ADT Reports Fourth Quarter and Full Year 2019 Results
Total revenue growth of 10% for the fourth quarter; 12% for the full year
Full year commercial organic revenue growth of 16%
Greater home automation, over 80% interactive take rate strengthen residential position
Full year financial performance in line with guidance despite sale of
National launch of consumer financing subsequent to quarter end
Provides preliminary 2020 outlook
FOURTH QUARTER 2019 HIGHLIGHTS COMPARED TO PRIOR YEAR(1)
- Total revenue of
$1,298 million , up 10% from$1,185 million - Net loss of
$72 million , compared to net loss of$149 million - Adjusted EBITDA of
$607 million , compared to$614 million
FULL YEAR 2019 HIGHLIGHTS COMPARED TO PRIOR YEAR(1)(2)
- Total revenue of
$5,126 million , up 12% from$4,582 million - Net loss of
$424 million , compared to net loss of$609 million - Adjusted EBITDA of
$2,483 million , compared to$2,453 million - Net cash provided by operating activities of
$1,873 million , compared to$1,788 million - Net cash used in investing activities of
$978 million , compared to$1,738 million - Net cash used by financing activities of
$1,214 million , compared to net cash provided by financing activities of$193 million - Free Cash Flow before special items of
$590 million , up 10% from$538 million - Trailing twelve-month revenue payback improved to 2.3 years from 2.4 years
- Trailing twelve-month gross customer revenue attrition of 13.4%, an increase of 10 bps
"Strong fourth quarter results capped a successful year for ADT in which we demonstrated strong growth in revenue, earnings and cash flow while significantly expanding product offerings, investing in new technologies, and enhancing our customer offerings. We returned over
FOURTH QUARTER 2019 RESULTS(1)(2)
Total revenue was
The Company reported a net loss of
Adjusted EBITDA was
Trailing twelve-month customer revenue payback improved to 2.3 years from 2.4 years in the fourth quarter of 2019. The improvement was a result of higher installation revenue, efficient sales and installation spend, and other productivity actions.
Trailing twelve-month gross customer revenue attrition was 13.4%, compared to 13.3%, an increase of approximately 10 basis points year-over-year. The change is primarily due to a higher level of dealer disconnects, partially offset by a lower level of direct disconnects.
FULL YEAR 2019 RESULTS(1)
On a full year basis, the Company reported total revenue of
Net loss was
Adjusted EBITDA increased by
Net cash provided by operating activities was
Net cash used in investing activities was
Net cash used by financing activities was
Free Cash Flow before special items was
HIGHLIGHTS
ADT Commercial - ADT Commercial continued to grow its geographic footprint and dedication to serving mid-market, national, and large-scale commercial customers with the acquisitions of
Defenders Acquisition – ADT acquired Defenders, its largest authorized dealer, in
Consumer Financing Rolls Out Nationwide – ADT’s consumer financing program pilot phase concluded in February and is now available to eligible customers across
Smart Home Automation Growth – ADT and real estate developer
Enhanced Mobile Offering – ADT’s mobile security platform, Safe by ADT, is now helping to secure many of Lyft’s 30 million ride share users in a pilot program that has reached 10 major
Blue by ADT – ADT’s launch and release of the new DIY smart home security brand, Blue by ADT, further solidifies ADT as the leading smart home security provider. Less than one year after acquiring
Sale of
Debt Refinancing – In
Quarterly Dividend - Effective
2020 PRELIMINARY FINANCIAL OUTLOOK(3)
The Company is providing the following preliminary financial guidance for 2020:
(in millions) | ||
Total Revenue | ||
Adjusted EBITDA | ||
Free Cash Flow before special items |
The Company is in the early stages of integrating the
The Company is not providing a quantitative reconciliation of its preliminary financial outlook for Adjusted EBITDA and Free Cash Flow before special items to net income (loss) and net cash provided by operating activities, which are their respective corresponding GAAP measures, because these GAAP measures that are excluded from the Company’s non-GAAP preliminary financial outlook are difficult to reliably predict or estimate without unreasonable effort due to their dependence on future uncertainties, such as special items discussed below under the heading — “Non-GAAP Measures—Adjusted EBITDA” and “Non-GAAP Measures—Free Cash Flow before special items.” Additionally, information that is currently not available to the Company could have a potentially unpredictable and potentially significant impact on its future GAAP financial results.
____________________________
(1 | ) | All variances are year-over-year unless otherwise noted. Adjusted EBITDA, Free Cash Flow before special items, Diluted earnings per share before special items, Commercial Organic Revenue, Commercial Inorganic Revenue, and Commercial Organic Revenue Growth are non-GAAP measures. Refer to the “Non-GAAP Measures” section for the definitions of these terms and reconciliations to the most comparable GAAP measures. The operating metrics Gross Customer Revenue Attrition, Unit Count, RMR, RMR additions, and Revenue Payback are approximated as there may be variations to reported results in each period due to certain adjustments the Company might make in connection with the integration over several periods of acquired companies that calculated these metrics differently, or otherwise, including periodic reassessments and refinements in the ordinary course of business. These refinements, for example, may include changes due to systems conversion or historical methodology differences in legacy systems. |
(2 | ) | In conjunction with the acquisition of |
(3 | ) | Guidance excludes 3G and Code-Division Multiple Access (“CDMA”) radio conversion costs. There are many variables involved in those costs, including retention levels, system upgrade rates, revenue opportunities, cost-sharing opportunities, and possible technology solutions. We continue to estimate the range of costs for this replacement program at |
Media Inquiries: | Investor Relations: |
paulwiseman@adt.com |
tel: 888.238.8525 investorrelations@adt.com |
Conference Call
Management will discuss the Company’s fourth quarter and full year 2019 results during a conference call and webcast today beginning at
- By dialing 1-877-407-3982 (domestic) or 1-201-493-6780 (international) and requesting the ADT Fourth Quarter and Full Year 2019 Earnings Conference Call
- Live webcast accessed through ADT’s website at investor.adt.com
An audio replay of the conference call will be available from approximately
From time to time, the Company may use its website as a channel of distribution of material Company information. Financial and other material information regarding our Company is routinely posted on and accessible at investor.adt.com.
About
ADT is a leading provider of security, automation, and smart home solutions serving consumer and business customers through more than 200 locations, 9 monitoring centers, and the largest network of security professionals in
NON-GAAP MEASURES
To provide investors with additional information in connection with our results as determined in accordance with generally accepted accounting principles in
Adjusted EBITDA
We believe that the presentation of Adjusted EBITDA is appropriate to provide additional information to investors about our operating profitability adjusted for certain non-cash items, non-routine items that we do not expect to continue at the same level in the future, as well as other items that are not core to our operations. Further, we believe Adjusted EBITDA provides a meaningful measure of operating profitability because we use it for evaluating our business performance, making budgeting decisions, and comparing our performance against that of other peer companies using similar measures.
We define Adjusted EBITDA as net income or loss adjusted for (i) interest, (ii) taxes, (iii) depreciation and amortization, including depreciation of subscriber system assets and other fixed assets and amortization of dealer and other intangible assets, (iv) amortization of deferred costs and deferred revenue associated with subscriber acquisitions, (v) share-based compensation expense, (vi) merger, restructuring, integration, and other, (vii) losses on extinguishment of debt, (viii) radio conversion costs, (ix) financing and consent fees, (x) foreign currency gains/losses, (xi) acquisition related adjustments, and (xii) other charges and non-cash items.
There are material limitations to using Adjusted EBITDA. Adjusted EBITDA does not take into account certain significant items, including depreciation and amortization, interest, taxes, and other adjustments which directly affect our net income or loss. These limitations are best addressed by considering the economic effects of the excluded items independently and by considering Adjusted EBITDA in conjunction with net income or loss as calculated in accordance with GAAP. The Adjusted EBITDA discussion above is also applicable to its margin measure, which is calculated as Adjusted EBITDA as a percentage of monitoring and related services revenue.
Free Cash Flow
We believe that the presentation of Free Cash Flow is appropriate to provide additional information to investors about our ability to repay debt, make other investments, and pay dividends.
We define Free Cash Flow as cash flows from operating activities less cash outlays related to capital expenditures. We define capital expenditures to include purchases of property, plant, and equipment; subscriber system asset additions; and accounts purchased through our network of authorized dealers or third parties outside of our authorized dealer network. These items are subtracted from cash flows from operating activities because they represent long-term investments that are required for normal business activities.
Free Cash Flow adjusts for cash items that are ultimately within management’s discretion to direct, and therefore, may imply that there is less or more cash that is available than the most comparable GAAP measure. Free Cash Flow is not intended to represent residual cash flow for discretionary expenditures since debt repayment requirements and other non-discretionary expenditures are not deducted. These limitations are best addressed by using Free Cash Flow in combination with the cash flows as calculated in accordance with GAAP.
Free Cash Flow before special items
We define Free Cash Flow before special items as Free Cash Flow adjusted for payments related to (i) financing and consent fees, (ii) restructuring and integration, (iii) integration related capital expenditures, (iv) radio conversion costs, and (v) other payments or receipts that may mask our operating results or business trends. As a result, subject to the limitations described below, Free Cash Flow before special items is a useful measure of our cash available to repay debt, make other investments, and pay dividends.
Free Cash Flow before special items adjusts for cash items that are ultimately within management’s discretion to direct, and therefore, may imply that there is less or more cash that is available than the most comparable GAAP measure. Free Cash Flow before special items is not intended to represent residual cash flow for discretionary expenditures since debt repayment requirements and other non-discretionary expenditures are not deducted. These limitations are best addressed by using Free Cash Flow before special items in combination with the GAAP cash flow numbers.
Net Income (Loss) and Diluted EPS before special items
Net Income (Loss) before special items is defined as net income (loss) adjusted for (i) merger, restructuring, integration, and other, (ii) financing and consent fees, (iii) foreign currency gains/losses, (iv) losses on extinguishment of debt, (v) radio conversion costs, (vi) share-based compensation expense, (vii) the change in the fair value of interest rate swaps not designated as hedges, (viii) acquisition related adjustments, (ix) other charges and non-cash items, and (x) the impact these adjusted items have on taxes. Diluted EPS before special items is diluted EPS adjusted for the items above. The difference between Net Income (Loss) before special items and Diluted EPS before special items, and net income (loss) and diluted EPS (the most comparable GAAP measures) consists of the impact of the special items noted above on the applicable GAAP measure. We believe that Net Income (Loss) and Diluted EPS both before special items are benchmarks used by analysts and investors who follow the industry for comparison of its performance with other companies in the industry, although our measures may not be directly comparable to similar measures reported by other companies. The limitation of these measures is that they exclude the impact (which may be material) of items that increase or decrease our reported operating income, operating margin, net income or loss, and EPS. This limitation is best addressed by using the non-GAAP measures in combination with the most comparable GAAP measures in order to better understand the amounts, character, and impact of any increase or decrease on reported results.
Commercial Organic / Inorganic Revenue and Commercial Organic Revenue Growth
We believe that the presentation of commercial organic revenue, commercial inorganic revenue, and commercial organic revenue growth is appropriate to provide additional information to investors about the periodic growth of our business on a consistent basis.
We define commercial organic revenue as revenue associated with commercial and national accounts adjusted for commercial inorganic revenue, which represents incremental total revenue associated with commercial and national accounts from acquisitions until there is a full twelve-month overlap from the date of acquisition. In addition, commercial organic revenue excludes current and prior period total revenue from divested operations associated with commercial and national accounts. We define commercial organic revenue growth as the increase in commercial organic revenue over a stated period.
There are material limitations to using commercial organic revenue, commercial inorganic revenue, and commercial organic revenue growth as they do not take into account all revenue in a given period. These limitations are best addressed by considering the economic effects of the excluded items independently, and by considering commercial organic revenue, commercial inorganic revenue, and commercial organic revenue growth in conjunction with revenue determined in accordance with GAAP.
FORWARD-LOOKING STATEMENTS
ADT has made statements in this press release and other reports, filings, and other public written and verbal announcements that are forward-looking and therefore subject to risks and uncertainties, including under the heading 2020 Preliminary Financial Outlook. All statements, other than statements of historical fact, included in this document are, or could be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and are made in reliance on the safe harbor protections provided thereunder. These forward-looking statements relate to anticipated financial performance, management’s plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions and other matters. Any forward-looking statement made in this press release speaks only as of the date on which it is made. ADT undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. Forward-looking statements can be identified by various words such as “expects,” “intends,” “will,” “anticipates,” “believes,” “confident,” “continue,” “propose,” “seeks,” “could,” “may,” “should,” “estimates,” “forecasts,” “might,” “goals,” “objectives,” “targets,” “planned,” “projects,” and similar expressions. These forward-looking statements are based on management’s current beliefs and assumptions and on information currently available to management. ADT cautions that these statements are subject to risks and uncertainties, many of which are outside of ADT’s control, and could cause future events or results to be materially different from those stated or implied in this document, including among others, risk factors that are described in the Company’s Annual Report on Form 10-K and other filings with the
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
(Unaudited)
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 49 | $ | 363 | |||
Accounts receivable trade, net | 287 | 246 | |||||
Inventories, net | 104 | 89 | |||||
Work-in-progress | 34 | 26 | |||||
Prepaid expenses and other current assets | 151 | 130 | |||||
Total current assets | 625 | 854 | |||||
Property and equipment, net | 329 | 327 | |||||
Subscriber system assets, net | 2,739 | 2,908 | |||||
Intangible assets, net | 6,670 | 7,488 | |||||
4,960 | 5,082 | ||||||
Deferred subscriber acquisition costs, net | 513 | 430 | |||||
Other assets | 248 | 120 | |||||
Total assets | $ | 16,084 | $ | 17,209 | |||
Liabilities and stockholders' equity | |||||||
Current liabilities: | |||||||
Current maturities of long-term debt | $ | 58 | $ | 58 | |||
Accounts payable | 242 | 221 | |||||
Deferred revenue | 342 | 335 | |||||
Accrued expenses and other current liabilities | 477 | 398 | |||||
Total current liabilities | 1,120 | 1,012 | |||||
Long-term debt | 9,634 | 9,944 | |||||
Deferred subscriber acquisition revenue | 674 | 544 | |||||
Deferred tax liabilities | 1,166 | 1,342 | |||||
Other liabilities | 305 | 141 | |||||
Total liabilities | 12,899 | 12,984 | |||||
Total stockholders' equity | 3,184 | 4,225 | |||||
Total liabilities and stockholders' equity | $ | 16,084 | $ | 17,209 |
Note: amounts may not add due to rounding
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(Unaudited)
For the Three Months Ended | For the Years Ended | ||||||||||||||||||
Monitoring and related services | $ | 1,058 | $ | 1,040 | $ | 4,308 | $ | 4,110 | |||||||||||
Installation and other | 240 | 145 | 818 | 472 | |||||||||||||||
Total revenue | 1,298 | 1,185 | 5,126 | 4,582 | |||||||||||||||
Cost of revenue (exclusive of depreciation and amortization shown separately below) | 370 | 283 | 1,390 | 1,041 | |||||||||||||||
Selling, general and administrative expenses | 359 | 324 | 1,407 | 1,247 | |||||||||||||||
Depreciation and intangible asset amortization | 487 | 484 | 1,989 | 1,931 | |||||||||||||||
Merger, restructuring, integration, and other | 13 | (5 | ) | 36 | (3 | ) | |||||||||||||
— | 88 | 45 | 88 | ||||||||||||||||
Loss on sale of business | 6 | — | 62 | — | |||||||||||||||
Operating income | 64 | 11 | 196 | 278 | |||||||||||||||
Interest expense, net | (154 | ) | (162 | ) | (620 | ) | (663 | ) | |||||||||||
Loss on extinguishment of debt | (1 | ) | — | (104 | ) | (275 | ) | ||||||||||||
Other income (expense) | 2 | (2 | ) | 5 | 28 | ||||||||||||||
Loss before income taxes | (88 | ) | (153 | ) | (522 | ) | (633 | ) | |||||||||||
Income tax benefit | 16 | 4 | 98 | 23 | |||||||||||||||
Net loss | $ | (72 | ) | $ | (149 | ) | $ | (424 | ) | $ | (609 | ) | |||||||
Net loss per share | |||||||||||||||||||
Basic and diluted | $ | (0.10 | ) | $ | (0.20 | ) | $ | (0.57 | ) | $ | (0.81 | ) | |||||||
Weighted-average number of shares: | |||||||||||||||||||
Basic and diluted | 743 | 757 | 747 | 748 |
Note: amounts may not add due to rounding
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
For the Years Ended | |||||||||
Cash flows from operating activities: | |||||||||
Net loss | $ | (424 | ) | $ | (609 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||
Depreciation and intangible asset amortization | 1,989 | 1,931 | |||||||
Amortization of deferred subscriber acquisition costs | 80 | 60 | |||||||
Amortization of deferred subscriber acquisition revenue | (107 | ) | (79 | ) | |||||
Share-based compensation expense | 86 | 135 | |||||||
Deferred income taxes | (118 | ) | (27 | ) | |||||
Provision for losses on accounts receivable and inventory | 55 | 61 | |||||||
Loss on extinguishment of debt | 104 | 275 | |||||||
45 | 88 | ||||||||
Loss on sale of business | 62 | — | |||||||
Other non-cash items, net | 138 | 20 | |||||||
Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions: | |||||||||
Deferred subscriber acquisition costs | (190 | ) | (185 | ) | |||||
Deferred subscriber acquisition revenue | 260 | 256 | |||||||
Other, net | (107 | ) | (139 | ) | |||||
Net cash provided by operating activities | 1,873 | 1,788 | |||||||
Cash flows from investing activities: | |||||||||
Dealer generated customer accounts and bulk account purchases | (670 | ) | (694 | ) | |||||
Subscriber system assets | (542 | ) | (576 | ) | |||||
Capital expenditures | (159 | ) | (127 | ) | |||||
Acquisition of businesses, net of cash acquired | (109 | ) | (353 | ) | |||||
Sale of business, net of cash sold | 496 | — | |||||||
Other investing, net | 5 | 11 | |||||||
Net cash used in investing activities | (978 | ) | (1,738 | ) | |||||
Cash flows from financing activities: | |||||||||
Proceeds from initial public offering, net of related fees | — | 1,406 | |||||||
Proceeds from long-term borrowings | 3,403 | 423 | |||||||
Repayment of long-term borrowings, including call premiums | (3,845 | ) | (700 | ) | |||||
Repayment of mandatorily redeemable preferred securities, including redemption premium | — | (853 | ) | ||||||
Dividends on common stock | (565 | ) | (79 | ) | |||||
Repurchases of common stock | (150 | ) | — | ||||||
Deferred financing costs | (54 | ) | — | ||||||
Other financing, net | (3 | ) | (4 | ) | |||||
Net cash (used in) provided by financing activities | (1,214 | ) | 193 | ||||||
Effect of currency translation on cash | 1 | (2 | ) | ||||||
Net (decrease) increase in cash and cash equivalents and restricted cash and cash equivalents | (318 | ) | 240 | ||||||
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period | 367 | 127 | |||||||
Cash and cash equivalents and restricted cash and cash equivalents at end of period | $ | 49 | $ | 367 |
Note: amounts may not add due to rounding
(Unaudited)
Adjusted EBITDA
For the Three Months Ended | For the Years Ended | ||||||||||||||||||
(in millions) | |||||||||||||||||||
Net loss | $ | (72 | ) | $ | (149 | ) | $ | (424 | ) | $ | (609 | ) | |||||||
Interest expense, net | 154 | 162 | 620 | 663 | |||||||||||||||
Income tax benefit | (16 | ) | (4 | ) | (98 | ) | (23 | ) | |||||||||||
Depreciation and intangible asset amortization | 487 | 484 | 1,989 | 1,931 | |||||||||||||||
Amortization of deferred subscriber acquisition costs | 22 | 17 | 80 | 60 | |||||||||||||||
Amortization of deferred subscriber acquisition revenue | (29 | ) | (23 | ) | (107 | ) | (79 | ) | |||||||||||
Share-based compensation expense | 21 | 22 | 86 | 135 | |||||||||||||||
Merger, restructuring, integration and other | 13 | (5 | ) | 36 | (3 | ) | |||||||||||||
— | 88 | 45 | 88 | ||||||||||||||||
Loss on sale of business | 6 | — | 62 | — | |||||||||||||||
Loss on extinguishment of debt | 1 | — | 104 | 275 | |||||||||||||||
Radio conversion costs, net(1) | 12 | — | 25 | 5 | |||||||||||||||
Financing and consent fees(2) | — | 9 | 23 | 9 | |||||||||||||||
Foreign currency (gains)/losses(3) | (1 | ) | 2 | (1 | ) | 3 | |||||||||||||
Acquisition related adjustments(4) | 6 | 5 | 22 | 16 | |||||||||||||||
Licensing fees(5) | — | — | — | (22 | ) | ||||||||||||||
Other(6) | 5 | 5 | 22 | 5 | |||||||||||||||
Adjusted EBITDA | $ | 607 | $ | 614 | $ | 2,483 | $ | 2,453 | |||||||||||
Net loss to total revenue ratio | (5.5 | ) | % | (12.6 | ) | % | (8.3 | ) | % | (13.3 | ) | % | |||||||
Adjusted EBITDA Margin (as percentage of M&S Revenue) |
57.4 | % | 59.0 | % | 57.6 | % | 59.7 | % |
Note: amounts may not add due to rounding
_______________________
(1) Represents costs, net of any incremental revenue earned, associated with replacing cellular technology used in many of our security systems pursuant to a replacement program.
(2) Represents fees expensed associated with financing transactions.
(3) Represents the conversion of intercompany loans that are denominated in Canadian dollars to
(4) Represents amortization of purchase accounting adjustments and compensation arrangements related to acquisitions.
(5) Represents other income related to
(6) Represents other charges and non-cash items as well as certain advisory and other costs associated with our transition to a public company. During 2019, includes a
Free Cash Flow Before Special Items
For the Three Months Ended | For the Years Ended | ||||||||||||||||||
(in millions) | |||||||||||||||||||
Net cash provided by operating activities | $ | 414 | $ | 382 | $ | 1,873 | $ | 1,788 | |||||||||||
Net cash provided by (used in) investing activities | 179 | (654 | ) | (978 | ) | (1,738 | ) | ||||||||||||
Net cash (used in) provided by financing activities | (704 | ) | 380 | (1,214 | ) | 193 | |||||||||||||
Net cash provided by operating activities | $ | 414 | $ | 382 | $ | 1,873 | $ | 1,788 | |||||||||||
Dealer generated customer accounts and bulk account purchases |
(155 | ) | (167 | ) | (670 | ) | (694 | ) | |||||||||||
Subscriber system assets | (112 | ) | (148 | ) | (542 | ) | (576 | ) | |||||||||||
Capital expenditures | (39 | ) | (33 | ) | (159 | ) | (127 | ) | |||||||||||
Free Cash Flow | 108 | 34 | 502 | 391 | |||||||||||||||
Financing and consent fees | 3 | 8 | 23 | 8 | |||||||||||||||
Restructuring and integration payments | 5 | 4 | 14 | 18 | |||||||||||||||
Integration related capital expenditures | 8 | 1 | 16 | 7 | |||||||||||||||
Radio conversion costs | 12 | 1 | 25 | 6 | |||||||||||||||
Redemption of mandatorily redeemable preferred securities(1) | — | — | — | 96 | |||||||||||||||
Other, net | (5 | ) | 11 | 10 | 12 | ||||||||||||||
Free Cash Flow before special items | 132 | 59 | 590 | 538 |
Note: amounts may not add due to rounding
_______________________
(1) On
Net Loss Before Special Items
For the Three Months Ended | For the Years Ended | ||||||||||||||||||
(in millions) | |||||||||||||||||||
Net loss | $ | (72 | ) | $ | (149 | ) | $ | (424 | ) | $ | (609 | ) | |||||||
Merger, restructuring, integration, and other | 13 | (5 | ) | 36 | (3 | ) | |||||||||||||
Financing and consent fees(1) | — | 9 | 23 | 9 | |||||||||||||||
Foreign currency (gains)/losses(2) | (1 | ) | 2 | (1 | ) | 3 | |||||||||||||
Loss on extinguishment of debt | 1 | — | 104 | 275 | |||||||||||||||
Radio conversion costs, net(3) | 12 | — | 25 | 5 | |||||||||||||||
Share-based compensation expense | 21 | 22 | 86 | 135 | |||||||||||||||
Interest rate swaps, net(4) | — | 5 | 8 | (4 | ) | ||||||||||||||
Acquisition related adjustments(5) | 6 | 5 | 22 | 16 | |||||||||||||||
Licensing fees(6) | — | — | — | (22 | ) | ||||||||||||||
Other(7) | 5 | 5 | 22 | 5 | |||||||||||||||
— | 88 | 45 | 88 | ||||||||||||||||
Loss on sale of business | 6 | — | 62 | — | |||||||||||||||
Tax adjustments(8) | (14 | ) | (10 | ) | (74 | ) | (15 | ) | |||||||||||
Net loss before special items | $ | (24 | ) | $ | (28 | ) | $ | (66 | ) | $ | (116 | ) |
Note: amounts may not add due to rounding
_______________________
(1) Represents fees expensed associated with financing transactions.
(2) Represents the conversion of intercompany loans that are denominated in Canadian dollars to
(3) Represents costs, net of any incremental revenue earned, associated with replacing cellular technology used in many of our security systems pursuant to a replacement program.
(4) Primarily represents the change in the fair value of interest rate swaps not designated as hedges.
(5) Represents amortization of purchase accounting adjustments and compensation arrangements related to acquisitions.
(6) Represents other income related to
(7) Represents other charges and non-cash items as well as certain advisory and other costs associated with our transition to a public company. During 2019, includes a
(8) Represents tax impact on special items. In 2018, includes a one-time non-deductible tax impact on share-based compensation expense related to certain awards.
Diluted EPS Before Special Items
For the Three Months Ended | For the Years Ended | ||||||||||||||||||
(in millions, except per share data) | |||||||||||||||||||
Diluted EPS (GAAP) | $ | (0.10 | ) | $ | (0.20 | ) | $ | (0.57 | ) | $ | (0.81 | ) | |||||||
Impact of special items | 0.08 | 0.17 | 0.58 | 0.68 | |||||||||||||||
Impact of tax adjustments | (0.02 | ) | (0.01 | ) | (0.10 | ) | (0.02 | ) | |||||||||||
Diluted EPS before special items | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.09 | ) | $ | (0.16 | ) | |||||||
Diluted weighted-average number of shares outstanding | 743 | 757 | 747 | 748 |
Note: amounts may not add due to rounding
Commercial Organic Revenue and Commercial Organic Revenue Growth
For the Years Ended | |||||||||
(in millions) | |||||||||
Total revenue | $ | 5,126 | $ | 4,582 | |||||
Revenue growth | 12 | % | |||||||
Commercial revenue(1) | $ | 1,064 | $ | 605 | |||||
Commercial revenue growth | 76 | % | |||||||
Acquisition-related commercial revenue(2) | (370 | ) | $ | — | |||||
Divestiture-related commercial revenue(3) | (28 | ) | (32 | ) | |||||
Commercial organic revenue | $ | 667 | 573 | ||||||
Commercial organic revenue growth | 16 | % |
_______________________
(1) Represents total revenue associated with commercial and national accounts.
(2) Represents incremental total revenue associated with commercial and national accounts from acquisitions until there is a full twelve-month overlap from the date of acquisition.
(3) Represents total revenue from divested operations associated with commercial and national accounts.
Source: ADT Inc.