ADT 2014 Annual Report Download - page 109
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FORM 10-K
As mentioned above, we manage our business to optimize a number of factors including: customer
additions, costs associated with adding new customers, average revenue per customer, costs related to providing
services to customers and customer tenure. In order to understand how these key factors impact our Consolidated
and Combined Statements of Operations, we consider the following components of our expenses: cost to serve
expenses, gross subscriber acquisition cost expenses and depreciation and amortization. The following tables
reflect the location of these costs in our Consolidated and Combined Statements of Operations for fiscal years
2014, 2013 and 2012:
2014
(in millions)
Cost of
revenue
Selling, general
and
administrative
expenses
Radio
conversion costs Total
Cost to serve expenses .................... $ 411 $ 647 $ 44 $1,102
Gross subscriber acquisition cost expenses .... 61 381 — 442
Depreciation and amortization .............. 968 203 — 1,171
Other .................................. 17 — — 17
Total .............................. $1,457 $1,231 $ 44 $2,732
2013
(in millions)
Cost of
revenue
Selling, general
and
administrative
expenses
Radio
conversion costs Total
Cost to serve expenses .................... $ 391 $ 610 $— $1,001
Gross subscriber acquisition cost expenses .... 59 389 — 448
Depreciation and amortization .............. 891 174 — 1,065
Other .................................. 37 — — 37
Total .............................. $1,378 $1,173 $— $2,551
2012
(in millions)
Cost of
revenue
Selling, general
and
administrative
expenses
Radio
conversion costs Total
Cost to serve expenses .................... $ 364 $ 597 $— $ 961
Gross subscriber acquisition cost expenses .... 146 377 — 523
Depreciation and amortization .............. 831 151 — 982
Other .................................. 33 — — 33
Total .............................. $1,374 $1,125 $— $2,499
Year Ended September 26, 2014 Compared with Year Ended September 27, 2013
Revenue
Revenue increased by $99 million, or 3.0%, to $3.4 billion for fiscal year 2014 as compared with fiscal year
2013, primarily as a result of growth in recurring customer revenue, which increased by $111 million, or 3.7%.
This increase was primarily the result of higher average revenue per customer and $28 million of recurring
revenue associated with Protectron.
Average revenue per customer increased by $0.74, or 1.8%, as of September 26, 2014 compared with
September 27, 2013 primarily due to price escalations on our existing customer base and the addition of new
43