Johnson Controls International Plc · NYSE:JCI
Johnson Controls International — The ADT — Merger or Acquisition (April 2012)
20 slides from Johnson Controls International's merger presentation, Apr 10, 2012
Slide 1: The ADT Corporation Form 10
The ADT Corporation Form 10 April 10, 2012
Slide 2: Forward-Looking Statements / Safe Harbor
Forward-Looking Statements / Safe Harbor This presentation contains a number of forward-looking statements. Words, and variations of words, such as “expect”, “intend”, “will”, “anticipate”, “believe”, “propose”, “potential”, “continue”, “opportunity”, “estimate”, “project” and similar expressions ar
Slide 3: Important Information
Important Information In connection with the proposed transactions, a definitive proxy statement for the stockholders of Tyco will be filed with the Securities and Exchange Commission (the “SEC”). Tyco will mail the final proxy statement to its stockholders. BEFORE MAKING ANY VOTING DECISION, TYCO’S
Slide 4: Contents of ADT Form 10
Contents of ADT Form 10 Non-Financial Information Financial Information Summary of Spin-off and Related Q&A Capitalization Risk Factors Selected historical combined financial data Business Overview and Future Strategy − Fiscal 2007-2011 annual periods and fiscal Q1 2012 Details Regarding
Slide 5: ADT At A Glance
ADT At A Glance 2011 revenue of $3.1B; 89% of which is recurring 6.4M customers, substantially larger than nearest competitor − 25% market share in the U.S. and Canada Trusted and well-known brand Highly profitable subscriber based business model Sustained growth of accounts and revenue pe
Slide 6: Leading Position in Residential & Small Business Security Market
Leading Position in Residential & Small Business Security Market Residential & Small Business Security Market Industry Characteristics U.S. & Canada 2011 Share by Competitor Large, stable market with additional growth potential as the economy recovers ADT 25% Security service penetration in hous
Slide 7: ADT Strengths
ADT Strengths We believe ADT is a clear leader in the security industry, supported by one of the industry’s most trusted, and well- known brands Attractive business model with strong cash flows Experienced management team with proven track record in the electronic security industry Industry
Slide 8: Our Strategic Priorities Support Our Mission
Our Strategic Priorities Support Our Mission Grow customer base through channel expansion Manage costs associated with adding new Strengthen & customers, leveraging mobility tools Grow the Core Increase average monthly recurring revenue per customer, driving ADT Pulse adoption Improve custom
Slide 9: An Experienced ADT Management Team
An Experienced ADT Management Team Naren Gursahaney CEO Steve Gribbon Shawn Lucht Marketing Kathryn Mikells David Bleisch Anita Graham Don Boerema Mark Edoff Sales Operations (TBA) Finance Legal HR and Corporate Business Administration Development Optimization
Slide 10: ADT Operating Overview
ADT Operating Overview Total Revenue $ Billions $3.1 $2.6 $2.2 FY09 FY10 FY11 Operating Highlights 89% recurring revenue ~ $0.9 billion annually in capital spend Strong cash flow generation − Majority used to acquire new accounts − FY11 operating cash flow $1.4 billion FY11 effective book ta
Slide 11: Key Performance Measures
Key Performance Measures Customer Additions Attrition Thousands 14.3% 1,025 1,088 971 491 459 464 13.3% 13.0% 566 597 507 FY09 FY10* FY11 Direct Dealer FY09 FY10 FY11 *Gross adds excluding acquired Broadview accounts Total Number Of Customers ARPU At Year End Thousands 6,285 6,351 $37.24 4,753 $35.9
Slide 12: Preliminary Pro Forma Cash And Debt
Preliminary Pro Forma Cash And Debt $ in Millions Pro Forma Cash $300 Pro Forma Debt $2,500 FY11 EBITDA* $1,506 FY11 CAPEX** $902 FY11 Pro Forma Debt / EBITDA* 1.7x Line of Credit We expect to enter into an unsecured senior revolving credit facility in the amount of $750 million * EBITDA includes $2
Slide 13: Capital Structure Provides Financial Flexibility
Capital Structure Provides Financial Flexibility $2.5 billion of term debt at separation expected to preserve investment grade ratings and provide Strong access to both the short-term and long-term capital Balance Sheet markets Capital structure expected to provide flexibility to pursue attracti
Slide 14: Effective and Cash Tax Rate Outlook
Effective and Cash Tax Rate Outlook Carve-out financial statements reflect tax attributes generated by the ADT business historically − Assumes ADT was a separate taxpayer and standalone enterprise for the periods presented The combined financial statements reflect an effective tax rate, common t
Slide 15: Effective and Cash Tax Rate Outlook (continued)
Effective and Cash Tax Rate Outlook (continued) The post–spin tax carryforwards along with cash tax planning opportunities will allow ADT to sustain a single-digit cash tax rate consistent with pre- spin cash tax rates The following table reflects the effective and cash tax rates for fiscal year
Slide 16: Next Steps – Tyco Separation
Next Steps – Tyco Separation File Flow Control Documents and Proxy Statement with SEC SEC Review of Documents − Future updates to include quarterly results, identification of Board members and finalization of capital structure Issuance of new ADT and Flow Control debt Settlement of Tyco debt
Slide 17: Appendix
tyco Appendix
Slide 18: Non-GAAP Measures
Non-GAAP Measures In this presentation, we disclose non-GAAP measures that management believes provide useful information to investors. These measures consist of (1) EBITDA and (2) free cash flow (“FCF”). These measures are not financial measures under GAAP and should not be considered as substitute
Slide 19: ADT EBITDA Reconciliation
ADT EBITDA Reconciliation (in millions) For the Quarters Ended For the Fiscal Years Ended December 30, December 24, September 30, September 24, September 25, 2011 2010 2011 2010 2009 Net Income as reported on ADT Form 10 $ 93 $ 86 $ 376 $ 239 $ 243 Interest expense, net 22 22 89 106 81 Income tax ex
Slide 20: ADT Free Cash Flow Reconciliation
ADT Free Cash Flow Reconciliation For the Quarters Ended For the Fiscal Years Ended (in millions) December December September September September 30, 2011 24, 2010 30, 2011 24, 2010 25, 2009 FCF................................................................................. $ 87 $ 110 $ 537 $ 269 $