Adt Inc. · NYSE:ADT
Adt — Debt Investor Presentation (October 2023)
31 slides from Adt's debt investor presentation, Oct 2, 2023
Slide 1: Lender Presentation October 3, 2023
Exhibit 99.1 Lender Presentation October 3, 2023
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) has been prepared by Prime Security Services Borrower, LLC (the “Borrower”) and The ADT Security Corporation (the “Co-Borrower”), a wholly owned subsidiary of the Company, in connection with the syndication of the Company's planned 1st Lien Senior Se
Slide 3: Forward Looking Statements and Non-GAAP Measures
Forward Looking Statements and Non-GAAP Measures ADT Inc. (“ADT”) has made statements in this presentation that are forward looking and therefore subject to risks and uncertainties. All statements, other than statements of historical fact, included in this document are, or could be, “forward looking
Slide 4: Call Participants
Call Participants Jim DeVries Chairman of the Board, President and Chief Executive Officer, ADT Ken Porpora Executive Vice President and Chief Financial Officer, ADT Deepika Yelamanchi Treasurer and Senior Vice President, ADT Bradford Aston Managing Director, Barclays 4
Slide 5: Transaction Overview
Transaction Overview 5
Slide 6: Transaction Overview
Transaction Overview • ADT is a leading provider of security, automation, and smart home solutions services to residential and business customers in the United States th • On August 8 , 2023, ADT announced the sale of 100% of the commercial business to GTCR for approximately $1.6 billion in an all-
Slide 7: As Adjusted Capitalization and Ratings Summary; Sources and Uses of Funds
As Adjusted Capitalization and Ratings Summary Sources and Uses of Funds Historical and Adjusted Capitalization ($ in millions) Historical Adj. for As Adjusted Adj. for As Adjusted ($ in millions) (2) (3) Paydown Transaction 6/30/2023 6/30/2023 6/30/2023 Sources of Funds $ % New Senior Secured Term
Slide 8: Summary of Terms: Senior Secured Term Loan Facility
Summary of Terms: Senior Secured Term Loan Facility Borrower: Prime Security Services Borrower, LLC and The ADT Security Corporation (the “Co-Borrowers”) Administrative Agent: Barclays Facility: $1,400 million Senior Secured Term Loan B Facility (the “TLB”) (1) Maturity: 7 years Security: Perfected
Slide 9: Execution Timeline
Execution Timeline October 2023 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Market Holiday Key Transaction Date Date Event October 3, 2023 Lender Call October 10, 2023 Commitments Due (5:00 PM EST) Thereafter Close and Fund 9
Slide 10: Business Overview and Recent Update
Business Overview and Recent Update 10
Slide 11: Positioned to Serve High-Growth Smart Home and Solar Markets
Positioned to Serve High-Growth Smart Home and Solar Markets Focused Business, Well Positioned Market Growth and Key Drivers to Gain Share in High-Growth Markets U.S. Market Sizing CAGR % ADT Share Key Growth Drivers (2022-2027) $120B • Differentiated pro install and monitoring capability Market Lea
Slide 12: Continuing Our Evolution as the #1 Smart Home Solutions Provider
Continuing Our Evolution as the #1 Smart Home Solutions Provider Providing best -in-class, comprehensive smart home Past 2023 Future security and monitoring All-in-One Leak Smart Home Sensors Ecosystem Solar Provider Panels Product expansions allow cross-selling opportunities in the home… Window Sen
Slide 13: Core Strategy to Drive Customer Preference and Long-term Shareholder Value Remains Unchanged
Core Strategy to Drive Customer Preference and Long-term Shareholder Value Remains Unchanged Strategic Differentiators Enablers Co-marketing ADT Solar to #1 Smart Home security provider existing customer base for 7 consecutive years Brand Reputation and 24/7 Monitoring as the Innovative Trusted top
Slide 14: ADT Continues to Provide Customers Safe, Smart, and Sustainable Solutions
ADT Continues to Provide Customers Safe, Smart, and Sustainable Solutions Addressing the Expanding Customer Opportunity Delivering Superior Results Across Key CSB Metrics Prior to IPO Today Transforming into a full-fledged smart home provider with (2017) differentiated products and services Customer
Slide 15: Partnerships Accelerate Innovation as Catalyst for Future Growth
Partnerships Accelerate Innovation as Catalyst for Future Growth • Accelerated innovation and product development with the launch of the ADT+ app — National rollout of ADT+ app and ADT Self Setup in February 2023 outpacing expectations — New ADT+ app with deep Google integration has improved camera
Slide 16: The investment thesis for ADT remains strong with an attractive financial profile
The investment thesis for ADT remains strong with an attractive financial profile Large and expanding addressable market with 1 Medium-term target framework 1 opportunities to meaningfully increase share In-line with market growth Revenue by lines of business Growing business with industry-leading s
Slide 17: Divestiture Allows ADT to Realize an Attractive Valuation for Commercial Business
Divestiture Allows ADT to Realize an Attractive Valuation for Commercial Business and Focus on the Significant Residential and Small Business Opportunities Focus Portfolio on ADT’s Core Residential, Small Business and Multifamily Markets • Better positions ADT to provide safe, smart and sustainable
Slide 18: Q2 Financial Update
Q2 Financial Update 18
Slide 19: Recent Highlights: 2Q 2023
Recent Highlights: 2Q 2023 Another record CSB performance with continued top-line growth and improved margins 1 2 Record revenue payback of 1.9 years, achieving 2025 goal more than 2 years early 3 Continued record high customer revenue retention, driving highest-ever RMR balance Partnership momentum
Slide 20: 2Q 2023: Highlights
2Q 2023: Highlights +4% $0.16 $651M M&S Revenue Growth Adjusted EPS Adjusted EBITDA vs. prior year with CSB up 3% Adjusted Net Income of $148M, up 9% vs. prior year; & Commercial up 7% up $98M vs. prior year up 13% excluding Solar 12.5% 1.9 years Gross Revenue Attrition Revenue Payback maintaining r
Slide 21: Key Financial and Operating Metrics
Key Financial and Operating Metrics For the three months ended June 30, June 30, Key Highlights Y/Y Change 2023 2022 ($ in millions) M&S Revenue $1,187 $1,146 $41 4% • M&S Revenue / End of Period RMR: Growth in recurring revenue base driven by higher average pricing across CSB subscriber base Total
Slide 22: Appendix
Appendix 22
Slide 23: As Our Penetration of the Smart Home Ecosystem Grows, Our Growth Flywheel Accelerates
As Our Penetration of the Smart Home Ecosystem Grows, Our Growth Flywheel Accelerates Accelerate Penetration and Enable Customers to Better Unlock Greater Share of Wallet Manage the Risks of Everyday Life in Fast-Growing Markets and Protect What Matters Most 1 2 • Actively increasing wallet share an
Slide 24: Consumer and Small Business Segment Financials and Key Metrics
C O N S U M E R A N D S M A L L B U S I N E S S Segment Financials and Key Metrics Revenue Segment Statistics $ in Millions 2Q'23 Y/Y Change +7% $1,168 $1,088 Ending Subscriber Count 6.4M 0% $125 $77 $1,043 $1,011 Interactive Customers 65% 400 bps as a % of Total Residential and Small Business 2Q’22
Slide 25: Solar Segment Financials and Key Metrics
S O L A R Segment Financials and Key Metrics Revenue Segment Statistics $ in Millions 2Q'23 Y/Y Change (64%) Solar Installations 2.0K (64%) $215 Revenue per Installation ~$39K 0% $78 2Q’22 2Q’23 Battery Attachment Rate 16.8% (100 bps) Solar Installation, Product, and Other Adjusted EBITDA $ in Milli
Slide 26: Non-GAAP Measures
Non-GAAP Measures ADT sometimes uses information(“non-GAAP financialmeasures”) that is derived from the consolidated financial statements, but that is not presented in accordance with accounting principles generally accepted in the U.S.(“GAAP”). Under SEC rules, non-GAAP financial measures may be co
Slide 27: GAAP to Non-GAAP Reconciliations: Adjusted EBITDA
GAAP to Non-GAAP Reconciliations Adjusted EBITDA, Adjusted EBITDA Margin and Reconciliation to GAAP Net Income or Loss We believe the presentation of Adjusted EBITDA provides useful information to investors about our operating profitability adjusted for certain non-cash items, non-routine items that
Slide 28: GAAP to Non-GAAP Reconciliations: Free Cash Flow
GAAP to Non-GAAP Reconciliations Free Cash Flow, Adjusted Free Cash Flow, Adjusted Free Cash Flow including interest rate swaps, and Reconciliation to GAAP Net Cash Flows from Operating Activities We define Free Cash Flow as cash flows from operating activities less cash outlays related to capital e
Slide 29: GAAP to Non-GAAP Reconciliations: Adjusted Net Income and EPS
GAAP to Non-GAAP Reconciliations Adjusted Net Income (Loss), Adjusted Diluted Net Income (Loss) per Share (or, Adjusted EPS), and Reconciliations to GAAP Net Income (Loss) and GAAP Diluted Net Income (Loss) per Share We define Adjusted Net Income (Loss) as net income (loss) adjusted for (i) merger,
Slide 30: GAAP to Non-GAAP Reconciliations: Leverage Ratios
GAAP to Non-GAAP Reconciliations Leverage Ratios and Reconciliation to GAAP Debt to Net Income (Loss) Leverage Ratio Net Leverage Ratio is calculated as the ratio of net debt to last twelve months(“LTM”) Adjusted EBITDA. Net leverage ratio after divestiture is calculated as the ratio of net debt aft
Slide 31: GAAP to Non-GAAP Reconciliations: Commercial Adjusted EBITDA
GAAP to Non-GAAP Reconciliations Commercial Adjusted EBITDA including estimated allocation of certain corporate costs Commercial Adjusted EBITDA is our segment profit measure presented in accordance with ASC 280. We believe the presentation of Commercial Adjusted EBITDA including the estimated alloc