnings per share for the periods indicated:

	Successor			Predecessor			Successor			Predecessor
(In millions, except per share amounts)	Three months ended June 30, 2018			Three months ended June 30, 2017			Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
Net (loss) income per share:
Numerator
Net (loss) income	$	(88	)	$	(98	)	$	19		$	2,977		$	(209	)
Dividends to preferred stockholders	—			(8		)	—			(6		)	(23		)
Undistributed earnings	(88		)	(106		)	19			2,971			(232		)
Percentage allocated to common stockholders(1)	100.0		%	100.0		%	100.0		%	86.9		%	100.0		%
Numerator for basic and diluted earnings per common share	$	(88	)	$	(106	)	$	19		$	2,582		$	(232	)
Denominator
Denominator for basic earnings per weighted average common shares	109.8			497.2			109.8			497.3			497.0
Effect of dilutive securities
Restricted stock units	—			—			1.2			—			—
Stock options	—			—			—			—			—
Convertible Notes	—			—			—			—			—
Call Spread Warrants	—			—			—			—			—
Emergence Date Warrants	—			—			—			—			—
Denominator for diluted earnings per weighted average common shares	109.8			497.2			111.0			497.3			497.0
Per common share net (loss) income
Basic	$	(0.80	)	$	(0.22	)	$	0.17		$	5.19		$	(0.47	)
Diluted	$	(0.80	)	$	(0.22	)	$	0.17		$	5.19		$	(0.47	)
(1) Basic weighted average common stock outstanding	109.8			497.2			109.8			497.3			497.0
Basic weighted average common stock and common stock equivalents (preferred shares)	109.8			497.2			109.8			572.4			497.0
Percentage allocated to common stockholders	100.0		%	100.0		%	100.0		%	86.9		%	100.0		%

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Operating Segments (Tables)

9 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

Summarized financial information relating to the Company’s operating segments is shown in the following table for the periods indicated:

	Successor			Predecessor			Successor			Predecessor
(In millions)	Three months ended June 30, 2018			Three months ended June 30, 2017			Period from December 16, 2017 through June 30, 2018			Period from October 1, 2017 through December 15, 2017			Nine months ended June 30, 2017
REVENUE
Global Communications Solutions	$	322		$	302		$	716		$	253		$	957
Avaya Networking (1)	—			43			—			—			137
Enterprise Collaboration Solutions	322			345			716			253			1,094
Avaya Global Services	433			458			967			351			1,388
Unallocated amounts (2)	(63		)	—			(171		)	—			—
	$	692		$	803		$	1,512		$	604		$	2,482
GROSS PROFIT
Global Communications Solutions	$	210		$	210		$	473		$	169		$	653
Avaya Networking (1)	—			14			—			—			47
Enterprise Collaboration Solutions	210			224			473			169			700
Avaya Global Services	257			274			582			196			828
Unallocated amounts (3)	(115		)	(5		)	(302		)	(3		)	(16		)
	352			493			753			362			1,512
OPERATING EXPENSES
Selling, general and administrative	281			295			613			264			923
Research and development	51			59			110			38			178
Amortization of intangible assets	39			57			86			10			170
Impairment of indefinite-lived intangible assets	—			65			—			—			65
Goodwill impairment	—			52			—			—			52
Restructuring charges, net	30			8			80			14			22
	401			536			889			326			1,410
OPERATING (LOSS) INCOME	(49		)	(43		)	(136		)	36			102
INTEREST EXPENSE, OTHER INCOME (EXPENSE), NET AND REORGANIZATION ITEMS, NET	(19		)	(61		)	(80		)	3,400			(333		)
(LOSS) INCOME BEFORE INCOME TAXES	$	(68	)	$	(104	)	$	(216	)	$	3,436		$	(231	)

⁽¹⁾ The Networking business was sold on July 14, 2017.

⁽²⁾ Unallocated amounts in Revenue represent the fair value adjustment to deferred revenue recognized upon emergence from bankruptcy and excluded from segment revenue.

⁽³⁾ Unallocated amounts in Gross Profit include the fair value adjustments recognized upon emergence from bankruptcy and excluded from segment gross profit; the effect of the amortization of technology intangibles; and costs that are not core to the measurement of segment management’s performance, but rather are controlled at the corporate level.

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Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Jun. 30, 2018

Equity [Abstract]

Schedule of Components of Accumulated Other Comprehensive Income (Loss)

periods indicated were as follows:

(In millions)	Foreign Currency Translation			Interest Rate Swaps			Total
Balance at March 31, 2018 (Successor)	$	(25	)	$	—		$	(25	)
Other comprehensive income (loss) before reclassifications	(4		)	(17		)	(21		)
Amounts reclassified to earnings	—			2			2
Benefit from income taxes	—			3			3
Balance at June 30, 2018 (Successor)	$	(29	)	$	(12	)	$	(41	)

(In millions)	Unamortized pension, post-retirement and postemployment benefit-related items			Foreign Currency Translation			Interest Rate Swaps			Other			Total
Balance at September 30, 2017 (Predecessor)	$	(1,375	)	$	(72	)	$	—		$	(1	)	$	(1,448	)
Other comprehensive (loss) income before reclassifications	(24		)	3			—			—			(21		)
Amounts reclassified to earnings	16			—			—			—			16
Pension settlement	721			—			—			—			721
Provision for income taxes	(58		)	—			—			—			(58		)
Balance at December 15, 2017 (Predecessor)	(720		)	(69		)	—			(1		)	(790		)
Elimination of Predecessor Company accumulated other comprehensive loss	720			69			—			1			790
Balance at December 15, 2017 (Predecessor)	$	—		$	—		$	—		$	—		$	—
Balance at December 16, 2017 (Successor)	$	—		$	—		$	—		$	—		$	—
Other comprehensive loss before reclassifications	—			(29		)	(17		)	—			(46		)
Amounts reclassified to earnings	—			—			2			—			2
Benefit from income taxes	—			—			3			—			3
Balance at June 30, 2018 (Successor)	$	—		$	(29	)	$	(12	)	$	—		$	(41	)

(In millions)	Unamortized pension, postretirement and postemployment benefit-related items			Foreign Currency Translation			Other			Total
Balance at March 31, 2017 (Predecessor)	$	(1,598	)	$	(7	)	$	(1	)	$	(1,606	)
Other comprehensive loss before reclassifications	—			(42		)	—			(42		)
Amounts reclassified to earnings	26			—			—			26
Provision for income taxes	(1		)	(2		)	—			(3		)
Balance at June 30, 2017 (Predecessor)	$	(1,573	)	$	(51	)	$	(1	)	$	(1,625	)

(In millions)	Unamortized pension, post-retirement and postemployment benefit-related items			Foreign Currency Translation			Other			Total
Balance at September 30, 2016 (Predecessor)	$	(1,627	)	$	(33	)	$	(1	)	$	(1,661	)
Other comprehensive income before reclassifications	—			(17		)	—			(17		)
Amounts reclassified to earnings	70			—			—			70
Provision for income taxes	(16		)	(1		)	—			(17		)
Balance at June 30, 2017 (Predecessor)	$	(1,573	)	$	(51	)	$	(1	)	$	(1,625	)

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Commitments And Contingencies (Tables)

9 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of Product Warranty Liability

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 Condensed Consolidated Balance Sheets, for actual experience. As of June 30, 2018 and September 30, 2017, the amount reserved was $2 million and $2 million, respectively.

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Background and Basis of Presentation (Details) $ in Millions			9 Months Ended
	Jul. 14, 2017 segment	Jul. 13, 2017 Segments	Jun. 30, 2018 USD ($) segment	Dec. 16, 2017 USD ($)	Dec. 15, 2017 USD ($)
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Number of operating segments	2	3	2
Cash			$ 685	$ 366	$ 366
Accounts receivable, net			$ 367	391
Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cash				26
Accounts receivable, net				$ (26)

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Background and Basis of Presentation - Balance Sheet (Details) - USD ($)	Jun. 30, 2018	Dec. 16, 2017	Dec. 15, 2017	Sep. 30, 2017
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cash	$ 685,000,000	$ 366,000,000	$ 366,000,000
Accounts receivable, net	367,000,000	391,000,000
Goodwill	2,771,000,000	2,658,000,000	2,658,000,000
Total Assets	7,826,000,000	7,609,000,000
Additional paid-in capital (Successor)		1,667,000,000
Total Stockholders' Equity	1,718,000,000	1,668,000,000	1,668,000,000
Total Liabilities and Stockholders' Equity	$ 7,826,000,000	7,609,000,000
Successor common stock value per share (in dollars per share)		15.16
As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cash		340,000,000
Accounts receivable, net		417,000,000
Goodwill		2,632,000,000	$ 2,632,000,000	$ 3,542,000,000
Total Assets		7,583,000,000
Additional paid-in capital (Successor)		1,641,000,000
Total Stockholders' Equity		1,642,000,000
Total Liabilities and Stockholders' Equity		7,583,000,000
Successor common stock value per share (in dollars per share)		14.93
Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cash		26,000,000
Accounts receivable, net		(26,000,000)
Goodwill		26,000,000
Total Assets		26,000,000
Additional paid-in capital (Successor)		26,000,000
Total Stockholders' Equity		26,000,000
Total Liabilities and Stockholders' Equity		26,000,000
Successor common stock value per share (in dollars per share)		$ 0.23

XML

Background and Basis of Presentation - Cash Flow (Details) - USD ($) $ in Millions	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Change in Accounts receivable				$ 23
Net gain on settlement of Liabilities subject to compromise	$ 26	$ 0		0
Fresh start adjustments, net	(26)	$ 0		0
Net Cash Used For Operating Activities				177
Net decrease in cash and cash equivalents				$ 319
As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Change in Accounts receivable	14
Net gain on settlement of Liabilities subject to compromise	(1,804)
Fresh start adjustments, net	(1,671)
Net Cash Used For Operating Activities	(440)
Net decrease in cash and cash equivalents	(536)
Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Change in Accounts receivable	26
Net gain on settlement of Liabilities subject to compromise	26
Fresh start adjustments, net	(26)
Net Cash Used For Operating Activities	26
Net decrease in cash and cash equivalents	26
Predecessor
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Change in Accounts receivable	40				$ 85
Net gain on settlement of Liabilities subject to compromise	(1,778)		$ 0		0
Fresh start adjustments, net	(1,697)		$ 0		0
Net Cash Used For Operating Activities	(414)				125
Net decrease in cash and cash equivalents	$ (510)				$ 393

XML

Recent Accounting Pronouncements (Details) - Accounting Standards Update 2017-07 - other income (expense) - USD ($) $ in Millions	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Other pension and post-retirement benefit costs		$ (4)		$ (9)
Predecessor
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Other pension and post-retirement benefit costs	$ 8		$ 12		$ 29

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Emergence from Voluntary Reorganization under Chapter 11 Proceedings (Details) - USD ($)		7 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Dec. 16, 2017
Fresh-Start Adjustment [Line Items]
Repayment of debtor-in-possession financing	$ 725,000,000	$ 0
Shares authorized (in shares)	605,000,000
Preferred stock, shares authorized		55,000,000
Preferred stock, par value (in usd per share)		$ 0.01
Common stock, shares authorized		550,000,000
Common stock, par value (in usd per share)		$ 0.01
Common stock, shares issued		110,160,835	110,000,000
Debt face amount		$ 3,260,000,000
Class of warrant or right, number of securities called by each warrant or right (in Shares)	5,600,000
Class of warrant or right, exercise price of warrants or rights (USD per share)	$ 25.55
Payment to PBGC		$ 0
Common stock issued for GUC (in shares)	200,000	200,000
Payment of unsecured claims		$ 0
General Unsecured Creditor Reserve
Fresh-Start Adjustment [Line Items]
Payment of unsecured claims	$ 58,000,000
Term Loan
Fresh-Start Adjustment [Line Items]
Debt face amount		$ 2,910,000,000
First Lien Debt
Fresh-Start Adjustment [Line Items]
Common stock issued for debt (in shares)	99,300,000
Repayments of long-term Debt	$ 2,061,000,000
Second Lien Debt
Fresh-Start Adjustment [Line Items]
Common stock issued for debt (in shares)	4,400,000
Term Loan Credit Agreement due December 15, 2024 | Term Loan
Fresh-Start Adjustment [Line Items]
Debt face amount	$ 2,925,000,000
7% senior secured notes
Fresh-Start Adjustment [Line Items]
Interest rate, stated percentage		7.00%
7% senior secured notes | First Lien Debt
Fresh-Start Adjustment [Line Items]
Debt face amount		$ 0
Interest rate, stated percentage		7.00%
9% senior secured notes
Fresh-Start Adjustment [Line Items]
Interest rate, stated percentage		9.00%
9% senior secured notes | First Lien Debt
Fresh-Start Adjustment [Line Items]
Debt face amount		$ 0
Interest rate, stated percentage		9.00%
10.50% senior secured notes
Fresh-Start Adjustment [Line Items]
Interest rate, stated percentage		10.50%
10.50% senior secured notes | Second Lien Debt
Fresh-Start Adjustment [Line Items]
Debt face amount		$ 0
Interest rate, stated percentage		10.50%
Revolving Credit Facility | ABL Credit Agreement | Line of Credit
Fresh-Start Adjustment [Line Items]
Line of credit facility, current borrowing capacity	$ 300,000,000
Avaya Inc. Pension Plan for Salaried Employees
Fresh-Start Adjustment [Line Items]
Common stock issued for PBGC (in shares)	6,100,000
Payment to PBGC	$ 340,000,000

XML

Fresh Start Accounting - Narrative (Details) - USD ($) shares in Millions		2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2017	Dec. 16, 2017	Sep. 30, 2017
Fresh-Start Adjustment [Line Items]
Enterprise value								$ 5,721,000,000
Repayment of debtor-in-possession financing	$ 725,000,000				$ 0
Debt maturing within one year	(29,000,000)	$ (29,000,000)	$ (29,000,000)		(29,000,000)	$ (29,000,000)
Debt face amount			3,260,000,000		3,260,000,000	3,260,000,000
Funding payment for Avaya represented employee pension plan					0
Debt cancelled due to bankruptcy	$ 5,721,000,000
Class of warrant or right, number of securities called by each warrant or right (in Shares)	5.6	5.6
Payment to PBGC					0
Establish Successor Goodwill	$ 2,632,000,000	$ 2,632,000,000						2,658,000,000
Net gain on settlement of liabilities subject to compromise		(26,000,000)	0		0
Discharge of Debt
Fresh-Start Adjustment [Line Items]
Adjustments, accounts payable	(49,000,000)	(49,000,000)
Adjustments, accounts payable, reclassification of accrued bankruptcy related professional fees	(50,000,000)	(50,000,000)
Adjustments, accounts payable, payment of bankruptcy professional fees	(3,000,000)	(3,000,000)
Adjustments, accounts payable, reinstatement of contract cure costs	4,000,000	4,000,000
Adjustments, payroll and benefit obligations	23,000,000	23,000,000
Fair value adjustment to Deferred revenue	79,000,000	79,000,000
Adjustments, deferred revenue	50,000,000	50,000,000
Adjustments, other liabilities, deferred revenue	29,000,000	29,000,000
Adjustments, restructuring reserve	7,000,000	7,000,000
Adjustments, business restructuring reserve	3,000,000	3,000,000
Adjustments, business restructuring reserve	4,000,000	4,000,000
Adjustments, liabilities subject to compromise, pension obligation	(295,000,000)	(295,000,000)
Funding payment for Avaya represented employee pension plan	(49,000,000)
Adjustments, other post-retirement obligation	212,000,000	212,000,000
Adjustments, other liabilities	233,000,000	233,000,000
Payment to PBGC	340,000,000
Adjustments, other assets	6,000,000	6,000,000
Adjustments, other current liabilities	65,000,000	65,000,000
Revaluation of Assets
Fresh-Start Adjustment [Line Items]
Adjustments, property, plant and equipment	116,000,000	116,000,000
Adjustments, intangible assets, net	3,137,000,000	3,137,000,000
Adjustments, other assets	(27,000,000)	(27,000,000)
Revaluation of Liabilities
Fresh-Start Adjustment [Line Items]
Adjustments, deferred revenue	(341,000,000)	(341,000,000)
Adjustments, business restructuring reserve	4,000,000	4,000,000
Adjustments, other liabilities	(43,000,000)	(43,000,000)
Adjustments, other current liabilities	$ (3,000,000)	(3,000,000)
Minimum
Fresh-Start Adjustment [Line Items]
Enterprise value								5,100,000,000
Maximum
Fresh-Start Adjustment [Line Items]
Enterprise value								7,100,000,000
Term Loan
Fresh-Start Adjustment [Line Items]
Debt face amount			2,910,000,000		2,910,000,000	2,910,000,000
First Lien Debt
Fresh-Start Adjustment [Line Items]
Debt cancelled due to bankruptcy						4,281,000,000
Common stock issued for debt (in shares)	99.3
Common stock issued for Predecessor debt	$ 1,509,000,000
Repayment of long-term debt	$ 2,061,000,000
Second Lien Debt
Fresh-Start Adjustment [Line Items]
Debt cancelled due to bankruptcy						1,440,000,000
Common stock issued for debt (in shares)	4.4
Common stock issued for Predecessor debt	$ 67,000,000
Term Loan Credit Agreement due December 15, 2024 | Term Loan
Fresh-Start Adjustment [Line Items]
Debt face amount	$ 2,925,000,000	2,925,000,000
Debt term	7 years
Revolving Credit Facility | ABL Credit Agreement | Line of Credit
Fresh-Start Adjustment [Line Items]
Debt term	5 years
Line of credit facility, current borrowing capacity	$ 300,000,000	$ 300,000,000
Letter of Credit | ABL Credit Agreement | Line of Credit
Fresh-Start Adjustment [Line Items]
Letters of credit outstanding			$ 48,000,000		$ 48,000,000	$ 48,000,000
Avaya Inc. Pension Plan for Salaried Employees
Fresh-Start Adjustment [Line Items]
Payment to PBGC	$ 340,000,000
Common stock issued for PBGC (in shares)	6.1	6.1
Common stock issued to Pension Benefit Guaranty Corporation	$ 92,000,000	$ 92,000,000
As Previously Reported
Fresh-Start Adjustment [Line Items]
Pre-petition first lien debt		734,000,000
Pre-petition second lien debt		1,357,000,000
Avaya pension plan for salaried employees		(514,000,000)
Enterprise value								5,721,000,000
Goodwill	3,541,000,000	3,541,000,000
Establish Successor Goodwill								2,632,000,000
General unsecured creditors' claims		227,000,000
Net gain on settlement of liabilities subject to compromise		1,804,000,000
As Previously Reported | Discharge of Debt
Fresh-Start Adjustment [Line Items]
Adjustments, accounts payable	(49,000,000)	(49,000,000)
Adjustments, payroll and benefit obligations	23,000,000	23,000,000
Adjustments, deferred revenue	50,000,000	50,000,000
Adjustments, business restructuring reserve	3,000,000	3,000,000
Adjustments, business restructuring reserve	4,000,000	4,000,000
Adjustments, other post-retirement obligation	212,000,000	212,000,000
Adjustments, other liabilities	233,000,000	233,000,000
Adjustments, other assets	6,000,000	6,000,000
Adjustments, other current liabilities	65,000,000	65,000,000
As Previously Reported | Revaluation of Assets
Fresh-Start Adjustment [Line Items]
Adjustments, property, plant and equipment	116,000,000	116,000,000
Adjustments, intangible assets, net	3,137,000,000	3,137,000,000
Adjustments, other assets	(27,000,000)	(27,000,000)
As Previously Reported | Revaluation of Liabilities
Fresh-Start Adjustment [Line Items]
Fair value adjustment to Deferred revenue	(235,000,000)	(235,000,000)
Adjustments, deferred revenue	(341,000,000)	(341,000,000)
Adjustments, business restructuring reserve	4,000,000	4,000,000
Adjustments, other liabilities	(43,000,000)	(43,000,000)
Adjustments, other current liabilities	(3,000,000)	(3,000,000)
Predecessor
Fresh-Start Adjustment [Line Items]
Pre-petition first lien debt		711,000,000
Pre-petition second lien debt		1,356,000,000
Avaya pension plan for salaried employees		(516,000,000)
Repayment of debtor-in-possession financing		725,000,000					$ 0
Debt maturing within one year									$ (725,000,000)
Debt face amount									6,557,000,000
Funding payment for Avaya represented employee pension plan		(49,000,000)					0
Payment to PBGC		340,000,000					0
Common stock issued to Pension Benefit Guaranty Corporation	92,000,000	92,000,000
Goodwill	3,541,000,000	3,541,000,000
General unsecured creditors' claims		227,000,000
Net gain on settlement of liabilities subject to compromise		1,778,000,000		$ 0			$ 0
Predecessor | Revaluation of Assets
Fresh-Start Adjustment [Line Items]
Adjustments, property, plant and equipment	116,000,000	116,000,000
Adjustments, other assets	(27,000,000)	(27,000,000)
Predecessor | Revaluation of Liabilities
Fresh-Start Adjustment [Line Items]
Fair value adjustment to Deferred revenue	(235,000,000)	(235,000,000)
Adjustments, business restructuring reserve	4,000,000	4,000,000
Adjustments, other liabilities	(43,000,000)	(43,000,000)
Adjustments, other current liabilities	(3,000,000)	(3,000,000)
Predecessor | Term Loan
Fresh-Start Adjustment [Line Items]
Debt face amount									$ 0
Warrants
Fresh-Start Adjustment [Line Items]
Fair value of warrant liability	17,000,000	17,000,000
Adjustments
Fresh-Start Adjustment [Line Items]
Enterprise value								0
Goodwill	0	0
Establish Successor Goodwill								$ 26,000,000
Adjustments | Discharge of Debt
Fresh-Start Adjustment [Line Items]
Adjustments, accounts payable	0	0
Adjustments, payroll and benefit obligations	0	0
Adjustments, deferred revenue	0	0
Adjustments, business restructuring reserve	0	0
Adjustments, business restructuring reserve	0	0
Adjustments, other post-retirement obligation	0	0
Adjustments, other liabilities	0	0
Adjustments, other assets	0	0
Adjustments, other current liabilities	0	0
Adjustments | Revaluation of Assets
Fresh-Start Adjustment [Line Items]
Adjustments, property, plant and equipment	0	0
Adjustments, intangible assets, net	0	0
Adjustments, other assets	0	0
Adjustments | Revaluation of Liabilities
Fresh-Start Adjustment [Line Items]
Fair value adjustment to Deferred revenue	0	0
Adjustments, deferred revenue	0	0
Adjustments, business restructuring reserve	0	0
Adjustments, other liabilities	0	0
Adjustments, other current liabilities	0	0
Adjustments | As Previously Reported
Fresh-Start Adjustment [Line Items]
Net gain on settlement of liabilities subject to compromise		(26,000,000)
Adjustments | Predecessor
Fresh-Start Adjustment [Line Items]
Pre-petition first lien debt		(23,000,000)
Pre-petition second lien debt		(1,000,000)
Avaya pension plan for salaried employees		(2,000,000)
Goodwill	$ 0	0
General unsecured creditors' claims		0
Net gain on settlement of liabilities subject to compromise		$ (26,000,000)

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Fresh Start Accounting - Enterprise Value To The Estimated Fair Value Of The Successor Common Stock (Details) - USD ($) $ / shares in Units, $ in Millions	Jun. 30, 2018	Dec. 16, 2017	Dec. 15, 2017
Fresh-Start Adjustment [Line Items]
Posconfirmation Assets, Fair Value		$ 4,951
Enterprise value		5,721
Cash and cash equivalents		366	$ 340
Minimum cash required for operations		(120)
Fair value of Term Loan Credit Agreement		(2,896)
Fair value of capitalized leases		(20)
Fair value of pension and other post-retirement obligations, net of tax		(856)
Change in net deferred tax liabilities from reorganization		(510)
Fair value of Successor warrants		(17)
Fair value of Successor common stock		$ 1,668	$ 1,642
Shares issued at December 15, 2017 (in shares)	110,160,835	110,000,000
Per share value (usd per share)		$ 15.16
Debt, fair value, percent of par		99.00%
Other Postretirement Benefits Plan
Fresh-Start Adjustment [Line Items]
Rate of return on plan assets			5.90%
Discount rate			3.77%
UNITED STATES | Pension Plan
Fresh-Start Adjustment [Line Items]
Rate of return on plan assets			7.75%
Discount rate			3.70%
Foreign Plan | Pension Plan
Fresh-Start Adjustment [Line Items]
Rate of return on plan assets			3.80%
Discount rate			1.52%
Adjustments
Fresh-Start Adjustment [Line Items]
Posconfirmation Assets, Fair Value		$ 0
Enterprise value		0
Cash and cash equivalents		26
Minimum cash required for operations		0
Fair value of Term Loan Credit Agreement		0
Fair value of capitalized leases		0
Fair value of pension and other post-retirement obligations, net of tax		0
Change in net deferred tax liabilities from reorganization		0
Fair value of Successor warrants		0
Fair value of Successor common stock		$ 26
Per share value (usd per share)		$ 0.23
As Previously Reported
Fresh-Start Adjustment [Line Items]
Posconfirmation Assets, Fair Value		$ 4,951
Enterprise value		5,721
Minimum cash required for operations		(120)
Fair value of Term Loan Credit Agreement		(2,896)
Fair value of capitalized leases		(20)
Fair value of pension and other post-retirement obligations, net of tax		(856)
Change in net deferred tax liabilities from reorganization		(510)
Fair value of Successor warrants		(17)
Fair value of Successor common stock		$ 1,642
Shares issued at December 15, 2017 (in shares)	110,200,000	110,000,000
Per share value (usd per share)		$ 14.93
As Previously Reported | Adjustments
Fresh-Start Adjustment [Line Items]
Shares issued at December 15, 2017 (in shares)		0

XML

Fresh Start Accounting - Enterprise Value To The Estimated Reorganization Value (Details) $ in Millions	Dec. 16, 2017 USD ($)
Enterprise value	$ 5,721
Plus:
Non-debt current liabilities	955
Non-debt non-current liabilities	2,090
Excess cash and cash equivalents	246
Less:
Fair value of pension and other post-retirement obligations, net of tax	(856)
Fair value of capitalized leases	(20)
Change in net deferred tax liabilities from reorganization	(510)
Fair value of Successor warrants	(17)
Reorganization value of Successor assets	7,609
As Previously Reported
Enterprise value	5,721
Plus:
Non-debt current liabilities	955
Non-debt non-current liabilities	2,090
Excess cash and cash equivalents	220
Less:
Fair value of pension and other post-retirement obligations, net of tax	(856)
Fair value of capitalized leases	(20)
Change in net deferred tax liabilities from reorganization	(510)
Fair value of Successor warrants	(17)
Reorganization value of Successor assets	7,583
Adjustments
Enterprise value	0
Plus:
Non-debt current liabilities	0
Non-debt non-current liabilities	0
Excess cash and cash equivalents	26
Less:
Fair value of pension and other post-retirement obligations, net of tax	0
Fair value of capitalized leases	0
Change in net deferred tax liabilities from reorganization	0
Fair value of Successor warrants	0
Reorganization value of Successor assets	$ 26

XML

Fresh Start Accounting - Fresh Start Accounting - Balance Sheet (Details) - USD ($) $ in Millions	Dec. 16, 2017	Dec. 15, 2017
Postconfirmation, Current Assets [Abstract]
Cash and cash equivalents	$ 366	$ 340
Accounts receivable, net	391	417
Inventory	127	127
Other current assets	242	242
TOTAL CURRENT ASSETS	1,126	1,126
Property, plant and equipment, net	310	310
Deferred income taxes, net	31	31
Intangible assets, net	3,435	3,435
Establish Successor Goodwill	2,658	2,632
Other assets	49	49
Reorganization value of Successor Company	7,609	7,583
Postconfirmation, Current Liabilities [Abstract]
Debt maturing within one year	29	29
Postconfirmation, Accounts Payable	276	276
Payroll and benefit obligations	146	146
Deferred revenue	336	336
Business restructuring reserve	38	38
Other current liabilities	159	159
TOTAL CURRENT LIABILITIES	984	984
Long-term debt, net of current portion	2,867	2,867
Pension obligations	785	785
Other post-retirement obligations	212	212
Deferred income taxes, net	689	689
Business restructuring reserve	34	34
Other liabilities	370	370
TOTAL NON-CURRENT LIABILITIES	4,957	4,957
TOTAL LIABILITIES	5,941	5,941
Postconfirmation, Stockholders' Equity [Abstract]
Common stock (Successor)	1	1
Additional paid-in capital (Successor)	1,667	1,641
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY	1,668	1,642
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	7,609	7,583
Discharge of Debt
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract]
Adjustments, cash and cash equivalents		(404)
Adjustments, other current assets		(58)
Adjustments, Total Current Assets		(462)
Adjustments, deferred income taxes, net		48
Adjustments, other assets		6
Adjustments, Total Assets		(408)
Fresh-Start Adjustment, Increase (Decrease), Current Liabilities [Abstract]
Adjustments, debt maturing within one year		(696)
Adjustments, accounts payable		(49)
Adjustments, payroll and benefit obligations		23
Adjustments, deferred revenue		50
Adjustments, business restructuring reserve		3
Adjustments, other current liabilities		65
Adjustments, Total Current Liabilities		(604)
Adjustments, long-term debt, net of current portion		2,771
Adjustments, pension obligations		246
Adjustments, other post-retirement obligation		212
Adjustments, deferred revenue		113
Adjustments, business restructuring reserve		4
Adjustments, other liabilities		233
Adjustments, Total Non-Current Liabilities		3,579
Adjustments, Liabilities Subject To Compromise		(7,585)
Adjustments, Total Liabilities		(4,610)
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract]
Adjustments, equity awards on redeemable shares		(6)
Adjustments, common stock		1
Adjustments, additional paid-in capital		1,641
Adjustments, (Accumulated deficit) retained earnings		4,846
Adjustments, accumulated other comprehensive (loss) income		664
Adjustments, Total Stockholders' Equity		4,791
Adjustments, Total Liabilities and Stockholders' (Deficit) Equity		(408)
Revaluation of Assets
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract]
Adjustments, accounts receivable, net		(106)
Adjustments, inventory		29
Adjustments, other current assets		(66)
Adjustments, Total Current Assets		(143)
Adjustments, property, plant and equipment		116
Adjustments, deferred income taxes, net		(17)
Adjustments, intangible assets, net		3,137
Adjustments, goodwill		(883)
Adjustments, other assets		(27)
Adjustments, Total Assets		2,183
Revaluation of Liabilities
Fresh-Start Adjustment, Increase (Decrease), Current Liabilities [Abstract]
Adjustments, deferred revenue		(341)
Adjustments, other current liabilities		(3)
Adjustments, Total Current Liabilities		(344)
Adjustments, long-term debt, net of current portion		96
Adjustments, deferred revenue		548
Adjustments, business restructuring reserve		4
Adjustments, other liabilities		(43)
Adjustments, Total Non-Current Liabilities		605
Adjustments, Total Liabilities		261
Exchange of Stock for Stock
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract]
Adjustments, (Accumulated deficit) retained earnings		1,132
Adjustments, accumulated other comprehensive (loss) income		790
Adjustments, Total Stockholders' Equity		1,922
Adjustments, Total Liabilities and Stockholders' (Deficit) Equity		2,183
As Previously Reported
Preconfirmation, Current Assets [Abstract]
Cash and cash equivalents		744
Accounts receivable, net		523
Inventory		98
Other current assets		366
TOTAL CURRENT ASSETS		1,731
Property, plant and equipment, net		194
Deferred income taxes, net		0
Intangible assets, net		298
Goodwill		3,541
Other assets		70
TOTAL ASSETS		5,834
Preconfirmation, Current Liabilities [Abstract]
Debt maturing within one year		725
Accounts payable		325
Payroll and benefit obligations		123
Deferred revenue		627
Business restructuring reserve		35
Other current liabilities		97
TOTAL CURRENT LIABILITIES		1,932
Pension obligations		539
Other post-retirement obligations		0
Deferred income taxes, net		28
Business restructuring reserve		26
Other liabilities		180
TOTAL NON-CURRENT LIABILITIES		773
LIABILITIES SUBJECT TO COMPROMISE		7,585
TOTAL LIABILITIES		10,290
Equity awards on redeemable shares		6
Preconfirmation, Stockholders' Equity [Abstract]
Additional paid-in capital (Predecessor)		2,387
(Accumulated deficit) retained earnings		(5,978)
Accumulated other comprehensive (loss) income		(1,454)
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY		(5,045)
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY		5,834
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract]
Adjustments, goodwill		(909)
Postconfirmation, Current Assets [Abstract]
Establish Successor Goodwill	2,632
Reorganization value of Successor Company	7,583
Postconfirmation, Stockholders' Equity [Abstract]
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY	1,642
As Previously Reported | Discharge of Debt
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract]
Adjustments, cash and cash equivalents		(404)
Adjustments, other current assets		(58)
Adjustments, Total Current Assets		(462)
Adjustments, deferred income taxes, net		48
Adjustments, other assets		6
Adjustments, Total Assets		(408)
Fresh-Start Adjustment, Increase (Decrease), Current Liabilities [Abstract]
Adjustments, debt maturing within one year		(696)
Adjustments, accounts payable		(49)
Adjustments, payroll and benefit obligations		23
Adjustments, deferred revenue		50
Adjustments, business restructuring reserve		3
Adjustments, other current liabilities		65
Adjustments, Total Current Liabilities		(604)
Adjustments, long-term debt, net of current portion		2,771
Adjustments, pension obligations		246
Adjustments, other post-retirement obligation		212
Adjustments, deferred revenue		113
Adjustments, business restructuring reserve		4
Adjustments, other liabilities		233
Adjustments, Total Non-Current Liabilities		3,579
Adjustments, Liabilities Subject To Compromise		(7,585)
Adjustments, Total Liabilities		(4,610)
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract]
Adjustments, equity awards on redeemable shares		(6)
Adjustments, common stock		1
Adjustments, additional paid-in capital		(2,387)
Adjustments, (Accumulated deficit) retained earnings		4,872
Adjustments, accumulated other comprehensive (loss) income		664
Adjustments, Total Stockholders' Equity		4,791
Adjustments, Total Liabilities and Stockholders' (Deficit) Equity		(408)
As Previously Reported | Revaluation of Assets
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract]
Adjustments, accounts receivable, net		(106)
Adjustments, inventory		29
Adjustments, other current assets		(66)
Adjustments, Total Current Assets		(143)
Adjustments, property, plant and equipment		116
Adjustments, deferred income taxes, net		(17)
Adjustments, intangible assets, net		3,137
Adjustments, goodwill		(909)
Adjustments, other assets		(27)
Adjustments, Total Assets		2,157
As Previously Reported | Revaluation of Liabilities
Fresh-Start Adjustment, Increase (Decrease), Current Liabilities [Abstract]
Adjustments, deferred revenue		(341)
Adjustments, other current liabilities		(3)
Adjustments, Total Current Liabilities		(344)
Adjustments, long-term debt, net of current portion		96
Adjustments, deferred revenue		548
Adjustments, business restructuring reserve		4
Adjustments, other liabilities		(43)
Adjustments, Total Non-Current Liabilities		605
Adjustments, Total Liabilities		261
As Previously Reported | Exchange of Stock for Stock
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract]
Adjustments, (Accumulated deficit) retained earnings		1,106
Adjustments, accumulated other comprehensive (loss) income		790
Adjustments, Total Stockholders' Equity		1,896
Adjustments, Total Liabilities and Stockholders' (Deficit) Equity		2,157
Predecessor
Preconfirmation, Current Assets [Abstract]
Cash and cash equivalents		770
Accounts receivable, net		497
Inventory		98
Other current assets		366
TOTAL CURRENT ASSETS		1,731
Property, plant and equipment, net		194
Deferred income taxes, net		0
Intangible assets, net		298
Goodwill		3,541
Other assets		70
TOTAL ASSETS		5,834
Preconfirmation, Current Liabilities [Abstract]
Debt maturing within one year		725
Accounts payable		325
Payroll and benefit obligations		123
Deferred revenue		627
Business restructuring reserve		35
Other current liabilities		97
TOTAL CURRENT LIABILITIES		1,932
Pension obligations		539
Other post-retirement obligations		0
Deferred income taxes, net		28
Business restructuring reserve		26
Other liabilities		180
TOTAL NON-CURRENT LIABILITIES		773
LIABILITIES SUBJECT TO COMPROMISE		7,585
TOTAL LIABILITIES		10,290
Equity awards on redeemable shares		6
Preconfirmation, Stockholders' Equity [Abstract]
Additional paid-in capital (Predecessor)		2,387
(Accumulated deficit) retained earnings		(5,978)
Accumulated other comprehensive (loss) income		(1,454)
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY		(5,045)
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY		5,834
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract]
Adjustments, goodwill		(883)
Predecessor | Discharge of Debt
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract]
Adjustments, additional paid-in capital		(2,387)
Predecessor | Revaluation of Assets
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract]
Adjustments, inventory		29
Adjustments, other current assets		(66)
Adjustments, property, plant and equipment		116
Adjustments, other assets		(27)
Predecessor | Revaluation of Liabilities
Fresh-Start Adjustment, Increase (Decrease), Current Liabilities [Abstract]
Adjustments, other current liabilities		(3)
Adjustments, long-term debt, net of current portion		96
Adjustments, business restructuring reserve		4
Adjustments, other liabilities		(43)
Predecessor | Exchange of Stock for Stock
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract]
Adjustments, accumulated other comprehensive (loss) income		790
Successor [Member] | Discharge of Debt
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract]
Adjustments, additional paid-in capital		1,667
Series B preferred stock | Discharge of Debt
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract]
Adjustments, preferred stock		(397)
Series B preferred stock | As Previously Reported
Preconfirmation, Current Liabilities [Abstract]
Preferred stock		397
Series B preferred stock | As Previously Reported | Discharge of Debt
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract]
Adjustments, preferred stock		(397)
Series B preferred stock | Predecessor
Preconfirmation, Current Liabilities [Abstract]
Preferred stock		397
Series A preferred stock | Discharge of Debt
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract]
Adjustments, preferred stock		(186)
Series A preferred stock | As Previously Reported
Preconfirmation, Current Liabilities [Abstract]
Preferred stock		186
Series A preferred stock | As Previously Reported | Discharge of Debt
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract]
Adjustments, preferred stock		(186)
Series A preferred stock | Predecessor
Preconfirmation, Current Liabilities [Abstract]
Preferred stock		186
Adjustments
Preconfirmation, Current Assets [Abstract]
Intangible assets, net		0
Goodwill		0
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract]
Adjustments, goodwill		26
Postconfirmation, Current Assets [Abstract]
Cash and cash equivalents	26
Accounts receivable, net	(26)
Inventory	0
Other current assets	0
TOTAL CURRENT ASSETS	0
Property, plant and equipment, net	0
Deferred income taxes, net	0
Intangible assets, net	0
Establish Successor Goodwill	26
Other assets	0
Reorganization value of Successor Company	26
Postconfirmation, Current Liabilities [Abstract]
Debt maturing within one year	0
Postconfirmation, Accounts Payable	0
Payroll and benefit obligations	0
Deferred revenue	0
Business restructuring reserve	0
Other current liabilities	0
TOTAL CURRENT LIABILITIES	0
Long-term debt, net of current portion	0
Pension obligations	0
Other post-retirement obligations	0
Deferred income taxes, net	0
Business restructuring reserve	0
Other liabilities	0
TOTAL NON-CURRENT LIABILITIES	0
TOTAL LIABILITIES	0
Postconfirmation, Stockholders' Equity [Abstract]
Common stock (Successor)	0
Additional paid-in capital (Successor)	26
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY	26
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$ 26
Adjustments | Discharge of Debt
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract]
Adjustments, cash and cash equivalents		0
Adjustments, other current assets		0
Adjustments, Total Current Assets		0
Adjustments, deferred income taxes, net		0
Adjustments, other assets		0
Adjustments, Total Assets		0
Fresh-Start Adjustment, Increase (Decrease), Current Liabilities [Abstract]
Adjustments, debt maturing within one year		0
Adjustments, accounts payable		0
Adjustments, payroll and benefit obligations		0
Adjustments, deferred revenue		0
Adjustments, business restructuring reserve		0
Adjustments, other current liabilities		0
Adjustments, Total Current Liabilities		0
Adjustments, long-term debt, net of current portion		0
Adjustments, pension obligations		0
Adjustments, other post-retirement obligation		0
Adjustments, deferred revenue		0
Adjustments, business restructuring reserve		0
Adjustments, other liabilities		0
Adjustments, Total Non-Current Liabilities		0
Adjustments, Liabilities Subject To Compromise		0
Adjustments, Total Liabilities		0
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract]
Adjustments, equity awards on redeemable shares		0
Adjustments, common stock		0
Adjustments, additional paid-in capital		26
Adjustments, (Accumulated deficit) retained earnings		(26)
Adjustments, accumulated other comprehensive (loss) income		0
Adjustments, Total Stockholders' Equity		0
Adjustments, Total Liabilities and Stockholders' (Deficit) Equity		0
Adjustments | Revaluation of Assets
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract]
Adjustments, accounts receivable, net		0
Adjustments, inventory		0
Adjustments, other current assets		0
Adjustments, Total Current Assets		0
Adjustments, property, plant and equipment		0
Adjustments, deferred income taxes, net		0
Adjustments, intangible assets, net		0
Adjustments, goodwill		26
Adjustments, other assets		0
Adjustments, Total Assets		26
Adjustments | Revaluation of Liabilities
Fresh-Start Adjustment, Increase (Decrease), Current Liabilities [Abstract]
Adjustments, deferred revenue		0
Adjustments, other current liabilities		0
Adjustments, Total Current Liabilities		0
Adjustments, long-term debt, net of current portion		0
Adjustments, deferred revenue		0
Adjustments, business restructuring reserve		0
Adjustments, other liabilities		0
Adjustments, Total Non-Current Liabilities		0
Adjustments, Total Liabilities		0
Adjustments | Exchange of Stock for Stock
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract]
Adjustments, (Accumulated deficit) retained earnings		26
Adjustments, accumulated other comprehensive (loss) income		0
Adjustments, Total Stockholders' Equity		26
Adjustments, Total Liabilities and Stockholders' (Deficit) Equity		26
Adjustments | Predecessor
Preconfirmation, Current Assets [Abstract]
Cash and cash equivalents		26
Accounts receivable, net		(26)
Inventory		0
Other current assets		0
TOTAL CURRENT ASSETS		0
Property, plant and equipment, net		0
Deferred income taxes, net		0
Intangible assets, net		0
Goodwill		0
Other assets		0
TOTAL ASSETS		0
Preconfirmation, Current Liabilities [Abstract]
Debt maturing within one year		0
Accounts payable		0
Payroll and benefit obligations		0
Deferred revenue		0
Business restructuring reserve		0
Other current liabilities		0
TOTAL CURRENT LIABILITIES		0
Pension obligations		0
Other post-retirement obligations		0
Deferred income taxes, net		0
Business restructuring reserve		0
Other liabilities		0
TOTAL NON-CURRENT LIABILITIES		0
LIABILITIES SUBJECT TO COMPROMISE		0
TOTAL LIABILITIES		0
Equity awards on redeemable shares		0
Preconfirmation, Stockholders' Equity [Abstract]
Additional paid-in capital (Predecessor)		0
(Accumulated deficit) retained earnings		0
Accumulated other comprehensive (loss) income		0
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY		0
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY		0
Adjustments | Predecessor | Discharge of Debt
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract]
Adjustments, additional paid-in capital		0
Adjustments | Series B preferred stock | Discharge of Debt
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract]
Adjustments, preferred stock		0
Adjustments | Series B preferred stock | Predecessor
Preconfirmation, Current Liabilities [Abstract]
Preferred stock		0
Adjustments | Series A preferred stock | Discharge of Debt
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract]
Adjustments, preferred stock		0
Adjustments | Series A preferred stock | Predecessor
Preconfirmation, Current Liabilities [Abstract]
Preferred stock		$ 0

XML

Fresh Start Accounting - Sources And Uses Of Cash (Details) - USD ($) $ in Millions		7 Months Ended
	Dec. 15, 2017	Jun. 30, 2018
Uses:
Cash paid to PBGC		$ 0
Funding payment for Avaya represented employee pension plan		0
Payment for general unsecured claims		$ 0
Discharge of Debt
Sources:
Proceeds from Term Loan Credit Agreement, net of original issue discount	$ 2,896
Release of restricted cash	76
Total sources of cash	2,972
Uses:
Repayment of DIP Credit Agreement	(725)
Payment of DIP Credit Agreement accrued interest	(1)
Cash paid to Predecessor first lien debt-holders	(2,061)
Cash paid to PBGC	(340)
Payment for professional fees escrow account	(56)
Funding payment for Avaya represented employee pension plan	(49)
Payment of accrued professional & administrative fees	(27)
Costs incurred for Term Loan Credit Agreement and ABL Credit Agreement	(59)
Payment for general unsecured claims	(58)
Total uses of cash	(3,376)
Net uses of cash	$ (404)

XML

Fresh Start Accounting - Other Current Assets (Details) $ in Millions	Dec. 15, 2017 USD ($)
Discharge of Debt
Fresh-Start Adjustment [Line Items]
Fair value adjustment to Other assets	$ 6
Restricted cash	(76)
Reclassification of prepaid debt issuance costs related to the Term Loan Credit Agreement	(42)
Payment of fees related to the ABL Credit Agreement	5
Restricted cash for bankruptcy related professional fees	55
Total other current assets	(58)
Revaluation of Assets
Fresh-Start Adjustment [Line Items]
Fair value adjustment to Other assets	(27)
Total other current assets	$ (66)

XML

Fresh Start Accounting - Other Current Liabilities (Details) - Discharge of Debt $ in Millions	Dec. 15, 2017 USD ($)
Fresh-Start Adjustment [Line Items]
Reclassification of accrued bankruptcy related professional fees	$ 50
Reinstatement of other current liabilities	16
Payment of accrued interest on the DIP Credit Agreement	(1)
Total other current liabilities	$ 65

XML

Fresh Start Accounting - Exit Financing (Details) - USD ($)	Jun. 30, 2018	Dec. 15, 2017
Fresh-Start Adjustment [Line Items]
Debt face amount	$ 3,260,000,000
Debt, Current	(29,000,000)	$ (29,000,000)
Discharge of Debt
Fresh-Start Adjustment [Line Items]
Discount		(29,000,000)
Upfront and underwriting fees		(54,000,000)
Cash received upon emergence from bankruptcy		2,842,000,000
Reclassification of debt issuance cost incurred prior to emergence from bankruptcy		(42,000,000)
Long-term debt, net of current portion		2,771,000,000
Term Loan
Fresh-Start Adjustment [Line Items]
Debt face amount	$ 2,910,000,000
Term Loan | Term Loan Credit Agreement due December 15, 2024
Fresh-Start Adjustment [Line Items]
Debt face amount		$ 2,925,000,000

XML

Fresh Start Accounting - Liabilities Subject to Compromise (Details) - USD ($) $ in Millions		2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Amounts reinstated:
Liabilities subject to compromise	$ 0	$ 0
Payment of unsecured claims					$ 0
Gain On Settlement of Liabilities Subject To Compromise [Abstract]
Net gain on settlement of liabilities subject to compromise		(26)	$ 0		$ 0
Discharge of Debt
Less amounts settled per the Plan of Reorganization
Pre-petition first lien debt	(4,281)	(4,281)
Pre-petition second lien debt	(1,440)	(1,440)
Avaya Pension Plan for Salaried Employees	(620)	(620)
Amounts reinstated:
Accounts payable	(4)	(4)
Payroll and benefit obligations	(23)	(23)
Deferred revenue	(50)	(50)
Business restructuring reserves	(7)	(7)
Other current liabilities	(16)	(16)
Pension obligations	(295)	(295)
Other post-retirement obligations	(212)	(212)
Deferred income taxes, net	(118)	(118)
Other liabilities	(216)	(216)
Total liabilities reinstated at emergence	(941)	(941)
General unsecured credit claims	(303)	(303)
Payment of unsecured claims	58
As Previously Reported
Fresh-Start Adjustment [Line Items]
Liabilities subject to compromise	7,585	7,585
Gain On Settlement of Liabilities Subject To Compromise [Abstract]
Pre-petition first lien debt		734
Pre-petition second lien debt		1,357
Avaya pension plan for salaried employees		(514)
General unsecured creditors' claims		227
Net gain on settlement of liabilities subject to compromise		1,804
Predecessor
Fresh-Start Adjustment [Line Items]
Liabilities subject to compromise	7,585	7,585
Amounts reinstated:
Payment of unsecured claims		58				$ 0
Gain On Settlement of Liabilities Subject To Compromise [Abstract]
Pre-petition first lien debt		711
Pre-petition second lien debt		1,356
Avaya pension plan for salaried employees		(516)
General unsecured creditors' claims		227
Net gain on settlement of liabilities subject to compromise		1,778		$ 0		$ 0
General Unsecured Creditor Reserve
Amounts reinstated:
Payment of unsecured claims	58
Adjustments | As Previously Reported
Gain On Settlement of Liabilities Subject To Compromise [Abstract]
Net gain on settlement of liabilities subject to compromise		(26)
Adjustments | Predecessor
Fresh-Start Adjustment [Line Items]
Liabilities subject to compromise	$ 0	0
Gain On Settlement of Liabilities Subject To Compromise [Abstract]
Pre-petition first lien debt		(23)
Pre-petition second lien debt		(1)
Avaya pension plan for salaried employees		(2)
General unsecured creditors' claims		0
Net gain on settlement of liabilities subject to compromise		$ (26)

XML

Fresh Start Accounting - Accumulated Deficit (Details) - USD ($) $ in Millions	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Fresh-Start Adjustment [Line Items]
Net gain on settlement of liabilities subject to compromise	$ (26)	$ 0		$ 0
Discharge of Debt
Fresh-Start Adjustment [Line Items]
Expense for certain professional fees	(26)
Benefit from income taxes	118
Cancellation of Predecessor equity awards	6
Cancellation of Predecessor Common stock	2,387
Total	4,846
Series B preferred stock | Discharge of Debt
Fresh-Start Adjustment [Line Items]
Cancellation of Predecessor Preferred stock	397
Series A preferred stock | Discharge of Debt
Fresh-Start Adjustment [Line Items]
Cancellation of Predecessor Preferred stock	186
As Previously Reported
Fresh-Start Adjustment [Line Items]
Net gain on settlement of liabilities subject to compromise	1,804
As Previously Reported | Discharge of Debt
Fresh-Start Adjustment [Line Items]
Expense for certain professional fees	(26)
Benefit from income taxes	118
Cancellation of Predecessor equity awards	6
Cancellation of Predecessor Common stock	2,387
Total	4,872
As Previously Reported | Series B preferred stock | Discharge of Debt
Fresh-Start Adjustment [Line Items]
Cancellation of Predecessor Preferred stock	397
As Previously Reported | Series A preferred stock | Discharge of Debt
Fresh-Start Adjustment [Line Items]
Cancellation of Predecessor Preferred stock	186
Predecessor
Fresh-Start Adjustment [Line Items]
Net gain on settlement of liabilities subject to compromise	1,778		$ 0		$ 0
Adjustments | Discharge of Debt
Fresh-Start Adjustment [Line Items]
Expense for certain professional fees	0
Benefit from income taxes	0
Cancellation of Predecessor equity awards	0
Cancellation of Predecessor Common stock	0
Total	(26)
Adjustments | Series B preferred stock | Discharge of Debt
Fresh-Start Adjustment [Line Items]
Cancellation of Predecessor Preferred stock	0
Adjustments | Series A preferred stock | Discharge of Debt
Fresh-Start Adjustment [Line Items]
Cancellation of Predecessor Preferred stock	0
Adjustments | As Previously Reported
Fresh-Start Adjustment [Line Items]
Net gain on settlement of liabilities subject to compromise	(26)
Adjustments | Predecessor
Fresh-Start Adjustment [Line Items]
Net gain on settlement of liabilities subject to compromise	$ (26)

XML

Fresh Start Accounting - Property, Plant and Equipment (Details) - USD ($) $ in Millions	Dec. 16, 2017	Dec. 15, 2017
Fresh-Start Adjustment [Line Items]
Total property, plant and equipment		$ 310
Less: accumulated depreciation and amortization		0
Property, plant and equipment, net	$ 310	310
Buildings and improvements
Fresh-Start Adjustment [Line Items]
Total property, plant and equipment		82
Machinery and equipment
Fresh-Start Adjustment [Line Items]
Total property, plant and equipment		38
Rental equipment
Fresh-Start Adjustment [Line Items]
Total property, plant and equipment		85
Assets under construction
Fresh-Start Adjustment [Line Items]
Total property, plant and equipment		13
Internal use software
Fresh-Start Adjustment [Line Items]
Total property, plant and equipment		$ 92

XML

Fresh Start Accounting - Intangible Assets (Details) - USD ($) $ in Millions	Dec. 16, 2017	Dec. 15, 2017
Fresh-Start Adjustment [Line Items]
Establish Successor Intangible assets	$ 3,435	$ 3,435
Revaluation of Assets
Fresh-Start Adjustment [Line Items]
Adjustments, intangible assets, net		3,137
Predecessor
Fresh-Start Adjustment [Line Items]
Intangible assets, net		298
Customer relationships and other intangibles
Fresh-Start Adjustment [Line Items]
Establish Successor Intangible assets	2,155
Customer relationships and other intangibles | Revaluation of Assets
Fresh-Start Adjustment [Line Items]
Adjustments, intangible assets, net		2,059
Customer relationships and other intangibles | Predecessor
Fresh-Start Adjustment [Line Items]
Intangible assets, net		96
Technology and patents
Fresh-Start Adjustment [Line Items]
Establish Successor Intangible assets	905
Technology and patents | Revaluation of Assets
Fresh-Start Adjustment [Line Items]
Adjustments, intangible assets, net		893
Technology and patents | Predecessor
Fresh-Start Adjustment [Line Items]
Intangible assets, net		12
Trademarks and trade names | Trademarks and trade names
Fresh-Start Adjustment [Line Items]
Establish Successor Intangible assets	$ 375
Trademarks and trade names | Trademarks and trade names | Revaluation of Assets
Fresh-Start Adjustment [Line Items]
Adjustments, intangible assets, net		185
Trademarks and trade names | Trademarks and trade names | Predecessor
Fresh-Start Adjustment [Line Items]
Intangible assets, net		$ 190

XML

Fresh Start Accounting - Goodwill (Details) - USD ($) $ in Millions	Dec. 16, 2017	Dec. 15, 2017
Reorganization value of Successor Company	$ 7,609	$ 7,583
Less: Fair value of Successor Company assets	(4,951)
Reorganization value of Successor Company assets in excess of fair value - goodwill	2,658	$ 2,632
As Previously Reported
Reorganization value of Successor Company	7,583
Less: Fair value of Successor Company assets	(4,951)
Reorganization value of Successor Company assets in excess of fair value - goodwill	2,632
Adjustments
Reorganization value of Successor Company	26
Less: Fair value of Successor Company assets	0
Reorganization value of Successor Company assets in excess of fair value - goodwill	$ 26

XML

Fresh Start Accounting - Fresh Start Adjustments (Details) - USD ($) $ in Millions	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 16, 2017
Fresh-Start Adjustment [Line Items]
Debtor Reorganization Items, Gain (Loss) on Settlement of Other Claims, Net	$ (26)	$ 0		$ 0
Establish Successor Intangible assets	3,435					$ 3,435
Establish Successor Goodwill	2,632					2,658
Fresh start adjustments included in Reorganization items, net	26	$ 0		$ 0
Revaluation of Assets
Fresh-Start Adjustment [Line Items]
Fair value adjustment to Inventory	29
Fair value adjustment to Other current assets	(66)
Fair value adjustment to Property, plant and equipment	116
Fair value adjustment to Other assets	(27)
Revaluation of Liabilities
Fresh-Start Adjustment [Line Items]
Fair value adjustment to Business restructuring reserves	(4)
Fair value adjustment to Other current liabilities	3
Fair value adjustment to Long-term debt	(96)
Fair value adjustment to Other liabilities	43
Exchange of Stock for Stock
Fresh-Start Adjustment [Line Items]
Release Predecessor Accumulated comprehensive loss	(790)
Predecessor
Fresh-Start Adjustment [Line Items]
Debtor Reorganization Items, Gain (Loss) on Settlement of Other Claims, Net	1,778		$ 0		$ 0
Eliminate Predecessor Intangible assets	(298)
Eliminate Predecessor Goodwill	(3,541)
Fresh start adjustments included in Reorganization items, net	1,697		$ 0		$ 0
Tax impact of fresh start adjustments	(565)
Gain on fresh start accounting, net	1,132
Predecessor | Revaluation of Assets
Fresh-Start Adjustment [Line Items]
Fair value adjustment to Inventory	29
Fair value adjustment to Other current assets	(66)
Fair value adjustment to Property, plant and equipment	116
Fair value adjustment to Other assets	(27)
Predecessor | Revaluation of Liabilities
Fresh-Start Adjustment [Line Items]
Fair value adjustment to Deferred revenue	235
Fair value adjustment to Business restructuring reserves	(4)
Fair value adjustment to Other current liabilities	3
Fair value adjustment to Long-term debt	(96)
Fair value adjustment to Other liabilities	43
Predecessor | Exchange of Stock for Stock
Fresh-Start Adjustment [Line Items]
Release Predecessor Accumulated comprehensive loss	(790)
As Previously Reported
Fresh-Start Adjustment [Line Items]
Debtor Reorganization Items, Gain (Loss) on Settlement of Other Claims, Net	1,804
Eliminate Predecessor Intangible assets	(298)
Eliminate Predecessor Goodwill	(3,541)
Establish Successor Goodwill						2,632
Fresh start adjustments included in Reorganization items, net	1,671
Tax impact of fresh start adjustments	(565)
Gain on fresh start accounting, net	1,106
As Previously Reported | Revaluation of Assets
Fresh-Start Adjustment [Line Items]
Fair value adjustment to Inventory	29
Fair value adjustment to Other current assets	(66)
Fair value adjustment to Property, plant and equipment	116
Fair value adjustment to Other assets	(27)
As Previously Reported | Revaluation of Liabilities
Fresh-Start Adjustment [Line Items]
Fair value adjustment to Deferred revenue	235
Fair value adjustment to Business restructuring reserves	(4)
Fair value adjustment to Other current liabilities	3
Fair value adjustment to Long-term debt	(96)
Fair value adjustment to Other liabilities	43
As Previously Reported | Exchange of Stock for Stock
Fresh-Start Adjustment [Line Items]
Release Predecessor Accumulated comprehensive loss	(790)
Adjustments
Fresh-Start Adjustment [Line Items]
Eliminate Predecessor Intangible assets	0
Eliminate Predecessor Goodwill	0
Establish Successor Intangible assets						0
Establish Successor Goodwill						$ 26
Fresh start adjustments included in Reorganization items, net	26
Tax impact of fresh start adjustments	0
Gain on fresh start accounting, net	26
Adjustments | Revaluation of Assets
Fresh-Start Adjustment [Line Items]
Fair value adjustment to Inventory	0
Fair value adjustment to Other current assets	0
Fair value adjustment to Property, plant and equipment	0
Fair value adjustment to Other assets	0
Adjustments | Revaluation of Liabilities
Fresh-Start Adjustment [Line Items]
Fair value adjustment to Deferred revenue	0
Fair value adjustment to Business restructuring reserves	0
Fair value adjustment to Other current liabilities	0
Fair value adjustment to Long-term debt	0
Fair value adjustment to Other liabilities	0
Adjustments | Exchange of Stock for Stock
Fresh-Start Adjustment [Line Items]
Release Predecessor Accumulated comprehensive loss	0
Adjustments | Predecessor
Fresh-Start Adjustment [Line Items]
Debtor Reorganization Items, Gain (Loss) on Settlement of Other Claims, Net	(26)
Eliminate Predecessor Intangible assets	0
Eliminate Predecessor Goodwill	0
Adjustments | As Previously Reported
Fresh-Start Adjustment [Line Items]
Debtor Reorganization Items, Gain (Loss) on Settlement of Other Claims, Net	$ (26)

XML

Business Combinations (Details) - USD ($) $ in Millions		3 Months Ended	7 Months Ended	9 Months Ended
	Mar. 09, 2018	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2018	Dec. 16, 2017	Dec. 15, 2017
Acquisition of businesses, net of cash acquired			$ 157
Goodwill adjustment			120
Goodwill		$ 2,771	2,771	$ 2,771	$ 2,658	$ 2,658
Revenue		692	1,512
Operating loss		49	136
Compensation expense			13
Amortization of intangible assets		83	178
Spoken [Member]
Acquisition price	$ 172
Acquisition of businesses, net of cash acquired	157
Net payable to company in settlement of contingent consideration	1
Goodwill adjustment	120
Fair value of intangible assets acquired	64
Net liabilities acquired	12
Goodwill	122
Acquisition related costs	3
Compensation expense related to acquisition	7
Revenue		4	5
Operating loss		12	$ 19
Compensation expense		2
Amortization of intangible assets		$ 3
Technology-Based Intangible Assets [Member] | Spoken [Member]
Fair value of intangible assets acquired	56
Customer Relationships And Other Intangibles [Member]
Useful life of intangible assets				14 years 22 days
Customer Relationships And Other Intangibles [Member] | Spoken [Member]
Fair value of intangible assets acquired	3
Minimum
Useful life of intangible assets		1 year
Minimum | Customer Relationships And Other Intangibles [Member]
Useful life of intangible assets				1 year
Maximum
Useful life of intangible assets		19 years
Maximum | Technology-Based Intangible Assets [Member] | Spoken [Member]
Useful life of intangible assets		4 years 11 months
Maximum | Customer Relationships And Other Intangibles [Member]
Useful life of intangible assets				19 years
Maximum | Customer Relationships And Other Intangibles [Member] | Spoken [Member]
Useful life of intangible assets		7 years 6 months
Estimate of Fair Value Measurement [Member] | Spoken [Member]
Contingent consideration	14
Former owners and employees [Member] | Spoken [Member]
Contingent consideration	$ 16
Performance targets	3
Spoken employees [Member] | Spoken [Member]
Contingent consideration	$ 4
In Process Research and Development | Spoken [Member]
Fair value of intangible assets acquired	$ 5

XML

Goodwill And Intangible Assets - Goodwill (Details) - USD ($) $ in Millions	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Sep. 30, 2017
Goodwill [Roll Forward]
Goodwill, start				$ 2,658
Goodwill adjustment				120
Impact of foreign currency fluctuations	$ (7)
Goodwill, end	2,658	$ 2,771		2,771
Goodwill impairment		0		0
Global Communications Solutions
Goodwill [Roll Forward]
Goodwill, start				1,171
Goodwill adjustment				120
Impact of foreign currency fluctuations	(3)
Goodwill, end	1,171	1,288		1,288
Avaya Global Services
Goodwill [Roll Forward]
Goodwill, start				1,487
Goodwill adjustment				0
Impact of foreign currency fluctuations	(4)
Goodwill, end	1,487	$ 1,483		1,483
As Previously Reported
Goodwill [Line Items]
Cost						$ 5,170
Accumulated impairment						(1,628)
Goodwill [Roll Forward]
Goodwill, start	3,542			2,632
Adjustments	(1)
Impact of fresh start accounting	(909)
Goodwill, end	2,632
As Previously Reported | Global Communications Solutions
Goodwill [Line Items]
Cost						2,669
Accumulated impairment						(1,576)
Goodwill [Roll Forward]
Goodwill, start	1,093			1,160
Adjustments	(1)
Impact of fresh start accounting	68
Goodwill, end	1,160
As Previously Reported | Avaya Global Services
Goodwill [Line Items]
Cost						2,501
Accumulated impairment						(52)
Goodwill [Roll Forward]
Goodwill, start	2,449			1,472
Adjustments	0
Impact of fresh start accounting	(977)
Goodwill, end	1,472
Predecessor
Goodwill [Roll Forward]
Goodwill, start	3,542			2,658
Adjustments	(1)
Impact of fresh start accounting	(883)
Goodwill, end	2,658
Goodwill impairment	0		$ 52		$ 52
Predecessor | Global Communications Solutions
Goodwill [Roll Forward]
Goodwill, start	1,093			1,171
Adjustments	(1)
Impact of fresh start accounting	79
Goodwill, end	1,171
Predecessor | Avaya Global Services
Goodwill [Roll Forward]
Goodwill, start	2,449			1,487
Adjustments	0
Impact of fresh start accounting	(962)
Goodwill, end	1,487
Adjustments
Goodwill [Line Items]
Cost						0
Accumulated impairment						0
Goodwill [Roll Forward]
Goodwill, start	0			26
Adjustments	0
Impact of fresh start accounting	26
Goodwill, end	26
Adjustments | Global Communications Solutions
Goodwill [Line Items]
Cost						0
Accumulated impairment						0
Goodwill [Roll Forward]
Goodwill, start	0			11
Adjustments	0
Impact of fresh start accounting	11
Goodwill, end	11
Adjustments | Avaya Global Services
Goodwill [Line Items]
Cost						0
Accumulated impairment						$ 0
Goodwill [Roll Forward]
Goodwill, start	0			$ 15
Adjustments	0
Impact of fresh start accounting	15
Goodwill, end	$ 15

XML

Goodwill And Intangible Assets - Intangible Assets (Details) - USD ($)	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2017	Sep. 30, 2017
Finite-lived intangible assets:
Finite-lived intangible assets		$ 3,159,000,000		$ 3,159,000,000	$ 3,159,000,000
Accumulated Amortization		(178,000,000)		(178,000,000)	(178,000,000)
Total		2,981,000,000		2,981,000,000	2,981,000,000
Indefinite-lived intangible assets:
Indefinite-lived intangible assets, net		337,000,000		337,000,000	337,000,000
Intangible assets, net		3,318,000,000		3,318,000,000	3,318,000,000
Intangible asset impairment		0		0	0
Amortization of intangible assets		83,000,000		178,000,000
Technology and patents
Indefinite-lived intangible assets:
Indefinite-lived intangible assets, net		5,000,000		5,000,000	5,000,000
Trademarks and trade names
Indefinite-lived intangible assets:
Indefinite-lived intangible assets, net		332,000,000		332,000,000	$ 332,000,000
Technology and patents
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items]
Useful life of intangible assets					5 years 1 month 29 days
Finite-lived intangible assets:
Finite-lived intangible assets		960,000,000		960,000,000	$ 960,000,000
Accumulated Amortization		(92,000,000)		(92,000,000)	(92,000,000)
Total		868,000,000		868,000,000	$ 868,000,000
Customer relationships and other intangibles
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items]
Useful life of intangible assets					14 years 22 days
Finite-lived intangible assets:
Finite-lived intangible assets		2,156,000,000		2,156,000,000	$ 2,156,000,000
Accumulated Amortization		(84,000,000)		(84,000,000)	(84,000,000)
Total		2,072,000,000		2,072,000,000	$ 2,072,000,000
Trademarks and trade names
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items]
Useful life of intangible assets					9 years 5 months 16 days
Finite-lived intangible assets:
Finite-lived intangible assets		43,000,000		43,000,000	$ 43,000,000
Accumulated Amortization		(2,000,000)		(2,000,000)	(2,000,000)
Total		$ 41,000,000		41,000,000	$ 41,000,000
Minimum
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items]
Useful life of intangible assets		1 year
Minimum | Technology and patents
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items]
Useful life of intangible assets					1 year
Minimum | Customer relationships and other intangibles
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items]
Useful life of intangible assets					1 year
Maximum
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items]
Useful life of intangible assets		19 years
Maximum | Technology and patents
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items]
Useful life of intangible assets					10 years
Maximum | Customer relationships and other intangibles
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items]
Useful life of intangible assets					19 years
Maximum | Trademarks and trade names
Schedule of Finite And Indefinite-Lived Intangible Assets [Line Items]
Useful life of intangible assets					10 years
Predecessor
Finite-lived intangible assets:
Finite-lived intangible assets							$ 3,623,000,000
Accumulated Amortization							(3,502,000,000)
Total							121,000,000
Indefinite-lived intangible assets:
Indefinite-lived intangible assets							545,000,000
Accumulated Impairment							(355,000,000)
Indefinite-lived intangible assets, net							190,000,000
Intangible assets, net							311,000,000
Intangible asset impairment	$ 0		$ 65,000,000			$ 65,000,000
Amortization of intangible assets	$ 13,000,000		62,000,000			186,000,000
Predecessor | Trademarks and trade names
Indefinite-lived intangible assets:
Indefinite-lived intangible assets							545,000,000
Accumulated Impairment							(355,000,000)
Indefinite-lived intangible assets, net							190,000,000
Predecessor | Technology and patents
Finite-lived intangible assets:
Finite-lived intangible assets							1,427,000,000
Accumulated Amortization							(1,411,000,000)
Total							16,000,000
Predecessor | Customer relationships and other intangibles
Finite-lived intangible assets:
Finite-lived intangible assets							2,196,000,000
Accumulated Amortization							(2,091,000,000)
Total							105,000,000
Predecessor | Trademarks and trade names
Finite-lived intangible assets:
Finite-lived intangible assets							0
Accumulated Amortization							0
Total							0
Technology and patents
Indefinite-lived intangible assets:
Intangible assets, net		$ 873,000,000		873,000,000	$ 873,000,000
Technology and patents | Predecessor
Indefinite-lived intangible assets:
Intangible assets, net							16,000,000
Customer relationships and other intangibles
Indefinite-lived intangible assets:
Intangible assets, net		2,072,000,000		2,072,000,000	2,072,000,000
Customer relationships and other intangibles | Predecessor
Indefinite-lived intangible assets:
Intangible assets, net							105,000,000
Trademarks and trade names
Indefinite-lived intangible assets:
Intangible assets, net		$ 373,000,000		$ 373,000,000	$ 373,000,000
Trademarks and trade names | Predecessor
Indefinite-lived intangible assets:
Indefinite-lived intangible assets, net			255,000,000			255,000,000
Intangible assets, net							$ 190,000,000
Intangible asset fair value			$ 190,000,000			$ 190,000,000

XML

Goodwill And Intangible Assets - Amortization Expense (Details) $ in Millions	Jun. 30, 2018 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of fiscal 2018	$ 84
2019	333
2020	333
2021	332
2022	305
2023 and thereafter	1,594
Total	$ 2,981

XML

Supplementary Financial Information (Other (Expense) Income, Net) (Details) - USD ($) $ in Millions	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
OTHER INCOME (EXPENSE), NET
Interest income		$ 1		$ 2
Foreign currency gains, net		25		24
Income from TSA, net		1		5
Change in fair value of Emergence Date Warrants		(6)		9
Loss on disposal/sale of long-lived assets, net				3
Other, net		0		0
Total other income (expense), net		37		32
Predecessor
OTHER INCOME (EXPENSE), NET
Interest income	$ 2		$ 1		$ 2
Foreign currency gains, net	0		2		1
Income from TSA, net	3		0		0
Change in fair value of Emergence Date Warrants	0		0		0
Loss on disposal/sale of long-lived assets, net	1				0
Other, net	1		0		(1)
Total other income (expense), net	(2)		(9)		(27)
Other income (expense), net
OTHER INCOME (EXPENSE), NET
Loss on disposal/sale of long-lived assets, net	0	0	0	1	0
Other income (expense), net | Accounting Standards Update 2017-07 [Member]
OTHER INCOME (EXPENSE), NET
Other pension and post-retirement benefit credits (costs), net		$ 4		$ 9
Other income (expense), net | Accounting Standards Update 2017-07 [Member] | Predecessor
OTHER INCOME (EXPENSE), NET
Other pension and post-retirement benefit credits (costs), net	$ (8)		$ (12)		$ (29)

XML

Supplementary Financial Information (Reorganization Items) (Details) - USD ($) $ in Millions	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Supplementary Financial Information [Line Items]
Bankruptcy-related professional fees	$ 0	$ 0		$ 0
DIP Credit Agreement financing costs	0	0		0
Contract rejection fees		0		0
Net gain on settlement of liabilities subject to compromise	(26)	0		0
Net gain on fresh start adjustments	26	0		0
Other items, net	0	0		0
Reorganization items, net	0	0		0
Cash payments for reorganization items	0	$ 0		$ 1
Predecessor
Supplementary Financial Information [Line Items]
Bankruptcy-related professional fees	(56)		$ (31)		$ (59)
DIP Credit Agreement financing costs	0		0		(14)
Contract rejection fees	0		(4)		(4)
Net gain on settlement of liabilities subject to compromise	1,778		0		0
Net gain on fresh start adjustments	1,697		0		0
Other items, net	(3)		0		0
Reorganization items, net	3,416		(35)		(77)
Cash payments for reorganization items	2,524		$ 33		$ 39
As Previously Reported
Supplementary Financial Information [Line Items]
Bankruptcy-related professional fees	(56)
DIP Credit Agreement financing costs	0
Net gain on settlement of liabilities subject to compromise	1,804
Net gain on fresh start adjustments	1,671
Other items, net	(3)
Reorganization items, net	3,416
Cash payments for reorganization items	$ 2,524

XML

Supplementary Financial Information (Narrative) (Details) - USD ($) $ in Millions	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Supplementary Financial Information [Line Items]
Debtor Reorganization Items, Debtor-in-Possession Facility Financing Costs	$ 0	$ 0		$ 0
Predecessor
Supplementary Financial Information [Line Items]
Payments for liabilities subject to compromise	2,468
Payments for emergence and success fees	56
Debtor Reorganization Items, Debtor-in-Possession Facility Financing Costs	$ 0		$ 0		$ 14

XML

Business Restructuring Reserves And Programs - Restructuring Reserve (Details) - USD ($) $ in Millions	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Sep. 30, 2017
Restructuring Cost and Reserve [Line Items]
Restructuring charges		$ (30)		$ (80)
Restructuring Reserve [Roll Forward]
Liabilities subject to compromise		0		0
Fiscal 2018 Restructuring Program
Restructuring Cost and Reserve [Line Items]
Restructuring charges				(78)
Restructuring Reserve [Roll Forward]
Beginning balance				9
Cash payments				(26)
Impact of foreign currency fluctuations				(2)
Ending balance	$ 9	59		59
Fiscal 2017 Restructuring Program
Restructuring Reserve [Roll Forward]
Beginning balance				3
Cash payments				(1)
Ending balance	3	2		2
Fiscal 2008-2016 Restructuring Programs
Restructuring Cost and Reserve [Line Items]
Restructuring charges				(2)
Restructuring Reserve [Roll Forward]
Beginning balance				60
Cash payments				(14)
Impact of foreign currency fluctuations				0
Ending balance	60	48		48
Employee Separation Costs | Fiscal 2018 Restructuring Program
Restructuring Cost and Reserve [Line Items]
Restructuring charges				(68)
Restructuring Reserve [Roll Forward]
Beginning balance				9
Cash payments				(16)
Impact of foreign currency fluctuations				(2)
Ending balance	9	59		59
Employee Separation Costs | Fiscal 2017 Restructuring Program
Restructuring Reserve [Roll Forward]
Beginning balance				3
Cash payments				(1)
Ending balance	3	2		2
Employee Separation Costs | Fiscal 2008-2016 Restructuring Programs
Restructuring Cost and Reserve [Line Items]
Restructuring charges				(1)
Restructuring Reserve [Roll Forward]
Beginning balance				53
Cash payments				(12)
Impact of foreign currency fluctuations				0
Ending balance	53	42		42
Lease Obligations | Fiscal 2018 Restructuring Program
Restructuring Cost and Reserve [Line Items]
Restructuring charges				(10)
Restructuring Reserve [Roll Forward]
Beginning balance				0
Cash payments				(10)
Impact of foreign currency fluctuations				0
Ending balance	0	0		0
Lease Obligations | Fiscal 2017 Restructuring Program
Restructuring Reserve [Roll Forward]
Beginning balance				0
Cash payments				0
Ending balance	0	0		0
Lease Obligations | Fiscal 2008-2016 Restructuring Programs
Restructuring Cost and Reserve [Line Items]
Restructuring charges				(1)
Restructuring Reserve [Roll Forward]
Beginning balance				7
Cash payments				(2)
Impact of foreign currency fluctuations				0
Ending balance	7	$ 6		6
Predecessor
Restructuring Cost and Reserve [Line Items]
Restructuring charges	(14)		$ (8)		$ (22)
Restructuring Reserve [Roll Forward]
Liabilities subject to compromise						$ 7,705
Predecessor | Fiscal 2018 Restructuring Program
Restructuring Cost and Reserve [Line Items]
Restructuring charges	(12)
Restructuring Reserve [Roll Forward]
Beginning balance				9
Cash payments	(3)
Ending balance	9
Predecessor | Fiscal 2017 Restructuring Program
Restructuring Reserve [Roll Forward]
Beginning balance	5			3
Cash payments	(2)
Ending balance	3
Predecessor | Fiscal 2008-2016 Restructuring Programs
Restructuring Cost and Reserve [Line Items]
Restructuring charges	(2)
Restructuring Reserve [Roll Forward]
Beginning balance	75			60
Cash payments	(20)
Adjustments - fresh start and reorganization items	3
Ending balance	60
Liabilities subject to compromise						$ 11
Predecessor | Employee Separation Costs | Fiscal 2018 Restructuring Program
Restructuring Cost and Reserve [Line Items]
Restructuring charges	(12)
Restructuring Reserve [Roll Forward]
Beginning balance				9
Cash payments	(3)
Ending balance	9
Predecessor | Employee Separation Costs | Fiscal 2017 Restructuring Program
Restructuring Reserve [Roll Forward]
Beginning balance	4			3
Cash payments	(1)
Ending balance	3
Predecessor | Employee Separation Costs | Fiscal 2008-2016 Restructuring Programs
Restructuring Cost and Reserve [Line Items]
Restructuring charges	(1)
Restructuring Reserve [Roll Forward]
Beginning balance	51			53
Cash payments	(3)
Adjustments - fresh start and reorganization items	4
Ending balance	53
Predecessor | Lease Obligations | Fiscal 2018 Restructuring Program
Restructuring Cost and Reserve [Line Items]
Restructuring charges	0
Restructuring Reserve [Roll Forward]
Beginning balance				0
Cash payments	0
Ending balance	0
Predecessor | Lease Obligations | Fiscal 2017 Restructuring Program
Restructuring Reserve [Roll Forward]
Beginning balance	1			0
Cash payments	(1)
Ending balance	0
Predecessor | Lease Obligations | Fiscal 2008-2016 Restructuring Programs
Restructuring Cost and Reserve [Line Items]
Restructuring charges	(1)
Restructuring Reserve [Roll Forward]
Beginning balance	24			$ 7
Cash payments	(17)
Adjustments - fresh start and reorganization items	(1)
Ending balance	$ 7

XML

Financing Arrangements - Schedule of Debt (Details) - USD ($)	Jun. 30, 2018	Jun. 11, 2018	Dec. 15, 2017	Sep. 30, 2017
Debt Instrument [Line Items]
Principal amount	$ 3,260,000,000
Net of discounts and issuance costs	3,128,000,000
Debt maturing within one year	(29,000,000)		$ (29,000,000)
Long-term debt, net of current portion	$ 3,099,000,000
7% senior secured notes
Debt Instrument [Line Items]
Interest rate, stated percentage	7.00%
9% senior secured notes
Debt Instrument [Line Items]
Interest rate, stated percentage	9.00%
10.50% senior secured notes
Debt Instrument [Line Items]
Interest rate, stated percentage	10.50%
Term Loan
Debt Instrument [Line Items]
Principal amount	$ 2,910,000,000
Net of discounts and issuance costs	$ 2,876,000,000
Convertible Notes
Debt Instrument [Line Items]
Interest rate, stated percentage	2.25%	2.25%
Principal amount	$ 350,000,000	$ 350,000,000
Net of discounts and issuance costs	252,000,000
DIP Credit Agreement
Debt Instrument [Line Items]
Principal amount	0
Net of discounts and issuance costs	0
First Lien Debt | Senior secured term B-3 loans
Debt Instrument [Line Items]
Principal amount	0
Net of discounts and issuance costs	0
First Lien Debt | Senior secured term B-4 loans
Debt Instrument [Line Items]
Principal amount	0
Net of discounts and issuance costs	0
First Lien Debt | Senior secured term B-6 loans
Debt Instrument [Line Items]
Principal amount	0
Net of discounts and issuance costs	0
First Lien Debt | Senior secured term B-7 loans
Debt Instrument [Line Items]
Principal amount	0
Net of discounts and issuance costs	$ 0
First Lien Debt | 7% senior secured notes
Debt Instrument [Line Items]
Interest rate, stated percentage	7.00%
Principal amount	$ 0
Net of discounts and issuance costs	$ 0
First Lien Debt | 9% senior secured notes
Debt Instrument [Line Items]
Interest rate, stated percentage	9.00%
Principal amount	$ 0
Net of discounts and issuance costs	$ 0
Second Lien Debt | 10.50% senior secured notes
Debt Instrument [Line Items]
Interest rate, stated percentage	10.50%
Principal amount	$ 0
Net of discounts and issuance costs	$ 0
Predecessor
Debt Instrument [Line Items]
Principal amount				$ 6,557,000,000
Net of discounts and issuance costs				6,557,000,000
Debt maturing within one year				(725,000,000)
Long-term debt, net of current portion				0
Predecessor | Senior secured term B-3 loans
Debt Instrument [Line Items]
Principal amount				594,000,000
Net of discounts and issuance costs				594,000,000
Predecessor | Senior secured term B-4 loans
Debt Instrument [Line Items]
Principal amount				1,000,000
Net of discounts and issuance costs				1,000,000
Predecessor | Senior secured term B-6 loans
Debt Instrument [Line Items]
Principal amount				519,000,000
Net of discounts and issuance costs				519,000,000
Predecessor | Senior secured term B-7 loans
Debt Instrument [Line Items]
Principal amount				2,012,000,000
Net of discounts and issuance costs				2,012,000,000
Predecessor | 7% senior secured notes
Debt Instrument [Line Items]
Principal amount				982,000,000
Net of discounts and issuance costs				982,000,000
Predecessor | 9% senior secured notes
Debt Instrument [Line Items]
Principal amount				284,000,000
Net of discounts and issuance costs				284,000,000
Predecessor | 10.50% senior secured notes
Debt Instrument [Line Items]
Principal amount				1,440,000,000
Net of discounts and issuance costs				1,440,000,000
Predecessor | Term Loan
Debt Instrument [Line Items]
Principal amount				0
Net of discounts and issuance costs				0
Predecessor | Convertible Notes
Debt Instrument [Line Items]
Principal amount				0
Net of discounts and issuance costs				0
Predecessor | DIP Credit Agreement
Debt Instrument [Line Items]
Principal amount				725,000,000
Net of discounts and issuance costs				725,000,000
Liabilities Subject To Compromise | Predecessor
Debt Instrument [Line Items]
Long-term debt, net of current portion				$ 5,832,000,000

XML

Financing Arrangements - Narrative (Details) $ / shares in Units, shares in Millions					3 Months Ended	9 Months Ended
	Jun. 18, 2018	Jun. 11, 2018 USD ($) day $ / shares shares	Dec. 15, 2017 USD ($) $ / shares	Jan. 19, 2017 USD ($)	Jun. 30, 2018 USD ($) $ / shares	Jun. 30, 2018 USD ($) $ / shares	Sep. 30, 2017 USD ($)
Debt Instrument [Line Items]
Debt cancelled due to bankruptcy			$ 5,721,000,000
Debt face amount					$ 3,260,000,000	$ 3,260,000,000
Weighted average contractual interest rate of debt					6.40%	6.40%
Class of warrant or right, exercise price of warrants or rights (USD per share) | $ / shares			$ 25.55
Capital lease obligations					$ 15,000,000	$ 15,000,000
Affiliated Entity
Debt Instrument [Line Items]
Capital lease obligations					14,000,000	14,000,000
Predecessor
Debt Instrument [Line Items]
Debt face amount							$ 6,557,000,000
Capital lease obligations							14,000,000
Liabilities subject to compromise, capital lease obligations and accrued interest							12,000,000
Predecessor | Affiliated Entity
Debt Instrument [Line Items]
Capital lease obligations							24,000,000
Liabilities subject to compromise, capital lease obligations and accrued interest							10,000,000
First Lien Debt
Debt Instrument [Line Items]
Fair value of assets received by debt holders			$ 3,570,000,000
Debt cancelled due to bankruptcy						4,281,000,000
Second Lien Debt
Debt Instrument [Line Items]
Fair value of assets received by debt holders			84,000,000
Debt cancelled due to bankruptcy						1,440,000,000
Term Loan
Debt Instrument [Line Items]
Debt face amount					2,910,000,000	2,910,000,000
Term Loan | Predecessor
Debt Instrument [Line Items]
Debt face amount							0
Term Loan | Term Loan Credit Agreement due December 15, 2024
Debt Instrument [Line Items]
Debt face amount			$ 2,925,000,000
Term Loan | Revolving Credit Facility | ABR Loans | Minimum
Debt Instrument [Line Items]
Interest rate, stated percentage			3.75%
Term Loan | Revolving Credit Facility | ABR Loans | Federal Funds Rate
Debt Instrument [Line Items]
Basis spread on variable rate			0.50%
Term Loan | Revolving Credit Facility | LIBOR Loans | Minimum
Debt Instrument [Line Items]
Interest rate, stated percentage			4.75%
Term Loan | Revolving Credit Facility | LIBOR Loans | Federal Funds Rate | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	0.50%
Term Loan | Revolving Credit Facility | LIBOR Loans | Floor | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	0.00%		1.00%
Term Loan | Revolving Credit Facility | LIBOR Loans | Alternative Base Rate | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	3.25%
Term Loan | Revolving Credit Facility | LIBOR Loans | LIBOR | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	4.25%
Line of Credit | Revolving Credit Facility | ABL Credit Agreement
Debt Instrument [Line Items]
Line of credit facility, current borrowing capacity			$ 300,000,000
Minimum fixed charge coverage ratio			1
Minimum net borrowing availability			$ 25,000,000
Percent of total borrowing base			10.00%
Line of Credit | Revolving Credit Facility | Base Rate Loans
Debt Instrument [Line Items]
Step up or step down percentage			0.25%
Line of Credit | Revolving Credit Facility | Base Rate Loans | Minimum
Debt Instrument [Line Items]
Interest rate, stated percentage			0.75%
Line of Credit | Revolving Credit Facility | Base Rate Loans | Federal Funds Rate
Debt Instrument [Line Items]
Basis spread on variable rate			0.50%
Line of Credit | Revolving Credit Facility | LIBOR Loans Denominated In US Dollars
Debt Instrument [Line Items]
Step up or step down percentage			0.25%
Line of Credit | Revolving Credit Facility | LIBOR Loans Denominated In US Dollars | Minimum
Debt Instrument [Line Items]
Interest rate, stated percentage			1.75%
Line of Credit | Revolving Credit Facility | Canadian Prime Rate Loans
Debt Instrument [Line Items]
Step up or step down percentage			0.25%
Line of Credit | Revolving Credit Facility | Canadian Prime Rate Loans | Minimum
Debt Instrument [Line Items]
Interest rate, stated percentage			0.75%
Line of Credit | Revolving Credit Facility | CDOR Loans
Debt Instrument [Line Items]
Step up or step down percentage			0.25%
Line of Credit | Revolving Credit Facility | CDOR Loans | Minimum
Debt Instrument [Line Items]
Interest rate, stated percentage			1.75%
Line of Credit | Revolving Credit Facility | LIBOR Loans Denominated In Sterling
Debt Instrument [Line Items]
Step up or step down percentage			0.25%
Line of Credit | Revolving Credit Facility | LIBOR Loans Denominated In Sterling | Minimum
Debt Instrument [Line Items]
Interest rate, stated percentage			1.75%
Line of Credit | Revolving Credit Facility | EURIBOR Loans Denominated In Euro
Debt Instrument [Line Items]
Step up or step down percentage			0.25%
Line of Credit | Revolving Credit Facility | EURIBOR Loans Denominated In Euro | Minimum
Debt Instrument [Line Items]
Interest rate, stated percentage			1.75%
Line of Credit | Revolving Credit Facility | Overnight LIBOR Loans
Debt Instrument [Line Items]
Step up or step down percentage			0.25%
Line of Credit | Revolving Credit Facility | Overnight LIBOR Loans | Minimum
Debt Instrument [Line Items]
Interest rate, stated percentage			1.75%
Line of Credit | Letter of Credit | ABL Credit Agreement
Debt Instrument [Line Items]
Letters of credit, maximum amount			$ 150,000,000
Letters of credit outstanding					48,000,000	48,000,000
Letter of credit, remaining borrowing capacity					195,000,000	195,000,000
Convertible Notes
Debt Instrument [Line Items]
Debt face amount		$ 350,000,000			$ 350,000,000	$ 350,000,000
Interest rate, stated percentage		2.25%			2.25%	2.25%
Proceeds from convertible debt		$ 314,000,000
Conversion ratio (shares per principal)		36.0295
Conversion price (in usd per share) | $ / shares		$ 27.76
Redemption price		100.00%
Amount held		25.00%
Liability component of debt		$ 258,000,000
Equity component of debt		92,000,000
Unamortized issuance costs		(10,000,000)			$ (7,000,000)	$ (7,000,000)
Interest expense on debt					1,000,000
Convertible Notes | Predecessor
Debt Instrument [Line Items]
Debt face amount							0
DIP Credit Agreement
Debt Instrument [Line Items]
Debt face amount					$ 0	$ 0
DIP Credit Agreement | Predecessor
Debt Instrument [Line Items]
Debt face amount							$ 725,000,000
DIP Credit Agreement | Base Rate Loans | Minimum
Debt Instrument [Line Items]
Interest rate, stated percentage				6.50%
DIP Credit Agreement | Base Rate Loans | Federal Funds Rate
Debt Instrument [Line Items]
Basis spread on variable rate				0.50%
DIP Credit Agreement | Base Rate Loans | Eurocurrency Rate | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate				2.00%
DIP Credit Agreement | DIP Credit Agreement due January 19, 2018 | Predecessor
Debt Instrument [Line Items]
Letters of credit outstanding				$ 150,000,000
Liability component of debt				$ 725,000,000
Cash collateralization percent, US dollar				101.50%
Cash collateralization percent, alternative currencies				103.00%
DIP Credit Agreement | Eurocurrency Loans | Minimum
Debt Instrument [Line Items]
Interest rate, stated percentage				7.50%
DIP Credit Agreement | Eurocurrency Loans | Eurocurrency Rate | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate				1.00%
Over-Allotment Option | Convertible Notes
Debt Instrument [Line Items]
Debt face amount		$ 50,000,000
Conversion Circumstance One | Convertible Notes
Debt Instrument [Line Items]
Trading days | day		20
Consecutive trading days | day		30
Conversion price threshold		130.00%
Conversion Circumstance Two | Convertible Notes
Debt Instrument [Line Items]
Consecutive trading days | day		5
Conversion price threshold		98.00%
Business day threshold		5 days
Bond Hedge
Debt Instrument [Line Items]
Amount of shares hedged (in shares) | shares		12.6
Purchase of convertible note bond hedge		$ 84,000,000
Bond hedge strike price (in usd per share) | $ / shares		$ 27.76
Bond Hedge And Call Spread Warrants
Debt Instrument [Line Items]
Conversion price (in usd per share) | $ / shares					$ 37.3625	$ 37.3625
Call Spread
Debt Instrument [Line Items]
Warrants issued (in shares) | shares		12.6
Value of warrants		$ 58,000,000
Class of warrant or right, exercise price of warrants or rights (USD per share) | $ / shares		$ 37.3625

XML

Financing Arrangements - Carrying Amount of Convertible Debt (Details) - USD ($)	Jun. 30, 2018	Jun. 11, 2018
Debt Instrument [Line Items]
Principal amount	$ 3,260,000,000
Convertible Notes
Debt Instrument [Line Items]
Principal amount	350,000,000	$ 350,000,000
Unamortized debt discount	(91,000,000)
Unamortized issuance costs	(7,000,000)	$ (10,000,000)
Net carrying amount	$ 252,000,000

XML

Financing Arrangements - Equity Component of Convertible Debt (Details) - Convertible Notes - USD ($) $ in Millions	Jun. 30, 2018	Jun. 11, 2018
Debt Instrument [Line Items]
Debt discount for conversion option		$ 92
Issuance costs	$ (7)	$ (10)
Net carrying amount	252
Convertible Debt, Equity Component
Debt Instrument [Line Items]
Debt discount for conversion option	92
Issuance costs	(3)
Net carrying amount	$ 89

XML

Derivative Instruments and Hedging Activities - Narrative (Details) $ / shares in Units, shares in Millions, $ in Millions		12 Months Ended
	May 16, 2018 counterparty	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($) agreement	Dec. 15, 2017 $ / shares shares
Class of Warrant or Right [Line Items]
Derivative, number of counterparties | counterparty	6
Class of warrant or right, number of securities called by each warrant or right (in Shares) | shares				5.6
Class of warrant or right, exercise price of warrants or rights (USD per share) | $ / shares				$ 25.55
Interest Rate Swap
Class of Warrant or Right [Line Items]
Derivative, fixed interest rate	2.935%
Derivative, number of instruments held | agreement			6
Derivative, notional amount			$ 1,800
Scenario, Forecast | Interest Rate Swap
Class of Warrant or Right [Line Items]
Derivative instruments, loss reclassified from AOCI into net income		$ 10

XML

Derivative Instruments and Hedging Activities - Assumptions Used (Details) - $ / shares		2 Months Ended	7 Months Ended
	Dec. 15, 2017	Dec. 15, 2017	Jun. 30, 2018
Warrants
Class of Warrant or Right [Line Items]
Volatility		54.38%	50.96%
Risk-free rate		2.20%	2.68%
Expected remaining life (in years)	5 years		4 years 5 months 15 days
Stock price (USD per share)	$ 15.16	$ 15.16	$ 20.08
As Previously Reported
Class of Warrant or Right [Line Items]
Volatility		54.57%
Risk-free rate		2.20%
Expected remaining life (in years)	5 years
Stock price (USD per share)	$ 14.93	$ 14.93

XML

Derivative Instruments and Hedging Activities - Fair Value (Details) - USD ($) $ in Millions	Jun. 30, 2018	Sep. 30, 2017	Jun. 30, 2017
Derivative [Line Items]
Asset	$ 0
Liability	42
Designated as Hedging Instrument
Derivative [Line Items]
Asset	0
Liability	16
Predecessor
Derivative [Line Items]
Asset		$ 0	$ 0
Liability			0
Predecessor | Designated as Hedging Instrument
Derivative [Line Items]
Asset			0
Liability			0
Other current liabilities | Designated as Hedging Instrument | Interest rate contracts
Derivative [Line Items]
Asset	0
Liability	11
Other current liabilities | Predecessor | Designated as Hedging Instrument | Interest rate contracts
Derivative [Line Items]
Asset			0
Liability			0
Other liabilities | Designated as Hedging Instrument | Interest rate contracts
Derivative [Line Items]
Asset	0
Liability	5
Other liabilities | Not Designated as Hedging Instrument | Emergence Date Warrants
Derivative [Line Items]
Asset	0
Liability	$ 26
Other liabilities | Predecessor | Designated as Hedging Instrument | Interest rate contracts
Derivative [Line Items]
Asset			0
Liability			0
Other liabilities | Predecessor | Not Designated as Hedging Instrument | Emergence Date Warrants
Derivative [Line Items]
Asset			0
Liability			$ 0

XML

Derivative Instruments and Hedging Activities - Derivatives Designated as Cash Flow Hedges (Details) - Designated as Hedging Instrument - USD ($) $ in Millions	2 Months Ended	3 Months Ended	7 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2018
Interest Expense
Derivative [Line Items]
Financial Statement Line Item in which Cash Flow Hedges are Recorded		$ (56)	$ (112)
Impact of cash flow hedging relationships:
Loss recognized in AOCI - on interest rate swaps		0	0
Interest expense reclassified from AOCI		(2)	(2)
Interest Expense | Predecessor
Derivative [Line Items]
Financial Statement Line Item in which Cash Flow Hedges are Recorded	$ (14)
Impact of cash flow hedging relationships:
Loss recognized in AOCI - on interest rate swaps	0
Interest expense reclassified from AOCI	0
Other Comprehensive Income (Loss)
Derivative [Line Items]
Financial Statement Line Item in which Cash Flow Hedges are Recorded		(16)	(41)
Impact of cash flow hedging relationships:
Loss recognized in AOCI - on interest rate swaps		(17)	(17)
Interest expense reclassified from AOCI		$ 2	$ 2
Other Comprehensive Income (Loss) | Predecessor
Derivative [Line Items]
Financial Statement Line Item in which Cash Flow Hedges are Recorded	658
Impact of cash flow hedging relationships:
Loss recognized in AOCI - on interest rate swaps	0
Interest expense reclassified from AOCI	$ 0

XML

Derivative Instruments and Hedging Activities - Derivatives Not Designated as Hedging Instruments (Details) - Other income (expense), net - Not Designated as Hedging Instrument - Emergence Date Warrants - USD ($) $ in Millions	2 Months Ended	3 Months Ended	7 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2018
Derivative [Line Items]
Pre-tax gain (loss)		$ 5.8	$ (9.0)
Predecessor
Derivative [Line Items]
Pre-tax gain (loss)	$ 0.0

XML

Derivative Instruments and Hedging Activities - Presented on a Net Basis (Details) - USD ($) $ in Millions	Jun. 30, 2018	Sep. 30, 2017	Jun. 30, 2017
Asset
Gross amounts recognized in the consolidated balance sheet	$ 0
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet	0
Net amounts	0
Liability
Gross amounts recognized in the consolidated balance sheet	42
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet	0
Net amounts	$ 42
Predecessor
Asset
Gross amounts recognized in the consolidated balance sheet		$ 0	$ 0
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet		0
Net amounts		0
Liability
Gross amounts recognized in the consolidated balance sheet		0
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet		0
Net amounts		$ 0

XML

Fair Value Measures (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - Recurring - USD ($) $ in Millions	Jun. 30, 2018	Sep. 30, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	$ 2
Fair value of warrant liability	57
Interest rate contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of warrant liability	16
Spoken acquisition Earn-outs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of warrant liability	15
Emergence Date Warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of warrant liability	26
Quoted prices in active markets for identical instruments (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	2
Fair value of warrant liability	0
Quoted prices in active markets for identical instruments (Level 1) | Interest rate contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of warrant liability	0
Quoted prices in active markets for identical instruments (Level 1) | Spoken acquisition Earn-outs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of warrant liability	0
Quoted prices in active markets for identical instruments (Level 1) | Emergence Date Warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of warrant liability	0
Significant other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0
Fair value of warrant liability	16
Significant other observable inputs (Level 2) | Interest rate contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of warrant liability	16
Significant other observable inputs (Level 2) | Spoken acquisition Earn-outs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of warrant liability	0
Significant other observable inputs (Level 2) | Emergence Date Warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of warrant liability	0
Unobservable inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0
Fair value of warrant liability	41
Unobservable inputs (Level 3) | Interest rate contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of warrant liability	0
Unobservable inputs (Level 3) | Spoken acquisition Earn-outs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of warrant liability	15
Unobservable inputs (Level 3) | Emergence Date Warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of warrant liability	$ 26
Predecessor
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments		$ 1
Predecessor | Quoted prices in active markets for identical instruments (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments		1
Predecessor | Significant other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments		0
Predecessor | Unobservable inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments		$ 0

XML

Fair Value Measures Fair Value Measures (Level 3 Liabilities Measured at Fair Value on a Recurring Basis) (Details) - Unobservable inputs (Level 3) - USD ($) $ in Millions	2 Months Ended	3 Months Ended	4 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Mar. 31, 2018
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Fair value of derivative liability, beginning balance		$ 46	$ 17
Contingent consideration			14
Accretion of interest		1
Change in fair value		(6)	15
Fair value of derivative liability, ending balance	$ 17	41	46
Predecessor
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Fair value of derivative liability, beginning balance	0		17
Issuance of Emergence Date Warrants	17
Fair value of derivative liability, ending balance	17
Emergence Date Warrants
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Fair value of derivative liability, beginning balance		32	17
Contingent consideration			0
Accretion of interest		0
Change in fair value		(6)	15
Fair value of derivative liability, ending balance	17	26	32
Emergence Date Warrants | Predecessor
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Fair value of derivative liability, beginning balance	0		17
Issuance of Emergence Date Warrants	17
Fair value of derivative liability, ending balance	17
Spoken acquisition Earn-outs
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Fair value of derivative liability, beginning balance		14	0
Contingent consideration			14
Accretion of interest		1
Change in fair value		0	0
Fair value of derivative liability, ending balance	0	$ 15	14
Spoken acquisition Earn-outs | Predecessor
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Fair value of derivative liability, beginning balance	0		$ 0
Issuance of Emergence Date Warrants	0
Fair value of derivative liability, ending balance	$ 0

XML

Fair Value Measures (Fair Value of Financial Instruments) (Details) - USD ($) $ in Millions	Jun. 30, 2018	Sep. 30, 2017
Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	$ 3,260
Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	3,261
Term Loan Credit Agreement due December 15, 2024 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	2,910
Term Loan Credit Agreement due December 15, 2024 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	$ 2,919
Convertible 2.25% senior notes due June 15, 2023
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate, stated percentage	2.25%
Convertible 2.25% senior notes due June 15, 2023 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	$ 350
Convertible 2.25% senior notes due June 15, 2023 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	342
DIP Credit Agreement due January 19, 2018 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	0
DIP Credit Agreement due January 19, 2018 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	0
Variable rate Term B-3 Loans due October 26, 2017 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	0
Variable rate Term B-3 Loans due October 26, 2017 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	0
Variable rate Term B-4 Loans due October 26, 2017 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	0
Variable rate Term B-4 Loans due October 26, 2017 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	0
Variable rate Term B-6 Loans due March 31, 2018 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	0
Variable rate Term B-6 Loans due March 31, 2018 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	0
Variable rate Term B-7 Loans due May 29, 2020 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	0
Variable rate Term B-7 Loans due May 29, 2020 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	$ 0
7% senior secured notes due April 1, 2019
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate, stated percentage	7.00%
7% senior secured notes due April 1, 2019 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	$ 0
7% senior secured notes due April 1, 2019 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	$ 0
9% senior secured notes due April 1, 2019
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate, stated percentage	9.00%
9% senior secured notes due April 1, 2019 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	$ 0
9% senior secured notes due April 1, 2019 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	$ 0
10.50% senior secured notes due March 1, 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate, stated percentage	10.50%
10.50% senior secured notes due March 1, 2021 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	$ 0
10.50% senior secured notes due March 1, 2021 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value	$ 0
Predecessor | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		$ 6,557
Predecessor | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		4,525
Predecessor | Term Loan Credit Agreement due December 15, 2024 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		0
Predecessor | Term Loan Credit Agreement due December 15, 2024 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		0
Predecessor | Convertible 2.25% senior notes due June 15, 2023 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		0
Predecessor | Convertible 2.25% senior notes due June 15, 2023 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		0
Predecessor | DIP Credit Agreement due January 19, 2018 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		725
Predecessor | DIP Credit Agreement due January 19, 2018 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		732
Predecessor | Variable rate Term B-3 Loans due October 26, 2017 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		594
Predecessor | Variable rate Term B-3 Loans due October 26, 2017 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		503
Predecessor | Variable rate Term B-4 Loans due October 26, 2017 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		1
Predecessor | Variable rate Term B-4 Loans due October 26, 2017 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		1
Predecessor | Variable rate Term B-6 Loans due March 31, 2018 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		519
Predecessor | Variable rate Term B-6 Loans due March 31, 2018 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		440
Predecessor | Variable rate Term B-7 Loans due May 29, 2020 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		2,012
Predecessor | Variable rate Term B-7 Loans due May 29, 2020 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		1,709
Predecessor | 7% senior secured notes due April 1, 2019 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		982
Predecessor | 7% senior secured notes due April 1, 2019 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		832
Predecessor | 9% senior secured notes due April 1, 2019 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		284
Predecessor | 9% senior secured notes due April 1, 2019 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		241
Predecessor | 10.50% senior secured notes due March 1, 2021 | Principal Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		1,440
Predecessor | 10.50% senior secured notes due March 1, 2021 | Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, fair value		$ 67

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Income Taxes (Details) - USD ($) $ in Millions	2 Months Ended	7 Months Ended	9 Months Ended	10 Months Ended	12 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Sep. 30, 2018	Sep. 30, 2018
Income Tax [Line Items]
Operating loss carryforward, estimated utilization in remainder of fiscal year	$ 92
Statutory tax rate	35.00%		35.00%
Tax cuts and jobs act, change in tax rate, DTL, income tax benefit		$ 242
Net Operating Loss And Tax Carryforwards And Other
Income Tax [Line Items]
Valuation allowance increase (decrease)	$ (787)
Deferred Tax Asset For Non-US Jurisdictions
Income Tax [Line Items]
Valuation allowance increase (decrease)	(47)
Fresh Start Accounting Adjustments
Income Tax [Line Items]
Valuation allowance increase (decrease)	$ (461)
Scenario, Forecast
Income Tax [Line Items]
Statutory tax rate				21.00%	24.50%

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Benefit Obligations - Schedule of Net Benefit Costs (Details) - USD ($) $ in Millions	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Components of Net Periodic Benefit (Credit) Cost
Curtailment				$ 0
Predecessor
Components of Net Periodic Benefit (Credit) Cost
Curtailment	$ 0				$ (4)
Other Postretirement Benefits Plan
Components of Net Periodic Benefit (Credit) Cost
Service cost		$ 1		1
Interest cost		4		7
Expected return on plan assets		(3)		(5)
Amortization of unrecognized prior service cost		0		0
Amortization of previously unrecognized net actuarial loss		0		0
Curtailment		0		0
Net periodic benefit (credit) cost		2		3
Other Postretirement Benefits Plan | Predecessor
Components of Net Periodic Benefit (Credit) Cost
Service cost	0		$ 0		1
Interest cost	3		4		10
Expected return on plan assets	(2)		(2)		(7)
Amortization of unrecognized prior service cost	(3)		(5)		(13)
Amortization of previously unrecognized net actuarial loss	2		3		9
Curtailment	0		0		(4)
Net periodic benefit (credit) cost	0		0		(4)
UNITED STATES | Pension Plan [Member]
Components of Net Periodic Benefit (Credit) Cost
Service cost		1		2
Interest cost		9		19
Expected return on plan assets		(17)		(35)
Amortization of unrecognized prior service cost		0		0
Amortization of previously unrecognized net actuarial loss		0		0
Settlement loss(1)		0		0
Net periodic benefit (credit) cost		(7)		(14)
UNITED STATES | Pension Plan [Member] | Predecessor
Components of Net Periodic Benefit (Credit) Cost
Service cost	1		1		3
Interest cost	22		24		73
Expected return on plan assets	(38)		(44)		(134)
Amortization of unrecognized prior service cost	0		0		1
Amortization of previously unrecognized net actuarial loss	20		26		77
Settlement loss(1)	0		0		0
Net periodic benefit (credit) cost	5		7		20
Foreign Plan | Pension Plan [Member]
Components of Net Periodic Benefit (Credit) Cost
Service cost		1		3
Interest cost		3		5
Expected return on plan assets		0		0
Amortization of previously unrecognized net actuarial loss		0		0
Net periodic benefit (credit) cost		$ 4		$ 8
Foreign Plan | Pension Plan [Member] | Predecessor
Components of Net Periodic Benefit (Credit) Cost
Service cost	2		1		5
Interest cost	3		2		6
Expected return on plan assets	0		0		(1)
Amortization of previously unrecognized net actuarial loss	1		4		12
Net periodic benefit (credit) cost	$ 6		$ 7		$ 22

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Benefit Obligations - Narrative (Details) - USD ($) shares in Millions		2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Defined Benefit Plan Disclosure [Line Items]
Payment to PBGC					$ 0
Net gain on settlement of Liabilities subject to compromise		$ 26,000,000	$ 0		0
Expected future contributions to satisfy funding requirements, remainder of fiscal year			20,000,000		20,000,000
Avaya Inc. Pension Plan for Salaried Employees
Defined Benefit Plan Disclosure [Line Items]
Payment to PBGC	$ 340,000,000
Common stock issued for PBGC (in shares)	6.1	6.1
Common stock issued to Pension Benefit Guaranty Corporation	$ 92,000,000	$ 92,000,000
Plan termination increase (decrease) in benefit obligation	(2,192,000,000)
Plan termination increase (decrease) in plan assets	(1,573,000,000)
ASPP Plan
Defined Benefit Plan Disclosure [Line Items]
Plan termination increase (decrease) in benefit obligation	(88,000,000)
Net gain on settlement of Liabilities subject to compromise	(53,000,000)
Settlement consideration	17,000,000
APP And Other
Defined Benefit Plan Disclosure [Line Items]
Plan termination increase (decrease) in benefit obligation	3,000,000
Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer (less than $1 million)	49,000,000
Postemployment Retirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Expected future employer contributions, remainder of fiscal year (less than $1 million)			3,000,000		3,000,000
Postretirement Health Coverage [Member]
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer (less than $1 million)		0			1,000,000
Domestic Plan [Member] | Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Contributions to satisfy minimum funding requirements		0			22,000,000
Foreign Plan | Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer (less than $1 million)					19,000,000
Expected future employer contributions, remainder of fiscal year (less than $1 million)			6,000,000		6,000,000
Predecessor
Defined Benefit Plan Disclosure [Line Items]
Payment to PBGC		340,000,000				$ 0
Common stock issued to Pension Benefit Guaranty Corporation	92,000,000	92,000,000
Loss on settlement recorded in Reorganization items, net		516,000,000
Pension settlement		721,000,000
Net gain on settlement of Liabilities subject to compromise		(1,778,000,000)		$ 0		$ 0
Predecessor | Postemployment Retirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer (less than $1 million)		2,000,000			2,000,000
Predecessor | Domestic Plan [Member] | Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Contributions to satisfy minimum funding requirements		0
Predecessor | Foreign Plan | Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer (less than $1 million)		3,000,000
Maximum
Defined Benefit Plan Disclosure [Line Items]
Expected future employer contributions, remainder of fiscal year (less than $1 million)			$ 0		$ 0
Change in unamortized pension, postretirement and postemployment benefit-related items | Avaya Inc. Pension Plan for Salaried Employees
Defined Benefit Plan Disclosure [Line Items]
Pension settlement	703,000,000
Change in unamortized pension, postretirement and postemployment benefit-related items | ASPP Plan
Defined Benefit Plan Disclosure [Line Items]
Pension settlement	$ 18,000,000
Change in unamortized pension, postretirement and postemployment benefit-related items | Predecessor
Defined Benefit Plan Disclosure [Line Items]
Pension settlement		$ 721,000,000

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Share-Based Compensation - Narrative (Details) - USD ($)		2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense			$ 7,000,000	$ 4,000,000	$ 13,000,000	$ 10,000,000
Predecessor
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Accelerated compensation cost		$ 3,000,000
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period					10 years
Dividend yield					0.00%
2017 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares authorized (shares)			7,400,000		7,400,000
Number of shares available for grant (shares)			2,700,000		2,700,000
2017 Equity Incentive Plan | Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs granted (shares)	3,440,528				400,000
Options granted (shares)	1,146,835				100,000
Cancellations (in shares)					291,725
2017 Equity Incentive Plan | Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cancellations (in shares)					89,281
2017 Equity Incentive Plan | Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum award			$ 750,000		$ 750,000

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Share-Based Compensation - Assumptions (Details) - Stock options	7 Months Ended
	Jun. 30, 2018 $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility, minimum	49.25%
Expected volatility, maximum	56.59%
Risk-free interest rate, minimum	2.35%
Risk-free interest rate, maximum	2.95%
Dividend yield	0.00%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price	$ 19.46
Expected life (in years)	5 years 10 months 10 days
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price	$ 21.79
Expected life (in years)	6 years 7 months 24 days

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Capital Stock (Details) - $ / shares	Jun. 30, 2018	Dec. 16, 2017	Dec. 15, 2017
Class of Stock [Line Items]
Preferred stock, shares authorized	55,000,000
Preferred stock, par value (in usd per share)	$ 0.01
Preferred stock, shares issued	0
Preferred stock, shares outstanding	0
Common stock, shares authorized	550,000,000
Common stock, par value (in usd per share)	$ 0.01
Common stock, shares issued	110,160,835	110,000,000
Common stock, share outstanding	109,954,972
Common stock issued for GUC (in shares)	200,000		200,000
As Previously Reported
Class of Stock [Line Items]
Common stock, shares issued	110,200,000	110,000,000

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Earnings (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, $ in Millions	2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 16, 2017	Sep. 30, 2017
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Common stock, shares issued		110,160,835		110,160,835		110,000,000
Common stock, share outstanding		109,954,972		109,954,972
Numerator
Net income (loss)		$ (88)		$ 19
Comprehensive Income (Loss), Net of Tax, Attributable to Parent		(104)		(22)
Dividends to preferred stockholders		0		0
Undistributed earnings		$ (88)		$ 19
Percentage allocated to common stockholders		100.00%		100.00%
Numerator for basic and diluted earnings per common share		$ (88)		$ 19
Denominator
Denominator for basic earnings per weighted average common shares (shares)		109,800,000		109,800,000
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract]
Warrants (shares)		0		0
Denominator for diluted earnings per weighted average common shares (shares)		109,800,000		111,000,000
Per common share net (loss) income
Basic (USD per share)		$ (0.80)		$ 0.17
Diluted (USD per share)		$ (0.80)		$ 0.17
Basic (shares)		109,800,000		109,800,000
Basic weighted average common stock and common stock equivalents (preferred shares)		109,800,000		109,800,000
Predecessor
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Common stock, shares issued							494,768,243
Common stock, share outstanding							494,768,243
Numerator
Net income (loss)	$ 2,977		$ (98)		$ (209)
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	4,425		(117)		(173)
Dividends to preferred stockholders	(6)		(8)		(23)
Undistributed earnings	$ 2,971		$ (106)		$ (232)
Percentage allocated to common stockholders	86.90%		100.00%		100.00%
Numerator for basic and diluted earnings per common share	$ 2,582		$ (106)		$ (232)
Denominator
Denominator for basic earnings per weighted average common shares (shares)	497,300,000		497,200,000		497,000,000
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract]
Warrants (shares)	0		0		0
Denominator for diluted earnings per weighted average common shares (shares)	497,300,000		497,200,000		497,000,000
Per common share net (loss) income
Basic (USD per share)	$ 5.19		$ (0.22)		$ (0.47)
Diluted (USD per share)	$ 5.19		$ (0.22)		$ (0.47)
Basic (shares)	497,300,000		497,200,000		497,000,000
Basic weighted average common stock and common stock equivalents (preferred shares)	572,400,000		497,200,000		497,000,000
Restricted stock units
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract]
Share-based payment arrangements (shares)		0		1,200,000
Restricted stock units | Predecessor
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract]
Share-based payment arrangements (shares)	0		0		0
Stock options
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract]
Share-based payment arrangements (shares)		0		0
Stock options | Predecessor
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract]
Share-based payment arrangements (shares)	0		0		0
Convertible Notes
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract]
Share-based payment arrangements (shares)		0		0
Convertible Notes | Predecessor
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract]
Share-based payment arrangements (shares)	0		0		0
Warrants
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract]
Warrants (shares)		0		0
Warrants | Predecessor
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract]
Warrants (shares)	0		0		0

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Earnings (Loss) Per Common Share Narrative (Details) - shares shares in Millions	3 Months Ended	7 Months Ended
	Jun. 30, 2018	Jun. 30, 2018
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	1.1	1.1
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	3.3
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	5.6	5.6

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Operating Segments (Details)			2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Jul. 14, 2017 segment	Jul. 13, 2017 Segments	Dec. 15, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 USD ($) segment	Jun. 30, 2017 USD ($)
Segment Reporting [Abstract]
Number of operating segments	2	3					2
Segment Reporting Information [Line Items]
REVENUE				$ 692,000,000		$ 1,512,000,000
GROSS PROFIT				352,000,000		753,000,000
Selling, general and administrative				281,000,000		613,000,000
Research and development				51,000,000		110,000,000
Amortization of intangible assets				39,000,000		86,000,000
Intangible asset impairment				0		0	$ 0
Goodwill impairment				0		0
Restructuring charges, net				30,000,000		80,000,000
TOTAL OPERATING EXPENSES				401,000,000		889,000,000
OPERATING (LOSS) INCOME				(49,000,000)		(136,000,000)
INTEREST EXPENSE, OTHER INCOME (EXPENSE), NET AND REORGANIZATION ITEMS, NET				(19,000,000)		(80,000,000)
(LOSS) INCOME BEFORE INCOME TAXES				(68,000,000)		(216,000,000)
Global Communications Solutions
Segment Reporting Information [Line Items]
REVENUE				322,000,000		716,000,000
Networking
Segment Reporting Information [Line Items]
REVENUE				0		0
Enterprise Collaboration Solutions
Segment Reporting Information [Line Items]
REVENUE				322,000,000		716,000,000
Avaya Global Services
Segment Reporting Information [Line Items]
REVENUE				433,000,000		967,000,000
Predecessor
Segment Reporting Information [Line Items]
REVENUE			$ 604,000,000		$ 803,000,000			$ 2,482,000,000
GROSS PROFIT			362,000,000		493,000,000			1,512,000,000
Selling, general and administrative			264,000,000		295,000,000			923,000,000
Research and development			38,000,000		59,000,000			178,000,000
Amortization of intangible assets			10,000,000		57,000,000			170,000,000
Intangible asset impairment			0		65,000,000			65,000,000
Goodwill impairment			0		52,000,000			52,000,000
Restructuring charges, net			14,000,000		8,000,000			22,000,000
TOTAL OPERATING EXPENSES			326,000,000		536,000,000			1,410,000,000
OPERATING (LOSS) INCOME			36,000,000		(43,000,000)			102,000,000
INTEREST EXPENSE, OTHER INCOME (EXPENSE), NET AND REORGANIZATION ITEMS, NET			3,400,000,000		(61,000,000)			(333,000,000)
(LOSS) INCOME BEFORE INCOME TAXES			3,436,000,000		(104,000,000)			(231,000,000)
Predecessor | Global Communications Solutions
Segment Reporting Information [Line Items]
REVENUE			253,000,000		302,000,000			957,000,000
Predecessor | Networking
Segment Reporting Information [Line Items]
REVENUE			0		43,000,000			137,000,000
Predecessor | Enterprise Collaboration Solutions
Segment Reporting Information [Line Items]
REVENUE			253,000,000		345,000,000			1,094,000,000
Predecessor | Avaya Global Services
Segment Reporting Information [Line Items]
REVENUE			351,000,000		458,000,000			1,388,000,000
Operating Segments | Global Communications Solutions
Segment Reporting Information [Line Items]
GROSS PROFIT				210,000,000		473,000,000
Operating Segments | Networking
Segment Reporting Information [Line Items]
GROSS PROFIT				0		0
Operating Segments | Enterprise Collaboration Solutions
Segment Reporting Information [Line Items]
GROSS PROFIT				210,000,000		473,000,000
Operating Segments | Avaya Global Services
Segment Reporting Information [Line Items]
GROSS PROFIT				257,000,000		582,000,000
Operating Segments | Predecessor | Global Communications Solutions
Segment Reporting Information [Line Items]
GROSS PROFIT			169,000,000		210,000,000			653,000,000
Operating Segments | Predecessor | Networking
Segment Reporting Information [Line Items]
GROSS PROFIT			0		14,000,000			47,000,000
Operating Segments | Predecessor | Enterprise Collaboration Solutions
Segment Reporting Information [Line Items]
GROSS PROFIT			169,000,000		224,000,000			700,000,000
Operating Segments | Predecessor | Avaya Global Services
Segment Reporting Information [Line Items]
GROSS PROFIT			196,000,000		274,000,000			828,000,000
Unallocated Amounts
Segment Reporting Information [Line Items]
REVENUE				(63,000,000)		(171,000,000)
GROSS PROFIT				$ (115,000,000)		$ (302,000,000)
Unallocated Amounts | Predecessor
Segment Reporting Information [Line Items]
REVENUE			0		0			0
GROSS PROFIT			$ (3,000,000)		$ (5,000,000)			$ (16,000,000)

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Accumulated Other Comprehensive Income (Loss) - Schedule of Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions		2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Dec. 15, 2017	Dec. 15, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
AOCI Attributable to Parent, Net of Tax
Beginning balance					$ 1,668
Other comprehensive income (loss) before reclassifications					(46)
Elimination of Predecessor Company accumulated other comprehensive loss			$ 0		0
Ending balance	$ 1,668	$ 1,668	1,718		1,718
Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to Parent, Net of Tax
Beginning balance			(25)		0
Other comprehensive income (loss) before reclassifications			(21)
Amounts reclassified to earnings			2
Provision for income taxes			3
Balance as of December 15, 2017 (Predecessor)	0	0
Ending balance	0	0	(41)		(41)
Change in unamortized pension, postretirement and postemployment benefit-related items
AOCI Attributable to Parent, Net of Tax
Other comprehensive income (loss) before reclassifications					0
Balance as of December 15, 2017 (Predecessor)	0	0
Ending balance			0		0
Foreign Currency Translation
AOCI Attributable to Parent, Net of Tax
Beginning balance			(25)
Other comprehensive income (loss) before reclassifications			(4)		(29)
Amounts reclassified to earnings			0
Provision for income taxes			0
Balance as of December 15, 2017 (Predecessor)	0	0
Ending balance			(29)		(29)
Interest Rate Swaps
AOCI Attributable to Parent, Net of Tax
Beginning balance			0
Other comprehensive income (loss) before reclassifications			(17)		(17)
Amounts reclassified to earnings			2
Provision for income taxes			3
Balance as of December 15, 2017 (Predecessor)	0	0
Ending balance			(12)		(12)
Other
AOCI Attributable to Parent, Net of Tax
Other comprehensive income (loss) before reclassifications					0
Balance as of December 15, 2017 (Predecessor)	0	0
Ending balance			$ 0		0
Predecessor
AOCI Attributable to Parent, Net of Tax
Beginning balance		(5,013)		$ (1,606)	1,668	$ (1,661)
Other comprehensive income (loss) before reclassifications		(21)		(42)		(17)
Amounts reclassified to earnings		16		26	2	70
Pension settlement		721
Provision for income taxes		(58)		(3)	3	(17)
Balance as of December 15, 2017 (Predecessor)	(1,380)	(1,380)
Elimination of Predecessor Company accumulated other comprehensive loss	1,380	790		0		0
Ending balance	1,668	1,668		(1,625)		(1,625)
Predecessor | Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to Parent, Net of Tax
Beginning balance		(1,448)			0
Balance as of December 15, 2017 (Predecessor)	(790)	(790)
Elimination of Predecessor Company accumulated other comprehensive loss	790
Ending balance	0	0
Predecessor | Change in unamortized pension, postretirement and postemployment benefit-related items
AOCI Attributable to Parent, Net of Tax
Beginning balance		(1,375)		(1,598)	0	(1,627)
Other comprehensive income (loss) before reclassifications		(24)		0		0
Amounts reclassified to earnings		16		26	0	70
Pension settlement		721
Provision for income taxes		(58)		(1)	0	(16)
Balance as of December 15, 2017 (Predecessor)	(720)	(720)
Elimination of Predecessor Company accumulated other comprehensive loss	720
Ending balance	0	0		(1,573)		(1,573)
Predecessor | Foreign Currency Translation
AOCI Attributable to Parent, Net of Tax
Beginning balance		(72)		(7)	0	(33)
Other comprehensive income (loss) before reclassifications		3		(42)		(17)
Amounts reclassified to earnings		0		0	0	0
Pension settlement		0
Provision for income taxes		0		(2)	0	(1)
Balance as of December 15, 2017 (Predecessor)	(69)	(69)
Elimination of Predecessor Company accumulated other comprehensive loss	69
Ending balance	0	0		(51)		(51)
Predecessor | Interest Rate Swaps
AOCI Attributable to Parent, Net of Tax
Beginning balance		0			0
Other comprehensive income (loss) before reclassifications		0
Amounts reclassified to earnings		0			2
Pension settlement		0
Provision for income taxes		0			3
Balance as of December 15, 2017 (Predecessor)	0	0
Elimination of Predecessor Company accumulated other comprehensive loss	0
Ending balance	0	0
Predecessor | Other
AOCI Attributable to Parent, Net of Tax
Beginning balance		(1)		(1)	0	(1)
Other comprehensive income (loss) before reclassifications		0		0		0
Amounts reclassified to earnings		0		0	0	0
Pension settlement		0
Provision for income taxes		0		0	$ 0	0
Balance as of December 15, 2017 (Predecessor)	(1)	(1)
Elimination of Predecessor Company accumulated other comprehensive loss	1
Ending balance	$ 0	$ 0		$ (1)		$ (1)

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Related Party Transactions (Details) $ in Millions	2 Months Ended	7 Months Ended	9 Months Ended	12 Months Ended
	Dec. 15, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 director	Sep. 30, 2017 USD ($)
Related Party Transaction [Line Items]
Number of directors on the Successor Company's Board of Directors | director			7
Number of non-employee directors on the Successor Company's Board of Directors | director			6
Senior Vice President | Purchased goods and services from Koopid, Inc.
Related Party Transaction [Line Items]
Purchases from related party (less than)		$ 1
Director | Sales of products and services to AIG
Related Party Transaction [Line Items]
Sales to related party (less than)		5
Chair of the Board of Directors | Purchased goods and services from Flex Ltd.
Related Party Transaction [Line Items]
Purchases from related party (less than)		$ 13
Predecessor | Director | Sales of products and services to AIG
Related Party Transaction [Line Items]
Sales to related party (less than)	$ 2
Predecessor | Chair of the Board of Directors | Purchased goods and services from Flex Ltd.
Related Party Transaction [Line Items]
Purchases from related party (less than)	6			$ 38
Predecessor | Affiliated Entity | Stockholders' agreement, registration rights agreement and management services agreement
Related Party Transaction [Line Items]
Expenses from transactions with related party (less than)	$ 0

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Commitments And Contingencies - Narrative (Details)					1 Months Ended	2 Months Ended	3 Months Ended	7 Months Ended	9 Months Ended
	Sep. 30, 2016 claim	Nov. 10, 2014 USD ($)	Sep. 30, 2014 USD ($)	Mar. 27, 2014 USD ($) claim	Sep. 30, 2016 USD ($)	Dec. 15, 2017 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Jun. 12, 2018 USD ($)	Sep. 30, 2017 USD ($)	Jan. 31, 2017 claim	Feb. 22, 2016 USD ($)	Oct. 23, 2014 USD ($)
Loss Contingencies [Line Items]
Legal fees								$ 0
Product warranty maximum duration									2 years
Maximum potential payment obligation with regards to letters of credit, guarantees and surety bonds								63,000,000	$ 63,000,000
Warranty accrual								2,000,000	2,000,000
Cash awards								0
Compensation expense								0
Lending institutions | Indemnification agreement
Loss Contingencies [Line Items]
Loss contingency accrual, payments								0
Loss contingency accrual								0	0
Nokia | Indemnification agreement
Loss Contingencies [Line Items]
Estimate of possible loss								50,000,000	50,000,000
Letter of Credit
Loss Contingencies [Line Items]
Cash collateral								$ 4,000,000	$ 4,000,000
Antitrust Litigation
Loss Contingencies [Line Items]
Number of claims settled | claim				2
Number of pending claims | claim				8
Damages awarded, value				$ 20,000,000
Damages awarded, value trebled				60,000,000
Amount awarded to other party		$ 71,000,000	$ 63,000,000
Prejudgment interest				$ 3,000,000
Bond posted													$ 8,000,000	$ 63,000,000
Damages sought, value					$ 61,000,000
Number of reinstated claims | claim	4
Number of vacated claim | claim	2
Patent Infringement Case Filed By BlackBerry Limited
Loss Contingencies [Line Items]
Number of pending claims | claim												2
Misappropriations Claim [Member]
Loss Contingencies [Line Items]
Estimated Litigation Liability										$ 1,000,000
Fraud Claim [Member]
Loss Contingencies [Line Items]
Estimated Litigation Liability										$ 0
Predecessor
Loss Contingencies [Line Items]
Legal fees						$ 37,000,000	$ 0
Warranty accrual											$ 2,000,000

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Label	Element	Value
Additional Paid-in Capital [Member] | Predecessor [Member]
Cancellation Of Predecessor Equity	cik0001116521_CancellationOfPredecessorEquity	$ 2,387,000,000
Common Stock [Member] | Predecessor [Member]
Cancellation Of Predecessor Equity, Shares	cik0001116521_CancellationOfPredecessorEquityShares	494,800,000
Retained Earnings [Member] | Predecessor [Member]
Cancellation Of Predecessor Equity	cik0001116521_CancellationOfPredecessorEquity	$ (2,977,000,000)