ADT 2011 Annual Report Download - page 144

Recurring Net Revenue
Recurring revenue is generated from contractual monitoring and maintenance agreements that are
long-term in nature, and is primarily driven by the addition or loss of customer accounts and increases
or decreases in average revenue per customer.
For the Years Ended
September 30, September 24, September 25,
2011 2010 2009
Number of customer accounts(1) ........ 9.0 million 8.9 million 7.4 million
Trailing 52 week attrition(1)(2) ........... 12.6% 12.8% 13.3%
Average monthly revenue per customer(1) . . $45.35 $44.62 $45.81
(1) The number of customer accounts, attrition rates and average revenue per customer for
all periods exclude the impact of divestitures.
(2) Trailing 52 week attrition rates exclude the impact of changes in foreign currency
exchange rates.
Recurring revenue increased by $612 million, or 14.2%, to approximately $4.9 billion during the
year ended September 30, 2011 as compared to the year ended September 24, 2010. Recurring net
revenue was favorably impacted by the estimated impact of acquisitions and divestitures of
$322 million, or 7.5%, relating to our acquisition of Broadview Security in May 2010, and to a lesser
extent the acquisition of Signature Security Group in April 2011. Changes in foreign currency exchange
rates also favorably impacted recurring revenue by $84 million, or 2.0%. Customer accounts grew
during the year ended September 30, 2011 by approximately 0.1 million, or 1.1%, to a total of
9.0 million accounts. The increase in average monthly revenue per customer of $0.73 from the year
ended September 24, 2010 to the year ended September 30, 2011 was partially due to favorable foreign
exchange rates along with incremental account growth, net of attrition, in the North America and
ROW regions.
Recurring revenue increased by $434 million, or 11.2%, to approximately $4.3 billion, during the
year ended September 24, 2010 as compared to the year ended September 25, 2009, as a result of
growth in customer accounts of approximately 1.5 million, or 20.3%, to a total of approximately
8.9 million accounts as of September 24, 2010. Approximately 1.4 million customer accounts were
acquired on May 14, 2010 in connection with the Broadview Security acquisition. The net impact of
acquisitions and divestitures and changes in foreign currency exchange rates favorably impacted
recurring revenue by $149 million, or 3.9%, and $116 million, or 3.0%, respectively, in 2010.
Non-Recurring Net Revenue
Non-recurring revenue is generated from product sales (including sales and installation of
electronic security and products related to retailer anti-theft systems, as well as other life safety
systems) and from services such as the provisioning of armored guards and one-time repair, security
system upgrades or inspection jobs. Non-recurring net revenue increased by $280 million, or 8.1%, to
$3.7 billion for the year ended September 30, 2011 as compared to the year ended September 24, 2010.
Changes in foreign currency exchange rates favorably impacted non-recurring net revenue by
$108 million, or 3.1%. In addition, an estimated $38 million, or 1.1%, of non-recurring revenue is
attributable to the additional week in fiscal 2011. These increases were partially offset by an
unfavorable net impact of acquisitions and divestitures of $89 million or 2.6%, primarily relating to the
sale of our French Security business in March 2010. The remaining increase was primarily due to
strength in commercial end markets with new retail store expansion activity in ROW and increased
demand within North America for construction projects and security systems upgrades.
2011 Financials 41