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Section 1: 8-K (FORM 8-K)

Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 8, 2018

 

 

RESIDEO TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-38635   82-5318796

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

1985 Douglas Drive North, Golden Valley, Minnesota   55422
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (763) 954-5204

Not applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 7.01

Regulation FD Disclosure.

Members of management of Resideo Technologies, Inc. (“Resideo” or the “Company”) are scheduled to present at the Baird 2018 Global Industrial Conference in Chicago, Illinois on November 8, 2018 at 8:30 a.m. Central Time. The presentation slides (the “Presentation Slides”) have been posted on the “Investor Relations” section of Resideo’s website (https://investor.resideo.com) and at the time of the presentation a live audio webcast (the “Audio Webcast”) will be available at http://wsw.com/webcast/baird53/rezi/index.aspx. The Presentation Slides and a replay of the Audio Webcast will be available on the “Investor Relations” section of Resideo’s website for a period of 30 days. A copy of the Presentation Slides is attached as Exhibit 99.1 and incorporated by reference herein.

The information furnished pursuant to this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act.

References to Resideo’s website are made as inactive textual references and information contained on Resideo’s website, except for the Presentation Slides attached hereto as Exhibit 99.1, is not incorporated by reference into this Current Report on Form 8-K.

 

Item 9.01

Financial Statements and Exhibits.

(d)

Exhibits.

 

Exhibit 99.1    Presentation Slides: Baird 2018 Global Industrial Conference – dated November 8, 2018


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    RESIDEO TECHNOLOGIES, INC.
    By:  

/s/ Jeannine J. Lane

      Name: Jeannine J. Lane
Date: November 8, 2018       Title: Executive Vice-President, General Counsel and Corporate Secretary
(Back To Top)

Section 2: EX-99.1 (EX-99.1)

EX-99.1

Slide 0

November 2018 Investor Presentation Exhibit 99.1


Slide 1

Non-GAAP Financial Measures This presentation includes Adjusted EBITDA, Adjusted EBITDA including environmental indemnification payments, Adjusted EBITDA Margin, Segment Profit, Segment Profit Margin and other financial measures not compliant with generally accepted accounting principles in the United States (GAAP). The non-GAAP financial measures provided herein are adjusted for certain items as presented in the Appendix and may not be directly comparable to similar measures used by other companies in our industry, as other companies may define such measures differently. Management believes that, when considered together with reported amounts, these measures are useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends. These metrics should be considered in addition to, and not as replacements for, the most comparable GAAP measure. Refer to the Appendix attached to this presentation for reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures. We believe EBITDA, Adjusted EBITDA, Adjusted EBITDA including environmental indemnification payments, Adjusted EBITDA Margin, Segment Profit, and Segment Profit Margin are important indicators of operating performance which more closely measure our operating profit. A reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin to the closest GAAP financial measure is not available without unreasonable efforts on a forward-looking basis due to the impact and timing on future operating results arising from items excluded from these measures, particularly standalone costs, environmental indemnification reimbursement expense, non-operating (income) expense, stock compensation expense and repositioning charges. For additional information with respect to our Unaudited Combined Financial Statements, see our Form 10. Disclaimer The Honeywell logo is a trademark of Honeywell International Inc. used under license to Resideo Technologies, Inc. Other brands and logos contained herein are trademarks of their respective owners. Forward Looking Statements This presentation contains “forward-looking statements.” All statements, other than statements of fact, that address activities, events or developments that we or our management intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risks, uncertainties, and other factors, which may cause the actual results or performance of the company to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to those described in the Form 10 under the headings “Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements.” You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Forward looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by our forward-looking statements. Additional Information For additional information with respect to Resideo Technologies, Inc., please refer to the Form 10 Registration Statement, as it may be further amended, on file with the Securities and Exchange Commission (“Form 10”). The financial information included in this document may not necessarily reflect Resideo's financial position, results of operations, and cash flows in the future or what Resideo's financial position results of operations, and cash flows would have been had Resideo been an independent, publicly traded company during the periods presented. This communication shall not constitute an offer of any securities for sale, nor shall there be any offer, sale or distribution of securities in any jurisdiction in which such offer, sale or distribution would be unlawful prior to appropriate registration or qualification under the securities law of such jurisdiction. Information in this presentation is given as of the date hereof and we undertake no obligation to update any information.


Slide 2

Business Overview Joe Ragan − Chief Financial Officer Inder Reddy − Vice President of Corporate Strategy


Slide 3

Source: Company Data, Management Estimates, IHS Markit Note: Sales does not include eliminations or corporate assessments. Pie Charts represent 2017 information. 1 Products operating at or below 24 volts. 2 Pie chart shows split between total net sales of $4,856M. Products Net Sales includes intercompany sales of $337M in 2017. 3 Products Net Sales includes intercompany sales of $337M in 2017 Resideo: Business Overview Leading global provider of critical, residential comfort and security solutions Licensing agreement to use brand for 40 years Primary channel to market is professional installation, ~95% of 2017 net sales Maintains network of 110,000+ professional contractors, 3,000+ distributors,1,200+ OEMs, major retailers and online merchants Currently serving 4.7M connected customers Leading global wholesale distributor of security and low voltage1 products Customer base of 100,000+ contractors; operations across 17 countries Serves as an important channel to market and provides insight into current trends ~85% of ADI sales are third party products ~14,500 employees Global Leadership in Mission Critical Solutions and Security Distribution Select Customers Key Facts and Figures Products Distribution Leader Security Systems Leader Thermostats Leader Americas Leader EMEA 150M Home Installed Base 100+ Year Heritage 15M Solutions Installed Annually 350k+ Items Available For Sale 100k+ Contractors 200+ ADI Stocking Locations Company Snapshot Leader India Segment Overview Net Sales2 Segment Profit Geography Overview Channel Overview3 2017 Total Net Sales: $4,519M 2017 Total Segment Profit: $484M 2017 Total Net Sales: $4,519M 2017 Product Net Sales2: $2,379M Home Depot ADT USAA TRANE Johnstone AO Smith


Slide 4

Broadest Presence Supported by Leading Distribution Business 1 5 6 9 Video Surveillance, Intrusion, Access Control Fire and Life Safety, and Other Products, Including Wire, Networking and Audio Visual Systems ADI Global Distribution 10 1 4 2 3 2 8 7 6 5 Exterior Camera, Outdoor Video, Motion Viewer, Perimeter Protection Mobile Apps AlarmNet 360 Resideo Solutions Overview: Our Mission Is To Connect The Home On the Exterior In the Cloud On the Wall Behind the Wall Heating Controls, Furnace, Boiler and Hot Water Heater Controls Humidification / Dehumidification Water Filtration and Treatment Water Leak / Freeze Detection 2 3 4 Security Panel, Interior Camera, Indoor, Indoor Video, Motion Viewer, Sound Detection, Motion Detection, Smoke Detection, Glassbreak Detection, CO Detection Thermostats, Life Care Telehealth 7 8 Co *Most Active SKUs


Slide 5

Source: Company data Note: Shows 2017 information. Multi-Channel Go-To-Market Strategy with Focus on Professional Installation Distribution Products z Homeowners and Other End Users Retail / Etail / Utilities Factory Direct OEM Suppliers Other Third Parties RemainCo Honeywell Professional Installation Other Professional Security Dealers System Integrators Distributors ~$1,780M ~$305M $337M ~$1,135M Professional Contractors ~$140M ~$650M ~$120M Retail, Telcos, Utilities, Banks, Etail, Insurance Resideo Comfort & Care and Security & Safety Solutions OEM Professional Installation ~$390M Resideo Resideo: Go-To-Market Channels


Slide 6

Source: Company financials, Management guidance 1 Pie Charts represent 2017 information. Net sales include intercompany sales of $337mm. 2 Net sales includes intercompany sales of $322M, $337M, $371M, $372M in LTM Q2 2018, 2017, 2016, and 2015, respectively. 3 Segment profit is combined income from continuing operations before taxes adjusted for pension expense, repositioning charges, other expense, and interest charges. Segment profit margin calculated as segment profit over total sales. 4 Other principally represents Australia, China, New Zealand and South Korea. See Appendix. Overview Historical Financials (US$ in Millions) Net Sales2 Sales by Geography1 Sales by Product Category¹ Connected / Non Connected1 Segment Profit3 Leading global provider of critical comfort and security solutions primarily in residential environments; these solutions benefit from the trusted, well-established Honeywell Home brand Comfort & Care Provides home products, services, and technologies as well as professionally installed temperature and humidity control, air, water, and thermal solutions Utilizes 3rd party distributors to take products to market Security & Safety Provides professionally installed and monitored intrusion and life safety detection and alarm systems, as well as self-installed and self-monitored awareness solutions Utilizes ADI to take products to market Sales by Geography Products Segment: Overview Segment Profit² Segment Profit Margin²


Slide 7

Source: Company Filings Note: Net sales includes $337M intercompany sales in 2017. Products Category Overview Differentiated End-to-End Solutions Focused on Professional Installation Comfort & Care Overview Security & Safety Overview Temperature & Humidity Control Solutions: air conditioners & heating equipment, thermostats & zoning devices, control panels, dampers & actuators Thermal Solutions: heating & cooling equipment, including electronic controls, actuators, valves & ignition controls Water Solutions: hydronic heating, cooling, & potable water solutions including control panels, valves, floor temperature sensors, & backflow preventers Air Solutions: humidifiers, dehumidifiers, filters, odor control & ventilation systems Remote Patient Monitoring Software Solutions (Telehealth): record, organize & transmit patient health data to health service providers to monitor patient well-being Software Solutions: provide contractors and consumers services such as demand response, energy management, auto-replenishment and predictive diagnostics Security Panels: communicate with sensors and connect with cloud Sensors: detect intrusion, smoke, carbon monoxide and water and transmit a signal Peripherals: interact with security systems (keypads and key-fobs) Wire and Cable: low voltage electrical wiring and category cable Software Solutions: services such as alarm monitoring, communication, and video Communication Devices: transmit notifications and info to monitoring stations Video Cameras: battery operated, video motion viewers and Wi-Fi cameras Awareness Solutions: self-installed and self-monitored systems Cloud Infrastructure: network operating center routing signals Installation and Maintenance Tools and Software $1.6B Net Sales $0.8B Net Sales


Slide 8

Products Segment: History of Innovation 100+ Years of Experience Providing Proven, Trusted and Tested Solutions SCOT – Adaptive Combustion Control 1885 1950 1960 1970 1990 2000 2009 2014 2016 2017 2018 Q1 2018 Q2 2018 Q4 planned introduction of new products Honeywell Founding Thermostat Damper Flapper Microelectronic Arming Station VISTA Control Panel Zone Panel Lyric Round The Minneapolis Thermostat The Honeywell Round Key switch The Prestige 2.0 Comfort System Water Heater Control Water Leak & Freeze Detector AlarmNet 360 Cloud Platform Alarm Platform and Cloud Services T Series Thermostats Cameras Smart Home Security 1916 1980 1890 Selected New Products Smart Vents Remote Appliance Monitoring Adaptive Combustion Control Global Intrusion Platform T10 Thermostat


Slide 9

Source: Company financials, Management guidance Note: Pie Charts represent 2017 external sales. ¹ Products operating at or below 24 volts. ² Other principally represents India. ³ Other includes fire and life safety, wire, networking and professional audio visual systems. 4 Segment profit is combined income from continuing operations before taxes adjusted for pension expense, repositioning charges, other expense, and interest charges. Segment profit margin calculated as segment profit over total sales. See Appendix. Sales by Geography² Sales by Product Category³ Leading Low-Voltage Distributor With Extensive Selection of Products Distribution Segment: Overview Overview Historical Financials (US$ in Millions) Net Sales Segment Profit4 Segment Profit4 Segment Profit Margin4 The leading wholesale distributor of security and low voltage products¹. Operates through a distribution network of 200+ stocking locations worldwide, delivering to over 100,000 contractors providing solutions to residential and non-residential environments; product categories include: Video Surveillance: internet protocol and high-definition analog cameras, recording and storage devices, video analytics software Intrusion: alarm systems, keypads, detection and sensing devices, alarm communication equipment Access Control: access control panels and software, readers, credentials, locking hardware, gate control, intercoms Fire and Life Safety: fire alarm control panels, fire detection and fire notification equipment, manual call points/stations Other Products: wire, networking and professional audio visual


Slide 10

Source: Company Data, Management Estimates Note: Shows 2017 information. Multi-Channel Strategy Enhancing End-Consumer Reach End Users Resideo Products Honeywell Products Other Third Parties Products Suppliers Other Professional System Integrators Security Dealers Fire Video Access Wire Intrusion Private Label ~$1,780M ~$305M ~$390M Professional Installation Local Inventory Product Training / Expos Project Registration One Stop for Products / Brands Systems Design Credit Sales Picked-Up / Shipped Distribution Segment: The ADI Model ~83% / ~17% Sales Through Branches / Online 200+ Stocking Locations ~6.5% 2015 – 2017 Revenue CAGR 19 Distribution Centers


Slide 11

Industry Overview


Slide 12

Source: IHS Markit (IHS), Navigant Consulting (Navigant), Building Services Research and Information Association (BSRIA) and Management Estimates 1 Industry leadership as per Management Estimates. Strong Market Positions in Addressable Markets Security & Safety Select Products Resideo’s Industry Leadership¹ 2018 Global Addressable Market Distribution Comfort & Care ~$20 Billion ~$5 Billion ~$10 Billion Major Player Connected Thermostats Leader Thermostats Major Player Humidity Systems Leader Security Systems Leader Indoor Sensors Leader Americas Distribution Leader EMEA Distribution Major Player Remote Services Strong Player India Distribution Products and Solutions Defining Resideo’s Addressable Markets Aprilaire BWT Carrier Ecobee Emerson Nest SIT Tado 2GIG Alarm.com Bosch Hive iSmart Alarm Qolsys Ring Aditya Anixter CSC Norbain Prama Rexel Scansource Trane UTC Vivint Watts Select Competitors SimpliSafe Tyco UTC Vivint Fire Video Access Wire Intrusion 2017 Comfort & Care Net Sales: $1.6B 2017 Security & Safety Net Sales: $0.8B 2017 Distribution Net Sales: $2.5B


Slide 13

Source: Research and Management Estimates 1 According to the US Census Bureau. Long-term median represents data from 1960 – 2017. 2 According to the Bureau of Economic Analysis (BEA). 3 According to Gartner Inc. Strong Industry Outlook Driven by Favorable Macro Trends Increasingly Connected Consumers Growing Demand for Comfort, Efficiency and Security Growing Demand for Expertise and Services Internet of things & proliferation of connected devices Mobile lifestyle & ubiquity of broadband Cloud & connectivity infrastructure Big data, data analytics capabilities Need for technical expertise and training Demand for same day order fulfillment Value-added services becoming a significant differentiator New Housing Starts (Units in M)¹ Resideo Momentum Underpinned by Favorable Macro Trends Key Stats Key Macro Trends Renovation & Remodeling Spend ($ M)2 Growth in residential construction and renovation & remodeling Energy efficiency & safety megatrends Growth in non-residential construction and equipment replacement Increased awareness of security threats and under-penetration of security systems Installed Base of Connected Things, Consumer Segment (Units in M)3


Slide 14

Connected Home: Focused on End-to-End Customer Experience Our Business Aligns to Customer Needs; Software Brings It All Together 86% ENERGY EFFICIENCY 77% INCREASED CONVENIENCE Source: PwC Survey 2016, US Non-Owners of Connected Home Devices 81% HOME SECURITY 73% GREATER CONTROL Consumer Motivating Factors Influencing Smart Home Device Purchase Contractors Consumers Developers


Slide 15

Key Investment Highlights


Slide 16

Resideo Key Investment Highlights Leader in Home Comfort, Security, and Low Voltage Distribution Markets with the Broadest Portfolio of End-to-End Solutions Iconic Brand with Unparalleled Presence in the Home Mature, Integrated Supply Chain with Continued Application of Best-in-Class Honeywell Operating System Proven Management Team with Transaction and Technology Experience Strong Operational and Financial Performance with Consistent Growth and Margin Performance Deep Channel Relationships and Diverse Customer Base Major Player in Connected Homes with Growing Suite of Software Services 1 2 3 5 6 4 7


Slide 17

Leader Residential Security Products Thermostats Leader 150M Installed Base 15M Solutions Installed Annually 1 Source: Management Estimates 1 Product net sales includes intercompany sales of $337M in 2017 Leveraging the Honeywell Home Brand and Existing Presence in Homes Leader in Home Comfort and Security with Differentiated End-to-End Solutions Focused on Professional Installation Increasingly diversified product portfolio in growing markets Uniquely positioned to benefit from growing demand for connected homes Translating physical installed base leadership to digital leadership Products regularly recognized in competitions; won IF Design Award, Red Dot Design Award, IDEA Design Award Diversified Product Portfolio Adaptive Combustion Control Global Intrusion Platform T10 Thermostat Honeywell Home App AlarmNet360 Smart Home Security Leak Detector T6 Thermostats Installed base of over 150M homes, with solutions installed in over 15M homes annually Leading global provider of critical, residential comfort and security solutions Maintains network of 110,000+ professional contractors, 3,000+ distributors,1,200+ OEMs, major retailers and online merchants Differentiated end-to-end solutions focused on professional installation Overview Key Growth Drivers Exciting and extensive new product pipeline: Continuous innovation and a shorter product-to-market period that, we believe, will drive revenue growth Investments in new technologies and platforms: Strong wins in long-term major customer contracts Increasing penetration of connected systems: Growth in software and solution sales as customers move into the connected world; ~37% of 2017 product net sales1 were from connected solutions


Slide 18

Source: Management Estimates, 1 Per IHS Unique Scale and Superior Services Resulting in Customer Stickiness The Leading Global Distributor of Security and Other Low Voltage Solutions 1 #1 Global Distributor of Security Products1 Customer base of >100K customers, >1,000 highly trained sales representatives with intimate knowledge of distributed brands and products Branch stocking programs provide local market inventory to serve contractors who require same day fulfillment Security Products sold through Distribution partner with NPS >60 Largest Global Distributor of Security Products Highly strategic global branch & warehouse distribution footprint with over 200 stocking locations across 17 countries Supported by customer friendly electronic ordering options, which accounted for ~17% net sales in 2017 Convenient 24/7 pick-up anytime lockers, and 1-hour pick up service for online orders Built-in third-party logistics (3PL) for fulfillment and distribution Multi-Channel Approach >350K items available for sale globally, across 13 product categories from more than 1,000 manufacturers One-stop-shop for customers Advanced category management, through “good, better, best” approach to inventory management Recently introduced private label products to meet key segment needs Revenue and wall-to-wall margin opportunities as ADI customers expand their security purchases Broadest Product Offering Stable, long tenured and highly skilled staff offering differentiated service through technical support and service quality Highly skilled sales staff offering differentiated service through expert systems design and sales support Offered more than 1,500 trainings and over 80 Expo product showcase events in 2017 Long-Standing Customer Relationships Intrusion & Smart Home Fire Video Surveillance Access Control Audio/Video PRO & Residential Networking Wire & Cable


Slide 19

Comprehensive Portfolio With Iconic Brand Providing End-to-End Residential Solutions 2 Iconic Brand with Unparalleled Presence in the Home 1 9 6 7 8 3 2 5 4 Extensive Pipeline of New Products Adaptive Combustion Control Remote Appliance Monitoring Smart Vents 1 2 3 4 5 6 7 8 9 Co Global Intrusion Platform T10 Thermostat Leader with Iconic Brand and History of Innovation Source: Management Estimates Ability to use iconic brand through 40 year license agreement Resideo to leverage Honeywell’s more than 100 years of innovation and market leadership History of industry “firsts”: 1st to introduce professionally-monitored residential smoke and carbon monoxide detection systems 1st to widely deploy alarm platform with cloud services Invented Dual Tech detector to detect both motion and heat from an intruder


Slide 20

Source: Company Data 1 Resideo will not be using the term HOS Gold going forward. Integrated Operating System Enabling Cost Efficiency and Innovation HOS Gold Impact on Resideo Honeywell Operating System ingrained within organization and will continue after the Spin-Off1 Founded on the lean and six sigma principles of improvement in quality, delivery, cost, growth and innovation Improved manufacturing productivity, more rapid product innovation and increased cost efficiencies 3 Mature, Integrated Supply Chain with Continued Application of Best-in-class Honeywell Operating Systems Supply chain strategically positioned in low cost regions that are located in or near key markets to reduce delivery time Develop global platforms to drive standardization for scale and cost efficiency incorporating key technologies and functionalities to drive speed and faster innovation for customers Products Segment: Manufacturing and Supply Chain Footprint Americas 8 Manufacturing Sites EMEA 8 Manufacturing Sites APAC 2 Manufacturing Sites Products Distribution Center (Owned) Resideo Manufacturing Site Products Distribution Center (3PL Operated)


Slide 21

4 Source: Company Data Note: Customers within each channel not limited to names listed. Multi-Channel Strategy Provides Stability and Customer Diversification Security & Safety Customers Comfort & Care Customers Selected Products Channel Description Contractors Includes professional contractors, installers, and distributors that form a link between us and the end users Deep relationships, many of which extend over 20 yrs. OEM Includes application service and solutions providers for use of professionally installed, monitored and maintained systems Long-standing relationships, many extend over 25 yrs. with some over 40 yrs. Other E-commerce, homebuilders, insurance companies, utilities and other adjacent channels Retail Includes retail and e-tail distributors for our self-installed, direct-to-consumers, self-monitored, and self-controlled systems Deep Channel Relationships and Diverse Customer Base Professional Installation Ackerman Bay Alarms Guardian Itesa Northstar Prosegur GC Gruppe Johnstone Travis Perkins Watsco Wolseley ADT ADT Authorized Dealer Sector Alarm Tyco A.O. Smith Bosch BWT Carrier Rheem Vaillant Viessmann Groupama Lennar Nexcur Essent GDF Suez Iren Scottish Power Amazon Home Depot Lowe’s Walmart Amazon BestBuy Home Depo Kingfisher` Lowe’s Media Markt OBI Walmart


Slide 22

Source: Company Data, Management Estimates 1 Products net sales includes intercompany sales of $337M in 2017. Leverage Connected Expertise to Grow Software and Services Revenue Platform agnostic systems seamlessly integrate with partners, including Amazon Alexa®, Apple HomeKit®, Google Home® Among first companies that work with Apple HomeKit ecosystem “Works with Honeywell” program currently has 3,000 third party developers creating mobile apps to integrate with solutions Established Leader Platform Agnostic Contractor Support Tools Extensive portfolio of innovative products, which are easy to purchase, install and deploy Adaptable to varying consumer requirements, reducing contractor new equipment training and installation time Diagnostic tools to improve customer service and reduce service costs 4.7M connected customers and 30M+ sensors generating over 40M customer notifications each day Connected products represent ~37% of 2017 Products net sales1 Expanding portfolio of self-installed and self-monitored solutions 4.7 MILLION CONNECTED CUSTOMERS 250 BILLION CLOUD TRANSACTIONS ANNUALLY 2.3 MILLION SECURITY PANEL SIGNALS TRANSMITTED DAILY DATA COLLECTED FROM MILLION SENSOR POINTS 30 Key Partnerships 5 Major Player in the Connected Home Software Services Expanding Developer Ecosystem CONNECTED SALES FOR PRODUCT SEGEMENT 2017 FY 37% 1


Slide 23

Software that Creates Recurring Revenue and Long Term Customers 5 Software Ties It All Together Software that unlocks new recurring revenue business models for contractors Recurring revenue with developers and participation in key smart home ecosystems Seamless control across connected product categories and control of 3rd party products Consumer in-app services offered on recurring revenue model


Slide 24

5 Alarmnet Solutions and Growth Highlights Key Products and Solutions Alarmnet Alarmnet Key Growth Initiatives Total Connect Application Cloud Platform Total Connect Comfort Application Honeywell Home Predictive Maintenance HVAC Monitoring Auto-Replenishment Remote Patient Monitoring Whole House Monitoring Simplified user experiences for contractors, developers and consumers Expand recurring revenues via new software offerings Converge platforms and expand geographically 25%+ CAGR 2013-2018E 4.7M Connected Users


Slide 25

Summary Financial Overview


Slide 26

Adj. EBITDA margin (post-indemnity payment) Adj. EBITDA margin (pre-indemnity payment) Indemnity payment of $140M PF Adjusted EBITDA² $605 - $615 / $465 - $475³ $554 / $414³ Note: 2018E margins calculated based off the midpoint of the estimated ranges. See Appendix for Adjusted EBITDA reconciliation. 1 Adjusted EBITDA adjusted for standalone costs, environmental expense, non-operating (income) expense, stock compensation expense and repositioning charges. Adjusted EBITDA is not pro forma for the impact of the Trademark License Agreement. Blue Dotted box on chart represents indemnity payment of $140M. Solid bars represent Adjusted EBITDA including environmental indemnification payments and is adjusted for an indemnity payment of $140M. 2 PF Adjusted EBITDA represents Adjusted EBITDA adjusted for the impact of the Trademark License Agreement. 2018E Trademark License Agreement Impact assumes ~$30M. 3PF Adjusted EBITDA including environmental indemnification payments is PF Adjusted EBITDA adjusted for an indemnity payment of $140M. Strong Track Record | (US$ in Millions) Net Sales Adjusted EBITDA¹ Capital Expenditures Adjusted EBITDA Incl. Environmental Indemnification Payments¹ Less Capital Expenditures Adj. EBITDA including environmental indemnification payments


Slide 27

Attractive Financial Profile 2015 – 2018 Net Sales Bridge | (US$ in Millions)


Slide 28

Profitable Growth 2015 – 2017 EBITDA Bridge | (US$ in Millions) Note: Adjusted EBITDA including environmental indemnification payments is Adjusted EBITDA adjusted for an indemnity payment of $140M. Adjusted EBITDA adjusted for standalone costs, environmental expense, non-operating (income) expense, stock compensation expense and repositioning charges. Adjusted EBITDA is not pro forma for the impact of the Trademark License Agreement. See Appendix. ¹PF Adjusted EBITDA including environmental indemnification payments is PF Adjusted EBITDA adjusted for an indemnity payment of $140M. PF Adjusted EBITDA represents PF EBITDA adjusted for the impact of the Trademark License Agreement, standalone costs, environmental expense, non-operating (income) expense, stock compensation expense and repositioning charges. See Appendix.


Slide 29

Accelerating EBITDA 2017 – 2018 EBITDA Bridge | (US$ in Millions) Note: PF Adjusted EBITDA represents PF EBITDA adjusted for the impact of the Trademark License Agreement, standalone costs, environmental expense, non-operating (income) expense, stock compensation expense and repositioning charges. 1 PF Adjusted EBITDA including environmental indemnification payments is PF Adjusted EBITDA adjusted for an indemnity payment of $140M. See Appendix.


Slide 30

Investments that Reinforce Capabilities and Grow Market Position (US$ in Millions) Capital Expenditure Priorities Modest capex needs Ample capacity for growth Continuous improvement in manufacturing processes driven by operating principles Capital Expenditures Capex (as % of Sales) Research and Development Priorities Robust patent portfolio (~3,000 patents and pending applications worldwide) R&D spending driven by investments in new product platforms and software business Strong pipeline to support long-term growth Research and Development Expenses R&D Expense (as a % of Product Sales) Note: 2018E % of product sales calculated based off the midpoint of the estimated ranges.


Slide 31

Strong Capital Structure and Liquidity Position to Drive Growth (US$ in Millions) 1 2015 – 2017 organic growth 2 PF Adjusted EBITDA including environmental indemnification payments is PF Adjusted EBITDA adjusted for an indemnity payment of $140M. PF Adjusted EBITDA represents EBITDA adjusted for the impact of the Trademark License Agreement, environmental expense, standalone costs, non-operating (income) expense, stock compensation expense and repositioning charges. 3 Honeywell and the Company have agreed that, upon completion of the Spin-Off and the related retirement of certain intercompany liabilities between Honeywell and the Company on or shortly after the Share Distribution Date, the Company will have an aggregate amount of cash-on-hand equal to approximately $75 million to $100 million. 4 Assumes $75M cash and cash equivalents. See Appendix. Tranche Amount xLTM EBITDA Maturity Cash and Cash Equivalents3 $75 $350M Revolver - 0.0x 5 Years Term Loan A $350 0.7 5 Years Term Loan B $475 1.0 7 Years Total Secured Debt $825 1.7x   Net Secured Debt $750 1.6x Senior Unsecured Notes $400 0.8x 8 Years Total Debt $1,225 2.6x   Total Net Debt 4 $1,150 2.4x PF LTM Q2 2018 Adj. EBITDA including environmental indemnification payments2 $474 Organic Growth 4%+ organic growth by investing in connected solutions, R&D and commercial excellence1 Deleveraging Long-term target Debt / PF Adjusted EBITDA2 ~2.0 x Near-term focus to delever through strong free cash flow Return on Capital Expect to declare modest dividend in 2019, subject to Board approval Acquisitions Select disciplined tuck-in acquisitions to access new technologies, new intellectual property, new product categories and new geographies Capital Allocation Priorities A B C D Pro Forma Capitalization


Slide 32

Indemnification and Reimbursement Overview and Impact Agreement for 25 years with maximum cash payment capped at $140M in respect of any year (exclusive of any late payment fees up to 5% per annum) plus any deferred amounts Financial relationship with Honeywell; not a contingent liability for Resideo Honeywell retains liability and is responsible for management and remediation Cash payments subordinated to all material indebtedness and subject to compliance with financial covenants Expenses recognized under the agreement not tax deductible by Resideo Conservative expectation of $140M of cash payment in respect of any year, but actual payment shall be the lesser of $140M or 90% of Honeywell’s net spend Note: See Appendix for further information on Indemnification and Reimbursement Agreement.


Slide 33

Organic Growth 4%+ ~13% excl. environmental indemnification payments1 / ~10% incl. environmental indemnification payments2 Adjusted EBITDA Margin Capital Expenditures / Research & Development Capital Expenditures at ~1% of sales / Research and Development Expenses of ~$125M Tax Rate ~27% Marginal Tax Rate Expect to declare modest dividends (~20% payout ratio) subject to Board approval Capital Return Balance Sheet Priorities Funding growth with existing liquidity; Targeting long-term gross leverage ~2x Note: Achieving these stated financial goals involves risk and uncertainties; many factors could affect actual financial results and could cause actual results to differ materially from these stated financial goals. See “Risk Factors,” Forward Looking Statements” and “Cautionary Statement Regarding Forward-Looking Statements” in our Form 10. ¹ Adjusted EBITDA represents EBITDA adjusted for the impact of the environmental expense, standalone costs, non-operating (income) expense, stock compensation expense and repositioning charges. 2 Adjusted EBITDA including environmental indemnification payments is Adjusted EBITDA adjusted for an indemnity payment of $140M. See Appendix. 2019 Full Year Financial Metrics


Slide 34

Appendix Supplementary Materials


Slide 35

Cash Reimbursement Payments to Honeywell Capped at $140M in Respect of Any Year Indemnification and Reimbursement Overview and Impact Background Honeywell is responsible for the environmental remediation of ~230 sites or groups of sites currently undergoing environmental remediation On the effective date, Resideo will enter into an Indemnification and Reimbursement Agreement (Reimbursement Agreement) with Honeywell Resideo will have obligation to make cash payments to Honeywell related to the remediation of the sites subject to the agreement, up to 90% of cash payments made by Honeywell less 90% of Honeywell’s net insurance receipts and less 90% of certain other specified amounts received by Honeywell Indemnity Obligation Payments subject to a cap of $140M in respect of any year (exclusive of any late payment fees up to 5% per annum) plus any deferred amounts Indemnity payment will be subject to compliance with financial covenants in credit agreement and is subordinated to all material indebtedness Agreement for a duration of 25 years, up to December 31, 2043, or 3rd consecutive year during which the annual indemnity payment obligations are less than $25M Honeywell’s Net Liability Upon spin, Resideo recognizes a liability to account for the contingent aspect of the indemnification and carries over Honeywell’s historical basis of the underlying obligation being indemnified As of June 30, 2018, the Company would have approximately $640M of liability under the Reimbursement Agreement Based on the Reimbursement Agreement, the liability will generally be recorded at 90% of Honeywell’s accrued liability (net of 90% of insurance receipts and certain other specified amounts) Quarterly meetings between Honeywell counsel managing liability and Resideo counsel to discuss claims experience P&L Impact Resideo will generally record 90% of the costs recorded by Honeywell Honeywell accrues noncash expense related to environmental matters when it is probable that it has incurred a liability and the amount can be reasonably estimated Note: Expense was $282M in 2017; Averaged ~$215M over last three years Cash Flow Impact Resideo will record an operating cash outflow for amounts paid to Honeywell in respect of a given year not to exceed the $140M cap plus any late payment amounts accruing if Resideo is subject to a specified event of default under certain indebtedness or is not compliant with certain financial covenants in certain indebtedness on a pro forma basis, provided these conditions are not continuing at this time of payment Tax Treatment Resideo’s payments to Honeywell will not be tax deductible by Resideo


Slide 36

Note: Margins calculated as % of net sales. 1 Assumed cash paid for the environmental obligations subject to the cap of $140M in respect of a year in accordance with the terms of the Indemnification and Reimbursement Agreement. Independent of the Indemnification and Reimbursement Agreement, Resideo will have ongoing liability for certain environmental claims which are part of SpinCo’s going forward business. For 2017 these payments totaled ~$1.1M. Net Loss to EBITDA Reconciliation | (US$ in Millions) Reconciliation Commentary 1 Represents historical environmental expenses as reported under 100% carryover basis Represents the difference between Resideo’s estimate of Selling, general and administrative costs as a stand-alone company and historical allocated costs. The preliminary estimates is ~$265M on an annual basis, which replaces the historical allocations on a carve-out basis of presentation Stock compensation expense adjustment includes only non-cash expenses Non-operating income / expense adjustment excludes net interest income / expenses On a going forward basis, pursuant to the Indemnification and Reimbursement Agreement Resideo expects to indemnify Honeywell in amounts equal to 90% of payments. Such payments will be subject to a cap of $140M in respect of liabilities arising in any given year (exclusive of any late payment fees up to 5% per annum) 2 3 4 5 1 2 3 4 5   2015A 2016A 2017A H1 2017 H1 2018 LTM Q2 2018 Net Sales $4,154 $4,455 $4,519 $2,158 $2,361 $4,722 Net Income (Loss) – GAAP $147 $177 $(394) $32 $78 $(348) Net Interest Income (1) (3) (3) (2) (1) (2) Tax Expense 110 133 560 54 6 512 Depreciation 54 57 57 28 27 56 Amortization 4 7 10 5 6 11 EBITDA (Non-GAAP) $314 $371 $230 $117 $116 $229 Environmental Expense 173 190 282 100 176 358 Estimated Stand-Alone Costs (16) 6 31 7 7 31 Stock Compensation Expense 10 13 16 8 9 17 Non-Operating (Income) Expense (6) 0 1 2 1 0 Repositioning Charges 10 19 23 19 5 9 Adjusted EBITDA (Non-GAAP) $485 $599 $583 $253 $314 $644 Adjusted EBITDA (Non-GAAP) Margin 12 % 13 % 13 % 12% 13% 14 % Assumed Cash Payments related to Indemnification and Reimbursement Agreement Obligations1 (140) (140) (140) (70) (70) (140) Adjusted EBITDA including environmental indemnification payments (Non-GAAP) $345 $459 $443 $183 $244 $504 Adjusted EBITDA including environmental indemnification payments (Non-GAAP) Margin 8 % 10 % 10 % 8% 10% 11 % Net Income (Loss) GAAP Margin 4 % 4 % (9)% 1% 3% (7)% Capital Expenditures (68) (60) (49) (22) (23) (50) Adjusted EBITDA including environmental indemnification payments (Non-GAAP) less Capital Expenditures $277 $399 $394 $161 $221 $454 % Conversion 80% 87% 89% 88% 91% 90%


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Source: Management Estimates Note: Assumes transaction close at 31-Dec-2018. Margin calculated as % of net sales. 1 Assumed cash paid for the environmental obligations subject to the cap of $140M in respect of a year in accordance with the terms of the Indemnification and Reimbursement Agreement. Independent of the Indemnification and Reimbursement Agreement, Resideo will have ongoing liability for certain environmental claims which are part of SpinCo’s going forward business. For 2017 these payments totaled ~$1.1M.   PF 2017A PF LTM Q2 2018 Net Sales $4,519 $4,722 Net Loss – GAAP $(425) $(380) Net Interest Expense 71 73 Tax Expense 520 479 Depreciation 57 56 Amortization 10 11 PF EBITDA (Non-GAAP) $233 $239 Environmental Expense 254 322 Estimated Stand-Alone Costs 31 31 Stock Compensation Expense 16 17 Non-Operating (Income) Expense (3) (4) Repositioning Charges 23 9 PF Adjusted EBITDA (Non-GAAP) $554 $614 Adjusted EBITDA (Non-GAAP) Margin 12 % 13 % Assumed Cash Payments related to Indemnification and Reimbursement Agreement Obligations1 140 140 PF Adjusted EBITDA including environmental indemnification payments (Non-GAAP) $414 $474 Adjusted EBITDA including environmental indemnification payments (Non-GAAP) Margin 9 % 10 % Net Income (Loss) GAAP Margin (9)% (8)% Pro-Forma Net Loss to Pro-Forma EBITDA Reconciliation | (US$ in Millions) Reconciliation Commentary Reflects the impact of the Trademark License Agreement with Honeywell, indebtedness from pro-forma capital structure (principal amount of $1,225M), settlement of cash pooling and short-term notes receivables and payables, and impact of certain pension assets and liabilities, impact of Indemnification and Reimbursement Agreement to include 90% of Honeywell’s expenses Reflects add back of net interest expense including adjustments related to indebtedness in an aggregate principal amount of $1,225M Reflects add back of tax expense including adjustments from pro-forma indebtedness (principal amount of $1,225M), Trademark License Agreement, settlement of cash pooling and short-term notes receivables and payables, and impact of certain pension assets and liabilities Reflects add back of environmental expenses including the impact of the Indemnification and Reimbursement Agreement with Honeywell pursuant to which Resideo will have an obligation to make cash payments to Honeywell in amounts equal to 90% of Honeywell’s certain environmental-related liabilities, net of recoveries, in each case related to legacy elements of the Honeywell homes business, including the legal costs of defending and resolving such liabilities Reflects the impact of Resideo’s assumption of certain pension assets and liabilities for employees who are eligible for benefits under defined benefit pension plans that are currently sponsored by Honeywell Includes impact of Trademark License Agreement with Honeywell in respect of certain Products segment sales 1 2 1 2 4 3 3 4 5 5 6 6


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Note: Segment profit margin calculated as % of total sales.  Products Segment Profit Calculation H1 2017 H1 2018 LTM Q2 2018 Total Sales $1,116 $1,200 $ 2,463 Less Intersegment Sales (174) (159) (322) External Sales $942 $1,041 $ 2,141 Cost of Products and Services Sold (528) (584) (1,205) Selling General and Administrative and Other Expenses (265) (259) (534) Segment Profit $149 $198 $ 402 Segment Profit Margin 13 % 17 % 16 % Segment Profit Reconciliation | (US$ in Millions)  Distribution Segment Profit Calculation  H1 2017 H1 2018 LTM Q2 2018 Total Sales $1,216 $1,320 $ 2,581 Less Intersegment Sales 0 0 0 External Sales $1,216 $1,320 $ 2,581 Cost of Products and Services Sold (995) (1,081) (2,118) Selling General and Administrative and Other Expenses (157) (165) (322) Segment Profit $64 $74 $ 141 Segment Profit Margin 5 % 6 % 5 % Total H1 2017 H1 2018 LTM Q2 2018 Total Sales $ 2,332 $ 2,520 $ 5,044 Less Intersegment Sales $(174) $(159) $(322) External Sales $ 2,158 $ 2,361 $ 4,722 Segment Profit $ 213 $ 272 $ 543 Segment Profit Margin 9.1 % 10.8 % 10.8 % Segment Profit to Income Before Taxes Reconciliation H1 2017 H1 2018 LTM Q2 2018 Products Segment Profit $149 198 $ 402 Distribution Segment Profit 64 74 141 Total Segment Profit $213 272 $ 543 Pension Expense (8) (7) (15) Repositioning Charges (19) (5) (9) Other Expense (100) (176) (357) Interest and Other Charges, net 0 0 2 Income Before Taxes $86 $84 $ 164 Income Before Taxes Margin 3.7 % 3.3 % 3.3 %

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