ADT 2014 Annual Report Download - page 68

FORM 10-K
The majority of the monitoring and home/business automation services and a large portion of the
maintenance services we provide to our customers are governed by multi-year contracts with automatic renewal
provisions. This provides us with significant recurring revenue, which for the year ended September 26, 2014,
was approximately 92% of our revenue. We believe that the recurring nature of the majority of our revenue,
combined with our large customer base and increasing average revenue per customer enables us to invest
continuously in growing and optimizing our business. This includes investments in technologies to further
enhance the attractiveness of our solutions to current and potential customers, to continue development and
training to enable our direct sales, installation, customer service and field service personnel to more effectively
deliver exceptional service to our customers, to expand our dealer and partner network and to make continued
enhancements to operations efficiency.
Our business plan contemplates the achievement of sustained, profitable growth in the markets we serve
today, as well as in adjacent markets, by executing against strategies that leverage our key assets and core
competencies. Where appropriate, we plan to supplement our organic growth efforts with complementary
acquisitions, leveraging our experience in effectively integrating acquired businesses.
We will continue to manage our business by optimizing the key business drivers noted above to maximize
the value from and to our residential customers. We also believe there is significant opportunity to increase our
share of monitored security and premises automation for an expanded business market, including small and mid-
sized businesses. Therefore, we plan to grow our share of business customers by continuing to expand our
business field sales force, supplemented with dedicated commercial sales professionals, and strengthen our
business marketing support. We believe these actions will contribute to building a larger, more robust partner
network and to assist in marketing additional value-added services, including ADT Pulse®, our remote
monitoring and home/business automation system.
Additionally, we believe monitored security and home/business automation services remain underpenetrated
in North America. The number of U.S. households with monitored security systems continues to be significantly
lower than those with other home services such as video and Internet. We plan to increase penetration of security
and automation services through the development of new solutions and enhanced offerings and marketing that
attract new customers to enter the market. In addition, through our efficient operating model and potentially
lower technology costs over time, we believe we can significantly reduce the cost of basic installation and
services, opening up the potential for a much larger portion of households and businesses to purchase monitored
security and home automation services.
Brands and Services
Our key brands are ADT®and ADT Pulse®. We believe our brands are among the most respected, trusted
and well-known brands in the monitored security industry. The strength of our brands is built upon our long-
standing record of providing quality, reliable monitored security services. Due to the importance that customers
place on reputation and trust when purchasing home and business security and automation services, we believe
the strength of our brands is a key contributor to our success.
Our monitored security and home/business automation offerings involve the installation and monitoring of
residential and business security and premises automation systems designed to detect intrusion, control access
and react to movement, smoke, carbon monoxide, flooding, temperature and other environmental conditions and
hazards, as well as to address personal emergencies, such as injuries, medical emergencies or incapacitation. We
believe the breadth of our solutions allows us to meet a wide variety of customer needs. Our monitored security
systems connect, upon the occurrence of a triggering event, to one of our state-of-the-art monitoring centers.
Depending upon the type of service contract and the response specified by the customer, our monitoring center
personnel respond to alarms by relaying appropriate information to local fire or police departments and notifying
the customer or others on the customer’s emergency contact list. Additional action may be taken by call center
associates as needed, depending on the specific situation and recorded customer preferences.
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