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Avaya: How we arrived at Chapter 11 - A letter from the corporate treasurer
John Sullivan, CFA, VP and Corporate Treasurer, Avaya Inc.
I have been asked how a company that reports strong financial results can at the same time file for chapter 11 restructuring. How did we, Avaya - one of the top competitors in business communications - arrive at this juncture? After looking at the multiple options of how to deal with our debt, we decided it was a critical next step in our transformation from a hardware company to a software and services company and the best path forward for our customers, partners and employees.
Our business is healthy and performing well. We have successfully transformed from our hardware heritage, with 75% of revenue now generated by software and services. All of our recent products are virtualized and run on various hardware platforms. We continue to be number one or two in the key markets we serve, and are at the beginning of new product cycles across our business.
Our customer satisfaction scores are more than 20 points ahead of our key competitors. From a financial perspective, the company's operating profitability metrics have improved in each of the past six years, and we generate positive cash flow. At the end of fiscal year 2016 we had $3 billion of estimated future revenue under contract. Pretty impressive results during a transformation.
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