NRLN Avaya Retirees Chapter

NRLN Avaya Retirees Chapter Newsletter

May 25, 2020

I am tired of hearing “everyone is in this together” well at least I know most of us in the Avaya Chapter are in the higher risk category by our ages so I say be safe, wash your hands and try to stay healthy. The old saying “I would not touch (her-him or cat) with a ten-foot pole” might literally be a good idea. I have a mixture of Avaya related news to share at this time and more to come soon on Medicare and Medicare Advantage. First off, Avaya 2nd quarter earnings report.

Avaya posted Second Quarter Financial Highlights – Our Takeaways Are in Blue

  • Revenues of $682 million – (2nd Qtr. Revenue was down from 1st Qtr. $33 million ($682 vs $715).
  • GAAP Operating loss was $597 million; Non-GAAP Operating income was $125 million.
  • Net loss was $672 million, which includes a non-cash goodwill impairment charge of $624 million.
  • Adjusted EBITDA was $149 million.
  • 79 deals signed with a TCV (Total Customer Value) of over $1 million.
  • Repurchased an additional $198 million of common stock in the 2nd quarter. As a result, Avaya has repurchased a total of 28.9 million shares since program inception, achieving their FY20 target.
  • Ending cash and cash equivalents were $553 million.

“Avaya delivered a strong second quarter on multiple fronts and I couldn’t be prouder of how the company has executed in the face of the global COVID-19 crisis,” stated Jim Chirico, President and CEO, of Avaya. “The last several weeks have driven home the importance of communication and collaboration technology for all of us and especially the need for modernization of existing investments and infrastructure. Demand for video collaboration, with our Spaces solution, contact center upgrades to include remote work from anywhere capabilities, and the need for flexible consumption models like our cloud and subscription offers has accelerated, and no other company operates with the scale or reach that Avaya does. Our results underscore the mission critical nature of the solutions we provide, the value we deliver, and the partnership we have with our global base of customers.”

Mr. Chirico added, “The company has improved on all key strategic metrics as we continue the deliberate move to a SaaS (Software as a Service) and cloud model. Recurring revenue was 64%, up five points sequentially and year over year, our CAPS revenue increased to 23% from 18% in the prior quarter, and software and services as a percent of revenue was 88% – all new highs for the company. The continued mix shift of our revenue reflects that the vision and strategy we laid out is taking hold and that our transformation to a software, SaaS, and cloud focused company is irreversible.” Note: SaaS is a method of software delivery and licensing in which software is accessed online via a subscription, rather than bought and installed on individual computers. Avaya’s cloud-based SaaS platform helps IT professionals strategically manage and forecast IT costs. (also known as subscribeware or rentware)


Our take on results – Product sales are down $53 million 2nd qtr. from $245 vs $298 1st qtr. 

They are reducing faster than they are growing Services. 

But Services are now 64% of sales, Services Up $20 million 2nd qtr. $437 vs $417 1st qtr.

Net Loss to the quarter was $50 million. Avaya has removed the $624 million write down of Goodwill. This write down does not affect current business activity. All the loss is interest, still a problem. Avaya cannot make enough income to service the debt of $53 million quarterly.

Debt – Avaya reduced its long-term debt by $223 million reducing interest costs by $5 million per quarter. But Avaya added a contract Liability of $300 million. We are not sure what the new liability is but assume it is the liability of future services under contract. There should not be any interest cost associated with this liability. The $223 million reduction in debt is at least a start to reduce debt and the associated costs.

Other good news, highlights we see:

  • Total Contract Value (TCV) of $2.3B*.
  • 88% of revenue was Software & Services.
  • 64% of revenue was Recurring.
  • More large deal activity with 79 deals over $1 million, 12 over $5 million, and 3 over $10 million.
  • Avaya Spaces video and collaboration usage grew 2,100% as we delivered nearly 400,000 new licenses this quarter.
  • Subscription revenue grew ~200% quarter over quarter.
  • Avaya deployed over 2 million complementary licenses to support customer needs for business continuity and work from home during the Covid-19 quarantine

There are numerous Avaya press releases available.

Avaya Represented (Union) Pension Plan – Annual Funding Notice was recently mailed to those covered

There was no major change in funding as the Moving Ahead Act from 2014 is still in effect. This allows the company to use a more generous interest rates to attain getting closer to full funding by spreading out the time a little longer. There is also some relief to allow a delay for annual funding this year due to COVID-19 if a company meets certain thresholds, so Avaya will most likely be doing that. Many companies have already issued notices that they will be doing this. The law allows them to postpone funding in 2020 but will need to pay it in 2021 with interested incurred.

Avaya Represented (Union) Pension Plan funding

The plan is underfunded but not to the extent that any action is required by the company or by any outside body. The Avaya fund still has the backstop of the PGBC. I don’t think there is any question that all those in this plan will get their pensions. If Avaya were to ever become a huge success and fully fund this pension plan, they could end the plan by paying out the annuity funding to the individuals in the plan. However, we don’t see that happening. If Avaya were to go broke then the PGBC still comes in to protect the individual getting a pension just as they did for our Salaried Penson Fund during the past Avaya Bankruptcy settlement.

The Avaya Represented Pension Plan as of end of March had a little over 1,800 terminated vested participants not aged in yet and roughly 4,200 in pay status.

I want to remind everyone to make sure they provide address changes to the pension center when they occur and also if they are age 65 or over, they need to call the pension center to start their benefits. Avaya currently has about 70 that have not started taking their vested pensions yet. (If you know anyone that is vested in this category tell them to contact Avaya Pension Center.)

  • For pension or NCS issues contact the Pension Service Center at 1-844-868-6236.
  • For healthcare enrollment or eligibility issues contact Avaya Healthy Decisions Benefits Center at 1-800-526-8056.
  • For urgent benefit issues, email
  • VIA Benefits, Avaya – 1-855-535-7157
  • This is the sign-in page –

Closing Comments

In closing, I hope all of you and your families stay well and also to remind you that the NRLN Annual appeal letter was mailed to all members a couple of weeks ago. Please help us with what you can to continue our next big fight regarding equal treatment for regular Medicare members as those provided to Medicare Advantage members. If you don’t have your letter you can contribute at this link here, Contribute to the NRLN. If you have already made your 2020 contribution, thank you. Remember, make sure to note that you are an Avaya retiree.

Best regards,
Vern Larson, President

NRLN Avaya Retirees Chapter and
NRLN Vice President -Membership Development

Avaya Q4 2018 Financial Results – January 2019

*Note: SaaS is a method of software delivery and licensing in which software is accessed online via a subscription, rather than bought and installed on individual computers. Avaya’s cloud-based SaaS platform helps IT professionals strategically manage and forecast IT costs (also known as subscribeware or rentware).