Greetings and welcome to The ADT Fourth Quarter and Full Year 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to your host today Jason Smith, Senior Vice President of Finance and Investor Relations. Please begin.

Good morning and thank you for joining us on ADT’s fourth quarter 2017 Earnings Conference Call. This morning we issued a press release with our fourth quarter 2017 results. Copy of the release is available on our website at investor.adt.com. Today’s call is being webcast and is accompanied by a slide presentation, which is also available on our website. Please refer now to Slide 2 of that presentation. Our remarks and answers will include forward-looking statements within the meaning of the Private Security Litigation Reform Act. These forward-looking statements, are subject to risks that could cause actual results to be materially different from those expressed or implied by such forward-looking statements. These risks include among others matters that we've described in our press release issued this morning. We expect this related to our initial public offering filed with the SEC and other filings we make with the SEC. Please note that all forward-looking statements speak only as of the day of this call and we disclaim any obligation to update these forward-looking statements. During our call today we’ll make reference to non-GAAP financial measures. Our forward-looking non-GAAP financial measures exclude special items, which are difficult to predict and are primarily dependent on future uncertainties. For a complete reconciliation of historical non-GAAP to GAAP financial measures please refer to our press release issued this morning and our slide presentation both of which are available on the website at investor.adt.com. Joining me on the call today are CEO Tim Whall, our President Jim DeVries, as well as our CFO, Jeff Likosar. I will now turn the call over to Tim.

Thanks Jason. Good morning everybody and welcome to our first call as a public company and personally for me is my first call as a CEO of a public company. So happy to be with you, like to thank the current shareholders for the trust you placed in us. It was a pleasure meeting many of you out on the road show and this kind of looks like we are doing the road show with none of you here. I'm sitting around with Jeff and Jim again but we look forward to sharing the results and being able to talk about how the actual business is doing. So it's a pleasure to be with you. Fourth quarter for us kept a very strong 2017 fiscal year. If I look at it in baseball term for spring training, I think we went five for five. Revenue was up year-over-year. Earnings were up year-over-year. Cash flow was up year-over-year. Attrition came down year-over-year and subscriber acquisition cost was reduced year-over-year. So feeling good about how 2017 looked and what we’ll share with you in 2018. This morning Jim and I will briefly share our view of the company, give you a little bit high level operating approach on how we drive shareholder value. I think, you guys know it's not our first time with this model in playbook, we’ll share our progress to date and then Jeff course is going to share our financial results with you. And then we’ll open up for Q&A. So, ADT has a lot of attractive company characteristics. We are five times the next largest competitor and fragmented in growing market. I think we uniquely positioned at the center of security and smart home. Automation with two million plus, interactive customers already. 90% of our business is…

Thanks Tim. We have a number of operating improvements in the fourth quarter and throughout 2017. And I'd like to share some brief thoughts on one of them, customer retention. As many of you know, we're focused on key customer retention metric and that metric is gross attrition. This is defined, as recurring revenue lost due to customer cancellations, divided by current recurring revenue in force. Focusing on gross attrition, enables our organization to view any single customer lost as an opportunity to improve or better said an opportunity to save. On the other hand net attrition because it includes re-sales can dilute or even overshadow the real opportunities that exist to improve customer attrition. In short, gross attrition is a truer and more accurate reflection of customer sentiment. You can read on Slide 7, that legacy ADT gross attrition was consistently above 16% on a trailing 12-month basis and we're now below 14%, finishing the calendar year at 13.7%. Admittedly, we had a benefit in Q2 of 2016 of combining legacy ADT with Protection One, which had much better attrition levels. But you'll also see on the chart that since then we've continued progress each and every quarter on this key customer retention metric. This improvement can be attributed to two strategic actions, first smarter more disciplined customer selection, this primarily includes credit screening and greater focus on the upfront payments from customers. The higher the costumer's initial cash outlay in a system the greater the retention. The second parallel lever we've used to improve attrition is related to customer service. Most notably nothing short of transformational improvements in our call center performance as well as field service. That is on site fight service to the customers home or place of business and while we’ve already made significant strides…

Thanks Jim and thanks everyone for joining the call today. While Jim just shared some detail on customer dynamics beyond what we described in our road show. I'm going to spend the next few minutes summarizing our fourth quarter results and we'll focus on the core metrics we use to evaluate and monitor progress against the top objectives Tim and Jim mentioned earlier. I also want to note that we will be filing our 10-K later this afternoon, which will include more detail. First on Slide 10, we are very pleased to have continued our strong progress lowering attrition by 110 basis points year-over-year as Jim described. As a reminder, every 100 basis points of attrition equates to an approximately $100 million reduction in the annual costs, would otherwise incur to replace lost revenue. So this is a key value driver for us. Our total revenue grew by 5% in the fourth quarter to $1.106 billion, our monitoring and services revenue of $1.012 billion grew 2% during the fourth quarter consistent with the rest of 2017, as a result of our attrition improvements. We've been able to maintain its revenue growth despite our tighter customer selection process. Installation and other revenue grew by more than 50% about half of which was driven by improvements in outright sales revenue across our business with the remainder split between new revenue from our 2017 acquisitions and incremental amortization of deferred installation revenue. I also want to mention that as required, we are adopting the new ASC 606 revenue accounting standard in the first quarter of 2018, which we do not expect to material – in a material way affect our overall revenue. It will however result in a very small amount of revenue shifting to installation rather than monitoring and services during 2018.…

Hey, thank you very much, Jeff. As guidance reflects, we expect 2018 to be another five for five year as we execute on the strategy, earnings to go up, revenue to grow up, cash flow to go up, attrition continue coming down and subscriber acquisition costs to keep coming down. Talk a little bit about growth, you guys are familiar with the three basic buckets that we put in obviously the core business is our consumer business, growing out our commercial plans and then we call our new markets area. You see a little bit of the puts and takes, that’s been illustrated for you with A, B and C below that kind of get you into 4% to 5% annual growth along with some percentages of how they go in each of those buckets. Of note is we don't really put anything into the new markets and market growth, we put it into the core business as well as commercial expansion. Obviously on the core side, no different than in our operations, which have gone very well, plenty of variance between performance and whether that's in the self-gen in a particular branch office or closing rate or amount of lease generated, we've got work to do to really start to fine tune that. We've got some outstanding players at the top of the house, we’ve got great folks in the room and we're going to work hard to get those lower numbers into the middle to continue to grow this part of the business. Commercial expansion is just how fast, how much and now we're going to stay disciplined as we move forward, you saw some small acquisitions where we acquired some talent, most of that goes with the sell products and then we come in there and show…

Thank you. At this time, we will conduct a question-and-answer session. [Operator Instructions] Our first question comes from Toni Kaplan with Morgan Stanley. Please proceed with your question.

Hi good morning, can you talk about – could you talk about the potential impact that you see Amazon’s acquisition of Ring, do you think that this increases the threat from new tech offerings just given Amazon scale, are you able to go after the monitoring for this contract and just maybe discuss how you see your positioning in the market just given that Amazon and Google are in this home automation space and sort of approaching into home security? Thanks.

Yes, I think you see a little difference, a little change in the competitive landscape, when we're trying to put this two together a few years ago, it was more AT&T, Verizon, Time Warner, Comcast coming in more of a service offering. Now you see a Google Nest coming out there with products you see Amazon, potentially Apple coming out more on the hardware side and kind of getting things started with a more of a DIY offer if you will, some of that – less sophisticated system with a few devices that comes out there. So again, our typical buyer is our technicians in the home for six hours with 15 to 30 devices. So I think it provides our hope is that it gives people buying systems sooner and more people in apartments and some of these applications are very good that's why we partnered with Samsung to make sure ADT was participating in that market base as well. But the idea that someone can buy a couple pieces of gear put it in themselves and get started and then perhaps even want to get the professional monitoring, we think that’s positive. I haven't had a conversation with anybody about doing the monitoring for them at that point. I have been in conversation with Amazon with Amazon Key and some of the other features. But again I think this is positive, you see a change going from service provider to trying to sell equipment at DIY in kind of an entry level offering. So hopefully that’s the thing that for years we've talked about driving penetration rates past 20% and perhaps this is one of the things that will help us with that.

Okay, great. And then I really like the disclosures on Slide 8, with the sort of customer account broken out within residential and commercial and basically one of things that I've been hearing from investors this January is they'd like to see subscriber count and ARPU that would help with their modeling. So could you talk about whether it would make sense to provide on based on a regularly basis and just directionally about your expectations for the year. So what should we expect modest or deliberate decline in subscriber count but that's offset by pricing and attrition or is that not the right way to look at it? Thanks.

And again, when we look at our model out there, we run a general manager model as opposed to a siloed model by our sales channels. We look for RMR growth obviously plenty of feedback in terms of what are the subscriber counts. I think as we shared on the road show, we specifically instituted tougher credit checks and I think you saw a kind of 9% drop in ads from 2015 to 2016 and 2016 to 2017 which probably very pleased in the fourth quarter, it was kind of up 2%. So we feel like we got where we needed to go with that piece of the business and that really was answering a common question, would be in brought to us out there. In terms of how we look at the business RMR growth is what I’m anchored on, Toni. That's what we ask our branches to deliver and if their particularly good in small biz versus commercial or national area versus resi, what they're accountable for is delivered RMR growth for us. So Jeff, you want to add on that with guidance?

So we were just trying to be responsive to some of the questions we got on the road show intense and therefore provide a little bit more information to show some of the dynamics between our different customer sets and then also on the space you talked about as well to describe a little bit of the comparison between the way legacy ADT looked at attrition on more of a net basis compared to the way we look at it on a gross basis, which was another question we got so hopefully those additional disclosures that helped everybody understand our business a little bit better.

Thanks a lot, appreciate the color. Congrats.

Thanks.

[Operator Instructions] Our next question comes from Manav Patnaik with Barclays. Please proceed with your questions.

Thank you. Good morning, gentlemen, my first question is more on the commercial side, its nice, you’ve already done two tuck-ins since the IPO and I think you talked about a pretty healthy tuck-in M&A pipeline, I was just curious if what the appetite would be for a large asset because its sounds like some of the multi-investor guys that own some of those might be willing to part with them and I was just curious what your thoughts there would be?

Yes, that's an interesting dynamic for us to contemplate Manav, obviously we shared most of what we do is an acquisition every day with our resi accounts commercials and national frankly a lot of the accounts probably brings us at the national level are bigger in scope than some of the acquisitions we're actually doing. But we've typically tried to get the talent and finding where we can deploy greater talents that wants to join us across the country and build out our footprint, which your suggestion would be very interesting to us, where we would be able to have those conversations, we saw some of those assets come out on the marketplace, it could be very interesting for us.

Got it. That's helpful. And then the broader question is in terms of the improvement over the next three years to five years the continued improvement I should say. I know you haven't said any targets, but if we look back at what you and your team did at P1 and HSM and so forth. Would you characterize the opportunity had ADT to be as good or better than what you did at those companies?

I say just as good because there is no reason. There's nothing different. It's a little better because there is more opportunity with more branches. And when you use a tool like we do in terms of variance performance management and outlier management always going for [indiscernible] a little different here. And our ability historically to move those bottom numbers into the middle. We're very encouraged. We've got some good benchmarks of what we've been able to do in the past that we've set at targets for the team and it's a competitive team they want to – they want to do best-in-class force.

I got it. Thanks a lot guys.

I mean one thing I'd add there to…

Sure.

…to remember is that we're very early days on a lot of these improvements in 2016, the companies came together a lot of time and effort focused on integrating back office G&A functions last year a lot of effort integrating the field operation. And these tools like the scorecard we've talked about the concept of variance performance management and cultural changes to get the organization more focused on the customer. Those happened during the course of 2017 and aren't even complete yet. So we think there's a lot of opportunity in front of us.

Got it, very helpful. Thanks, guys.

Thanks.

Our next question comes from George Tong with Goldman Sachs. Please proceed with your question.

Hi, thanks. Good morning.

Good morning, Joyce.

Your free cash flow guidance at the midpoint for 2018 is $500 million in 2017, you generated $403 million in free cash flow. So the increase is approximately $100 million. I want to estimate it interest expense savings alone to generate about $85 million in an increase in free cash flows. And then the attrition rate guidance of 13.2% call it for 2018 has improved from 13.7% in 2017, so 50 basis points of improvement and that alone should translate into another $50 million in free cash flow increase. And that doesn't yet include benefits for margin expansion or set leverage. So can you elaborate on the bridge for free cash flow growth going from 2017 to 2018 what the specific components are?

George, our cash flow model is generally driven by EBITDA less and much we spend on subscriber acquisition costs as I mentioned we're very low cash tax payer and then interest expense of course. We're estimating our interest expense going down by something on the order of $60 million year-on-year. And then we have EBITDA growth as you see that if you take the midpoint of the range EBITDA goes up by about 70, that difference in free cash flow and part of the reason we have a range, the difference is that much we spend on subscriber acquisition cost. And then one of the things that we talked about on the road show and Tim mentioned even just briefly as we're in kind of in the process of turning from being in a mode where we have taken on fewer new ads year-over-year towards a mode where we take on more – marginally more new adds year-over-year. So we were up on the revenue adds in the fourth quarter. We expect to be up on revenue as we go through the year. So even though we will have some efficiency improvements on our subscribe acquisition cost relative to the revenue we take on. We do not expect to have the same reductions in absolute dollars of subscriber acquisition cost as we had in prior years, last couple of years.

Got it, very helpful. And then as a follow-up, I wanted to go back to the question around the Amazon-Ring acquisition and the potential there for a partnership, the company decided to forgo a partnership with Nest earlier due to economic reasons and the contract ended up going to Monitronics. Can you comment on what economic terms you would need to see in order to strike the successful partnership with Amazon ring?

Yes. We’re a service provider with the brand. So again there’s some version of what we find to be attractive test to provide that service and as we go forward as opposed to an equipment arrangement if you would. So again when we – from our side, it’s our ability to serve whether that’s simply the 24/7 piece or whether that would be with technicians in the home. Those are the things that we would strive to deliver.

Got it, thank you.

Thank you. Our next question comes from Jeff Kessler with Imperial Capital. Please proceed with your question.

Thank you. My first question is and I’ve asked this question of a very sure and my, so you guys are fair game for it. What do you believe is the base case for excellent, the base case for a customer – sorry, for base case for the customer experience that you’re looking for to gain not just the reputation. But gain new customers through referrals as well as improving the financials of those customers as they remain as your customers. At what point does that customer, do you get that customer. Because you are doing it and what point do you – there’s one losing customer, because they can’t produce that customer experience. Where is that line?

Yes. So for us, as we said, what we’d like to have a best in class customer experience, a big part of our sales fits right now is to have, if you’re looking at a competition or a competitor, just another 800 number and see what happens. And they said that was an emergency what would you do so. A lot of focus on our end in terms of our call centers answering the phones, but live buddies one or two rings. A lot of improvement in the past year under Jim’s leadership to deliver technicians inside of 24 hours of the house. This year what they’re focused on is really every time that customer calls. Why are they calling? What can we do to make that? I think the word is a frictionless experience. So that we’re smooth in and out of the transaction, customers typically don’t want to be bothered with having a call about their electronic security systems and home automation system. So what can we do to really maximize that experience, but we do get amount of phone. And as we look out we see technology helping us under down Young’s leadership. Can you go to your app, can you say like a technician 6:15 on Tuesday, I’d like a technician 11:00 AM Saturday, get a quick response and here’s your deck et cetera. So I think we have to keep raising the bar in terms of what our customers can expect from us from a delivery standpoint. And then, keeps things through what services can we bring them that make it more part of their daily lives and we’ve been focusing heavily in consumer and commercial and protecting people against cyber attacks as we go forward. And we’ve got some good things planned for 2018 in that arena, as well as security outside the house. I think it’s a little bit of delivery Jeff, as well as the services we provide. But we anchored in 2017 and experienced in the phone and with the technician at their home. This year, we’re doing a better job of analysts. Why are they calling? What can we do to stop the calls proactively? As you look out a little further is developing the apps and the capabilities to extend our hours of service delivery and being more customer friendly with when they’d like it, be there when they’re asking us as opposed to inside our schedule. That’s how we’re looking forward on this. I think we should make it hard to compete with ADT on a service delivery. That’s kind of our cornerstone.

Thank you. And then my follow-up is, you’ve just made a couple of acquisitions of companies that I know really well, Aronson and Acme. And Phil, if you’re on the phone Congratulations. The problem – the difference is that these are very, very specific cultures that have been built up over a long time particularly at a place like Aronson. How are you going to manage the integration of those cultures? And I’m assuming you’re going to be making more of these types of high end or high quality integrator acquisitions to build up your commercial base. How do you integrate them over a period of time? Or through people to make sure that; number one, they eventually do become ADT’s so to speak. And secondly, that you don’t – that they are – that they become productive sooner rather than later.

Yes. So a couple things is how we look at those. And again, Aronson is just a great reputation, terrific company out there in the Northwest, really helped us with our footprint and expand our capabilities. Done a good job, and there was a story in one of the industry trades last year. They talked about our owners club and the last 10 deals that we’ve done and the owners all still work here. Dan Bresingham has kind of led this initiative for us over the years and again we’re very upfront with – our new partners can expect from us and what we expect from them. I think we do a first rate job of explaining that. We were at dinner the other night with the guys from Camtronics, it was our first acquisition in 2012 in all three of the partners are still with us today. And if you look at Joe Nuccio, Joe at ASG, and he can talk to how that integrated for us. And whether it’s [indiscernible] with integration logistics, we have a sap model in a way we do this to bring the companies along. So again they’ve got their identity. We’re trying to get them to grow what they did on a bigger scale and whether it’s Travis MacDonald and the team at Vintage et cetera. They flourished with this because typically on the commercial side, when we look fro a job is, you’re selling more installation revenue and you’re sell more products out there and then we bring a little different level of services and service capability. In this case with Phil, he’s got some core relationship with some great buyers is there a way we can take advantage of the relationships he created and the trust he at those buyers to deliver against a bigger footprint as we move forward. And whether that’s – some of the larger names you know with the Microsoft and the Nike out there in that part of the country. How do we bring our service capabilities across the country to bear? So this has been a key area of growth for us in the commercial space. But I think we’re particularly good at integrating the teams as we go forward.

Thank you very much.

Thanks Jeff.

Our next question comes from Gary Bisbee with RBC. Please proceed with your question.

Hey, guys good morning and congratulations on completing the IPO. First question for me, you’ve talked a lot about attrition is one of the key things but one strategy, we haven't heard as much about is just what exactly you're doing to improve the efficiency of the SAC spend, I know part of it is you've spent last because you put in tighter more disciplined standards and part of it is certainly with attrition improving you have to spend less but outside of those two factors, what exactly are you doing and is there runway to continue to deliver more efficiency in the per household added type of cost going forward? Thanks.

Yes, so subscriber acquisition costs four main buckets, what you do in marketing and advertising, your cost in the sales department your cost of product. And then the job costing, which is the technicians on the site, leaving the first two out, that kind of talk through product Jim did a great job renegotiating a new contract for us as we go, we get a little bit of a one-time pop in 2018 that's not something that we've baked in. But the other piece of this area is the job costings. So I mentioned earlier, we spend about 6 hours on average on our basic system with 15 to 30 devices. There's a big spread there between how that goes in each branch, how that goes with each technician, how that goes with each sales rep. You may be a sales rep that when you sell 10 hours of labor. On average it takes us 12 hours to put yours in. I maybe a technician when I'm assigned 10 hours of work, it takes me 13 hours to get that in. You and I combine on a job, there's a good chance that job's going to run over. Jeff, gets to selling – he sells 10 hours of labor and he takes an average of 8 hours. What is he doing in that regard? And Jeff since he’s the technician, when he gets 10 hours of work, he does it in 9 hours, we’ve got some efficiency. So it's a dynamic ability to give us the data that leads us see those variances across the country. And this is one that just gets a little bit better all the time. P1 for instance, I mean, this thing went down 6 turns in six years, and it’s just the ability to be able to see those highlight those differences between your different players, your different branches, whether it's on the sales side or the insulation side, and data analytics is something that is a strength of ours as we move forward. So again this is one that kind of gets a little bit better and we've never got to the bottom yet in terms of where it can go. So where it’s attrition, you get some bigger pops. When you get bigger initiatives, this is more kind of just blocking and tackling on daily basis.

Jeff, I’d like to add too, one, this is another example of what I described earlier as being early days on some of these improvement opportunities for the job costing that Jim talking about that opportunity is very much still in front of us, Second point is, to-date we haven't really realized any material benefit in equipment cost and we have opportunities as we go into 2018 and beyond that equipment cost savings on top of the other things that we've had helping us in 2016-2017.

Great, thanks. And then, Jeff, a follow-up for you. Given the leverage around 4x pro forma for the IPO, you've got some really expensive debt still in the balance sheet. And I know that there's some timing issue around when you can call – how much and when you can call the secondly notes. But it would strike me there's a massive opportunity to do a wholesale refinancing even if there's some fairly meaningful short-term fees to take out the next five years of that at an exorbitant interest rate. So how are you thinking about the plan of attack from here? And we won't necessarily hold you to it, but is that a likely or you’re thinking more chip away that slowly over time…

Well, the best opportunity to do that becomes a lot less expensive to do that in the first part of 2019. So we're working through and evaluating different ways to address the debt structure over time, but specifically the second we notice is presumably what you're talking about are more economical to do some kind of a refinancing transaction first part of next year.

But in your later call 40% before than you did only half that roughly in the IPO. Is there any reason you wouldn't just – because the premiums are high that you wouldn't do that more quickly? I think one could argue rather than paying – the delta and the interest versus what you could refinance that is such that it might make sense to be fairly aggressive.

Yes, there's also some permissions related to the use of IPO proceeds in restricted payment in some of the other debt instruments that those we’re equating.

Okay. All right, fair enough. Thanks guys

Thank you. Our next question comes from Kevin McVeigh with Deutsche Bank. Please proceed with your question.

Great, thanks. I wonder, can you give us a sense, I appreciate the range of that the revenue and EBITDA guidance in attrition. What would cause you to come in at the low end versus the high end? And just any way to think about that?

It’s just a multiple levers, Kevin. I mean, if you look at attrition, if you look at SAC, if you look at margin, all three of those go at the better end we're going to go obviously it is going to be a terrific year. Each of those levers kind of moves independently but again evolve three go in one way, or that's how you get to the high-end, again 2017 was great. We've kept improving in our five measurable, given guidance that we're going to you know have improvement in all five measurables again in 2018 but you get to the high end when all three of those key drivers end up at the better end of the year for you.

That's super helpful and then just, again rally nice job on the attrition. As you look at the improvement going forward, should we think about that a combination of better underwriting standards and service and what do you think about the split on that and or is there anything else you can do to kind of continue to drive that forward is as we look for continued improvement.

And I think in 2016, 2017, we got most of the kind of the tighter credit screen and customer selection. And then it kind of shifted into the customer service levels following tech delivery where the key focus is at the end of 2017 that they delivered on. 2018 you see much more focus between our branches and our centers in terms of managing each interaction with each customer. And understand why that interaction happened and make sure there is no second calls. We’re kind of doing this work, so again a lot of work to do to bring our branches and our centers together throughout the year. And then as we look forward we look toward using technology from down in an IT group to how to make dealing with ADT even easier, tools that we've never been able to deploy before. So again to the earlier question is ADT is equal to or better than the opportunities that you have seen in attrition we’d like to see it as better than what we've been able to do. But 2018 is going to be a year of really managing through each of those conversations the customers are having whether it is electronic or via phone, or via with one of our people in their homes and really getting below that so there's never a second conversation. And then again we expect to, we're giving guidance and meaningful reduction in attrition again this year but plenty of work to do and left to accomplish in that area.

Super thank you

Thank you. Our next question comes from Peter Christiansen with Citi. Please proceed with your question.

Thank you. Good morning. So you have a general benefit here of – with attrition wise with I guess the majority of that proportionally of customers that are loosing or the lower ARPU more traditional, packages, can you talk about what that proportion is or maybe even perhaps outlay what the pulse attrition rate is relative to the traditional I think that would be helpful describing that tailwind.

Yes. So for us it poses our interactive service that those customers they want to be able to interact with their service from a remote location. A cell phone, typically the adoption of that has become more the norm in the last few years in terms of what people buy. It’s minimal in terms of any benefit we're gaining from the dollars of the prior cancels to the dollars of new customers. There is some delta there, but it's not material in terms of the attrition metric. What we're working toward is now better data analytics in terms of usage of the systems because you have interactive doesn't necessarily bring different characteristics but it does bring us the insight to see how you use your system and maybe you're a once on in the morning, once on at night maybe you are once on the weekend, maybe you're on and off all throughout the day. But it will allow us to see changes in those patterns. And we’re hopeful that our ability to analyze those changes and patterns is going to allow us to be more proactive of customers to make sure hey you’re still getting the benefit that you thought you would get on day one when you purchase it and how do we use that with our – but that’s in the early stages in terms of anything we’re doing at this point.

That’s helpful. And can you remind us where ADT is with Amazon on the Amazon key program, I know that you did some testing earlier last year. Do you see your deal – DIY kit or even your traditional services being able to – partial delivery type of launching whether it’s with Amazon or not?

Yeah there is a couple of conversations going on with different providers in terms of that key delivery and again taking advantage of ADT being a trusted brand and that’s where the most of the conversations begun, a little too early to make any comments in terms of where those conversations go other than to say it’s not conversations just with Amazon, there is several people delivering products to ones that are interested in a service like that. Again ADT is a trusted brand that could help with that key services something that we’re in good conversations with, but too early to give any guidance on that.

Thanks.

Thanks. Our next question comes from [indiscernible]. Please proceed with your question.

Sure, so we’ve gotten a lot of questions about the longer term opportunity for on attrition. We’re looking at ADT versus peers, ADT versus the independent and so on. But I wanted to ask about the variance within ADT, sort of ADT versus itself. If you look at attrition at the top 20% of your branches, top 25% of your branches what is the attrition of those branches today?

Yeah, for the fourth quarter, I will give you some general guidance, if we started it a range of 10 to 24. I would say that your current range is 8.5 to 16.5, is kind of where we are. So approve ones are again, its current first trailing 12 to the questions. So I think that trailing 12 would be a little higher, I would say the upper ones are still in that 2014, 2015, 2016 range as we continue to drive that down. And again, we measured it as rose and there's a reason for that, I mean, approximately 400 basis points better when you kind of look at if you're going to deduct for many other things that our competitors are saying is there a net attrition, that we don't use. So again, it's a gross attrition metric that we're using here.

Thank you. That's really helpful. And then maybe a question for Jeff. What's the level of contribution from the recent acquisitions that embedded into 2018 revenue guidance?

Yes. For our overall revenue guidance, I mentioned that install revenue will grow where quickly the monitoring service revenue – recent acquisitions not really material on monitoring and service revenue but you could think about this as somewhere in the neighborhood of a point of total revenue can come from acquisitions. And net equity more like two points depending on what acquisitions occur during the course of 2018.

Great. Thank you very much.

Thanks. Ladies and gentlemen, at this time, I would like to turn the call back over to Mr. Tim Whall for closing comments.

We appreciate the time, we appreciate the institution and we certainly appreciate the investment from our shareholders. So in closing, saying thanks to the employees for the hard work for 2017 and what they're doing in 2018 and a shout out to our dealer partners for providing a great year for us as well in 2017. So thank you very much for the time. Thanks everybody.

Thanks. This does concludes today's teleconference. You may disconnect your lines this time. And thank you for your participation.