February 23, 2011 - Johnson Controls

Transcription

February 23, 2011

Tyco International SHOW FILE FINAL.pptFebruary 24, 2011Forward-Looking Statements / Safe HarborCertain statements in this presentation are ‘‘forward-looking statements’’ within the meaning of the U.S. Private Securities Litigation Reform Act of1995. All forward-looking statements involve risks and uncertainties. All statements contained herein that are not clearly historical in nature areforward-looking, and the words ‘‘anticipate,’’ ‘‘believe,’’ ‘‘expect,’’ ‘‘estimate,’’ ‘‘project’’ and similar expressions are generally intended to identifyforward-looking statements. Any forward-looking statement contained herein, in press releases, written statements or documents filed with theSecurities and Exchange Commission (‘‘SEC’’), or in Tyco’s communications and discussions with investors and analysts in the normal course ofbusiness through meetings, webcasts, phone calls and conference calls, regarding expectations with respect to sales, earnings, cash flows, operatingand tax efficiencies, product expansion, backlog, the consummation and benefits of acquisitions and divestitures, as well as financings andrepurchases of debt or equity securities, are subject to known and unknown risks, uncertainties and contingencies. Many of these risks, uncertaintiesand contingencies are beyond our control, and may cause actual results, performance or achievements to differ materially from anticipated results,performances or achievements. Factors that might affect such forward-looking statements include, among other things:other capital market conditions, including availability of funding sources andcurrency exchange rate fluctuations;-availability of and fluctuations in the prices of key raw materials, includingsteel and copper;-economic and political conditions in international markets, includinggovernmental changes and restrictions on the ability to transfer capitalacross borders;overall economic and business conditions;-the demand for Tyco’s goods and services;-competitive factors in the industries in which Tyco competes;-changes in tax requirements (including tax rate changes, new taxlaws and revised tax law interpretations);-results and consequences of Tyco’s internal investigations andgovernmental investigations concerning the Company’s governance, management, internal controls and operations including its businessoperations outside the United States;the outcome of litigation and governmental proceedings;effect of income tax audit settlements;the ratings on our debt and our ability to repay or refinance ouroutstanding indebtedness as it matures;-2--the ability to achieve cost savings in connection with the company’srestructuring initiatives;potential impairment of our goodwill and/or our long-lived assets;the impact of fluctuations in the price of Tyco common shares;risks associated with the change in our jurisdiction of incorporation fromBermuda to Switzerland, including the possibility of reduced flexibility withrespect to certain aspects of capital management, increased or differentregulatory burdens, and the possibility that we may not realize anticipatedtax benefits;-our ability to operate within the limitations imposed by financingarrangements and to maintain our credit ratings;-interest rate fluctuations and other changes in borrowing costs;-changes in U.S. and non-U.S. government laws and regulations; and-our ability to execute our portfolio refinement and acquisitionstrategy, and our ability to integrate acquired businesses;-the possible effects on us of pending and future legislation in the UnitedStates that may limit or eliminate potential U.S. tax benefits resulting fromTyco International’s jurisdiction of incorporation or deny U.S. governmentcontracts to us based upon Tyco International’s jurisdiction of incorporation.Tyco is under no obligation (and expressly disclaims any obligation)to update its forward-looking statements.John B. KochPresident, ADT North AmericaResidential/Small Business1

Tyco International SHOW FILE FINAL.pptFebruary 24, 2011AgendaUN RoomNoon -12:45 p.m. Discussion of ADT Residential/SmallBusiness (John Koch)12:45 -1:15 p.m.Discussion of Interactive Services(Don Boerema)1:15 - 1:30 p.m.BreakExecutive Briefing Center1:30 - 2:00 p.m.2:00 - 3:00 p.m.Pulse demoWalk through/demos (Arlene Hoffman)4ADT Is Part Of Tyco’s Portfolio Of BusinessesGlobal ElectronicSecurity IndustryGlobal FireIndustryGlobal Industrial Valves& Controls FlowserveUTCIndustry 68B HoneywellIndustry 32B SiemensIndustry 29B HoneywellThousandsof Others 73%5Thousandsof Others 59%Thousandsof Others 80%Source: Freedonia, McIIrain, Industry and Management Estimates2

Tyco International SHOW FILE FINAL.pptFebruary 24, 2011Following The Broadview Acquisition, WeSeparated ADT NA Into Two Business Units2010 North AmericaRevenue 4.4BCommercial42%Residential &Small Business58%2010 North America CompositionResidential& SmallBusinessCommercialTotal NARevenue 2.6B 1.8B 4.4B% Recurring88%39%68%Op Inc* 618M 189M 807M% Margin23.8%23 8%10 2%10.2%18 2%18.2%AdjustedEBITDA*EBITDA % 1,298M50.1% 358M 1,656M19.4%37.3%The Market Leader in Residential/Small Business Security Services6* Operating Income before special items ,Operating Margin before special items and adjusted EBITDA are Non-GAAP measures.For a reconciliation to the most comparable GAAP measure, please see Appendix.In The Subscriber-Based Model, PerformanceIs Driven By Four Key FactorsDefinitionAccount GrowthRateSAC(SubscriberAcquisition Cost)RPU(Revenue Per User)UserDisconnectRateCustomer additionsFocus Areas Multi-channel strategy Sales force reach andeffectivenessCosts to establish customer(e.g. install, sales/marketing) Cost effective lead generation Balancing Direct andDealer modelsMonthly revenue generatedper accountp Increasing RPU throughexpansionpof offeringsg% of recurring revenue lost Differentiated customer service Contract length and renewalManaging The Relationship Throughout The Customer Lifecycle73

Tyco International SHOW FILE FINAL.pptFebruary 24, 2011Residential/Small Business Areas of stributionchannels to drivegrowth in achangingenvironment2Grow revenuevia solutionsand expand intoopportunisticsegments4Enhance thecustomertexperienceto reduceattrition81Broadview Security Acquisition And Integration94

Tyco International SHOW FILE FINAL.ppt1February 24, 2011Why We Liked The Broadview SecurityAcquisition Exceptional business fit Increases our North American residential and small businesst 2.9 2 9 billii revenuerevenue tobillion; over 85% recurring Adds strong new account generation capabilities to ADT Combination will result in enhanced service offerings forcustomers Significant synergies starting on day one Expected to be 0.10 accretive* to earnings in FY2011( 0.18 accretive* on a cash basis)Will Generate Solid Long-Term Returns for our Shareholders101* Accretive before special items; which include transaction related expenses.Fact-Based Approach To Integration Planning& Execution Leveraging The “Best Of Both” Better CustomerExperienceHighCOMPLEXITYBest of BothApproachAh“We will ALL changeand improve”LowConversion toAcquirer's Processesand Systems“Do it our way” ImprovedEmployeeExperience Increased Salesand OperationalProductivity AcceleratedLong-TermGrowth and ProfitWholly-OwnedWhollySubsidiary“Keep doing whatyou do”G R E AT E R B E N E F I T S115

Tyco International SHOW FILE FINAL.ppt1February 24, 2011Eight Months Into The Integration - We RemainCommitted To The “Best Of Both” ApproachADTBroadviewProductPortfolio Interactive services Two-way voice capabilities Downloading capabilities Bmobile installation technologyMarketing Lower cost per lead Rebate/pricing structure Simpler core offeringsSales Higher RPU, lower SAC model Credit approval/resale process Takeover effectiveness Self-generated lead process Inspection & Builders programCustomerCare DealersD lwebb portalt l Better Interactive VoiceResponse (IVR) structure SiSinglel care/billing/billi queue Proactive one-call resolution Single install-to-cash system Centralized dispatch system, More effective remote serviceOperationswith automated optimization(fewer field calls)121Our Structured Program ManagementApproach Ensures Delivery Of Synergy Savings Dedicated Program Management Office with ExecutiveOversight– Began during integration planning– Continues during integration execution Lean/Six Sigma Techniques with Focus on Business Process Coordinated Program Milestones Detailed Financial Tracking– By department– Synergies and cost to realize136

Tyco International SHOW FILE FINAL.ppt1February 24, 2011Communicated, Communicated, And ThenCommunicated Some MoreMessages from LeadersCommunicate MilestonesIntranet – Regular UpdatesVideoPlasma PromosDealer ommunications Do’sand Dont’s for Leadersand IMCVenue for Questions141Developed Roadmap For Full Integration“Interim State”“Future State”2010MayJunJulAugSep2011OctAug 27 Sep 27May 14A ClosingNovDecJanFebMarJan-MarC Fiscal Day 1/HR Day 1B Customer Day 1AprMayJunJulAugSepJul-SepE Integrated Future StateD Field Integration157

Tyco International SHOW FILE FINAL.ppt2February 24, 2011Grow Revenue Via Solutions And ExpandInto Opportunistic Segments Pulse Launch– Enhancing our Customers’ Lifestyle– Expanding our Offering– Energy Management Opportunity ContinueBundledSolutionsC titto BuildB ild Bdl d Sl ti Evolve Home Health163Position Distribution Channels To DriveGrowth In A Changing Environment Continue Direct Sales Force Expansion Increase Productivity per Sales Rep Develop Alternative Channels (Inspectors/Builders, Utilities, Broadband, Retail) Dealer Channel and Opportunistic BulkPurchases178

Tyco International SHOW FILE FINAL.ppt4February 24, 2011Enhance Customer Experience To ReduceAttrition Drive “Creating Customers for Life” Missionacross the Organization Leverage Broadview’s Best Practices– Field Integration– Integrated Back-End Systems– Customer eServices & Statement Improve our Performance at each CustomerTouch Point18Customer Experience Strategic ArchitectureCustomerCustomerTouch PointsMassMarketAdvertisingSalesC duct/UsageMonitoring/Alarm nnectCustomer Experience Responsibilities: Refining the Current Customer Touch Points Defining the “Ideal” Customer Experience Defining the Relevant Drivers/Criteria to be Measured foreach Customer Touch Point Soliciting Feedback from our Customers and otherRelevant Arenas on our Performance for each CustomerTouch Point Providing Timely Feedback to the Organization on ourPerformance, Including Issues that Need ImmediateAttention Analyzing the Results to Identify and PrioritizeOpportunities for Improving the Customer Experience Determining and Measuring the Critical Drivers ofCustomer Retention199

Tyco International SHOW FILE FINAL.pptFebruary 24, 2011Summary North America Residential / Small Business Security isan Attractive Sector– Although Capital Intensive, Solid Business Model– Growth During the Housing Downturn and Recession withIncreased Growth Ahead– ADT is the Clear Market Leader The Broadview Integration is on Track– “Best of Both” Approach will Improve the Customer Experience– Structured and Disciplined Integration Approach Will EnsureWe Deliver on Synergy Commitments ADT PulseTM Interactive Solutions Positions Us Well in aChanging and Competitive Environment20Don BoeremaVP & Chief Marketing Officer,ADT North AmericaResidential/Small Business10

Tyco International SHOW FILE FINAL.pptFebruary 24, 2011Our Expansion Into Interactive Services ShouldFuel Continued Growth In RevenueSecurity IndustryPast 20 yearsInteractive Services2010 Intrusion Detection Fire/Smoke Detection Carbon MonoxideDetection Flood DetectionSecurity monitoringConnectivity and controlEnergy managementHome and lifestyle managementBusiness productivityHome healthEntertainmentAdding Lifestyle To Life Safety22Home Security and Automation are EvolvingTHEN WiredDisparate TechnologiesLimited BandwidthCostly HardwareProprietary solutionsHigh-end ConsumersNOW WirelessIntegrated TechnologiesUbiquitous BandwidthAffordable HardwareOpen StandardsMass Market2311

Tyco International SHOW FILE FINAL.pptFebruary 24, 2011Interactive Capabilities From any InternetConnected Device Anywhere in the WorldViewablevideo fromtriggeredteventsRemotearming/disarmingof securityysystemsReceive notificationsand establish schedulesand automations“Glance-able” contentLighting, HVACand energymanagementWill Help Fuel Revenue-per-user Growth And Customer Retention24ADT PulseTM Will Integrate With NumerousDevicesADT can integrate home control systems with zwave technologyGarage Doors2512

Tyco International SHOW FILE FINAL.pptFebruary 24, 2011Supported With A Personalized Customer Portal26Mobile Applications On All Mobile Platforms Remote Arm/DisarmLighting ManagementTemperature ControlLive Video and Snapshots2713

Tyco International SHOW FILE FINAL.pptFebruary 24, 2011New Customer Touchscreen With Content28ADT Pulse Interactive SolutionsADT Pulse SelectADT Pulse AdvantageADT Pulse Premier24/7 Intrusion & Fire Monitoring Remote Arm & Disarm / iPhone App Alerts & Event Notification Lighting and Climate Control/ZWaveVideo Touchscreen with Content QSP/P-QSP ADT Pulse Interactive Solutions Is Fully Upgradable At Any Time2914

Tyco International SHOW FILE FINAL.pptFebruary 24, 2011The New ADT Look And FeelConsumerBrochures:30Website:Residential & Business TV Ads:30ADT PulseTM Internet Siteswww.ADTPulse.comwww.findyourpulse.com3115

Tyco International SHOW FILE FINAL.pptFebruary 24, 2011Social Media And Mobile Advertising32ADT PulseTM iPhone Downloads Hundreds of ratings andreviewsSample Review:“Love this app and system.The wait and price was right forbeing able to set my home onschedules to arm, turn on/off,set thermostat and so muchmore. It’s kinda like theJetsons has come to life andthisisRosiethi systemti Ri :)”)” Tens of thousands ofdownloads and leads3316

Tyco International SHOW FILE FINAL.pptFebruary 24, 2011Public Relations Has Added New Depth ToADT’s Media OutreachFresh media for Pulse has generated over 51Mimpressions34ADT PulseTM Is Gaining Recognition All NBC affiliates nationwide 2.8 million viewers January 4, 2011 Consumer Electronics Show177 TV & radio stations3.8 million viewers & listenersJanuary 6, 2011International Builder’s Show210 TV & radio stations2.62 6 million viewers & listenersJanuary 20, 2011Electronic House 2011 product of the yearFavorite tech product of 2010 – Rob Enderle, analyst3517

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Tyco International SHOW FILE FINAL.pptFebruary 24, 20112010 Adjusted EBITDA Reconciliation MRevenueResidential/Small Business CommercialSecurityySecurityyNANANAEMEAROWProducts Solutions 2,592 1,844 4,436 1,738 1,207 353 7,734Operating IncomeRestructuring and asset impairment charges, net 567 51 187 2 754 53 159 (14) 142 9 35 2 Operating Income Before Special ItemsOperating Margin Before Special ItemsDepreciation & Amortization 618 23.8%680 189 10.2%169 807 18.2%849 145 8.3%73 151 12.5%97 37 10.5%12 1,14014.7%1,0311 298 1,29850.1%358 19.4%1 656 1,65637.3%218 12.5%248 20.5%49 13.9%2 1712,17128.1%Adjusted EBITDAAdjusted EBITDA Margin 1,0905038Non-GAAP Measures“Operating income before special items" and "operating margin before special items" are non-GAAP measures and should not beconsidered replacements for GAAP results. The company has presented its nd operating income and margin before special items.Special Items include charges and gains related to divestitures, acquisitions, restructurings, impairments, legacy legal and taxcharges and other income or charges that may mask the underlying operating results and/or business trends of the company orbusiness segmentsegment, as applicableapplicable. The company utilizes operating income and margin before special items to assess overalloperating performance and segment level core operating performance, as well as to provide insight to management in evaluatingoverall and segment operating plan execution and underlying market conditions. They may be used as components in the company'sincentive compensation plans. Operating income and operating margin before special items are useful measures for investorsbecause they permit more meaningful comparisons of the company's underlying operating results and business trends betweenperiods. The difference between income and EPS from continuing operations before special items and income and EPS fromcontinuing operations (the most comparable GAAP measures) consists of the impact of charges and gains related to divestitures,acquisitions, restructurings, impairments, legacy legal and tax charges and other income or charges that may mask the underlyingoperating results and/or business trends. Operating income and margin before special items do not reflect any additional adjustmentsthat are not reflected in income from continuing operations before special items. The limitation of these measures is that they excludethe impact (which may be material) of items that increase or decrease the company's reported operating income and margin andoperating income and EPS from continuing operations. This limitation is best addressed by using the non-GAAP measures incombination with the most comparable GAAP measures in order to better understand the amounts, character and impact of anyincrease or decrease on reported results.3919

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ADT PulseTM Interactive Solutions Positions Us Well in a Changing and Competitive Environment Don Boerema VP & Chief Marketing Officer, ADT North America Residential/Small Business. Tyco_International_SHOW_FILE_FINAL.ppt Feb