Avaya Announces Preliminary Fourth Fiscal Quarter 2016 Financial Results - Seite 2

• Year-over-year growth in Contact Center and Networking products, and Cloud & Managed Services; sequential growth in Unified Communications products
• Sequential and year-over-year increase in Adjusted EBITDA $ and %, with Adjusted EBITDA % reaching record level
• Cash balance up sequentially and year-over-year
• Continued focus on assessment of capital structure improvement opportunities
• FY '16 Adjusted EBITDA in the range of ~$926M - $936M or a record ~25% of FY '16 revenue, up from $900M for FY '15

For a reconciliation of non-GAAP to GAAP financial information, please see our most recent filings at www.sec.gov

Use of non-GAAP (Adjusted) Financial Measures

The information furnished in this release includes non-GAAP financial measures that differ from measures calculated in accordance with generally accepted accounting principles in the United States of America ("GAAP"), including Adjusted EBITDA and non-GAAP gross margin.

EBITDA is defined as net income (loss) before income taxes, interest expense, interest income and depreciation and amortization. Adjusted EBITDA is EBITDA further adjusted to exclude certain charges and other adjustments described in our SEC filings.

We believe that including supplementary information concerning Adjusted EBITDA is appropriate because it serves as a basis for determining management and employee compensation. In addition, we believe Adjusted EBITDA provides more comparability between our historical results and results that reflect purchase accounting and our current capital structure. Accordingly, Adjusted EBITDA measures 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 it presents our financial performance in a way that can be more easily compared to prior quarters or fiscal years.

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 potential inconsistencies in the method of calculation. 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). Our debt agreements also allow us to add back restructuring charges, certain fees payable to our private equity sponsors and other advisors, resolution of certain legal matters, and a portion of our pension and post-employment benefits costs, which represents the amortization of pension service costs and actuarial gain or (loss) associated with these benefits. However, these are expenses that may recur, may vary and are difficult to predict.