ADT 2012 Annual Report Download - page 64

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modification based upon a qualitative assessment of first quarter results and each individual’s contribution to the
Separation. The operating results are described in the table below.
Fiscal Year 2012 Annual Incentive Compensation Design Summary
Performance Measure Weights
Performance
Target
Actual
Performance
Messrs. Gursahaney and Boerema, Ms. Mikells and
Ms. Graham
•Operating Income of ADT NA Residential & Small
Business before special items (“Adjusted Operating
Income”) 25% $ 826 million $ 794 million
•Free Cash Flow (“Adjusted FCF”) of ADT NA
Residential/& Small Business and ADT Commercial (now
known as Tyco Integrated Security) 20% $ 1.06 billion $ 909 million
•Net Revenue of ADT NA Residential & Small Business
(in constant currency) 25% $ 3.22 billion $ 3.25 billion
•Net Attrition of ADT NA Residential & Small Business 10% 12.70% 13.83%
•Corporate: 20%
Adjusted Operating Income from continuing
operations before special items ................ 7% $ 2.33 billion $ 2.29 billion
Adjusted FCF before special items ............... 7% $ 1.49 billion $ 1.46 billion
Total Net Revenue (in constant currency) ......... 6% $17.68 billion $17.44 billion
Mr. Edoff
•ADT: 50%
Adjusted Operating Income of ADT NA
Residential & Small Business before special
items ..................................... 15.62% See above See above
Adjusted FCF of ADT NA Residential & Small
Business and ADT Commercial (now known as
Tyco Integrated Security) ..................... 12.50% See above See above
Net Revenue of ADT NA Residential & Small
Business (in constant currency) ................ 15.63% See above See above
Net Attrition of ADT NA Residential & Small
Business .................................. 6.25% See above See above
•Corporate: 50%
Adjusted Operating Income from continuing
operations before special items ................ 17.50% See above See above
Adjusted FCF before special items ............... 17.50% See above See above
Total Net Revenue (in constant currency) ......... 15.00% See above See above
Description of Performance Measures: For compensation purposes, Adjusted Operating Income and
Adjusted FCF were adjusted to exclude the effects of events that the Tyco Compensation Committee deems did
not reflect the performance of the named executive officers. The categories of special items were identified at the
time the performance measure was approved at the beginning of the fiscal year, although the Tyco Compensation
Committee may in its discretion make adjustments during the fiscal year. Special items include gains, losses or
cash outlays that may mask the underlying operating results and/or business trends of Tyco or business segment,
as applicable. For fiscal 2012, the approved categories of adjustments included adjustments related to (i) business
acquisitions and divestitures; (ii) debt refinancing; (iii) legacy legal and tax matters; (iv) goodwill and intangible
asset impairments for business acquired prior to 2002; (v) tax law changes in Europe; (vi) certain unbudgeted
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