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Avaya Repurchases $131.6 Million of Senior Secured Notes During Third Fiscal Quarter

07-06-2004

Avaya said it completed cash repurchases of $131.6 million in principal amount of its 11-1/8% senior secured notes during its third fiscal quarter.

Avaya Inc. (NYSE:AV), a leading global provider of business communications software, systems and services, today said it completed cash repurchases of $131.6 million in principal amount of its 11 1/8% senior secured notes during its third fiscal quarter. As a result of the repurchases, the company expects to record a one-time, pre-tax loss of $21.0 million for the third quarter.

"These repurchases are consistent with Avaya's objectives of reducing our long-term debt and de-leveraging our balance sheet," said Garry McGuire, chief financial officer, Avaya.

These repurchases, along with the previously announced redemption of $224 million in senior secured notes in February 2004, have lowered the outstanding balance of this issue by 55 percent from $640 million to $284 million. The company said that together, the transactions will save a total of approximately $17.7 million in interest expense for fiscal 2004 and $39.6 million annually thereafter.

About Avaya
Avaya Inc. designs, builds and manages communications networks for more than one million businesses worldwide, including over 90 percent of the FORTUNE 500®. Focused on businesses large to small, Avaya is a world leader in secure and reliable Internet Protocol (IP) telephony systems and communications software applications and services.

Driving the convergence of voice and data communications with business applications - and distinguished by comprehensive worldwide services - Avaya helps customers leverage existing and new networks to achieve superior business results. For more information visit the Avaya Web site: http://www.avaya.com

This news release contains forward-looking statements regarding the company's view of the benefits of the contribution to the pension plan. This view is based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include, but are not limited to, general industry market conditions and growth rates and general domestic and international economic conditions including interest rate and currency exchange rate fluctuations and the economic, political, and other risks associated with international sales and operations, U.S. and foreign government regulation, price and product competition, rapid technological development, dependence on new product development, the successful introduction of new products, the mix of our products and services, customer demand for our products and services, the ability to successfully integrate acquired companies, control of costs and expenses, the ability to implement in a timely manner our restructuring plans, and the ability to form and implement alliances. For a further list and description of such risks and uncertainties, see the reports filed by Avaya with the Securities and Exchange Commission. Avaya disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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