Factors Relating to Our Common Stock and Convertible Notes

Our stock price has been volatile in the past and may decline in the future.

Our common stock has experienced significant price and volume fluctuations in the past. For example, during 2018, our Series A common stock price fluctuated from a high of $12.23 to a low of $0.25. Investors may not be able to sell their shares at or above the price at which they were purchased. The market price of our common stock may experience significant fluctuations in the future depending upon a number of factors, some of which are beyond our control. Factors that could affect our stock price and trading volume include, among others, the ability, or perceived ability, of our Company and Brinks Home Security to continue as going concerns, the ability of Brinks Home Security to obtain or maintain any requested waiver or forbearance with respect to the Credit Facility and Senior Notes, potential restructurings and strategic transactions with respect to Brinks Home Security, the delisting of our Series A common stock from Nasdaq, the perceived prospects of our business; differences between anticipated and actual operating results; changes in analysts' recommendations or projections; the commencement and/or results of litigation and other legal proceedings; and future sales of our common stock by us or by significant shareholders, officers and directors. In addition, stock markets in general have experienced extreme price and volume volatility from time to time, which may adversely affect the market price of our common stock for reasons unrelated to our performance.

Brinks Home Security may be subject to United States Bankruptcy Court proceedings in the near future, which would have an adverse effect on our common stock.

See "Brinks Home Security may be subject to United States Bankruptcy Court proceedings in the near future, which would pose significant risks to its business and to its and our investors" above for a discussion of the impact on our common stock if Brinks Home Security became subject to United States Bankruptcy Court proceedings.

Our Series A Common Stock could be delisted, which could have an adverse impact on the trading volume, liquidity and market price of our common stock and may make it more difficult for our shareholders to sell our common stock.

Our Series A Common Stock is listed on the Nasdaq Global Select Market. As a Nasdaq listed company, we are required to satisfy Nasdaq’s continued listing requirements.

On November 26, 2018, we received a letter from Nasdaq indicating that the market value of publicly held shares of our Series A common stock (“MVPHS”) for the last 30 consecutive business days was less than $15 million, which is the minimum market value of publicly held shares (the “MVPHS Requirement”) necessary to qualify for continued listing on the Nasdaq Global Select Market under Nasdaq Listing Rule 5450(b)(3)(C). In accordance with Nasdaq Listing Rule 5810(c)(3)(D), we have been provided 180 calendar days, or until May 28, 2019, to regain compliance with the MVPHS Requirement. To regain compliance, our MVPHS must be at least $15 million for at least ten consecutive business days during this 180-day period, at which point Nasdaq would provide written confirmation to us and close the matter. If we do not regain compliance with the

MVPHS Requirement within the 180-day compliance period, Nasdaq will provide notice to us that our Series A common stock is subject to delisting. We may transfer our Series A common stock to the Nasdaq Capital Market, provided we meet the listing requirements for that market, but there can be no assurance that we will meet those listing requirements.

In addition, on December 28, 2018, we received a letter (the “Minimum Bid Notice”) from Nasdaq indicating that the closing bid price of our Series A common stock for the last 30 consecutive business days was less than $1.00, which is the minimum closing bid price (the “Minimum Bid Price Requirement”) necessary to qualify for continued listing on the Nasdaq Global Select Market under Nasdaq Listing Rule 5450(a)(1). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have been provided 180 calendar days, or until June 26, 2019, to regain compliance with the Minimum Bid Price Requirement. To regain compliance, the closing bid price of our Series A common stock must be at least $1.00 per share for at least ten consecutive business days during this 180-day period, at which point Nasdaq would provide written confirmation to the Company of compliance with the Minimum Bid Price Requirement and close the matter. The Minimum Bid Notice provides that, if we do not regain compliance with the Minimum Bid Price Requirement by June 26, 2019, we may be eligible to transfer to the Nasdaq Capital Market and take advantage of an additional 180 calendar day compliance period. To qualify, we would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and provide written notice of our intention to cure the minimum bid price deficiency during the second compliance period, by effecting a reverse split, if necessary. If we meet these requirements, we will be granted an additional compliance period of 180 calendar days to regain compliance with the Minimum Bid Price Requirement, but there can be no assurance that we will meet those listing requirements. If we do not regain compliance with the Minimum Bid Price Requirement by June 26, 2019, and the Nasdaq staff determines that we will not be able to cure the deficiency, or if we are not otherwise eligible for any additional compliance period, Nasdaq will provide notice that our Series A common stock is subject to delisting.

While Nasdaq’s rules permit us to appeal any delisting determination, there can be no assurance the Nasdaq’s staff would grant our request for continued listing. Further, there can be no assurance that we will be able to regain compliance with the MVPHS Requirement or the Minimum Bid Price Requirement or maintain compliance with Nasdaq’s other continued listing requirements.

In addition, a delisting of our Series A Common Stock from Nasdaq would negatively impact us because it could, among other things: (i) reduce the liquidity and market price of our common stock; (ii) reduce the amount of news and analyst coverage for our company; (iii) reduce the number of investors willing to hold or acquire our common stock, which could negatively impact our ability to raise equity financing and the ability of our shareholders to sell our common stock; (iv) limit our ability to use a registration statement to offer and sell freely tradable securities, thereby preventing us from accessing the public capital markets; (v) impair our ability to provide liquid equity incentives to our employees; and (vi) have negative reputational impact for us with our customers, suppliers, employees and other persons with whom we transact from time to time.

If our Series A Common Stock ceases to be listed on at least one U. S. national securities exchange, such cessation would trigger a fundamental change under the Indenture governing our outstanding Convertible Notes, which would give holders of our convertible notes the right to require us to repurchase all or a portion of the outstanding convertible notes.

If our Series A Common Stock ceases to be listed on at least one U.S. national securities exchange, such cessation would constitute a “fundamental change,” as such term is defined in the indenture (the “Indenture”) governing our Convertible Notes. As a result, each holder of the remaining Convertible Notes would have the right, at such noteholder’s option, to require Ascent Capital to repurchase for cash all or a portion of such noteholder’s Convertible Notes on the repurchase date specified by Ascent Capital in accordance with the provisions of the Indenture at a repurchase price equal to 100% of the principal amount thereof, together with any accrued and unpaid interest, including any unpaid “additional interest” (as such term is defined in the Indenture) to, but excluding, the “fundamental change repurchase date” (as such term is defined in the Indenture). We may not have sufficient funds, or be able to obtain financing, to pay the fundamental change repurchase price if we are required to repurchase the Convertible Notes. A failure to pay the fundamental change repurchase price if we are required to repurchase the Convertible Notes would constitute an event of default under the Indenture. If an event of default occurs under the Indenture, either the trustee under the Indenture or the holders of the requisite aggregate principal amount of the Convertible Notes then outstanding in accordance with the provisions of the Indenture may accelerate the due date of the entire outstanding principal amount of, and any accrued and unpaid interest and accrued and unpaid additional interest on all the Convertible Notes, to be due and payable immediately.

It may be difficult for a third party to acquire us, even if doing so may be beneficial to our shareholders.

Certain provisions of our certificate of incorporation and bylaws may discourage, delay or prevent a change in control of our ~~company~~Company that our shareholders may consider favorable. These provisions include the following:

a capital structure with multiple series of common stock: a Series B that entitles the holders to ten votes per share, a Series A that entitles the holders to one vote per share, and a Series C that, except in such limited circumstances as may be required by applicable law, entitles the holders to no voting rights;

authorizing the issuance of ~~“blank check”~~"blank check" preferred stock, which could be issued by our board of directors to increase the number of outstanding shares and thwart a takeover attempt;

classifying our board of directors with staggered three-year terms, which may lengthen the time required to gain control of our board of directors through a proxy contest or exercise of voting rights;

limiting who may call special meetings of shareholders;

prohibiting shareholder action by written consent (subject to certain exceptions), thereby requiring such action to be taken at a meeting of the shareholders;

establishing advance notice requirements for nominations of candidates for election to our board of directors or for proposing matters that can be acted upon by shareholders at shareholder meetings;

requiring shareholder approval by holders of at least 80% of our voting power or the approval by at least 75% of our board of directors with respect to certain extraordinary matters, such as a merger or consolidation of our ~~company,~~Company, a sale of all or substantially all of our assets or an amendment to our certificate of incorporation;

requiring the consent of the holders of at least 75% of the outstanding Series B ~~Common Stock~~common stock (voting as a separate class) to certain share distributions and other corporate actions in which the voting power of the Series B ~~Common Stock~~common stock would be diluted, for example by issuing shares having multiple votes per share as a dividend to holders of Series A ~~Common Stock;~~common stock; and

the existence of authorized and unissued stock which would allow our board of directors to issue shares to persons friendly to current management, thereby protecting the continuity of its management, or which could be used to dilute the stock ownership of persons seeking to obtain control of us.

In addition, ~~Monitronics’~~Brinks Home Security's Credit Facility provides that the occurrence of specified change of control events will result in an event of default thereunder, and the Senior Notes include a covenant that requires ~~Monitronics~~Brinks Home Security to make an offer to purchase all outstanding Senior Notes, at 101% of par, upon the occurrence of specified change of control events, each of which could cause an acquisition of our ~~company~~Company to be prohibitively expensive for a potential bidder.

~~Our stock price has been volatile in the past and may decline in the future.~~

Our common stock has experienced significant price and volume fluctuations in the past. For example, during 2015, our stock price fluctuated from a high of $53.09 to a low of $15.26. Investors may not be able to sell their shares at or above the price at which they were purchased. The market price of our common stock may experience significant fluctuations in the future depending upon a number of factors, some of which are beyond our control. Factors that could affect our stock price and trading volume include, among others, the perceived prospects of our business; differences between anticipated and actual operating results; changes in analysts' recommendations or projections; the commencement and/or results of litigation and other legal proceedings; and future sales of our common stock by us or by significant shareholders, officers and directors. In addition, stock markets in general have experienced extreme price and volume volatility from time to time, which may adversely affect the market price of our common stock for reasons unrelated to our performance.

Holders of a single series of our common stock may not have any remedies if an action by our directors has an adverse effect on only that series of our common stock.

Principles of Delaware law and the provisions of our certificate of incorporation may protect decisions of our board of directors that have a disparate impact upon holders of any single series of our common stock. Under Delaware law, the board of directors has a duty to act with due care and in the best interests of all of our shareholders, including the holders of all series of our common stock. Principles of Delaware law established in cases involving differing treatment of multiple classes or series of stock provide that a board of directors owes an equal duty to all common shareholders regardless of class or series and does not have separate or additional duties to any group of shareholders. As a result, in some circumstances, our directors may be required to make a decision that is viewed as adverse to the holders of one series of our common stock. Under the principles of Delaware law and the business judgment rule, holders may not be able to successfully challenge decisions that they believe have a disparate impact upon the holders of one series of our stock if our board of directors is disinterested and independent

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with respect to the action taken, is adequately informed with respect to the action taken and acts in good faith and in the honest belief that the board is acting in the best interest of all of our stockholders.

Although our Series B ~~Common Stock~~common stock trades on the OTC Markets, there is no meaningful trading market for the stock.

Our Series B ~~Common Stock~~common stock is not widely held, with 95% of the outstanding shares as of December 31, ~~2015~~2018 beneficially owned by John C. Malone, a former director of the Company, and William Fitzgerald, Ascent Capital's Chairman ~~President and Chief Executive Officer.~~of the Board. Although it is quoted on the OTC Markets, it is sparsely traded and does not have an active trading market. The OTC Markets tends to be highly illiquid, in part, because there is no national quotation system by which potential investors can track the market price of shares except through information received or generated by a limited number of broker-dealers that make markets in particular stocks. There is also a greater chance of market volatility for securities that trade on the OTC Markets as opposed to a national exchange or quotation system. This volatility is due to a variety of factors, including a lack of readily available price quotations, lower trading volume, absence of consistent administrative supervision of ~~“bid”~~"bid" and ~~“ask”~~"ask" quotations, and market conditions. Each share of the Series B ~~Common Stock~~common stock is convertible, at any time at the option of the holder, into one share of Series A ~~Common Stock,~~common stock, which is listed and traded on the NASDAQ Global Select Market under the symbol "ASCMA."

Factors Relating to Ascent Capital and Its Corporate History and Structure

We have a history of losses and may incur losses in the future.

~~Monitronics,~~Brinks Home Security, our primary operating subsidiary, incurred losses in each of its last five ~~full~~ fiscal years. In future periods, we may not be able to achieve or sustain profitability on a consistent quarterly or annual basis. Failure to maintain profitability in future periods may materially and adversely affect the market price of our common stock.

~~We are~~Ascent Capital is a holding company and ~~derive~~derives substantially all of ~~our~~its revenue and cash flow from ~~our~~its primary operating subsidiary, ~~Monitronics.~~Brinks Home Security.

~~Monitronics~~Brinks Home Security is a separate and independent legal entity and has no obligation to make funds available to us, whether in the form of loans, dividends or otherwise. The ability of ~~Monitronics~~Brinks Home Security to pay dividends to us is subject to, among other things, compliance with covenants in its Credit Facility and Senior Note indenture, the availability of sufficient earnings and funds, and applicable state laws. As of December 31, ~~2015, Monitronics~~2018, Brinks Home Security had principal indebtedness of ~~$1,667,909,000, excluding the 9.868% promissory note for $100,000,000 due to the Company, which has since been amended and restated as discussed above.~~$1,804,450,000. Claims of other creditors of ~~Monitronics~~Brinks Home Security have priority as to its assets over our claims and those of our creditors and shareholders. In addition, ~~for the year ended December 31, 2015, the Company~~as of April 1, 2019, Ascent Capital had ~~approximately $$96,775,000~~$260,000 aggregate principal amount outstanding ~~under~~of its ~~4.00%~~ Convertible ~~Senior Notes due July 15, 2020 (the "Convertible Notes").~~Notes. Although we believe we currently have sufficient cash reserves at the Company to service our obligations under the Convertible Notes, our sources of cash remain limited as a result of our holding company structure and the restrictions on ~~Monitronics’~~Brinks Home Security's ability to distribute cash to our ~~company.~~Company.

An inability to access capital markets at attractive rates could materially increase our expenses.

~~Although we currently have sufficient cash and investments available to meet our anticipated capital requirements for the foreseeable future, we~~We may in the future require access to capital markets as a source of liquidity for investments and expenditures. In any such event, there can be no assurance that we would be able to obtain financing on terms acceptable to us or at all. If our ability to access required capital were to become significantly constrained, we could incur material borrowing costs, our financial condition could be harmed and future results of operations could be adversely affected.

~~Goodwill and other identifiable intangible assets represent a significant portion of our total assets, and we may never realize the full value of our intangible assets.~~

As of December 31, 2015, we had goodwill of $563,549,000, which represents approximately 26% of total assets. Goodwill was recorded in connection with the Monitronics, Security Networks, and LiveWatch acquisitions. The Company accounts for its goodwill pursuant to the provisions of FASB ASC Topic 350, Intangibles-Goodwill and Other ("FASB ASC Topic 350"). In accordance with FASB ASC Topic 350, goodwill is tested for impairment annually or when events or changes in circumstances occur that would, more likely than not, reduce the fair value of an asset below its carrying value, resulting in an impairment. Impairments may result from, among other things, deterioration in financial and operational performance, declines in stock price, increased attrition, adverse market conditions, adverse changes in applicable laws and/or regulations, deterioration of general macroeconomic conditions, fluctuations in foreign exchange rates, increased competitive markets in which Monitronics

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~~operates in, declining financial performance over a sustained period, changes in key personnel and/or strategy, and a variety of other factors.~~

The amount of any quantified impairment must be expensed immediately as a charge to results of operations. Any impairment charge relating to goodwill or other intangible assets would have the effect of decreasing our earnings or increasing our losses in such period. At least annually, or as circumstances arise that may trigger an assessment, we will test our goodwill for impairment. There can be no assurance that our future evaluations of goodwill will not result in our recognition of impairment charges, which may have a material adverse effect on our financial statements and results of operations.

~~We may have substantial indemnification obligations under certain inter-company agreements we entered into in connection with the 2008 spin-off of our company from DHC (the "2008 spin-off").~~

Pursuant to our tax sharing agreement with DHC, we have agreed to be responsible for all taxes attributable to us or any of our subsidiaries, whether accruing before, on or after the 2008 spin-off (subject to specified exceptions). We have also agreed to be responsible for and indemnify DHC with respect to (i) certain taxes attributable to DHC or any of its subsidiaries (other than Discovery Communications, LLC) and (ii) all taxes arising as a result of the 2008 spin-off (subject to specified exceptions). Our indemnification obligations under the tax sharing agreement are not limited in amount or subject to any cap. Pursuant to the reorganization agreement we entered into with DHC in connection with the 2008 spin-off, we assumed certain indemnification obligations designed to make our company financially responsible for substantially all non-tax liabilities that may exist relating to the business of our former subsidiary, Ascent Media Group, LLC, whether incurred prior to or after the 2008 spin-off, as well as certain obligations of DHC. Any indemnification payments under the tax sharing agreement or the reorganization agreement could be substantial.

ITEM 1B. UNRESOLVED STAFF COMMENTS

~~None.~~Not applicable.

ITEM 2. PROPERTIES

Currently, the Company leases approximately ~~59,000 square feet of office space in California of which 43,000 is being subleased to third parties. The Company leases approximately~~ 4,000 square feet of office space in Colorado. The Company owns 29,000 square feet of office space in California and 15,000 square feet of office space in the United Kingdom. The Company is currently exploring opportunities to dispose of or monetize such real property.

~~Monitronics~~Brinks Home Security leases approximately 165,000 square feet in Farmers Branch, Texas to house its executive offices, monitoring and certain call centers, sales and marketing and data retention functions. ~~Monitronics~~Brinks Home Security also leases approximately 16,000 square feet of office space in Dallas, Texas ~~and 13,000 square feet in McKinney, Texas, of office space~~ that ~~support our~~supports its monitoring operations and back up facility.

~~LiveWatch~~Additionally, Brinks Home Security leases approximately ~~10,000~~26,000 square feet of office space in StSt. Marys, Kansas to house sales office functions and its fulfillment center and approximately 17,500 square feet of office space in Manhattan, Kansas to house sales ~~fulfillment function and software development. Additionally, LiveWatch~~office functions. Brinks Home Security also leases approximately ~~1,500~~8,100 square feet of office space in Evanston, Illinois for ~~its~~ general administrative and sales office functions.

ITEM 3. LEGAL PROCEEDINGS

~~From~~In the ordinary course of business, from time to time, the Company ~~is involved in~~and its subsidiaries are the subject of complaints or litigation from subscribers or inquiries or investigations from government officials, sometimes related to alleged violations of state or federal consumer protection statutes. The Company and ~~similar~~its subsidiaries may also be subject to employee claims ~~incidental to the conduct of its business.~~based on, among other things, alleged discrimination, harassment or wrongful termination claims. Although no assurances can be given, in the opinion of management, none of the pending actions is likely to have a material adverse impact on the ~~Company’s~~Company's financial position or results of operations, either individually or in the aggregate.

Other Legal Proceedings

On August 27, 2018, certain holders of Ascent Capital’s Convertible Notes caused an action to be filed in the Court of Chancery of the State of Delaware, captioned KLS Diversified Master Fund L.P. et. al. v. Ascent Capital Group, Inc. et al., C.A. No. 2018-0636 (as amended on September 5, 2018, October 1, 2018 and October 22, 2018, the “Noteholder Action”)

against Ascent Capital and each of its directors and executive officers. On February 11, 2019, Ascent Capital and its directors and executive officers, on the one hand, and the holders of Convertible Notes that were plaintiffs in the Noteholder Action (together with certain of each of such holders’ respective affiliates, the “Noteholder Parties”) collectively holding $75,674,000 in aggregate principal amount of Convertible Notes, representing 78.20% of the aggregate principal amount of the Convertible Notes then outstanding, on the other hand, entered into a Settlement and Note Repurchase Agreement and Release (the “Settlement Agreement”), which, among other things as described herein, (i) provided for the settlement of the Noteholder Action and the mutual release of claims related thereto (the “Settlement”) and (ii) in connection with the Settlement, provided for the delivery by the Noteholder Parties of their respective written consents (the “Consents”) with respect to all Convertible Notes held by such Noteholder Parties to certain amendments described below (the “Amendments”) to the Indenture and for the private repurchase (the “Note Repurchase”) by the Company of all Convertible Notes held by such Noteholder Parties. On February 14, 2019, the transactions contemplated in the Settlement Agreement (including the obtaining of the Consents and the Note Repurchase) were consummated and following the receipt of the Consents, the Company and the Trustee entered into the Second Supplemental Indenture, dated as of February 14, 2019 (the “Second Supplemental Indenture”), to the Indenture and the Amendments became effective. The Amendments effected by the Second Supplemental Indenture modified the Indenture to (i) remove references to subsidiary, subsidiaries and/or significant subsidiary, as applicable, of Ascent Capital from certain events of default provisions contained in Section 6.01 of the Indenture and (ii) allow conversion of Ascent Capital into a non-corporate legal form. Following the consummation of the transactions contemplated in the Settlement Agreement, on February 15, 2019, a Stipulation of Dismissal with respect to the Noteholder Action was filed in the Court of Chancery of the State of Delaware, pursuant to which the Noteholder Action was dismissed with prejudice.

The Settlement Agreement states that, in connection with the Settlement, Ascent Capital paid to the Noteholder Parties an aggregate amount of $70,666,176.28 in cash, consisting of (i) an aggregate of $6,104,720.92 for professional fees and expenses incurred on the Noteholder Parties’ behalf, (ii) an aggregate of $2,000,000.00 in consideration for the Noteholder Parties’ Consents, (iii) an aggregate of $10,808,555.36 in consideration for and in full and final satisfaction of the settled claims as set forth in the Settlement Agreement and (iv) an aggregate of $51,752,900.00 on account of the Note Repurchase.

ITEM 4. MINE SAFETY DISCLOSURES

None.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

We have two series of common stock outstanding. Holders of our Series A common stock are entitled to one vote for each share held, and holders of our Series B common stock are entitled to 10 votes for each share held, as well as a separate class vote on certain corporate actions. Each share of the Series B common stock is convertible, at the option of the holder, into one share of Series A common stock; the Series A common stock is not convertible. Except for such voting rights, conversion rights and designations, shares of Series A common stock and Series B common stock are substantially identical.

Our Series A common stock trades on the ~~NASDAQ~~Nasdaq Global Select Market under the symbol ~~ASCMA.~~"ASCMA". Our Series B common stock is ~~eligible for quotation~~quoted on the OTC Markets under the symbol ~~ASCMB,~~"ASCMB", but it is not actively traded. ~~The following table sets forth~~Stock price information for securities traded on the ~~quarterly range of high and low sales prices of shares of our Series A common stock for~~Nasdaq's Global Select Market can be found on the ~~years ended December 31, 2015 and 2014.~~

Series A
High Low
Amounts in U.S. Dollar
2015

First quarter 53.09
38.78
Second quarter 44.17
37.83
Third quarter 43.68
25.96
Fourth quarter 32.18
15.26
2014

First quarter 85.61
66.04
Second quarter 79.02
59.80
Third quarter 67.35
59.31
Fourth quarter 64.99
49.22

Nasdaq's website at www.nasdaq.com.

The following table sets forth the quarterly range of high and low sales prices of shares of our Series B common stock for the years ended December 31, ~~2015~~2018 and ~~2014, as reported by~~2017. There is no established public trading market for Series B common stock, which are quoted on the OTC ~~Markets. This information represents~~Market. Such over-the-counter market quotations reflect inter-dealer prices without dealer mark-ups, mark-downs or commissions, and may not ~~be indicative of the value of the common stock or the existence of an active market.~~necessarily represent actual transactions.


	Series B		Series B
	High	Low	High	Low
	Amounts in U.S. Dollar		Amounts in U.S. Dollar
2015
2017:
First quarter	57.87	48.37	16.00	15.00
Second quarter	44.37	41.00	15.00	15.00
Third quarter(a)	44.00	30.00	—	—
Fourth quarter(a)	31.13	20.00	—	—
2014
2018:
First quarter	80.96	67.75	11.40	6.67
Second quarter	73.07	64.00	5.85	5.85
Third quarter	65.00	63.37	3.78	3.00
Fourth quarter	64.75	57.87	2.50	1.65

(a)No sales of our Series B common stock were reported during the period.

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Holders

As of ~~January 29, 2016,~~March 13, 2019, there were ~~approximately 760~~634 record holders of our Series A common stock and 5042 record holders of our Series B common stock (which amounts do not include the number of shareholders whose shares are held of record by banks, brokerage houses or other institutions, but include each institution as one shareholder).

Dividends

We have not paid any cash dividends on our common stock and have no present intention to do so. Any payment of cash dividends in the future will be determined by our ~~Board~~board of ~~Directors~~directors in light of our earnings, financial condition, alternative uses for cash and other relevant considerations.

Securities Authorized for Issuance under Equity Compensation Plans

Information required by this item ~~is incorporated by reference~~will be included in an amendment to ~~our definitive proxy statement for our 2016 Annual Meeting of stockholders.~~

~~Stock Performance Graph~~

~~The following performance graph and related information shall not~~this Form 10-K that will be ~~deemed "soliciting material" or "filed"~~filed with the ~~SEC, nor shall such information be incorporated by reference into any future filings under the~~ Securities ~~Act of 1933~~and Exchange Commission on or ~~the Securities Exchange Act of 1934, each as amended, except to the extent we specifically incorporate it by reference into such filing.~~

The following graph sets forth the percentage change in the cumulative total shareholder return on our Series A and Series B common stock for the preceding 5-year period ended December 31, 2015, as compared to the NASDAQ Stock Market Index over the same period. The graph assumes $100 was originally invested on December 31, 2011.

~~The comparisons in the graph below are based on historical data and are not intended to forecast the possible future performance of our Series A and Series B common stock.~~before April 30, 2019.

12/31/2011 12/31/2012 12/31/2013 12/31/2014 12/31/2015
ASCMA Series A $ 100.00
$ 122.12
$ 168.69
$ 104.36
$ 32.97
ASCMB Series B $ 100.00
$ 146.25
$ 205.00
$ 144.68
$ 50.00
NASDAQ Stock Market Index $ 100.00
$ 115.91
$ 160.32
$ 181.80
$ 192.21

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Purchases of Equity Securities by the Issuer

The ~~following table sets forth information concerning the Company’s~~Company did not purchase any of its own equity securities during the three months ended December 31, ~~2015:~~2018. The following table sets forth information concerning shares withheld in payment of withholding taxes on certain vesting of stock awards of Series A Common Stock, in each case, during the three months ended December 31, 2018.

Period
Total number of
shares
purchased /
surrendered (1)

Average price
paid per share

Total Number of
Shares (or Units)
Purchased as Part
of Publicly
Announced Plans
or Programs

Maximum Number (or
Approximate Dollar
Value) or Shares (or
Units) that May Yet Be
Purchased Under the
Plans or Programs
10/1/2015 - 10/31/15 86,700
$ 28.05
—
(1)
11/1/2015 - 11/30/15 —
—
—

12/1/2015 - 12/31/15 6,136
(2) 16.97
—

Total 92,836
$ 27.32
—



Period	Total number of shares purchased (surrendered) (1)		Average price paid per share		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) or Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (1)
10/1/2018 - 10/31/2018	7,798	(2)	$	1.71	—
11/1/2018 - 11/30/2018	2,740	(2)	0.99		—
12/1/2018 - 12/31/2018	3,291	(2)	0.35		—
Total	13,829		$	1.24	—

(1) On June 16, 2011, the Company announced that it received authorization to implement a share repurchase program, pursuant to which it could purchase up to $25,000,000 of its shares of Series A Common Stock, par value $0.01, from time to time. On November 14, 2013, November 10, 2014 and September 4, 2015, the Company’s Board of Directors authorized, at each date, the repurchase of an incremental $25,000,000 of its Series A Common Stock. As of December 31, ~~2015, 2,002,425~~2018, 2,391,604 shares of Series A Common Stock had been purchased, at an average price paid of ~~$44.99~~$40.65 per share, pursuant to these authorizations. As of December 31, ~~2015,~~2018, the remaining availability under the Company's existing stock repurchase program will enable the Company to purchase up to an aggregate of approximately ~~$9,910,000~~$2,771,000 of Series A ~~Common Stock.~~common stock. The Company may also purchase shares of its Series B Common Stock, par value $0.01 per share, under the increased program.


(2)	~~These~~Represents shares ~~were~~ withheld in payment of withholding taxes ~~by certain of our employees~~ upon vesting of ~~their~~employees' restricted share ~~awards in December 2015.~~awards.

ITEM 6.SELECTED FINANCIAL DATA

The balance sheet data as of December 31, 2015 and 2014, and the statements of operations data for the years ended December 31, 2015, 2014 and 2013, all of which are set forth below, are derived from the accompanying consolidated financial statements and notes included elsewhere in this Annual Report and should be read in conjunction with those financial statements and the notes thereto. The balance sheet data as of December 31, 2013, 2012 and 2011 and the statements of operations data for the years ended December 31, 2012 and 2011 shown below were derived from previously issued financial statements including a reclass of deferred financing costs and current deferred taxes as required by the adoption of new pronouncements from the Financial Accounting Standards Board. Not applicable.

December 31,
2015 2014 2013 2012 2011
(amounts in thousands)
Summary Balance Sheet Data:

Current assets $ 123,273
176,500
196,894
257,866
284,012
Property and Equipment, net $ 32,440
36,010
56,528
56,491
74,697
Total assets $ 2,173,305
2,163,342
2,191,359
1,677,780
1,619,693
Current liabilities $ 86,211
91,143
95,568
72,150
124,807
Long-term debt, excluding current portion $ 1,713,868
1,595,649
1,544,792
1,074,127
891,347
Stockholders’ equity $ 324,769
439,688
514,757
508,603
550,678

~~Table of Contents~~

Years ended December 31,
2015 2014 2013 2012 2011
(amounts in thousands, except per share amounts)
Summary Statement of Operations Data:

Net revenue $ 563,356
539,449
451,033
344,953
311,898
Operating income $ 49,367
78,198
71,556
49,642
22,341
Net loss from continuing operations $ (86,236 ) (37,448 ) (21,600 ) (25,001 ) (28,901 )
Net income (loss) (a) $ (83,384 ) (37,752 ) (21,471 ) (29,349 ) 19,888
Basic and diluted net income (loss) per common share (b) $ (6.44 ) (2.77 ) (1.54 ) (2.09 ) 1.40

~~(a)~~Includes a gain on the sale of Content Distribution of $66,136,000 and related income tax expense of $6,716,000 for the year ended December 31, 2011. The gain and related tax expense is included in discontinued operations.

~~(b)~~Diluted net income (loss) per common share is computed the same as basic net income (loss) per share for all periods presented because the Company recorded a loss from continuing operations in all periods presented, which would make potentially dilutive securities antidilutive.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis provides information concerning our results of operations and financial condition. This discussion should be read in conjunction with our accompanying consolidated financial statements and the notes thereto included elsewhere herein.

At December 31, ~~2015,~~2018, our principal assets consisted ~~primarily~~ of our wholly-owned operating subsidiary, ~~Monitronics.~~Brinks Home Security, and cash and cash equivalents.

Overview

~~Monitronics~~Brinks Home Security and Subsidiaries

~~On December 17, 2010, we acquired 100%~~Brinks Home Security provides residential customers and commercial client accounts with monitored home and business security systems, as well as interactive and home automation services, in the United States, Canada and Puerto Rico. Brinks Home Security customers are obtained through its direct-to-consumer sales channel (the "Direct to Consumer Channel") or its exclusive authorized dealer network (the "Dealer Channel"), which provides product and installation services, as well as support to customers. Its Direct to Consumer Channel offers both Do-It-Yourself ("DIY") and professional installation security solutions.

The rollout of the outstanding capital stock of Monitronics, through the merger of Mono Lake Merger Sub, Inc., a direct wholly-owned subsidiary of Ascent Capital established to consummate the merger, with and into Monitronics, with Monitronics as the surviving corporationBrinks Home Security brand in the ~~merger (the “Monitronics Acquisition”). On August 16, 2013, Monitronics acquired all~~second quarter of 2018 included the integration of our business model under a single brand. As part of the ~~equity interests~~integration, we reorganized our business from two reportable segments, "MONI" and "LiveWatch", to one reportable segment, Brinks Home Security. Following the integration, the Company's chief operating

decision maker reviews internal financial information on a consolidated basis. The change in reportable segments had no impact on our previously reported historical consolidated financial statements.

Effective January 1, 2018, the Company adopted Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, as amended, (Topic 606) ("Topic 606") using the modified retrospective approach, which means the standard is applied to only the current period. Any significant impact as a result of ~~Security Networks and certain affiliated entities~~this adoption is discussed in the ~~Security Networks Acquisition. On February 23, 2015, Monitronics acquired LiveWatch, a DIY home security provider.~~

~~Monitronics provides security alarm monitoring and related services~~results of operations detail below. See note 5, Revenue Recognition, in the notes to ~~residential and business subscribers throughout~~ the U.S. and parts of Canada. Monitronics monitors signals arising from burglaries, fires, medical alerts and other events through security systems at subscribers’ premises. Nearly all of its revenues are derived from monthly recurring revenues under security alarm monitoring contracts acquired through its exclusive nationwide network of independent dealers.accompanying consolidated financial statements for further discussion.

~~Revenues are~~The Company early adopted ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04") which requires a goodwill impairment to be recognized as the ~~related monitoring services are provided. Other revenues are derived from~~difference of the ~~provision~~fair value and the carrying value of ~~third-party contract monitoring services~~the reporting unit. See note 8, Goodwill, in the notes to the accompanying consolidated financial statements for further discussion.

The Company also adopted ASU 2017-12, Derivatives and ~~from field technical repair services. Additionally, LiveWatch generates revenue from equipment sales~~Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities ("ASU 2017-12") which simplifies the application of hedge accounting guidance. The standard was early adopted effective January 1, 2018, and an opening equity adjustment of $605,000 was recognized that reduced Accumulated deficit, offset by a gain in Accumulated other comprehensive income (loss). There was no material impact as a result of this adoption to the results of operations detail below. See note 1, Basis of Presentation, in the notes to the accompanying consolidated financial statements for further discussion.

Going Concern and Potential Bankruptcy

Based on the factors discussed below in "Liquidity and Capital Resources," the Company and Brinks Home Security have each received a going concern qualification in connection with the external audit report of their respective Annual Report on Form 10-K for the year ended December 31, 2018.

Brinks Home Security has engaged financial and legal advisors to assist in considering potential alternatives to address the issues described in "Liquidity and Capital Resources." Brinks Home Security may not be able to come to an agreement with respect to the outstanding indebtedness that is ~~recognized as~~acceptable to all of Brinks Home Security’s stakeholders. Brinks Home Security’s failure to refinance the ~~equipment is shipped~~Senior Notes or to reach an agreement with its stakeholders on the ~~customer. All direct external costs associated with~~terms of a restructuring would have a material adverse effect on its and our liquidity, financial condition and results of operations and may result in it filing a voluntary petition for relief under Chapter 11 of the ~~creation of subscriber accounts and certain internal direct costs, including bonus incentives for account activations at LiveWatch, are capitalized and amortized over fifteen years using~~United States Bankruptcy Code in order to implement a ~~declining balance method beginning in the month following the date of acquisition.~~restructuring plan.

Attrition

Account cancellation, otherwise referred to as subscriber attrition, has a direct impact on the number of subscribers that ~~Monitronics~~Brinks Home Security services and on its financial results, including revenues, operating income and cash flow. A portion of the subscriber base can be expected to cancel its service every year. Subscribers may choose not to renew or terminate their contract for a variety of reasons, including relocation, cost, ~~and~~ switching to a ~~competitor’s service.~~competitor's service and limited use by the subscriber and thus low perceived value. The largest ~~category~~categories of canceled accounts relate to subscriber relocation or the inability to contact the subscriber. ~~Monitronics~~Brinks Home Security defines its attrition rate as the number of canceled accounts in a given period divided by the weighted average of number of subscribers for that period.

~~Table of Contents~~

~~Monitronics~~Brinks Home Security considers an account canceled if payment from the subscriber is deemed uncollectible or if the subscriber cancels for various reasons. If a subscriber relocates but continues its service, this is not a cancellation. If the subscriber relocates, discontinues its service and a new subscriber takes over the original ~~subscriber’s~~subscriber's service continuing the revenue stream, this is also not a cancellation. ~~Monitronics~~Brinks Home Security adjusts the number of canceled accounts by excluding those that are contractually guaranteed by its dealers. The typical dealer contract provides that if a subscriber cancels in the first year of its contract, the dealer must either replace the canceled account with a new one or refund to ~~Monitronics~~Brinks Home Security the cost paid to acquire the contract. To help ensure the ~~dealer’s~~dealer's obligation to ~~Monitronics, Monitronics~~Brinks Home Security, Brinks Home Security typically maintains a dealer funded holdback reserve ranging from ~~5-10%~~5-8% of subscriber accounts in the guarantee period. In some cases, the amount of the holdback liability ~~may be~~is less than actual attrition experience.

The table below presents subscriber data for the ~~twelve months~~years ended December 31, ~~2015~~2018 and ~~2014:~~2017:


	Twelve Months Ended December 31,					Year Ended December 31,
	2015		2014			2018		2017
Beginning balance of accounts	1,058,962		1,046,155			975,996		1,046,791
Accounts acquired	188,941		156,225			112,920		95,786
Accounts canceled(b)	(147,923	)	(135,842	)		(162,579	)	(159,630	)
Canceled accounts guaranteed by dealer and acquisition adjustments (a)	(10,445	)	(7,576	)	(b)
Canceled accounts guaranteed by dealer and other adjustments (a) (b)						(4,587	)	(6,951	)
Ending balance of accounts	1,089,535		1,058,962			921,750		975,996
Monthly weighted average accounts	1,086,071		1,052,492			950,705		1,016,798
Attrition rate (c)	(13.6	)%	(12.9	)%
Attrition rate - Unit (b)						17.1	%	15.7	%
Attrition rate - RMR (b) (c)						14.9	%	14.1	%

~~Table of Contents~~

Results of Operations

The following table sets forth selected data from the accompanying consolidated statements of operations and comprehensive income (loss) for the periods indicated ~~(amounts~~(dollar amounts in thousands).

Year Ended December 31,
2015 2014 2013
Net revenue (a) $ 563,356
539,449
451,033

Cost of services 110,246
93,600
74,136

Selling, general, and administrative, including stock-based compensation 121,418
102,109
92,002

Amortization of subscriber accounts, dealer network and other intangible assets 258,668
253,403
208,760

Gain on disposal of operating assets, net (1,156 ) (71 ) (5,473 )
Interest expense (123,743 ) (117,464 ) (95,836 )
Income tax expense from continuing operations (6,505 ) (3,420 ) (3,270 )
Net loss from continuing operations (86,236 ) (37,448 ) (21,600 )
Net loss (83,384 ) (37,752 ) (21,471 )
Adjusted EBITDA (b)

Monitronics business Adjusted EBITDA $ 354,807
362,227
305,250

Corporate Adjusted EBITDA (7,055 ) (7,422 ) (776 )
Total Adjusted EBITDA $ 347,752
354,805
304,474

Adjusted EBITDA as a percentage of Revenue

Monitronics business 63.0 % 67.1 % 67.7 %
Corporate (1.3 )% (1.4 )% (0.2 )%



	Year Ended December 31,
	2018			2017
Net revenue	$	540,358		553,455
Cost of services	128,939			119,193
Selling, general and administrative, including stock-based and long-term incentive compensation	130,637			167,887
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets	211,639			236,788
Interest expense	191,202			152,257
Income tax benefit from continuing operations	(11,611		)	(408	)
Net loss from continuing operations (b)	(698,044		)	(107,651	)
Net loss (b)	(698,044		)	(107,559	)

Adjusted EBITDA (a)
Brinks Home Security business Adjusted EBITDA	$	289,448		313,553
Corporate Adjusted EBITDA	(8,616		)	(7,275	)
Total Adjusted EBITDA	$	280,832		306,278
Adjusted EBITDA as a percentage of Net revenue
Brinks Home Security business	53.6		%	56.7	%
Corporate	(1.6		)%	(1.3	)%

Expensed Subscriber acquisition costs, net
Gross subscriber acquisition costs	$	47,874		40,312
Revenue associated with subscriber acquisition costs	(4,678		)	(4,852	)
Expensed Subscriber acquisition costs, net	$	43,196		35,460

(a) See reconciliation of Net revenue for the years ended December 31, 2015 and 2013 reflects the negative impact of $359,000 and $2,715,000, respectively, fair value adjustments that reduced deferred revenue acquired in the Security Networks Acquisition and LiveWatch Acquisition, respectively.loss from continuing operations to Adjusted EBITDA below.

(b) ~~See reconciliation to net~~Included in Net loss from continuing operations ~~below.~~and Net loss for the year ended December 31, 2018 is a goodwill impairment of $563,549,000. Refer to Note 8, Goodwill, for further information.

Net ~~Revenue.~~revenue. Revenue ~~increased $23,907,000,~~decreased $13,097,000, or ~~4.4%~~2.4%, for the year ended December 31, ~~2015~~2018 as compared to the corresponding prior year. The decrease in net revenue is attributable to the lower average number of subscribers in 2018. This decrease was partially offset by an increase in average RMR per subscriber due to certain price increases enacted during the past twelve months. Average RMR per subscriber increased from $44.04 as of December 31, 2017 to $45.27 as of December 31, 2018. In addition, the Company recognized a $8,149,000 increase in revenue for the year ended December 31, 2018 from the favorable impact of the new revenue recognition guidance, Topic 606, adopted effective January 1, 2018.

Cost of services. Cost of services increased $9,746,000, or 8.2%, for the year ended December 31, 2018 as compared to the corresponding prior year. The increase is primarily due to expensing certain direct and incremental field service costs on new contracts obtained in connection with a subscriber move ("Moves Costs") of $8,646,000 for the year ended December 31, 2018. Upon adoption of Topic 606, all Moves Costs are expensed, whereas prior to adoption, certain Moves Costs were capitalized on the balance sheet. For comparative purposes, Moves Costs capitalized as Subscriber accounts, net for the year ended December 31, 2017 were $14,366,000. Furthermore, subscriber acquisition costs, which include expensed equipment and labor costs associated with the creation of new subscribers, increased to $14,722,000 for the year ended December 31, 2018 as compared to $12,158,000 for the year ended December 31, 2017. The increase is attributable to increased production volume in the Company's Direct to Consumer Channel. These increases were partially offset by reduced salary and wage expense due to lower headcount. Cost of services as a percent of net revenue increased from 21.5% for the year ended December 31, 2017 to 23.9% for the year ended December 31, 2018.

Selling, general and administrative. Selling, general and administrative expense ("SG&A") decreased $37,250,000, or 22.2%, for the year ended December 31, 2018 as compared to the corresponding prior year. The decrease is primarily attributable to a $28,000,000 legal settlement recognized in the second quarter of 2017 for class action litigation of alleged violation of telemarketing laws and the 2018 recognition of an aggregate of $12,500,000 in related insurance receivable settlements reached with multiple carriers that provided coverage on the matter. Also contributing to the decrease in 2018 were decreases in stock-based compensation expense, consulting fees related to company cost reduction initiatives and general and administrative headcount. These decreases were offset by increases in SG&A subscriber acquisition costs associated with the creation of new subscribers. Subscriber acquisition costs included in SG&A increased to $33,152,000 for the year ended December 31, 2018 as compared to $28,154,000 for the year ended December 31, 2017. Other increases in SG&A contributing to the overall change period over period included increased professional legal fees at Ascent Capital, Brinks Home Security rebranding expense and severance expense related to transitioning Ascent Capital executive leadership and a reduction in headcount event at Brinks Home Security. SG&A as a percent of net revenue decreased from 30.3% for the year ended December 31, 2017 to 24.2% for the year ended December 31, 2018.

Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets. Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets decreased $25,149,000, or 10.6%, for the year ended December 31, 2018 as compared to the corresponding prior year. The decrease is related to a lower number of subscriber accounts purchased in the last year ended December 31, 2018 compared to the corresponding prior year as well as the timing of amortization of subscriber accounts acquired prior to 2018, which have a lower rate of amortization in 2018 based on the applicable double declining balance amortization method. Additionally, as discussed above, Moves Costs are expensed under Topic 606, whereas prior to adoption, these Moves Costs were capitalized on the balance sheet and amortized. This change resulted in a $7,487,000 decrease in amortization expense for the year ended December 31, 2018. The decrease is partially offset by increased amortization related to accounts acquired subsequent to December 31, 2017.

Interest expense. Interest expense increased $38,945,000, or 25.6%, for the year ended December 31, 2018 as compared to the corresponding prior year. The increase in net revenue is attributable to the growth in the number of subscriber accounts and the increase in average monthly revenue per subscriber. The growth in subscriber accounts reflects the acquisition of over 157,000 accounts through the Monitronics and LiveWatch subscriber channels, as well as 31,919 accounts from the LiveWatch Acquisition in February 2015. In addition, average monthly revenue per subscriber increased from $41.64 as of December 31, 2014 to $41.92 as of December 31, 2015. Excluding accounts acquired through the LiveWatch Acquisition, which had an average monthly revenue per subscriber of $28.46, Monitronics' average monthly revenue per subscriber increased from $41.64 to $42.33 for the period ending December 31, 2015. Net revenue also reflects the negative impact of a $359,000 fair value adjustment that reduced deferred revenue acquired in the LiveWatch Acquisition.

Revenue increased $88,416,000, or 19.6%, for the year ended December 31, 2014 as compared to the corresponding prior year. The increase in net revenue is attributable to the growth in the number of subscriber accounts and the increase in average monthly revenue per subscriber. The increase in net revenue is attributable to the growth in the number of subscriber accounts and the increase in average monthly revenue per subscriber. The growth in subscriber accounts reflects the acquisition of over 200,000 accounts from the Security Networks Acquisition in August 2013 and the acquisition of over 145,000 accounts through Monitronics’ authorized dealer program subsequent to December 31, 2013. In addition, average monthly revenue per subscriber increased from $40.90 as of December 31, 2013 to $41.64 as of December 31, 2014. Net revenue for the year ended December 31, 2013 also reflects the negative impact of a $2,715,000 fair value adjustment that reduced deferred revenue acquired in the Security Networks Acquisition.

~~Cost of Services.~~ Cost of services increased $16,646,000 or 17.8%, for the year ended December 31, 2015 as compared to the corresponding prior year. The increase is attributable to the inclusion of LiveWatch, which expensed equipment costs associated with the creation of new subscribers of $7,058,000. The increase is also attributable to the growth in the number of accounts being monitored across the cellular network, including home automation accounts, and service costs to upgrade

~~Table of Contents~~

~~existing subscribers' equipment. Service cost of services as a percent of net revenue increased from 17.4% for the year ended December 31, 2014 to 19.6% for the year ended December 31, 2015.~~

Costs of services increased $19,464,000, or 26.3%, for the year ended December 31, 2014 as compared to the corresponding prior year. The increase is attributed to subscriber growth and increases in cellular and service costs as more accounts are being monitored across the cellular network, which require additional service costs to upgrade existing subscribers' equipment. In addition, Monitronics incurred redundant staffing costs at its Dallas, Texas monitoring and call center facilities through April 2014, when the transition of Security Networks operations from Florida to Texas was complete. Cost of service as a percent of net revenue increased from 16.4% for the year ended December 31, 2013 to 17.4% for the year ended December 31, 2014.

~~Selling, General and Administrative.~~ Selling, general and administrative expense (“SG&A”) increased $19,309,000, or 18.9%, for the year ended December 31, 2015 as compared to the corresponding prior year. The primary driver of the increase in SG&A expense is attributable to $11,240,000 of LiveWatch marketing and sales expense related to the creation of new subscribers. LiveWatch SG&A also includes $3,930,000 of contingent bonuses payable to LiveWatch's key members of management in accordance with the employment agreements entered into in connection with th LiveWatch Acquisition. Other increases in SG&A are one-time costs incurred by Monitronics of $946,000 related to professional services rendered in connection with the LiveWatch Acquisition and $720,000 costs incurred to relocate Monitronics' headquarters in July 2015. These increases are partially offset by decreases in Monitronics' staffing and operating costs incurred at its headquarters as a result of the Security Networks' integration being completed in April 2014. SG&A for the year ended December 31, 2014 also includes $2,182,000 of incremental costs incurred in connection with Security Networks integration. SG&A as a percent of net revenue increased from 18.9% for the year ended December 31, 2014 to 21.6% for the year ended December 31, 2015.

Selling, general and administrative expense (“SG&A”) increased $10,107,000, or 11.0%, for the year ended December 31, 2014 as compared to the corresponding prior year. The increase is attributable to increases in Monitronics SG&A costs which are primarily attributable to subscriber growth over the last twelve months. In addition, Monitronics incurred redundant staffing and operating costs in its Dallas, Texas headquarters through April 2014, when the transition of Security Network operations from Florida to Texas was completed. SG&A as a percent of net revenue decreased from 20.4% for the year ended December 31, 2013 to 18.9% for the year ended December 31, 2014.

~~Amortization of Subscriber Accounts, Dealer Network and Other Intangible Assets~~. Amortization of subscriber accounts, dealer network and other intangible assets increased $5,265,000 and $44,643,000 for the years ended December 31, 2015 and 2014, respectively, as compared to the corresponding prior years. The increases are attributable to amortization of subscriber accounts acquired subsequent to each of the preceding years ended. In addition, for the year ended December 31, 2014, amortization includes approximately $58,126,000 of amortization expense related to the definite lived intangible assets acquired in the Security Networks Acquisition as compared to $23,599,000 for the year ended December 31, 2013.

~~Gain on the Sale of Assets~~. During the year ended December 31, 2015 the Company sold certain land and building property for approximately $20,170,000 property, resulting in a pre-tax gain of approximately $1,151,000. During the year ended December 31, 2014 the Company disposed of certain property, resulting in a pre-tax gain of approximately $71,000. During the year ended December 31, 2013, the Company sold an equity investment which resulted in a pre-tax gain of $3,250,000. Additionally, the Company sold certain land and building property for $9,634,000 resulting in a pre-tax gain of $2,221,000.

~~Interest Expense. Interest expense increased $6,279,000 and $21,628,000 for the years ended December 31, 2015 and 2014, respectively, as compared to the corresponding prior years. The increase in~~ interest expense for the year ended December 31, 2015 is primarily attributable to increases in the Company's consolidated debt balance related to the borrowings incurred to fund the the Company's LiveWatch acquisition and the subsequent amendment of its Credit Facility term loans in April 2015. The increase includes the impact of the amortization of the debt discount and deferred financing costs related to the Company's outstanding debt.

~~The increase in interest expense for the year ended December 31, 2014~~ is attributable to increases in the Company's ~~consolidated debt balance related to the borrowings incurred to fund the Security Networks Acquisition. This increase includes the impact of the~~revolving credit facility activity, higher interest rates from increasing LIBOR rates and increased amortization of ~~the~~ debt discount ~~related to~~and deferred debt costs under the ~~beneficial conversion feature of Ascent Capital's Convertible Notes issued in the third quarter of 2013. The increase is partially offset by the favorable repricing of Monitronics' credit facility~~effective interest ~~rates effective March 25, 2013.~~

rate method. Amortization of debt discount and deferred debt costs included in interest expense for the years ended December 31, ~~2015, 2014~~2018 and ~~2013~~2017 was ~~$10,357,000, $9,023,000~~$41,430,000 and ~~$5,851,000,~~$11,111,000, respectively.

~~Table~~Included in the Amortization of ~~Contents~~

~~Income Taxes from Continuing Operations.~~ ~~For~~debt discount and deferred debt costs in interest expense for the year ended December 31, ~~2015, we~~2018 is $3,128,000 of accelerated amortization related to the Convertible Notes debt discount and deferred debt costs, $2,784,000 of accelerated amortization related to the Senior Notes debt premium and deferred debt costs and $23,215,000 of accelerated amortization related to the Credit Facility debt discount and deferred debt costs.

Income tax benefit from continuing operations. The Company had a pre-tax loss from continuing operations of ~~$79,731,000~~$709,655,000 and income tax ~~expense~~benefit from continuing operations of ~~$6,505,000. For~~$11,611,000 for the year ended December 31, ~~2014, we~~2018. The Company had a pre-tax loss from continuing operations of ~~$34,028,000~~$108,059,000 and income tax ~~expense~~benefit from continuing operations of ~~$3,420,000. For~~$408,000 for the year ended December 31, ~~2013, we had a pre-tax loss from continuing operations of $18,330,000 and~~2017. The income tax ~~expense from continuing operations~~benefit for the year ended December 31, 2018 is attributable to the deferred tax impact of ~~$3,270,000. Income~~the full impairment of Brinks Home Security's goodwill, partially offset by Brinks Home Security's state tax expense incurred from Texas margin tax. The income tax benefit from continuing operations for the year ended December 31, ~~2015~~2017 is ~~attributable to Monitronics’ state tax expense and the deferred tax impact from amortization of deductible goodwill~~primarily attributable to the ~~Security Networks and LiveWatch acquisitions. Income~~United States federal tax ~~expense from continuing operations for~~reform legislation that was enacted on December 22, 2017, which lowered the years ended December 31, 2014 and 2013 is attributable to Monitronics’ state tax expense and the deferred tax impact from amortization of deductible goodwill attributable to the Security Networks Acquisition. For the year ended December 31, 2013,federal corporate income tax rate from ~~continuing operations is offset by the reduction~~35% to 21% beginning in ~~valuation allowance as a result of acquisition accounting for the Security Networks Acquisition.~~ fiscal year 2018.

Net loss from continuing operations. ~~For the year ended December 31, 2015,~~The Company had net loss from continuing operations ~~increased to $86,236,000 from $37,448,000~~of $698,044,000 for the year ended December 31, ~~2014. The increase in net loss from continuing operations is attributable~~2018, as compared to a $13,256,000 increase in costs incurred under the Company's Radio Conversion Program, the negative impact of expensed creation costs as a result of LiveWatch's direct-to-consumer model (which is further discussed in ~~Adjusted EBITDA~~ ~~below), increased interest costs and refinancing costs of $4,468,000 related to the April 2015 amendment to Monitronics' Credit Facility and $6,389,000 of non-cash charges~~$107,651,000 for ~~other-than-temporary impairments recognized on certain marketable securities.~~

~~For~~ the year ended December 31, ~~2014, net loss from continuing operations increased to $37,448,000 from $21,600,000 for the year end December 31, 2013.~~2017. The increase in net loss from continuing operations is primarily ~~attributable~~related to ~~increased interest costs~~the $563,549,000 goodwill impairment recognized in 2018, reductions in net revenue and the gains on sale of Ascent Capital properties recognized in 2017 offset by the $28,000,000 legal settlement reserve recognized in the second quarter of 2017 as ~~a result of the borrowings incurred to fund the Security Networks Acquisition.~~discussed above.

Adjusted EBITDA. The following table provides a reconciliation of ~~total Adjusted EBITDA to net~~Net loss from continuing operations to total Adjusted EBITDA for the periods indicated (amounts in thousands):

Year Ended December 31,
2015 2014 2013
Adjusted EBITDA $ 347,752
354,805
304,474
Amortization of subscriber accounts, dealer network and other intangible assets (258,668 ) (253,403 ) (208,760 )
Depreciation (10,444 ) (10,145 ) (8,941 )
Stock-based compensation (7,343 ) (7,164 ) (8,174 )
Restructuring charges —
(952 ) (1,111 )
Radio Conversion Program costs (14,369 ) (1,113 ) —
One-time severance expense (a) (112 ) —
—
LiveWatch acquisition related costs (946 ) —
—
LiveWatch acquisition contingent bonus charges (3,930 ) —
—
Monitronics Headquarters relocation costs (720 ) —
—
Security Networks Acquisition costs —
—
(2,470 )
Security Networks Integration costs —
(2,182 ) (1,264 )
Other-than-temporary impairment losses on marketable securities (6,389 ) —
—
Refinancing expense, net of gain on extinguishment of debt (3,723 ) —
—
Interest income 2,904
3,590
3,752
Interest expense (123,743 ) (117,464 ) (95,836 )
Income tax expense from continuing operations (6,505 ) (3,420 ) (3,270 )
Net loss from continuing operations $ (86,236 ) (37,448 ) (21,600 )



	Year Ended December 31,
	2018			2017
Net loss from continuing operations	$	(698,044	)	(107,651	)
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets	211,639			236,788
Depreciation	11,457			8,844
Stock-based compensation	1,615			7,229
Radio conversion costs	—			450
Legal settlement reserve (related insurance recovery)	(12,500		)	28,000
Severance expense (a)	4,014			1,363
LiveWatch acquisition contingent bonus charges	250			189
Rebranding marketing program	7,410			880
Integration / implementation of company initiatives	516			2,425
Gain on revaluation of acquisition dealer liabilities	(240		)	(1,358	)
Impairment of capitalized software	—			713
Loss on goodwill impairment	563,549			—
Gain on disposal of operating assets	—			(21,217	)
Interest income	(2,439		)	(2,446	)
Interest expense	191,202			152,257
Unrealized loss on derivative financial instruments	3,151			—
Refinancing expense	13,356			—
Unrealized (gain) loss on marketable securities, net	(3,251		)	220
Release of foreign currency translation adjustments	758			—
Income tax benefit from continuing operations	(11,611		)	(408	)
Adjusted EBITDA	$	280,832		306,278

(a) Severance expense for the year ended December 31, 2018 related to transitioning executive leadership at ~~Monitronics.~~Ascent Capital and a reduction in headcount event at Brinks Home Security. Severance expense for the year ended December 31, 2017 related to transitioning executive leadership and a reduction in headcount event at Brinks Home Security.

Adjusted EBITDA decreased ~~$7,053,000,~~$25,446,000, or ~~2.0%~~8.3%, for the year ended December 31, ~~2015 as compared to the corresponding prior year. Adjusted EBITDA is negatively impacted for the year ending December 31, 2015 due to LiveWatch's direct-to-~~

~~Table of Contents~~

consumer business, which requires it to recognize certain revenue and expenses associated with the creation of subscriber accounts. This is in contrast to Monitronics' dealer business, which capitalizes payments to dealers to acquire accounts and amortizes those payments to amortization expense over the life of the accounts. LiveWatch's expensed creation costs, net of creation revenue, included in adjusted EBITDA for the year ended December 31, 2015 was $14,276,000.

~~Adjusted EBITDA increased $50,331,000, or 16.5% for the year ended December 31, 2014~~2018 as compared to the corresponding prior year. The decrease is primarily the result of lower revenues, the expensing of subscriber moves in 2018, an increase in ~~Adjusted EBITDA was primarily due to revenue growth.~~ subscriber acquisition costs and Ascent Capital professional legal fees as discussed above.

~~Monitronics~~Brinks Home Security's consolidated Adjusted EBITDA was ~~$354,807,000, $362,227,000~~$289,448,000 and ~~$305,250,000~~$313,553,000 for the years ended December 31, ~~2015, 2014~~2018 and ~~2013,~~2017, respectively.

Expensed Subscriber acquisition costs, net. Subscriber acquisition costs, net increased to $43,196,000 for the year ended December 31, 2018 as compared to $35,460,000 for the year ended December 31, 2017. The increase in subscriber acquisition costs, net is primarily attributable to the increase in volume of direct sales subscriber acquisitions year over year.

Liquidity and Capital Resources

Capital Resources

At December 31, ~~2015,~~2018, we had ~~$5,577,000~~$105,921,000 of cash and cash ~~equivalents, $55,000~~equivalents. Subsequent to December 31, 2018, we used an aggregate of ~~current restricted~~approximately $70,700,000 of our cash to make payments pursuant to the terms of the Settlement Agreement (as defined in “Part I - Item 3. Legal Proceedings - Other Legal Proceedings” of this Annual Report on Form 10-K) and ~~$87,052,000~~an additional approximately $19,800,000 of ~~marketable securities on a consolidated basis.~~our cash to pay holders of our Convertible Notes whose Convertible Notes were accepted for payment in the Amended Tender Offer (as defined below). We may use a portion of ~~these assets~~our remaining cash and cash equivalents to decrease debt obligations, fund stock repurchases, or fund potential strategic acquisitions or investment opportunities.

Additionally, our other source of funds is our cash flows from operating activities which are primarily generated from the operations of ~~Monitronics.~~Brinks Home Security. During the years ended December 31, ~~2015, 2014~~2018 and ~~2013,~~2017, our cash flow from operating activities was ~~$207,885,000, $233,870,000~~$92,931,000 and ~~$212,233,000,~~$136,497,000, respectively. The primary ~~driver~~drivers of our cash flow from operating activities ~~is Adjusted EBITDA. Fluctuations~~are the fluctuations in ~~our Adjusted EBITDA~~revenues and ~~the components of that measure are~~operating expenses as discussed in ~~“Results~~"Results of ~~Operations”~~Operations" above. In addition, our cash flow from operating activities may be significantly impacted by changes in working capital.

During the years ended December 31, ~~2015, 2014~~2018 and ~~2013,~~2017, the Company used cash of ~~$266,558,000, $268,160,000~~$140,450,000 and ~~$234,914,000,~~$142,909,000, respectively, to fund subscriber account acquisitions, net of holdback and guarantee obligations. In addition, during the years ended December 31, ~~2015, 2014~~2018 and ~~2013,~~2017, the Company used cash of ~~$12,431,000, $7,769,000~~$14,903,000 and ~~$9,939,000,~~$14,393,000, respectively, to fund its capital expenditures.

In 2015, Monitronics paid cash of $56,778,000 for the acquisition of LiveWatch, net of the transfer of $3,988,000 to LiveWatch upon the Closing Date to fund LiveWatch employees' transaction bonuses and LiveWatch cash on hand of $784,000. The LiveWatch Acquisition was funded by borrowings from Monitronics' expanded Credit Factility revolver as well as cash contributions from Ascent Capital.

In 2013, we paid cash of $478,738,000 as part of the purchase price paid to acquire Security Networks, net of Security Networks cash on hand of $3,096,000. The Security Networks Acquisition was funded by the proceeds of Ascent Capital’s July issuance of $103,500,000 in aggregate principal amount of 4.00% Senior Convertible Notes due 2020, the proceeds of Monitronics’ issuance of $175,000,000 in aggregate principal amount of 9.125% Senior Notes due 2020 and the proceeds of incremental term loans of $225,000,000 issued under Monitronics’ existing credit facility, and approximately $20,000,000 of cash on hand. In addition to the cash paid, the purchase price also consisted of 253,333 shares of Ascent Capital’s Series A common stock (par value $0.01 per share) with a Closing Date fair value of $18,723,000.

During the years ended December 31, ~~2015, 2014~~2018 and ~~2013,~~2017, we purchased marketable securities for cash of ~~$26,934,000, $4,603,000~~$39,022,000 and ~~$21,770,000,~~$26,634,000, respectively. In addition, the Company sold marketable securities for proceeds of ~~$57,291,000~~$143,316,000 and ~~$7,842,000~~$1,108,000 for the years ended December 31, ~~2015~~2018 and ~~2014,~~2017, respectively.

~~On June 16, 2011,~~The existing long-term debt of the Company ~~announced that it received authorization~~at December 31, 2018 includes the aggregate principal balance of $1,901,225,000 under (i) the Ascent Capital Convertible Notes totaling $96,775,000 in aggregate principal amount, maturing on July 15, 2020 and bearing interest at 4.00% per annum, (ii) the Brinks Home Security senior notes totaling $585,000,000 in principal, maturing on April 1, 2020 and bearing interest at 9.125% per annum (the "Senior Notes"), and (iii) the $1,100,000,000 senior secured term loan and $295,000,000 super priority revolver under the sixth amendment to ~~implement~~the Brinks Home Security secured credit agreement dated March 23, 2012, as amended (the "Credit Facility"). The Convertible Notes had an outstanding principal balance of $96,775,000 as of December 31, 2018. Following the consummation of the transactions contemplated by the Settlement Agreement and the consummation of the Amended Tender Offer (as defined below), an aggregate principal amount of $260,000 of Convertible Notes remain outstanding. The Senior Notes have an outstanding principal balance of $585,000,000 as of December 31, 2018. The Credit Facility term loan has an outstanding principal balance of $1,075,250,000 as of December 31, 2018 and requires principal payments of $2,750,000 per quarter with the remaining amount becoming due on September 30, 2022. The Credit Facility revolver has an outstanding balance of $144,200,000 and a ~~stock repurchase program,~~$600,000 standby letter of credit issued as of December 31, 2018, which becomes due on September 30, 2021.

On February 14, 2019, the Company repurchased $75,674,000 in aggregate principal amount of then outstanding Convertible Notes pursuant to the Settlement Agreement (as defined and described in “Part I - Item 3. Legal Proceedings - Other Legal Proceedings” of this Annual Report on Form 10-K). Convertible Notes repurchased pursuant to the Settlement Agreement were cancelled.

On February 19, 2019, the Company commenced a cash tender offer to purchase any and all of its outstanding Convertible Notes (the “Tender Offer”). On March 22, 2019, the Company entered into transaction support agreements with holders of approximately $18,554,000 in aggregate principal amount of the Convertible Notes, pursuant to which itthe Company agreed to increase the purchase price for the Convertible Notes in the Tender Offer to $950 per $1,000 principal amount of Convertible Notes, with no accrued and unpaid interest to be payable (as so amended, the “Amended Tender Offer”) and such holders agreed to tender, or cause to be tendered, into the Amended Tender Offer all Convertible Notes held by such holders. The Amended Tender Offer expired at 5:00 pm Eastern time on March 29, 2019 and was settled on April 1, 2019. A total of $20,841,000 in aggregate principal amount of Convertible Notes were accepted for payment pursuant to the Amended Tender Offer. The information in this Annual Report on Form 10-K shall not constitute an offer to purchase nor a solicitation of an offer to sell the Convertible Notes or any other securities of the Company, nor shall there be any offer, solicitation or sale of such securities in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful.

The maturity date for each of the term loan and the revolving credit facility under the Credit Facility is subject to a springing maturity 181 days prior to the scheduled maturity date of the Senior Notes, or October 3, 2019, if Brinks Home Security is unable to refinance the Senior Notes by that date. Since Brinks Home Security has not refinanced the Senior Notes and the springing maturity date of October 3, 2019 occurs in a period less than twelve months after the issuance date of the accompanying consolidated financial statements, management has concluded there is substantial doubt regarding the Company’s ability to continue as a going concern within one year from the issuance date of these consolidated financial statements. Based on the factors above and other factors discussed below, the Company has received a going concern qualification in connection with the external audit report of this Annual Report on Form 10-K for the year ended December 31, 2018.

Furthermore, as there is substantial doubt about Brinks Home Security's ability to continue as a going concern, Brinks Home Security has received a going concern qualification in connection with its standalone external audit report of its Annual Report on Form 10-K, for the year ended December 31, 2018, which is an event of default under Brinks Home Security’s Credit Facility. At any time after the occurrence of an event of default under the Credit Facility, the lenders may, ~~purchase~~among other options, declare any amounts outstanding under the Credit Facility immediately due and payable and terminate any commitment to make further loans under the Credit Facility. A default under the Credit Facility is also an event of default under the Senior Notes. If an event of default under the indenture governing the Senior Notes occurs and is continuing, the holders of the Senior Notes may declare the aggregate principal amount of the Senior Notes and any accrued interest on the Senior Notes to be immediately due and payable. To the extent that an event of default under the indenture governing the Senior Notes exists, Brinks Home Security will seek a waiver or forbearance of such event of default.

Brinks Home Security has obtained a waiver from the Credit Facility revolving loan lenders and a forbearance from the Credit Facility term lenders, in each case with respect to the default in connection with the going concern qualification contained in Brinks Home Security’s external audit report of their Annual Report on Form 10-K for the year ended December 31, 2018 (the “Going Concern Default”), and in each case through April 30, 2019, subject to the terms and conditions of the waiver and forbearance. The waiver obtained from the Credit Facility revolving loan lenders allows Brinks Home Security to continue to borrow under the revolving credit facility under the Credit Facility, up to ~~$25,000,000~~$195,000,000 at an alternate base rate plus 3.00%. The forbearance obtained from the Credit Facility term lenders states that the term loan lenders will not exercise remedies with respect to an event of ~~its~~default that may mature from the Going Concern Default. The Going Concern Default and any resulting event of default under the Credit Facility term loan would continue, absent a waiver from the term loan lenders. To the extent any waiver or forbearance under the Credit Facility expires, any acceleration as a result of an event of default under the Credit Facility would trigger an Event of Default under the indenture governing the Senior Notes. To the extent an event of default under such indenture occurs, Brinks Home Security would seek to obtain a waiver or forbearance from the bondholders thereunder.

Nasdaq Deficiency Notices

Our Series A Common Stock is listed on the Nasdaq Global Select Market. As a Nasdaq listed company, we are required to satisfy Nasdaq’s continued listing requirements.

On November 26, 2018, we received a letter from The Nasdaq Stock Market LLC (“Nasdaq”) indicating that the market value of publicly held shares of our Series A common stock (“MVPHS”) for the last 30 consecutive business days was less than $15 million, which is the minimum market value of publicly held shares (the “MVPHS Requirement”) necessary to qualify for continued listing on the Nasdaq Global Select Market under Nasdaq Listing Rule 5450(b)(3)(C). In accordance with Nasdaq Listing Rule 5810(c)(3)(D), we have been provided 180 calendar days, or until May 28, 2019, to regain compliance with the MVPHS Requirement. To regain compliance, our MVPHS must be at least $15 million for at least ten consecutive business days during this 180-day period, at which point Nasdaq would provide written confirmation to us and close the matter. If we do not regain compliance with the MVPHS Requirement within the 180-day compliance period, Nasdaq will provide notice to us that our Series A common stock is subject to delisting. We may transfer our Series A common stock to the Nasdaq Capital Market, provided we meet the listing requirements for that market, but there can be no assurance that we will meet those listing requirements. Alternatively, if the Series A Common Stock is not eligible to be listed on the Nasdaq Capital Market, we intend to apply to have the Series A Common Stock quoted on the OTC Market.

business days during this 180-day period, at which point Nasdaq would provide written confirmation to the Company of compliance with the Minimum Bid Price Requirement and close the matter. The Minimum Bid Notice provides that, if we do not regain compliance with the Minimum Bid Price Requirement by June 26, 2019, we may be eligible to transfer to the Nasdaq Capital Market and take advantage of an additional 180 calendar day compliance period. To qualify, we would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and provide written notice of our intention to cure the minimum bid price deficiency during the second compliance period, by effecting a reverse split, if necessary. If we meet these requirements, we will be granted an additional compliance period of 180 calendar days to regain compliance with the Minimum Bid Price Requirement, but there can be no assurance that we will meet those listing requirements. If we do not regain compliance with the Minimum Bid Price Requirement by June 26, 2019, and the Nasdaq staff determines that we will not be able to cure the deficiency, or if we are not otherwise eligible for any additional compliance period, Nasdaq will provide notice that our Series A common stock is subject to delisting. Alternatively, if the Series A Common Stock is not eligible to be listed on the Nasdaq Capital Market, we intend to apply to have the Series A Common Stock quoted on the OTC Market.

If our Series A Common Stock ceases to be listed on at least one U.S. national securities exchange, such cessation would constitute a “fundamental change,” as such term is defined in the indenture (the ~~"Share Repurchase Authorizations"~~“Indenture”) governing our 4.00% Convertible Senior Notes due July 15, 2020 (the "Convertible Notes").

~~Table~~As a result, each holder of ~~Contents~~

During 2015, the Company repurchased 940,729 shares of its Series A common stock at an average purchase price of $31.88 per share for a total of approximately $29,988,000 pursuant to the Share Repurchase Authorizations. During 2014, the Company repurchased 557,309 shares of its Series A common stock at an average purchase price of $64.12 per share for a total of approximately $35,734,000 pursuant to the Share Repurchase Authorizations. There were no stock repurchases pursuant to the Share Repurchase Authorizations during 2013. These repurchased shares were all canceled and returned to the status of authorized and unissued. As of December 31, 2015, the remaining ~~availability~~Convertible Notes would have the right, at such noteholder’s option, to require Ascent Capital to repurchase for cash all or a portion of such noteholder’s Convertible Notes on the repurchase date specified by Ascent Capital in accordance with the provisions of the Indenture at a repurchase price equal to 100% of the principal amount thereof, together with any accrued and unpaid interest, including any unpaid “additional interest” (as such term is defined in the Indenture) to, but excluding, the “fundamental change repurchase date” (as such term is defined in the Indenture). We may not have sufficient funds, or be able to obtain financing, to pay the fundamental change repurchase price if we are required to repurchase the Convertible Notes. A failure to pay the fundamental change repurchase price if we are required to repurchase the Convertible Notes would constitute an event of default under the ~~Company's Share Repurchase Authorizations will enable the Company to purchase up to~~Indenture. If an ~~aggregate~~event of ~~approximately $9,910,000 of Series A Common Stock. The Company may also purchase shares of its Series B Common Stock, par value $0.01 per share,~~default occurs under the ~~increased program.~~

~~In December 2015,~~Indenture, either the ~~Company used cash~~trustee under the Indenture or the holders of ~~$4,653,000 to repurchase outstanding Convertible Notes representing $6,725,000 in~~the requisite aggregate principal amount ~~which were~~of the Convertible Notes then ~~retired.~~outstanding in accordance with the provisions of the Indenture may accelerate the due date of the entire outstanding principal amount of, and any accrued and unpaid interest and accrued and unpaid additional interest on all the Convertible Notes, to be due and payable immediately.

Radio Conversion Costs

Recently, Brinks Home Security has become aware that certain cellular carriers of 3G and CDMA cellular networks will be retiring their 3G and CDMA networks by the end of 2022 and Brinks Home Security currently estimates that the retirement of these networks will impact approximately 510,000 of its subscribers. Brinks Home Security is working on plans to identify and offer equipment upgrades to this population of subscribers. While such plans are not finalized, Brinks Home Security does expect to incur incremental expenses over the next three years related to retirement of 3G and CDMA networks. Total costs for the conversion of such customers are subject to numerous variables, including Brinks Home Security's ability to work with its partners and subscribers on cost sharing initiatives.

Liquidity Outlook

In considering our liquidity requirements for ~~2016,~~the next twelve months, we evaluated our known future commitments and ~~obligations.~~ obligations including factors discussed above. Brinks Home Security has engaged financial and legal advisors to advise it regarding potential alternatives to address the issues described above. There can be no assurance that any such potential alternatives or restructuring transactions will be possible on acceptable terms, if at all. Brinks Home Security may not be able

to come to an arrangement that is acceptable to all of its stakeholders. Brinks Home Security’s failure to reach an arrangement on the terms of a restructuring with its stakeholders would have a material adverse effect on its and our liquidity, financial condition and results of operations, including requiring it to potentially file a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in order to implement a restructuring plan.

We will require the availability of funds to finance the strategy of our primary operating subsidiary, ~~Monitronics,~~Brinks Home Security, which is to grow through the acquisition of subscriber accounts. ~~In 2014, Monitronics implemented a Radio Conversion Program in response to one of the nation's largest carriers announcing~~ that it does not intend to support its 2G cellular network services beyond 2016. The Company has incurred $14,369,000 and $1,113,000 in connection with the Radio Conversion Program for the years ended December 31, 2015 and 2014, respectively. Additionally, Monitronics could incur incremental costs of $17,000,000 to $21,000,000 in 2016, as it replaces or upgrades equipment used in those of our subscribers' security systems that operate over this carrier's network. As of December 31, 2015, we have approximately 41% of the 2G subscriber base remaining to convert from the 2G cellular network. We considered the expected cash flow from ~~Monitronics,~~Brinks Home Security, as this business is the driver of our operating cash ~~flows, as well as~~flows. In addition, we considered the current borrowing capacity of ~~Monitronics’~~Brinks Home Security's Credit Facility revolver, under which ~~Monitronics~~Brinks Home Security could, subject to the recently obtained waiver by Credit Facility revolving lenders, borrow an additional ~~$181,750,000~~$50,200,000 as of December 31, ~~2015. Based on this analysis, we expect that cash on hand, cash flow generated~~2018. Without additional waivers or forbearances from ~~operations and borrowings under the Monitronics’ Credit Facility will provide sufficient liquidity, given our anticipated current and future requirements.~~

~~The existing long-term debt of the Company at December 31, 2015 includes the principal balance of $1,764,684,000 under~~ its Convertible Notes, Senior Notes, Credit Facility, and Credit Facility revolver. The Convertible Notes have an outstanding principal balance of $96,775,000 as of December 31, 2015 and mature July 15, 2020. The Senior Notes have an outstanding principal balance of $585,000,000 as of December 31, 2015 are due on April 1, 2020. The Credit Facility term ~~loans have an outstanding principal balance of $949,659,000 as of December 31, 2015~~ and require principal payments of $1,375,000 per quarter with $403,784,000 becoming due on March 23, 2018 and the remaining amount becoming due April 9, 2022. The Credit Facility revolver has an outstanding balance of $133,250,000 as of December 31, 2015 and becomes due on December 22, 2017.revolving lenders, there may be insufficient liquidity to finance Brinks Home Security's operating strategy.

We may seek external equity or debt financing in the event of any new investment opportunities, additional capital expenditures or our operations ~~requiring~~require additional funds, but there can be no assurance that we will be able to obtain equity or debt financing on terms that would be acceptable to us or at all. Our ability to seek additional sources of funding depends on our future financial position and results of operations, which are subject to general conditions in or affecting our industry and our ~~customers~~subscribers and to general economic, political, financial, competitive, legislative and regulatory factors beyond our control.

~~Table of Contents~~

~~Contractual Obligations~~

~~Information concerning the amount and timing of required payments under our contractual obligations at December 31, 2015 is summarized below (amounts in thousands):~~

Payments Due by Period

Less than
1 Year
1-3 Years 3-5 Years
After 5
Years
Total
Operating leases $ 5,414
5,905
5,870
30,905
48,094
Long-term debt (a) 5,500
548,034
692,775
518,375
1,764,684
Other (b) 16,496
220
522
5,767
23,005
Total contractual obligations $ 27,410
554,159
699,167
555,047
1,835,783

~~(a)~~Amounts reflect principal amounts owed and therefore exclude net unamortized discount, premiums, and deferred debt costs, of $45,316,000. Amounts also exclude interest payments which are based on variable interest rates.

~~(b)~~

Primarily represents Monitronics holdback liability whereby it withholds payment of a designated percentage of acquisition cost when it acquires subscriber accounts from dealers. The holdback is used as a reserve to cover any terminated subscriber accounts that are not replaced by the dealer during the guarantee period. At the end of the guarantee period, the dealer is responsible for any deficit or is paid the balance of the holdback.

We have contingent liabilities related to legal proceedings and other matters arising in the ordinary course of business. Although it is reasonably possible we may incur losses upon conclusion of such matters, an estimate of any loss or range of loss cannot be made. In the opinion of management, it is expected that amounts, if any, which may be required to satisfy such contingencies will not be material in relation to the accompanying consolidated financial statements.

Off-Balance Sheet Arrangements

None.

Critical Accounting Policies and Estimates

Valuation of Subscriber Accounts

Subscriber accounts, which totaled ~~$1,423,538,000~~$1,195,463,000 net of accumulated amortization, at December 31, ~~2015,~~2018, relate primarily to the cost of acquiring portfolios of monitoring service contracts from independent dealers. The subscriber accounts acquired in ~~the Monitronics and Security Networks~~Brinks Home Security's business acquisitions were recorded at fair value under the acquisition method of accounting. Subscriber accounts not acquired as part of a business combination are recorded at cost. All direct ~~external costs~~ and ~~certain internal~~incremental costs, including bonus incentives related to account activation ~~at LiveWatch,~~in the Direct to Consumer Channel, associated with the creation of subscriber accounts, ~~including new subscriber contracts obtained in connection with a subscriber move,~~ are ~~capitalized.~~ capitalized (the "subscriber accounts asset"). Upon adoption of Topic 606, all Moves Costs are expensed, whereas prior to adoption, certain Moves Costs were capitalized on the balance sheet.

The costs of subscriber accounts acquired in ~~the Monitronics and Security Networks~~Brinks Home Security's business acquisitions, as well as certain accounts acquired in bulk purchases, are amortized using the 14-year 235% declining balance method. The costs of all other subscriber accounts are amortized using the 15-year 220% declining balance method, beginning in the month following the date of acquisition. The amortization methods were selected to provide an approximate matching of the amortization of the subscriber accounts intangible asset to estimated future subscriber revenues based on the projected lives of individual subscriber contracts. The realizable value and remaining useful lives of these assets could be impacted by changes in subscriber attrition rates, which could have an adverse effect on our earnings.

The Company ~~reviews~~has processes and controls in place, including the review of key performance indicators, to assist management in identifying events or circumstances that indicate the subscriber accounts ~~for impairment or a change in amortization method and period whenever events or changes indicate~~asset may not be recoverable. If an indicator that ~~the carrying amount of~~ the asset may not be recoverable orexists, management tests the ~~life should be shortened.~~subscriber accounts asset for impairment. For purposes of recognition and measurement of an impairment loss, ~~we view~~the Company views subscriber accounts as a single pool, for each of the Dealer Channel and the Direct to Consumer Channel, because of the assets’ homogeneous characteristics, and ~~because~~ the pool of subscriber accounts is the lowest level for which identifiable cash flows are largely independent of the cash flows of the other assets and liabilities.

~~Valuation of Long-lived Assets and Amortizable Other Intangible Assets~~

~~We perform~~ If such assets are considered to be impaired, the impairment ~~tests for our long-lived assets, primarily property and equipment, if an event or circumstance indicates that the carrying amount of our long-lived assets may not~~loss to be ~~recoverable. We are subject to the possibility of impairment of~~

~~Table of Contents~~

long-lived assets arising in the ordinary course of business. We regularly consider the likelihood of impairment and may recognize impairment if the carrying amount of a long-lived asset or intangible asset is not recoverable from its undiscounted cash flows. Impairmentrecognized is measured as the ~~difference between~~amount by which the carrying ~~amount and the fair~~ value of the ~~asset. We use both~~assets exceeds the estimated fair value, as determined using the income approach and market approach to estimate fair value. Our estimates of fair value are subject to a high degree of judgment since they include a long-term forecast of future operations. Accordingly, any value ultimately derived from our long-lived assets may differ from our estimate of fair value.approach.

~~Valuation of Trade Receivables~~

~~We must make estimates of~~In addition, the ~~collectability of our trade receivables. We perform extensive credit evaluations on~~Company reviews the ~~portfolios of~~ subscriber accounts ~~prior~~asset amortization methodology annually to ~~acquisition and require no collateral on~~ensure the accounts that are acquired. We establish an allowance for doubtful accounts for estimated losses resulting from the inability of subscribers to make required payments. Factors such as historical-loss experience, recoveries and economic conditions are considered in determining the sufficiency of the allowance to cover potential losses. Our trade receivables balance was $13,622,000, net of allowance for doubtful accounts of $2,762,000, as of December 31, 2015. As of December 31, 2014, our trade receivables balance was $13,796,000, net of allowance for doubtful accounts of $2,120,000.methodology is consistent with actual experience.

Valuation of Deferred Tax Assets

In accordance with ~~Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC")~~FASB ASC Topic 740, Income Taxes, we review the nature of each component of our deferred income taxes for the ability to realize the future tax benefits. As part of this review, we rely on the objective evidence of our current

performance and the subjective evidence of estimates of our forecast of future operations. Our estimates of realizability are subject to ~~a high degree of~~ judgment since they include such forecasts of future operations. After consideration of all available positive and negative evidence and estimates, we have determined that it is more likely than not that we will not realize the tax benefits associated with our United States deferred tax assets and certain foreign deferred tax assets, and as such, we have a valuation allowance which totaled ~~$90,216,000~~$150,612,000 and ~~$63,214,000~~$104,006,000 as of December 31, ~~2015~~2018 and ~~2014,~~2017, respectively.

Valuation of Goodwill

~~As of~~During the year ended December 31, ~~2015,~~2018, we ~~had~~recorded a full goodwill impairment of ~~$563,549,000, which represents approximately 26% of total assets.~~$563,549,000. Goodwill was recorded in connection with ~~the~~Ascent Capital's acquisition of Monitronics ~~Security Networks~~in 2010 and ~~LiveWatch~~Monitronics' subsequent business acquisitions. The Company accounts for its goodwill pursuant to the provisions of FASB ASC Topic 350, Intangibles — Goodwill and Other ~~("FASB ASC Topic 350")~~. In accordance with FASB ASC Topic 350, goodwill is not amortized, but rather tested for impairment at least annually.

To the extent necessary, recoverability of goodwill for the reporting unit is measured using a discounted cash flow model incorporating discount rates commensurate with the risks involved, which is classified as a Level 3 measurement under FASB ASC Topic 820, Fair Value Measurement. The key assumptions used in the discounted cash flow valuation model include discount rates, growth rates, cash flow projections and terminal value rates. Discount rates, growth rates and cash flow projections are the most sensitive and susceptible to change as they require significant management judgment.

~~We perform our annual~~The Company assesses the recoverability of the carrying value of goodwill ~~impairment analysis~~ during the fourth quarter of ~~each~~its fiscal ~~year. In the event that we are not able to achieve expected cash flow levels,~~year, based on October 31 financial information, or ~~other factors~~whenever events or changes in circumstances indicate that the carrying amount of the goodwill of a reporting unit may not be fully recoverable. In early June 2018, the reportable segments known as MONI and LiveWatch were combined and presented as Brinks Home Security. As a result of the change in reportable segments, goodwill assigned to these former reporting units was reallocated and combined under the Brinks Home Security reporting unit. Recoverability is ~~impaired, we may need to write off all or part~~measured at the reporting unit level based on the provisions of ~~our goodwill, which would adversely impact our operating results and financial position.~~FASB ASC Topic 350.

~~Table of Contents~~

ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

~~As of December 31, 2015, we have variable interest rate debt with principal amounts of $1,082,909,000. As a result, we~~We have exposure to changes in interest rates related to ~~these~~the terms of our debt obligations. ~~Monitronics~~Brinks Home Security uses derivative financial instruments to manage the exposure related to the movement in interest rates. ~~As of December 31, 2015, we have seven outstanding derivatives with a net liability fair value of $13,470,000.~~ The derivatives are designated as hedges and were entered into with the intention of reducing the risk associated with variable interest rates on the debt obligations. We do not use derivative financial instruments for trading purposes.

Tabular Presentation of Interest Rate Risk

The table below provides information about our outstanding debt obligations and derivative financial instruments that are sensitive to changes in interest rates. Interest rate swaps are presented at their fair value amount and by maturity ~~date.~~date as of December 31, 2018. Debt amounts represent principal payments by maturity ~~date.~~

As of December 31, 2015
Year of Maturity
Fixed Rate
Derivative
Instruments,
net (a)

Variable Rate
Debt

Fixed Rate
Debt
Total
Amounts in thousands
2016 —
5,500
—
5,500
2017 —
138,750
—
138,750
2018 8,610
409,284
—
417,894
2019 —
5,500
—
5,500
2020 —
5,500
681,775
687,275
2021 —
5,500
—
5,500
Thereafter 4,860
512,875
—
517,735
Total $ 13,470
1,082,909
681,775
1,778,154

~~(a)The derivative financial instruments reflected in this column include seven interest rate swaps. The terms~~date, assuming certain accelerated maturities due to potential events of ~~the Company’s outstanding swap derivative instruments~~default, as of December 31, ~~2015 are as follows:~~2018.

Notional Effective Date Maturity Date Fixed
Rate Paid Variable Rate Received
$ 529,375,000
March 28, 2013 March 23, 2018 1.884% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a)
140,287,500
March 28, 2013 March 23, 2018 1.384% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a)
109,673,367
September 30, 2013 March 23, 2018 1.959% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
109,673,367
September 30, 2013 March 23, 2018 1.850% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
191,475,002
March 23, 2018 April 9, 2022 2.924% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
250,000,000
March 23, 2018 April 9, 2022 2.810% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
50,000,000
March 23, 2018 April 9, 2022 2.504% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor



Year of Maturity	Fixed Rate Derivative Instruments, net (a)			Variable Rate Debt	Fixed Rate Debt	Total
	(Amounts in thousands)
2019	$	—		1,219,450	681,775	1,901,225
2020	—			—	—	—
2021	—			—	—	—
2022	(4,513		)	—	—	(4,513	)
2023	—			—	—	—
Thereafter	—			—	—	—
Total	$	(4,513	)	1,219,450	681,775	1,896,712

(a)

~~On March 25, 2013, Monitronics negotiated amendments to the terms~~The derivative financial instruments reflected in this column include four interest rate swaps with a maturity date in 2022. As a result of these interest rate ~~swap agreements, which were entered into in March 2012 (the "Existing Swap Agreements," as amended,~~swaps, Brinks Home Security's effective weighted average interest rate (excluding the ~~"Amended Swaps"). The Amended Swaps are held with~~impacts of non-cash amortization of deferred debt costs and discounts) on the same counterparties as the Existing Swap Agreements. Upon entering into the Amended Swaps, Monitronics simultaneously dedesignated the Existing Swap Agreements and redesignated the Amended Swaps as cash flow hedges for the underlying change in the swap terms. The amounts previously recognized in Accumulated other comprehensive loss relating to the dedesignation are recognized in Interest expense over the remaining life of the Amended Swaps.borrowings under

~~Table of Contents~~

the Credit Facility term loan is 8.08% as of December 31, 2018. The terms of the Company’s outstanding swap derivative instruments as of December 31, 2018 are as follows:



Notional		Effective Date	Maturity Date	Fixed Rate Paid	Variable Rate Received
$	189,506,107	March 23, 2018	April 9, 2022	3.110%	3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
247,500,000		March 23, 2018	April 9, 2022	3.110%	3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
49,500,000		March 23, 2018	April 9, 2022	2.504%	3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
373,230,000		March 23, 2018	September 30, 2022	1.833%	3 mo. USD-LIBOR-BBA, subject to a 1.00% floor

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our consolidated financial statements are filed under this Item, beginning on page 4144. The financial statement schedules required by Regulation S-X are filed under Item 15 of this Annual Report on Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

In accordance with Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Company carried out an evaluation, under the supervision and with the participation of management, including its chairman, ~~president~~chief executive officer and ~~principal accounting~~chief financial officer (the "Executives"), of the effectiveness of its disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Executives concluded that the ~~Company’s~~Company's disclosure controls and procedures were effective as of December 31, ~~2015~~2018 to provide reasonable assurance that information required to be disclosed in its reports filed or submitted under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange ~~Commission’s~~Commission's rules and ~~forms.~~forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

There has been no change in the Company’s internal control over financial reporting identified during the three months ended December 31, ~~2015~~2018 that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

~~MANAGEMENT’S~~MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Ascent ~~Capital’s~~Capital's management is responsible for establishing and maintaining adequate internal control over the ~~Company’s~~Company's financial reporting. The ~~Company’s~~Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements and related disclosures in accordance with generally accepted accounting principles. The ~~Company’s~~Company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the consolidated financial statements and related disclosures in accordance with generally accepted accounting principles; (3) provide reasonable assurance that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (4) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the ~~Company’s~~Company's assets that could have a material effect on the consolidated financial statements and related disclosures.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

The Company assessed the design and effectiveness of internal control over financial reporting as of December 31, ~~2015.~~2018. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ~~(“COSO”~~("COSO") in Internal ~~Control—Integrated~~Control-Integrated Framework (2013).

Based upon our assessment using the criteria ~~contained in~~set forth by COSO, management has concluded that, as of December 31, ~~2015, Ascent Capital’s internal control over financial reporting is effectively designed and operating effectively.~~

~~Ascent Capital acquired LiveWatch during 2015, and management excluded from its assessment of the effectiveness of~~2018, Ascent Capital's internal control over financial reporting ~~as of December 31, 2015, LiveWatch's internal control over financial reporting associated with total assets of $63,267,000~~is designed and ~~total revenues of $14,734,000 included in the consolidated financial statements of Ascent Capital as of and for the year ended December 31, 2015.~~operating effectively.

The effectiveness of our internal control over financial reporting as of December 31, 2015 has been audited by KPMG LLP, the independent registered public accounting firm that audited our financial statements. Their report appears on next page of this Annual Report on Form 10-K.

~~Table of Contents~~

ITEM 9B. OTHER INFORMATION

None.

~~Table of Contents~~

Report of Independent Registered Public Accounting Firm

~~The~~

To the Stockholders and Board of Directors ~~and Stockholders~~

Ascent Capital Group, Inc.:

We have audited Ascent Capital Group, Inc’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Ascent Capital Group, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting in Item 9A. Our responsibility is to express an opinionOpinion on the ~~Company’s internal control over financial reporting based on our audit.~~

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

~~In our opinion, Ascent Capital Group, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on criteria established in~~ ~~Internal Control - Integrated Framework~~ ~~(2013) issued by the COSO.~~

Ascent Capital Group, Inc. acquired LiveWatch Security, LLC. during 2015, and management excluded from its assessment of the effectiveness of Ascent Capital Group, Inc.’s internal control over financial reporting as of December 31, 2015, LiveWatch Security, LLC’s internal control over financial reporting associated with total assets of $63,267,000 and total revenues of $14,734,000 included in the consolidated financial statements of Ascent Capital Group, Inc. (and subsidiaries) as of and for the year ended December 31, 2015. Our audit of internal control over financial reporting of Ascent Capital Group, Inc. also excluded an evaluation of the internal control over financial reporting of LiveWatch Security, LLC.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Ascent Capital Group, Inc. and subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2015,~~and our report dated February 29, 2016 expressed an unqualified opinion on those consolidated financial statements~~

~~Table of Contents~~



	~~/s/ KPMG LLP~~
~~Dallas, Texas~~
~~February 29, 2016~~

~~Table of Contents~~

~~Report of Independent Registered Public Accounting Firm~~

~~The Board of Directors and Stockholders~~

~~Ascent Capital Group, Inc.:~~

Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Ascent Capital Group, Inc. and subsidiaries (the Company) as of December 31, ~~2015~~2018 and ~~2014, and~~2017, the related consolidated statements of ~~income~~operations and comprehensive income (loss), cash flows, and stockholders’ (deficit) equity for each of the years in the three-year period ended December 31, ~~2015.~~ 2018, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has substantial indebtedness classified within current liabilities that raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Change in Accounting Principle

As discussed in Note 5 to the consolidated financial statements, the Company has changed its method of accounting for revenue transactions with customers due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers, as amended.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the ~~auditing~~ standards of the ~~Public Company Accounting Oversight Board (United States).~~PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material ~~misstatement. An~~misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit ~~includes~~of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence ~~supporting~~regarding the amounts and disclosures in the consolidated financial ~~statements, assessing~~statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial ~~statement presentation.~~statements. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Ascent Capital Group, Inc. and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2015 in conformity with U.S. generally accepted accounting principles.

~~As discussed in Note 3 to the consolidated financial statements, during 2015, Ascent Capital Group, Inc. adopted Financial Accounting Standards Board Accounting Standards Update (“ASU”) 2015-03,~~ ~~Interest - Imputation of Interest (Subtopic 835-30)~~ ~~and ASU 2015-17,~~ ~~Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes~~.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Ascent Capital Group, Inc.’s internal controls over financial reporting as of December 31, 2015, based on criteria established in ~~Internal Control - Integrated Framework (2013)~~ issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 29, 2016 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.



	/s/ KPMG LLP

We have served as the Company's auditor since 2008.

Dallas, Texas
~~February 29, 2016~~April 1, 2019

~~Table of Contents~~

ASCENT CAPITAL GROUP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

Amounts in thousands, except share amounts


	As of December 31,						As of December 31,
	2015			2014			2018			2017
Assets
Current assets:
Cash and cash equivalents	$	5,577		$	12,612		$	105,921		10,465
Restricted cash	55			18			189			—
Marketable securities, at fair value	87,052			122,593			—			105,958
Trade receivables, net of allowance for doubtful accounts of $2,762 in 2015 and $2,120 in 2014	13,622			13,796
Trade receivables, net of allowance for doubtful accounts of $3,759 in 2018 and $4,162 in 2017							13,121			12,645
Prepaid and other current assets	10,702			8,546			32,202			11,175
Assets held for sale	6,265			18,935
Total current assets	123,273			176,500			151,433			140,243
Property and equipment, net of accumulated depreciation of $32,158 in 2015 and $30,030 in 2014	32,440			36,010
Subscriber accounts, net of accumulated amortization of $975,795 in 2015 and $736,824 in 2014	1,423,538			1,373,630
Dealer network and other intangible assets, net of accumulated amortization of $73,578 in 2015 and $54,077 in 2014	26,654			44,855
Property and equipment, net of accumulated depreciation of $40,827 in 2018 and $37,915 in 2017							36,549			32,823
Subscriber accounts, net of accumulated amortization of $1,621,242 in 2018 and $1,439,164 in 2017							1,195,463			1,302,028
Dealer network and other intangible assets, net of accumulated amortization of $0 in 2018 and $42,806 in 2017							—			6,994
Goodwill	563,549			527,502			—			563,549
Deferred income tax asset, net							783			—
Other assets, net	3,851			4,845			29,316			9,348
Total assets	$	2,173,305		$	2,163,342		$	1,413,544		2,054,985
Liabilities and Stockholders’ Equity
Liabilities and Stockholders' (Deficit) Equity
Current liabilities:
Accounts payable	$	8,660		$	6,781		$	12,668		11,092
Accrued payroll and related liabilities	4,385			4,077
Other accrued liabilities	31,573			30,727			36,006			56,282
Deferred revenue	16,207			14,945			13,060			13,871
Holdback liability	16,386			19,046			11,513			9,309
Current portion of long-term debt	5,500			9,166			1,895,175			11,000
Liabilities of discontinued operations	3,500			6,401
Total current liabilities	86,211			91,143			1,968,422			101,554
Non-current liabilities:
Long-term debt	1,713,868			1,595,649			—			1,778,044
Long-term holdback liability	3,786			5,156			1,770			2,658
Derivative financial instruments	13,470			5,780			6,039			13,491
Deferred income tax liability, net	13,646			9,529			—			13,311
Other liabilities	17,555			16,397			2,742			3,255
Total liabilities	1,848,536			1,723,654			1,978,973			1,912,313
Commitments and contingencies
Stockholders’ equity:
Stockholders' (deficit) equity:
Preferred stock, $0.01 par value. Authorized 5,000,000 shares; no shares issued	—			—			—			—
Series A common stock, $0.01 par value. Authorized 45,000,000 shares; issued and outstanding 12,301,248 and 13,162,095 shares at December 31, 2015 and December 31, 2014, respectively	123			132
Series B common stock, $0.01 par value. Authorized 5,000,000 shares; issued and outstanding 382,359 and 384,086 shares at December 31, 2015 and December 31, 2014, respectively	4			4
Series A common stock, $0.01 par value. Authorized 45,000,000 shares; issued and outstanding 12,080,683 and 11,999,630 shares at December 31, 2018 and December 31, 2017, respectively							121			120
Series B common stock, $0.01 par value. Authorized 5,000,000 shares; issued and outstanding 381,528 at both December 31, 2018 and December 31, 2017							4			4
Series C common stock, $0.01 par value. Authorized 45,000,000 shares; no shares issued	—			—			—			—
Additional paid-in capital	1,417,895			1,441,291			1,425,325			1,423,899
Accumulated deficit	(1,078,315		)	(994,931		)	(1,998,487		)	(1,277,118	)
Accumulated other comprehensive income (loss), net	(14,938		)	(6,808		)
Total stockholders’ equity	324,769			439,688
Total liabilities and stockholders’ equity	$	2,173,305		$	2,163,342
Accumulated other comprehensive loss, net							7,608			(4,233	)
Total stockholders' (deficit) equity							(565,429		)	142,672
Total liabilities and stockholders' (deficit) equity							$	1,413,544		2,054,985

See accompanying notes to consolidated financial statements.

~~Table of Contents~~

ASCENT CAPITAL GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Income (Loss)

Amounts in thousands, except per share amounts


	Year Ended December 31,							Year Ended December 31,
	2015			2014		2013		2018			2017		2016
Net revenue	$	563,356		539,449		451,033		$	540,358		553,455		570,372
Operating expenses:
Cost of services	110,246			93,600		74,136		128,939			119,193		115,236
Selling, general and administrative, including stock-based compensation	121,418			102,109		92,002
Selling, general and administrative, including stock-based and long-term incentive compensation								130,637			167,887		125,892
Radio conversion costs	14,369			1,113		—		—			450		18,422
Amortization of subscriber accounts, dealer network and other intangible assets	258,668			253,403		208,760
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets								211,639			236,788		246,753
Depreciation	10,444			10,145		8,941		11,457			8,844		8,435
Restructuring charges	—			952		1,111
Loss on goodwill impairment								563,549			—		—
Gain on disposal of operating assets, net	(1,156		)	(71	)	(5,473	)	—			(21,217	)	—
	513,989			461,251		379,477		1,046,221			511,945		514,738
Operating income	49,367			78,198		71,556
Other income (expense), net:
Operating income (loss)								(505,863		)	41,510		55,634
Other expense (income), net:
Interest income	2,904			3,590		3,752		(2,439		)	(2,446	)	(2,282	)
Interest expense	(123,743		)	(117,464	)	(95,836	)	191,202			152,257		132,269
Refinancing expense, net of gain on extinguishment of debt	(3,723		)	—		—
Other income (expense), net	(4,536		)	1,648		2,198
Unrealized loss on derivative financial instruments								3,151			—		—
Refinancing expense								13,356			—		9,500
Other expense (income), net								(1,478		)	(242	)	140
	(129,098		)	(112,226	)	(89,886	)	203,792			149,569		139,627
Loss from continuing operations before income taxes	(79,731		)	(34,028	)	(18,330	)	(709,655		)	(108,059	)	(83,993	)
Income tax expense from continuing operations	(6,505		)	(3,420	)	(3,270	)
Income tax expense (benefit) from continuing operations								(11,611		)	(408	)	7,251
Net loss from continuing operations	(86,236		)	(37,448	)	(21,600	)	(698,044		)	(107,651	)	(91,244	)
Discontinued operations:
Earnings (loss) from discontinued operations	2,852			(304	)	169
Income tax expense from discontinued operations	—			—		(40	)
Earnings (loss) from discontinued operations, net of income tax	2,852			(304	)	129
Income from discontinued operations, net of income tax of $0								—			92		—
Net loss	(83,384		)	(37,752	)	(21,471	)	(698,044		)	(107,559	)	(91,244	)
Other comprehensive income (loss):
Foreign currency translation adjustments	(293		)	(382	)	121		758			782		(1,032	)
Unrealized holding gains (losses) on marketable securities, net	904			(3,286	)	(1,169	)
Unrealized gain (loss) on derivative contracts, net	(8,741		)	(4,879	)	12,317
Total other comprehensive income (loss), net of tax	(8,130		)	(8,547	)	11,269
Unrealized holding gain (loss) on marketable securities, net								(3,900		)	2,828		1,956
Unrealized gain on derivative contracts, net								14,378			1,582		4,589
Total other comprehensive income, net of tax								11,236			5,192		5,513
Comprehensive loss	$	(91,514	)	(46,299	)	(10,202	)	$	(686,808	)	(102,367	)	(85,731	)

Basic and diluted earnings (loss) per share:
Continuing operations	$	(6.66	)	(2.75	)	(1.55	)	$	(56.54	)	(8.83	)	(7.44	)
Discontinued operations	0.22			(0.02	)	0.01		—			0.01		—
Net loss	$	(6.44	)	(2.77	)	(1.54	)	$	(56.54	)	(8.82	)	(7.44	)

See accompanying notes to consolidated financial statements.

~~Table of Contents~~

ASCENT CAPITAL GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Amounts in thousands


	Year Ended December 31,							Year Ended December 31,
	2015			2014		2013		2018			2017		2016
Cash flows from operating activities:
Net loss	$	(83,384	)	(37,752	)	(21,471	)	$	(698,044	)	(107,559	)	(91,244	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Loss (earnings) from discontinued operations, net of income tax	(2,852		)	304		(129	)
Income from discontinued operations, net of income tax								—			(92	)	—
Amortization of subscriber accounts, dealer network and other intangible assets	258,668			253,403		208,760		211,639			236,788		246,753
Depreciation	10,444			10,145		8,941		11,457			8,844		8,435
Stock-based compensation	7,343			7,164		8,174
Stock-based and long-term incentive compensation								1,451			7,431		6,984
Deferred income tax expense (benefit)	4,138			(192	)	203		(14,094		)	(4,474	)	4,201
Gain on disposal of operating assets, net	(1,156		)	(71	)	(5,473	)	—			(21,217	)	—
Refinancing expense, net of gain on extinguishment	3,725			—		—
Non-cash legal settlement reserve (related insurance recovery)								(2,750		)	23,000		—
Amortization of debt discount and deferred debt costs	10,357			9,023		5,851		41,430			11,111		10,670
Other-than-temporary impairment of marketable securities	6,389			—		—
Refinancing expense								13,356			—		9,500
Unrealized loss on derivative financial instruments								3,151			—		—
Bad debt expense								12,300			11,014		10,785
Loss on goodwill impairment								563,549			—		—
Other non-cash activity, net	13,366			7,611		7,479		(2,199		)	(4,057	)	(3,210	)
Changes in assets and liabilities:
Trade receivables	(9,378		)	(8,926	)	(8,165	)	(12,776		)	(9,790	)	(11,032	)
Prepaid expenses and other assets	(3,857		)	62		8,638		(14,576		)	(1,669	)	325
Subscriber accounts - deferred contract costs	(1,773		)	—		—		(5,418		)	(3,064	)	(2,947	)
Payables and other liabilities	(4,096		)	(5,862	)	(525	)	(15,545		)	(6,361	)	(317	)
Operating activities from discontinued operations, net	(49		)	(1,039	)	(50	)	—			(3,408	)	—
Net cash provided by operating activities	$	207,885		233,870		212,233		92,931			136,497		188,903
Cash flows from investing activities:
Capital expenditures	(12,431		)	(7,769	)	(9,939	)	(14,903		)	(14,393	)	(9,180	)
Cost of subscriber accounts acquired	(266,558		)	(268,160	)	(234,914	)	(140,450		)	(142,909	)	(201,381	)
Cash paid for acquisition, net of cash acquired	(56,778		)	—		(478,738	)
Purchases of marketable securities	(26,934		)	(4,603	)	(21,770	)	(39,022		)	(26,634	)	(5,036	)
Proceeds from sale of marketable securities	57,291			7,842		33,415		143,316			1,108		15,184
Decrease (increase) in restricted cash	(37		)	22		2,600
Proceeds from the disposal of operating assets	20,175			241		12,886
Other investing activities	—			(436	)	(100	)
Proceeds from disposal of operating assets								—			32,612		—
Net cash used in investing activities	$	(285,272	)	(272,863	)	(696,560	)	(51,059		)	(150,216	)	(200,413	)
Cash flows from financing activities:
Proceeds from long-term debt	778,000			169,000		639,075		248,800			187,950		1,280,700
Payments on long-term debt	(671,183		)	(127,166	)	(138,048	)	(184,100		)	(175,250	)	(1,238,059	)
Payments of financing costs	(6,477		)	—		(11,136	)	(10,739		)	—		(16,946	)
Stock option exercises	—			804		171
Value of shares withheld for share-based compensation								(188		)	(835	)	(358	)
Purchases and retirement of common stock	(29,988		)	(35,734	)	(33,436	)	—			—		(7,140	)
Bond hedge and warrant transactions, net	—			—		(6,107	)
Other financing activities	—			—		87
Net cash provided by financing activities	$	70,352		6,904		450,606		53,773			11,865		18,197
Net decrease in cash and cash equivalents	$	(7,035	)	(32,089	)	(33,721	)
Cash and cash equivalents at beginning of period	12,612			44,701		78,422
Cash and cash equivalents at end of period	$	5,577		12,612		44,701
Net increase (decrease) in cash, cash equivalents and restricted cash								95,645			(1,854	)	6,687
Cash, cash equivalents and restricted cash at beginning of period								10,465			12,319		5,632
Cash, cash equivalents and restricted cash at end of period								$	106,110		10,465		12,319
Supplemental cash flow information:
State taxes paid, net								$	2,517		2,713		2,645
Interest paid								150,003			140,706		120,873
Accrued capital expenditures								552			272		558

See accompanying notes to consolidated financial statements.

~~Table of Contents~~

ASCENT CAPITAL GROUP, INC. AND SUBSIDIARIES

Consolidated ~~Statement~~Statements of ~~Stockholders’~~Stockholders' (Deficit) Equity

Amounts in thousands

Additional
Accumulated
Other
Total
Preferred Common Stock Paid-in Accumulated Comprehensive Stockholders’
Stock Series A Series B Series C Capital Deficit Income (Loss) Equity
Balance at December 31,2012 $ —
134
7
—
1,453,700
(935,708 ) (9,530 ) 508,603
Net loss —
—
—
—
—
(21,471 ) —
(21,471 )
Other comprehensive income —
—
—
—
—
—
11,269
11,269
Stock issued as considerations for
  the Security Networks
   Acquisition
—
3
—
—
18,720
—
—
18,723
Stock awards and option exercises —
—
—
—
171
—
—
171
Purchases and retirement of
  common stock
—
—
(3 ) —
(33,433 ) —
—
(33,436 )
Value of beneficial conversion
  option on the issuance of 4.00%
  Convertible Notes, net of the
  equity component of debt
  issuance costs
—
—
—
—
29,857
—
—
29,857
Bond hedge and warrant transactions, net —
—
—
—
(6,107 ) —
—
(6,107 )
Stock-based compensation —
—
—
—
8,174
—
—
8,174
Value of shares withheld for tax liability —
—
—
—
(1,026 ) —
—
(1,026 )
Balance at December 31, 2013 $ —
137
4
—
1,470,056
(957,179 ) 1,739
514,757
Net loss —
—
—
—
—
(37,752 ) —
(37,752 )
Other comprehensive loss —
—
—
—
—
—
(8,547 ) (8,547 )
Stock awards and option exercises —
—
—
—
804
—
—
804
Purchases and retirement of
  common stock
—
(5 ) —
—
(35,729 ) —
—
(35,734 )
Stock-based compensation —
—
—
—
6,894
—
—
6,894
Value of shares withheld for tax liability
—
—
—
(734 ) —
—
(734 )
Balance at December 31, 2014 $ —
132
4
—
1,441,291
(994,931 ) (6,808 ) 439,688
Net loss —
—
—
—
—
(83,384 ) —
(83,384 )
Other comprehensive loss —
—
—
—
—
—
(8,130 ) (8,130 )
Stock awards and option exercises —
1
—
—
(1 ) —
—
—
Purchases and retirement of common stock —
(10 ) —
—
(29,978 ) —
—
(29,988 )
Stock-based compensation —
—
—
—
7,509
—
—
7,509
Purchase of convertible debt —
—
—
—
(131 ) —
—
(131 )
Value of shares withheld for tax liability —
—
—
(795 ) —
—
(795 )
Balance at December 31, 2015 $ —
$ 123
$ 4
$ —
$ 1,417,895
$ (1,078,315 ) $ (14,938 ) $ 324,769



	Preferred Stock		Common Stock				Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
	Preferred Stock		Series A		Series B	Series C	Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
Balance at December 31, 2015	$	—	123		4	—	1,417,895		(1,078,315	)	(14,938	)	324,769
Net loss	—		—		—	—	—		(91,244	)	—		(91,244	)
Other comprehensive income	—		—		—	—	—		—		5,513		5,513
Purchases and retirement of common stock	—		(4	)	—	—	(7,136	)	—		—		(7,140	)
Stock-based compensation	—		1		—	—	7,104		—		—		7,105
Value of shares withheld for minimum tax liability	—		—		—	—	(358	)	—		—		(358	)
Balance at December 31, 2016	$	—	120		4	—	1,417,505		(1,169,559	)	(9,425	)	238,645
Net loss	—		—		—	—	—		(107,559	)	—		(107,559	)
Other comprehensive income	—		—		—	—	—		—		5,192		5,192
Stock-based compensation	—		1		—	—	7,228		—		—		7,229
Value of shares withheld for minimum tax liability	—		(1	)	—	—	(834	)	—		—		(835	)
Balance at December 31, 2017	$	—	120		4	—	1,423,899		(1,277,118	)	(4,233	)	142,672
Impact of adoption of Topic 606	—		—		—	—	—		(22,720	)	—		(22,720	)
Impact of adoption of ASU 2017-12	—		—		—	—	—		(605	)	605		—
Adjusted balance at January 1, 2018	—		120		4	—	1,423,899		(1,300,443	)	(3,628	)	119,952
Net loss	—		—		—	—	—		(698,044	)	—		(698,044	)
Other comprehensive income	—		—		—	—	—		—		11,236		11,236
Stock-based compensation	—		1		—	—	1,614		—		—		1,615
Value of shares withheld for minimum tax liability	—		—		—	—	(188	)	—		—		(188	)
Balance at December 31, 2018	$	—	121		4	—	1,425,325		(1,998,487	)	7,608		(565,429	)

See accompanying notes to consolidated financial statements.

~~Table of Contents~~

ASCENT CAPITAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(1) Basis of Presentation

~~On July 7, 2011, Ascent Media Corporation merged with its direct wholly owned subsidiary, Ascent Capital Group, Inc., for the purpose of changing its name to Ascent Capital Group, Inc.~~ The accompanying Ascent Capital Group, Inc. ("Ascent Capital" or the "Company") consolidated financial statements represent the financial position and results of operations of Ascent Capital and its consolidated subsidiaries. Monitronics International, Inc. ~~("Monitronics"~~and its consolidated subsidiaries (collectively, "Brinks Home Security^TM") is, are the primary, wholly owned ~~operating subsidiary~~subsidiaries of the Company. On August 16, 2013, ~~Monitronics~~Brinks Home Security acquired all of the equity interests of Security Networks LLC ("Security Networks") and certain affiliated entities (the "Security Networks Acquisition"). On February 23, 2015, ~~Monitronics~~Brinks Home Security acquired LiveWatch Security, LLC ("LiveWatch"), a Do-It-Yourself ("DIY") home security firm, offering professionally monitored security services through a direct-to-consumer sales channel (the "LiveWatch Acquisition"). ~~Monitronics~~

Brinks Home Security provides ~~security alarm monitoring~~residential customers and ~~related services to residential~~commercial client accounts with monitored home and business ~~subscribers throughout~~security systems, as well as interactive and home automation services, in the United States, Canada and ~~parts~~Puerto Rico. Brinks Home Security customers are obtained through its direct-to-consumer sales channel (the "Direct to Consumer Channel") or its exclusive authorized dealer network (the "Dealer Channel"), which provides product and installation services, as well as support to customers. Its Direct to Consumer Channel offers both DIY and professional installation security solutions.

The rollout of ~~Canada. Monitronics monitors signals arising~~the Brinks Home Security brand in the second quarter of 2018 included the integration of our business model under a single brand. As part of the integration, we reorganized our business from ~~burglaries, fires, medical alerts~~two reportable segments, "MONI" and ~~other events through security systems installed by independent dealers at subscribers’ premises.~~"LiveWatch," to one reportable segment, Brinks Home Security. Following the integration, the Company's chief operating decision maker reviews internal financial information on a consolidated Brinks Home Security basis, which excludes corporate Ascent Capital activities and consolidation eliminations not associated with the operation of Brinks Home Security. Total assets related to corporate Ascent Capital activities are $107,815,000 and $113,698,000 as of December 31, 2018 and 2017, respectively. Net gain (loss) from continuing operations before income taxes related to corporate Ascent Capital activities was $(16,311,000), $5,131,000 and $(14,835,000) for the years ended December 31, 2018, 2017 and 2016, respectively.

The consolidated financial statements contained in this Annual Report have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for all periods presented.

The Company ~~has reclassified certain prior period amounts to conform~~adopted Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, as amended, (Topic 606) ("Topic 606") using the modified retrospective approach on January 1, 2018, at which time it became effective for the Company. The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the ~~current period's presentation including~~opening balance of retained earnings.

The Company adopted ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities ("ASU 2017-12") which amends the hedge accounting rules to align risk management activities and financial reporting by simplifying the application of hedge accounting guidance. The guidance expands the ability to hedge nonfinancial and financial risk components and eliminates the requirement to separately measure and report hedge ineffectiveness. Additionally, certain hedge effectiveness assessment requirements may be accomplished qualitatively instead of quantitatively. The Company early adopted ASU 2017-12 effective January 1, 2018, and as such, an opening equity adjustment of $605,000 was recognized that reduced Accumulated deficit, offset by a gain in Accumulated other comprehensive income (loss). This adjustment primarily relates to the derecognition of the cumulative ineffectiveness recorded on the Company's interest rate swap derivative instruments, as well as adjustments to cumulative dedesignation adjustments. The Company does not expect this adoption to have a material impact on its financial position, results of operations or cash flows on an ongoing basis.

The Company early adopted ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). Prior to the adoption of ASU ~~2015-03,~~ ~~Interest-Imputation~~2017-04, the fair value of ~~Interest (Subtopic 835-30)~~ the reporting unit was compared with the carrying value of the reporting unit (identified as "Step 1"). If the fair value of the reporting unit was lower than its carrying amount, then the implied fair value of goodwill was calculated. If the implied fair value of goodwill was lower than the carrying value of goodwill, an impairment was recognized (identified as "Step 2"). ASU 2017-04 eliminated Step 2 from the impairment test; therefore, a goodwill impairment is recognized as the difference of the fair value and ~~ASU 2015-17,~~ ~~Income Taxes (Topic 740), Balance Sheet Classification~~the carrying value of ~~Deferred Taxes.~~ the reporting unit.

The comparative information has not been restated and continues to be reported under the accounting standards in effect during those periods. See note ~~3 Recent Accounting Pronouncements~~5, Revenue Recognition fand note 8, Goodwill~~or the changes~~ in the ~~presentation~~notes to the consolidated financial statements for further discussion.

The Company’s Series A Common Stock is listed on the Nasdaq Global Select Market. As a Nasdaq listed company, the Company is required to satisfy Nasdaq’s continued listing requirements.

On November 26, 2018, the Company received a letter from The Nasdaq Stock Market LLC (“Nasdaq”) indicating that the market value of ~~those items. Additionally,~~publicly held shares of the Company’s Series A common stock (“MVPHS”) for the last 30 consecutive business days was less than $15 million, which is the minimum market value of publicly held shares (the “MVPHS Requirement”) necessary to qualify for continued listing on the Nasdaq Global Select Market under Nasdaq Listing Rule 5450(b)(3)(C). In accordance with Nasdaq Listing Rule 5810(c)(3)(D), the Company has ~~reclassified certain prior~~been provided 180 calendar days, or until May 28, 2019, to regain compliance with the MVPHS Requirement. To regain compliance, the Company’s MVPHS must be at least $15 million for at least ten consecutive business days during this 180-day period, ~~amounts related to Radio conversion costs to conform~~at which point Nasdaq would provide written confirmation to the ~~current period's presentation. These costs were previously reported in Cost~~Company and close the matter. If the Company does not regain compliance within the 180-day compliance period, Nasdaq will provide notice to the Company that its Series A common stock is subject to delisting.

In addition, on December 28, 2018, the Company received a letter (the “Minimum Bid Notice”) from Nasdaq indicating that the closing bid price of ~~services~~its Series A common stock for the last 30 consecutive business days was less than $1.00, which is the minimum closing bid price (the “Minimum Bid Price Requirement”) necessary to qualify for continued listing on the ~~Consolidated Statements of Operations and Other Comprehensive Income (Loss)~~Nasdaq Global Select Market under Nasdaq Listing Rule 5450(a)(1). ~~Radio conversion costs represent all direct costs incurred by Monitronics during~~In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the ~~subscribers' alarm monitoring system upgrade in relation~~Company has been provided 180 calendar days, or until June 26, 2019, to ~~Monitronics' Radio Conversion Program as well as indirect retention costs for impacted subscribers. The Monitronics' Radio Conversion program was implemented in 2014 in response to one~~regain compliance with the Minimum Bid Price Requirement. To regain compliance, the closing bid price of the ~~nation's largest carriers announcing~~Company’s Series A common stock must be at least $1.00 per share for at least ten consecutive business days during this 180-day period, at which point Nasdaq would provide written confirmation to the Company of compliance with the Minimum Bid Price Requirement and close the matter. If the Company does not regain compliance with the Minimum Bid Price Requirement by June 26, 2019, and the Nasdaq staff determines that it ~~does~~will not ~~intend~~be able to ~~support~~cure the deficiency, or if it is not otherwise eligible for any additional compliance period, Nasdaq will provide notice that its ~~2G cellular services beyond 2016.~~Series A common stock is subject to delisting.

While Nasdaq’s rules permit the Company to appeal any delisting determination, there can be no assurance the Nasdaq’s staff would grant its request for continued listing. Further, there can be no assurance that the Company will be able to regain compliance with the MVPHS requirement or the Minimum Bid Price Requirement or maintain compliance with Nasdaq’s other continued listing requirements.

In addition, a delisting of our Series A Common Stock from Nasdaq would negatively impact the Company because it could, among other things: (i) reduce the liquidity and market price of the Company’s common stock; (ii) reduce the amount of news and analyst coverage for the Company; (iii) reduce the number of investors willing to hold or acquire the Company’s common stock, which could negatively impact its ability to raise equity financing and the ability of our shareholders to sell its common stock; (iv) limit the Company’s ability to use a registration statement to offer and sell freely tradable securities, thereby preventing it from accessing the public capital markets; (v) impair the Company’s ability to provide liquid equity incentives to its employees; and (vi) have negative reputational impact for the Company with its customers, suppliers, employees and other persons with whom it transacts from time to time.

If the Company’s Series A Common Stock ceases to be listed on at least one U.S. national securities exchange, such cessation would constitute a “fundamental change,” as such term is defined in the indenture (the “Indenture”) governing our 4.00% Convertible Senior Notes due July 15, 2020 (the "Convertible Notes"). As a result, each remaining holder of the Convertible Notes would have the right, at such noteholder’s option, to require the Company to repurchase for cash all or a portion of such noteholder’s Convertible Notes on the repurchase date specified by the Company in accordance with the provisions of the Indenture at a repurchase price equal to 100% of the principal amount thereof, together with any accrued and unpaid interest, including any unpaid “additional interest” (as such term is defined in the Indenture) to, but excluding, the “fundamental change repurchase date” (as such term is defined in the Indenture). The Company may not have sufficient funds, or be able to obtain financing, to pay the fundamental change repurchase price if it is required to repurchase the Convertible Notes. A failure to pay the fundamental change repurchase price if the Company is required to repurchase the Convertible Notes would constitute an event of default under the Indenture. If an event of default occurs under the Indenture, either the trustee under the Indenture or the holders of the requisite aggregate principal amount of the Convertible Notes then outstanding in accordance with the provisions of the Indenture may accelerate the due date of the entire outstanding principal amount of, and any accrued and unpaid interest and accrued and unpaid additional interest on all the Convertible Notes, to be due and payable immediately.

(2)Going Concern

~~(2)~~ The Company has substantial indebtedness at December 31, 2018, including Brinks Home Security's $585,000,000 principal of senior notes, maturing on April 1, 2020 (the "Senior Notes"), and its existing credit facility with a term loan in principal of $1,075,250,000 as of December 31, 2018, maturing September 30, 2022, and a revolving credit facility with an outstanding balance of $144,200,000 as of December 31, 2018, maturing September 30, 2021 (the term loan and the revolver, together, the "Credit Facility"). The maturity date for each of the term loan and the revolving credit facility under the Credit Facility is subject to a springing maturity 181 days prior to the scheduled maturity date of the Senior Notes, or October 3, 2019, if Brinks Home Security is unable to refinance the Senior Notes by that date. Since Brinks Home Security has not refinanced the Senior Notes and the springing maturity date of October 3, 2019 occurs in a period less than twelve months after the issuance date of these consolidated financial statements, management has concluded there is substantial doubt regarding the Company’s ability to continue as a going concern within one year from the issuance date of these consolidated financial statements.

Ascent Capital and Brinks Home Security have engaged financial and legal advisors to assist them in considering potential alternatives to address the issues described above. As of the issuance date of these consolidated financial statements, Brinks Home Security has not refinanced the Senior Notes and there can be no assurance that any refinancing, or an alternative restructuring of its outstanding indebtedness will be possible on acceptable terms, if at all. Brinks Home Security may not be able to come to an agreement with respect to the outstanding indebtedness that is acceptable to all of Brinks Home Security’s stakeholders. Brinks Home Security’s failure to refinance the Senior Notes or to reach an agreement with its stakeholders on the terms of a restructuring would have a material adverse effect on its liquidity, financial condition and results of operations and may result in it filing a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in order to implement a restructuring plan. Ascent Capital has not guaranteed any of Brinks Home Security's obligations under the Senior Notes and Credit Facility.

Based on the factors above, the Company has received a going concern qualification in connection with the external audit report of this Annual Report on Form 10-K for the year ended December 31, 2018.

Furthermore, there is substantial doubt about Brinks Home Security’s ability to continue as a going concern within one year from the issuance date of its consolidated financial statements in its standalone Annual Report on Form 10-K for the year ended December 31, 2018. As such, Brinks Home Security has also received a going concern qualification in connection with its standalone external audit report of its Annual Report on Form 10-K, for the year ended December 31, 2018, which constitutes a default under Brinks Home Security’s Credit Facility. Any default under the Credit Facility may, upon the passage of time, mature into an event of default. At any time after the occurrence of an event of default under the Credit Facility, the lenders thereunder may, among other options, declare any amounts outstanding under the Credit Facility immediately due and payable and the revolving loan lenders thereunder may terminate any commitment to make further loans under the revolving credit facility under the Credit Facility. Any such acceleration may constitute an event of default under the indenture governing the Senior Notes. Further, in connection with management’s negotiations with its creditors, Brinks Home Security did not make its Senior Notes interest payment due on April 1, 2019. The indenture governing the Senior Notes provides for a 30-day cure period on past due interest payments. If an event of default occurs and is continuing thereunder, the holders of the Senior Notes may declare the aggregate principal amount of the Senior Notes and any accrued interest on the Senior Notes to be immediately due and payable.

Brinks Home Security has obtained a waiver from the Credit Facility revolving loan lenders and a forbearance from the Credit Facility term lenders, in each case with respect to the default in connection with the going concern qualification contained in Brinks Home Security’s external audit report of their Annual Report on Form 10-K for the year ended December 31, 2018 (the “Going Concern Default”), and in each case through April 30, 2019, subject to the terms and conditions of the waiver and forbearance. The waiver obtained from the Credit Facility revolving loan lenders allows Brinks Home Security to continue to borrow under the revolving credit facility under the Credit Facility for up to $195,000,000 at an alternate base rate plus 3.00%. The forbearance obtained from the Credit Facility term lenders states that the term loan lenders will not exercise remedies with respect to an event of default that may mature from the Going Concern Default. The Going Concern Default and any such event of default under the Credit Facility term loan would continue absent a waiver from the term loan lenders. To the extent any waiver or forbearance under the Credit Facility expires, any acceleration as a result of an event of default under the Credit Facility would trigger an event of default under the indenture governing the Senior Notes. To the extent an event of default under such indenture occurs, Brinks Home Security would seek to obtain a waiver or forbearance from the bondholders thereunder.

The Company’s consolidated financial statements as of December 31, 2018 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

(3)Summary of Significant Accounting Policies

Consolidation Principles

The consolidated financial statements include the accounts of the Company and its majority owned subsidiaries over which the Company exercises control. All intercompany accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers investments with original purchased maturities of three months or less when acquired to be cash equivalents.

Restricted Cash

Restricted cash is cash that is restricted for a specific purpose and cannot be included in the cash and cash equivalents account.

Trade Receivables

Trade receivables consist primarily of amounts due from ~~customers~~subscribers for recurring monthly monitoring services over a wide geographical base. ~~Monitronics~~Brinks Home Security performs extensive credit evaluations on the portfolios of subscriber accounts prior to acquisition and requires no collateral on the accounts that are acquired. ~~Monitronics~~Brinks Home Security has established an allowance for doubtful accounts for estimated losses resulting from the inability of subscribers to make required payments. Factors such as historical-loss experience, recoveries and economic conditions are considered in determining the sufficiency of the allowance to cover potential losses. The allowance for doubtful accounts as of December 31, ~~2015~~2018 and ~~2014~~2017 was ~~$2,762,000~~$3,759,000 and ~~$2,120,000,~~$4,162,000, respectively.

~~Table of Contents~~

A summary of activity in the allowance for doubtful accounts is as follows (amounts in thousands):

Balance
Beginning
of Year

Charged
to Expense

Write-Offs
and Other

Balance
End of
Year
2015 $ 2,120
9,735
(9,093 ) 2,762
2014 $ 1,937
8,149
(7,966 ) 2,120
2013 $ 1,436
7,342
(6,841 ) 1,937



	Balance Beginning of Year		Charged to Expense	Write-Offs and Other		Balance End of Year
2018	$	4,162	12,300	(12,703	)	3,759
2017	$	3,043	11,014	(9,895	)	4,162
2016	$	2,762	10,785	(10,504	)	3,043

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of trade accounts receivable. ~~Monitronics~~Brinks Home Security performs extensive credit evaluations on the portfolios of subscriber accounts prior to acquisition and requires no collateral on the subscriber accounts that are acquired. Concentrations of credit risk with respect to trade accounts receivable are generally limited due to the large number of subscribers comprising ~~Monitronics’~~Brinks Home Security's customer base.

Fair Value of Financial Instruments

Fair values of cash equivalents, current accounts receivable and current accounts payable approximate the carrying amounts because of their short-term nature. ~~For information related to the fair value of the Company’s convertible senior notes, see~~ ~~note 10, Long-Term Debt, below.~~ The ~~Company’s other~~Company's debt instruments are recorded at amortized cost on the consolidated balance sheet. See note 12, Fair Value Measurements, for further fair value information on the ~~Company’s~~Company's debt instruments.

Investments

All investments in marketable securities held by the Company ~~are~~in the prior year were classified as available-for-sale ("AFS") and ~~are~~were carried at fair value generally based on quoted market prices. The Company ~~records~~recorded unrealized changes in the fair value of AFS securities in Accumulated other comprehensive loss on the consolidated balance sheets. When these investments ~~are~~were sold, the gain or loss realized on the sale iswas recorded in Other income, net in the consolidated statements of ~~operations.~~operations and comprehensive income (loss). In the third quarter of 2018, Ascent Capital divested of all marketable securities.

Inventories

Inventories consist of security system components and parts and are stated at the lower of cost (using the weighted average costing method) or net realizable value. Inventory is included in Prepaid and other current assets on the consolidated balance sheets and was $4,868,000 and $3,495,000 at December 31, 2018 and 2017, respectively.

Property and Equipment

Property and equipment are carried at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the underlying lease. Estimated useful lives by class of asset are as follows:



~~Buildings~~		~~20 years~~
Leasehold improvements		15 years or lease term, if shorter
~~Machinery~~Computer systems and ~~equipment~~software		3 - 5 years
Furniture and fixtures		5 - 7 ~~years~~
~~Computer systems and software (included in Machinery and Equipment in~~ ~~note 7, Property and Equipment~~)		~~3 - 5~~ years

Management reviews the realizability of its property and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In evaluating the value and future benefits of long-term assets, their carrying value is compared to management’s best estimate of undiscounted future cash flows over the remaining economic life. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying value of the assets exceeds the estimated fair value of the assets. If necessary, the Company would use both the income approach and market approach to estimate fair value.

Subscriber Accounts

Subscriber accounts primarily relate to the cost of acquiring monitoring service contracts from independent dealers. The subscriber accounts acquired in ~~the Monitronics, Security Networks and the LiveWatch~~Brinks Home Security's business acquisitions were recorded at fair value under the acquisition method of accounting. All other acquired subscriber accounts are recorded at cost. All direct ~~external~~and incremental costs, including bonus incentives related to account activation in the Direct to Consumer Channel, associated with the creation of subscriber accounts, ~~and~~are capitalized. Upon adoption of Topic 606, all costs on new subscriber contracts obtained in connection with a subscriber move ("Moves Costs") are expensed, whereas prior to adoption, certain ~~internal direct costs, including bonus incentives for account activations at LiveWatch, are~~Moves Costs were capitalized ~~and and amortized over fifteen years using a declining~~on the balance ~~method beginning in the month forllowing the date of acquisition.~~sheet.

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The costs of subscriber accounts acquired in ~~the Monitronics, Security Networks and LiveWatch~~Brinks Home Security's business acquisitions, as well as certain accounts acquired in bulk purchases, are amortized using the 14-year 235% declining balance method. The costs of all other subscriber accounts are amortized using the 15-year 220% declining balance method, beginning in the month following the date of acquisition. The amortization methods were selected to provide an approximate matching of the amortization of the subscriber accounts intangible asset to estimated future subscriber revenues based on the projected lives of individual subscriber contracts. Amortization of subscriber accounts was ~~$238,800,000, $233,327,000~~$204,130,000, $226,697,000 and ~~$195,010,000~~$236,673,000 for the fiscal years ended December 31, ~~2015, 2014~~2018, 2017 and ~~2013,~~2016, respectively.

Based on subscriber accounts held at December 31, ~~2015,~~2018, estimated amortization of subscriber accounts in the succeeding five fiscal years ending December 31 is as follows (amounts in thousands):

2016 $ 220,860
2017 $ 186,295
2018 $ 157,168
2019 $ 132,735
2020 $ 117,419



2019	$	185,338
2020	$	161,949
2021	$	143,426
2022	$	130,246
2023	$	121,634

The Company ~~reviews~~has processes and controls in place, including the ~~subscriber accounts at least annually for impairment or a change~~review of key performance indicators, to assist management in ~~amortization method and period whenever~~identifying events or ~~changes~~circumstances that indicate ~~that~~ the ~~carrying amount of~~Subscriber Accounts Asset may not be recoverable. If an indicator that the asset may not be recoverable orexists, management tests the ~~life should be shortened.~~Subscriber Accounts Asset for impairment. For purposes of recognition and measurement of an impairment loss, the Company views subscriber accounts as a single pool, for each of the Dealer Channel and the Direct to Consumer Channel, because of the ~~assets’~~assets' homogeneous characteristics, and the pool of subscriber accounts is the lowest level for which identifiable cash flows are largely independent of the cash flows of the other

assets and liabilities. If such assets are considered to be impaired, the impairment loss to be recognized is measured as the amount by which the carrying value of the assets exceeds the estimated fair value, as determined using the income approach.

Dealer Network and Other Intangible Assets

Dealer network iswas an intangible asset that ~~relates~~related to the dealer relationships that were acquired as part of the ~~Monitronics Acquisition and the~~ Security Networks Acquisition. Other intangible assets ~~consist~~consisted of non-compete agreements signed by the seller of Security Networks and certain key Security Networks ~~executives and the LiveWatch trade mark asset.~~executives. These intangible assets ~~will be~~were amortized on a straight-line basis over their estimated useful lives of 5 years. These intangible assets were fully amortized during 2018. The LiveWatch trade mark asset was initially to be amortized over 10 years. Upon the rollout of the Brinks Home Security brand in the second quarter of 2018, it was determined that the LiveWatch trade mark asset had no remaining useful life and the remaining asset balance was amortized. Amortization of dealer network and other intangible assets was ~~$19,501,000, $19,780,000~~$6,994,000, $9,830,000 and ~~$13,717,000~~$9,830,000 for the fiscal years ended December 31, ~~2015, 2014~~2018, 2017 and ~~2013,~~2016, respectively.

The Company reviews the dealer network and other intangible assets at least annually for impairment or a change in amortization period whenever events or changes indicate that the carrying amount of the assets may not be recoverable or the lives should be shortened.

Goodwill

The Company accounts for its goodwill pursuant to the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 350, ~~Intangibles — Goodwill~~Intangibles-Goodwill and Other ("FASB ASC Topic 350"). In accordance with FASB ASC Topic 350, goodwill is not amortized, but rather tested for impairment at least ~~annually.~~annually, or earlier if an event occurs, or circumstances change, that indicate the fair value of a reporting unit may be below its carrying amount.

The Company assesses the recoverability of the carrying value of goodwill during the fourth quarter of its fiscal year, based on October 31 financial information, or whenever events or changes in circumstances indicate that the carrying amount of the goodwill of a reporting unit may not be fully recoverable. In early June 2018, the reportable segments known as MONI and LiveWatch were combined and presented as Brinks Home Security. As a result of the change in reportable segments, goodwill assigned to these former reporting units was reallocated and combined under the Brinks Home Security reporting unit. Recoverability is measured at the reporting unit level based on the provisions of FASB ASC Topic 350.

To the extent necessary, recoverability of goodwill at a reporting unit level is measured using a discounted cash flow model incorporating discount rates commensurate with the risks involved, which is classified as a Level 3 measurement under FASB ASC Topic 820, Fair Value Measurements and Disclosures. The key assumptions used in the discounted cash flow valuation model include discount rates, growth rates, cash flow projections and terminal value rates. Discount rates, growth rates and cash flow projections are the most sensitive and susceptible to change as they require significant management judgment. IfAn impairment charge is recognized for the ~~calculated fair value is less than~~amount by which the ~~current~~ carrying ~~value, impairment of~~amount exceeds the reporting ~~unit may exist. When the recoverability test indicates potential impairment, the Company will calculate an implied~~unit's fair value of goodwill for the reporting unit. The implied fair value of goodwill is determined in a manner similar to how goodwill is calculated in a business combination. If the implied fair value of goodwill exceeds the carrying value of goodwill assigned to the reporting unit, there is no impairment. If the carrying value of goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment loss is recorded to write down the carrying value. ~~An impairment loss cannot exceed the carrying value of goodwill~~

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~~assigned to the reporting unit but may indicate certain long-lived and amortizable intangible assets associated with the reporting unit may require additional impairment testing.~~

Deferred Financing Costs

Deferred financing costs are recorded as a reduction to long-term debt when the related debt is issued or when revolving credit lines increase the borrowing capacity of the Company. Deferred financing costs are amortized over the term of the related debt using the effective interest method.

Holdback Liability

The Company typically withholds payment of a designated percentage of the acquisition cost when it acquires subscriber accounts from dealers. The withheld funds are recorded as a liability until the guarantee period provided by the dealer has expired. The holdback is used as a reserve to cover any terminated subscriber accounts that are not replaced by the dealer during the guarantee period. At the end of the guarantee period, the dealer is responsible for any deficit or is paid the balance of the holdback.

Derivative Financial Instruments

The Company uses derivative financial instruments to manage exposure to movement in interest rates. The use of these financial instruments modifies the exposure of these risks with the intention of reducing the risk or cost. The Company does not use derivatives for speculative or trading purposes. The Company recognizes the fair value of all derivative instruments as either assets or liabilities at fair value on the consolidated balance sheets. Fair value is based on market quotes for similar instruments with the same duration. For derivative instruments that qualify for hedge accounting under the provisions of FASB ASC Topic 815, Derivatives and Hedging, unrealized gains and losses on the derivative instruments are reported in ~~accumulated~~Accumulated other comprehensive income (loss), to the extent the hedges are effective, until the underlying transactions are

recognized in earnings. Derivative instruments that do not qualify for hedge accounting are marked to market at the end of each accounting period with the change in fair value recorded in earnings.

Foreign Currency Translation

The functional currencies of the ~~Company’s~~Company's foreign subsidiaries are their respective local currencies. Assets and liabilities of foreign operations ~~are~~were translated into U.S. dollars using exchange rates on the balance sheet date, and revenue and expenses ~~are~~were translated into U.S. dollars using average exchange rates for the period. The effects of the foreign currency translation adjustments ~~are~~were deferred and ~~are~~were included in ~~stockholders’~~stockholders' equity as a component of ~~accumulated~~Accumulated other comprehensive loss. The Company dissolved all of its foreign subsidiaries in 2018. The cumulative foreign currency translation adjustment recorded in Accumulated other comprehensive loss was reclassified through Other expense (income), net on the consolidated statements of operations and comprehensive income (loss).

Revenue Recognition

Revenue is generated from security alarm monitoring and related services provided by ~~Monitronics and its subsidiaries.~~Brinks Home Security. See note 5, Revenue ~~related to alarm monitoring services is recognized ratably over~~Recognition, for the ~~life of the contract. Revenue related to maintenance and other services is recognized as the services are rendered. Deferred revenue includes payments~~accounting policy under Topic 606 for ~~monitoring services to be provided in future periods. Additionally, equipment sales are recognized as the equipment is shipped to the customer.~~ periods commencing January 1, 2018.

Income Taxes

The Company accounts for income taxes under FASB ASC Topic 740, Income Taxes ("FASB ASC Topic 740"), which prescribes an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the ~~Company’s~~Company's consolidated financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than proposed changes in the tax law or rates. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

FASB ASC Topic 740 specifies the accounting for uncertainty in income taxes recognized in a ~~company’s~~company's consolidated financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In instances where the Company has taken or expects to take a tax

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position in its tax return and the Company believes it is more likely than not that such tax position will be upheld by the relevant taxing authority, the Company records the benefits of such tax position in its consolidated financial statements.

Share-Based Compensation

The Company accounts for share-based awards pursuant to FASB ASC Topic 718, ~~Compensation — Stock~~Compensation-Stock Compensation ("FASB ASC Topic 718"), which requires companies to measure the cost of employee services received in exchange for an award of equity instruments (such as stock options and restricted stock) based on the grant-date fair value of the award, and to recognize that cost over the period during which the employee is required to provide service (usually the vesting period of the award). Forfeitures of awards are recognized as they occur.

The grant-date fair value of the Ascent Capital stock options granted to the Company’s employees was calculated using the Black-Scholes model. The expected term of the awards was calculated using the simplified method included in FASB ASC Topic 718. The volatility used in the calculation is based on the historical volatility of Ascent Capital and peer companies ~~and~~while the risk-free rate is based on Treasury Bonds with a term similar to that of the subject options. A dividend rate of zero was utilized for all granted stock options.

Basic and Diluted Earnings (Loss) Per Common Share — Series A and Series B

Basic earnings (loss) per common share ("EPS") is computed by dividing net income (loss) by the weighted average number of Series A and Series B common shares outstanding for the period. Diluted EPS is computed by dividing net income (loss) by the sum of the weighted average number of Series A and Series B common shares outstanding and the effect of dilutive securities, including the Company’s outstanding stock options, unvested restricted stock ~~convertible notes~~ and warrant transactions using the treasury stock method and convertible securities using the if-converted method.

For the years ended December 31, ~~2015, 2014~~2018 and ~~2013,~~2017, diluted EPS is computed the same as basic EPS because the Company recorded a loss from continuing operations, which would make potentially dilutive securities ~~antidilutive.~~anti-dilutive. Diluted shares

outstanding excluded ~~892,851~~401,083 of stock options, unvested restricted shares and performance units for the year ended December 31, ~~2015~~2018 because their inclusion would have been anti-dilutive. Diluted shares outstanding excluded ~~1,492,531~~259,915 stock options, ~~and~~ unvested restricted shares and performance units for the year ended December 31, 2014 because their inclusion would have been anti-dilutive. Diluted shares outstanding excluded 1,524,539 stock options, unvested restricted shares and rights to acquire restricted shares for the year ended December 31, 2013,2017 because their inclusion would have been anti-dilutive.

Year Ended December 31,
2015 2014 2013
Weighted average Series A and Series B shares 12,947,215
13,611,264
13,926,832



	Year Ended December 31,
	2018	2017	2016
Weighted average Series A and Series B shares	12,346,804	12,195,530	12,256,895

Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, assumptions and ~~assumptions~~judgments that affect the reported amounts of revenue and expenses for each reporting period. The significant estimates made in preparation of the ~~Company’s~~Company's consolidated financial statements primarily relate to valuation of ~~goodwill, other intangible assets, long-lived assets,~~subscriber accounts, deferred tax assets ~~convertible debt arrangements, derivative financial instruments,~~ and ~~the amount of the allowance for doubtful accounts.~~goodwill. These estimates are based on ~~management’s~~management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts them when facts and circumstances change. As the effects of future events cannot be determined with any certainty, actual results could differ from the estimates upon which the carrying values were based.

~~Supplemental Cash Flow Information~~

For the years ended December 31, 2015, 2014 and 2013, net cash paid for income taxes was $3,245,000, $2,718,000 and $2,464,000, respectively. For the years ended December 31, 2015, 2014 and 2013, net cash paid for interest was $112,282,000, $106,535,000 and $88,252,000, respectively.

~~(3)~~(4) Recent Accounting Pronouncements

In ~~May 2014, the FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606). Under the update, revenue will be recognized based on a five-step model. The core principle of the model is that revenue will be recognized when the~~

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transfer of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In the third quarter of 2015, the FASB deferred the effective date of the standard to annual and interim periods beginning after December 15, 2017. Early adoption will be permitted for annual and interim periods beginning after December 15, 2016. The Company is currently evaluating the impact that adopting this

~~ASU will have on its financial position, results of operations and cash flows.~~

~~In April 2015, the FASB issued ASU 2015-03,~~ ~~Interest - Imputation of Interest (Subtopic 835-30)~~. Under this update, the cost of issuing debt will no longer be recorded as a separate asset, unless it is incurred before the receipt of the funding from the associated debt liability. Instead, debt issuance costs will be presented as a direct deduction from the debt liability, similar to the presentation of debt discounts. The costs will continue to be amortized to interest expense using the effective interest rate method. The ASU requires retrospective application to all prior periods presented in the financial statements and is effective for annual and interim periods beginning after December 15, 2015. The Company elected to early adopt the ASU for the financial statements ending December 31, 2015. The change reclassified $22,675,000 from other assets, net to long-term debt on the consolidated balance sheet for the period ending December 31, 2014. The adoption of the ASU did not impact results of operations or cash flows.

~~In September 2015, the FASB issued ASU 2015-16,~~ ~~Business Combinations (Topic 805)~~. Under the update, an acquirer in a business combination is no longer required to account for measurement-period adjustments retrospectively, and, instead, will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment. The effective date of the standard is for fiscal years beginning after December 15, 2015, and interim periods within those years. The Company does not expect the impact of adopting this ASU to be material to the Company's financial statements and related disclosures.

~~In November 2015, the FASB issued ASU 2015-17,~~ ~~Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes~~. Under the update, deferred taxes would be classified as noncurrent in the statement of financial position instead of being separated into current and non-current amounts. The ASU is effective for financial statements issued after January 1, 2017 with early adoption permitted. Additionally, the Company may apply the standard either prospectively or retrospectively. The Company elected to early adopt the ASU for the financial statements ending December 31, 2015 and to apply the change retrospectively. The change reclassified $6,346,000 from the current asset for Deferred income assets, net to the non-current Deferred income tax liability, net on the consolidated balance sheet for the period ending December 31, 2014. The adoption of the ASU did not impact results of operations or cash flows.

~~In January 2016, the FASB issued ASU 2016-01,~~ ~~Financial Instruments--Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities~~ ("ASU 2016-01"). ASU 2016-01 requires all equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) will be measured at fair value through earnings. The option for equities classified as available-for-sale to report changes in fair value in other comprehensive income is eliminated. Additionally, ASU 2016-01 requires deferred tax assets related to unrealized losses on securities be analyzed in combination with the Company's other deferred tax assets. The Company will adopt ASU 2016-01 beginning January 1, 2019 using a modified retrospective application to all outstanding instruments, with a cumulative effect adjustment recorded to opening accumulated retained deficit.

In February 2016, the ~~FASB~~Financial Accounting Standards Board (the "FASB") issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 requires the lessee to recognize assets and liabilities for leases with lease terms of more than twelve months. For leases with a term of twelve months or less, the Company is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. ~~Further, the lease~~Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. ASU 2016-02 requires a lessee of a finance lease to recognize ~~both an~~ interest expense and an amortization expense of the associated ~~expense. Operating leases generally recognize the associated~~asset. A lessee of an operating lease recognizes lease expense on a straight line ~~basis.~~basis over the lease term. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018. ASU 2018-10, Codification Improvements to Topic 842, Leases, clarifies certain aspects of ASU 2016-12 and the two updates will be adopted concurrently. ASU 2016-02 requires leases to be recognized and measured at the ~~Company to adopt~~beginning of the ~~standard~~earliest period presented using a modified retrospective approach upon adoption. However, ASU 2018-11, Leases (Topic 842): Targeted Improvements provides an alternative transition method by which leases are recognized at the date of adoption and ~~adoption beginning on January 1, 2019.~~a cumulative-effect adjustment to the opening balance of retained earnings is recognized in the period of adoption. The Company plans to adopt using this alternative and is currently evaluating the impact that ~~ASU 2016-02~~these standards will have on its financial position, results of operations and cash flows.

~~(4) Acquisitions~~(5)Revenue Recognition

Topic 606 amends and supersedes FASB Accounting Standards Codification ("ASC") Topic 605, Revenue Recognition ("Topic 605"). The ~~Company accounts for business combinations utilizing~~core principle of Topic 606 is that revenue will be recognized when the ~~acquisition method~~transfer of promised goods or services to customers is made in ~~accordance with ASC Topic 805,~~ ~~Business Combinations. Under the acquisition method of accounting, the fair value of~~an amount that reflects the consideration ~~transferred has been allocated~~ to which the ~~tangible and identifiable intangible assets acquired and liabilities assumed based on their preliminary estimates of fair value.~~entity expects to be entitled in exchange for those goods or services.

~~LiveWatch Acquisition~~Accounting Policy for Periods Commencing January 1, 2018

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On February 23, 2015 ("the Closing Date"), Monitronics acquired LiveWatch for a purchase price of approximately $61,550,000 (the "LiveWatch Purchase Price"). The LiveWatch Purchase Price includes approximately $3,988,000 of cash transferred directly to LiveWatch to fund transaction bonuses payable to LiveWatch employees as of the Closing Date. This cash is not included in the fair value of consideration transferred for the LiveWatch Acquisition. The LiveWatch Purchase Price also includes post-closing adjustments of $435,000 which were paid in the third quarter of 2015. The LiveWatch acquisition was funded by borrowings from Monitronics' revolving credit facility,Brinks Home Security offers its subscribers professional alarm monitoring services, as well as ~~cash contributions~~interactive and home automation services, through equipment at the subscriber's site that communicates with Brinks Home Security’s alarm monitoring station and interfaces with other equipment at the site and third party technology companies for interactive and home automation services. These services are typically provided under alarm monitoring agreements (“AMAs”) between Brinks Home Security and the subscriber. The equipment at the site is either obtained independently from ~~Ascent Capital.~~Brinks Home Security’s network of third party Authorized Dealers or directly from Brinks Home Security via its Direct to Consumer Channel. Brinks Home Security also offers equipment sales and installation services and, to its existing subscribers, maintenance services on existing alarm equipment. Additionally, Brinks Home Security collects fees for contract monitoring, which are services provided to other security alarm companies for monitoring their accounts on a wholesale basis and other fees from subscribers for late fee or insufficient fund charges.

In connection with the LiveWatch Acquisition, Monitronics entered into employment agreements with certain key members of the LiveWatch management team which provide for retention bonuses of $5,400,000 (the "LiveWatch Retention Bonuses")Revenue under subscriber AMAs is allocated to ~~be paid on the second anniversary of the Closing Date,~~alarm monitoring revenue and, performance based bonus arrangements payable on the fourth anniversary of the Close Date (the "LiveWatch Performance Bonuses"). The LiveWatch Performance Bonuses are estimated to yield an aggregate payout of approximately $7,600,000. The LiveWatch Retention Bonusesif applicable, product and LiveWatch Performance Bonuses (together, the "LiveWatch Acquisition Contingent Bonuses") are contingent upon the continued employment of the key members of the LiveWatch management team. As such, the LiveWatch Acquisition Contingent Bonuses are expensed ratably over the service periodinstallation revenue based on the ~~estimated value~~stand alone selling prices (“SSP”) of each performance obligation as a percentage of the ~~payouts. For~~total SSP of all performance obligations. Allocated alarm monitoring revenue is recognized as the ~~year ended December 31, 2015,~~monthly service is provided. Allocated

product and installation revenue is recognized when the ~~Company~~product sale is complete or shipped and the installation service is provided, typically at inception of the AMA. Product and installation revenue is not applicable to AMA's acquired from Authorized Dealers in their initial term. Any cash not received from the subscriber at the time of product sale and installation is recognized ~~$3,930,000 related~~as a contract asset at inception of the AMA and is subsequently amortized over the subscriber contract term as a reduction of the amounts billed for professional alarm monitoring, interactive and home automation services. If a subscriber cancels the AMA within the negotiated term, any existing contract asset is determined to ~~the LiveWatch Acquisition Contingent Bonuses, which are included~~be impaired and is immediately expensed in full to Selling, general and administrative expense on the condensed consolidated statement of operations.

Maintenance services are billed and recognized as revenue when the services are completed in the home and agreed to by the subscriber under the subscriber AMA. Contract monitoring fees are recognized as alarm monitoring revenue as the monitoring service is provided. Other fees are recognized as other revenue when billed to the subscriber which coincides with the timing of when the services are provided.

Disaggregation of Revenue

Revenue is disaggregated by source of revenue as follows (in thousands):



	Year Ended December 31,
	2018		2017	2016
Alarm monitoring revenue	$	498,236	537,399	552,590
Product and installation revenue	38,455		12,308	13,264
Other revenue	3,667		3,748	4,518
Total Net revenue	$	540,358	553,455	570,372

Contract Balances

The following table provides information about receivables, contract assets and contract liabilities from contracts with customers (in thousands):



	December 31, 2018		At adoption
Trade receivables, net	$	13,121	12,645
Contract assets, net - current portion (a)	13,452		14,197
Contract assets, net - long-term portion (b)	16,154		10,377
Deferred revenue	13,060		12,892

(a)Amount is included in Prepaid and other current assets in the consolidated balance sheets.

(b)Amount is included in Other assets in the consolidated balance sheets.

Changes in Accounting Policies

The Company adopted Topic 606, effective January 1, 2018, using the modified retrospective transition method. Under the modified retrospective transition method, the Company evaluated active AMAs on the adoption date as if each AMA had been accounted for under Topic 606 from its inception. Some revenue related to AMAs originated through Brinks Home Security's Direct to Consumer Channel or through extensions that would have been recognized in future periods under Topic 605 were recast under Topic 606 as if revenue had been accelerated and recognized in prior periods, as it was allocated to product and installation performance obligations. A contract asset was recorded as of the adoption date for any cash that has yet to be collected on the accelerated revenue. As this transition method requires that the Company not adjust historical reported revenue amounts, the accelerated revenue that would have been recognized under this method prior to the adoption date was recorded as an adjustment to opening retained earnings and, thus, will not be recognized as revenue in future periods as previously required under Topic 605. Therefore, the comparative information has not been adjusted and continues to be reported under Topic 605.

Under Topic 605, revenue provided under the AMA was recognized as the services were provided, based on the recurring monthly revenue amount billed for each month under contract. Product, installation and service revenue generally was recognized as billed and incurred. Under Topic 606, the Company concluded that certain product and installation services sold or provided to our customers at AMA inception are capable of being distinct and are distinct within the context of the contract.

As such, when Brinks Home Security initiates an AMA with a customer directly and provides equipment and installation services, each component is considered a performance obligation that must have revenue allocated accordingly. The allocation is based on the SSP of each performance obligation as a percentage of the total SSP of all performance obligations multiplied by the total consideration, or cash, expected to be received over the contract term. These AMAs may relate to new customers originated by Brinks Home Security through its Direct to Consumer Channel or existing customers who agree to new contract terms through customer service offerings. For AMAs with multiple performance obligations, management notes that a certain amount of the revenue billed on a recurring monthly basis is recognized earlier under Topic 606 than it was recognized under Topic 605, as a portion of that revenue is allocated to the equipment sale and installation, which is satisfied upon delivery of the product and performance of the installation services at AMA inception.

Revenue on AMAs originated through the Authorized Dealer program are not impacted by Topic 606 in their initial term, as the customer contracts for the equipment sale and installation separately with the Authorized Dealer prior to Brinks Home Security purchasing the AMA from the Authorized Dealer. Revenue on these customers is recognized as the service is provided based on the recurring monthly revenue amount billed for each month of the AMA. Maintenance service revenue for repair of existing alarm equipment at the subscribers' premises will continue to be billed and recognized based on their SSP at the time Brinks Home Security performs the services.

Topic 606 also requires the deferral of incremental costs of obtaining a contract with a customer. Certain direct and incremental costs were capitalized under Topic 605, including on new AMAs obtained in connection with Moves Costs. Under Topic 606, Moves Costs are expensed as incurred to accompany the allocated revenue recognized upon product and installation performance obligations recognized at the AMA inception. There are no other significant changes in contract costs that are capitalized or the period over which they are expensed.

Impacts on Consolidated Financial Statements

The significant effects of adopting Topic 606 are changes to Prepaid and other current assets, Subscriber accounts, net, Other assets, net, Net revenue, Cost of services, Selling, general and administrative and Amortization of subscriber accounts for the period beginning January 1, 2018 for AMAs initiated by Brinks Home Security with the customer directly with multiple performance obligations, as a portion of that revenue is allocated to the equipment sale and installation, which is satisfied upon delivery of the product and performance of the installation services at AMA inception.

The following tables summarize the impacts of adopting Topic 606 on the Company’s consolidated financial statements as of and for the year ended December 31, 2018 (in thousands):

i. Consolidated balance sheets



	Impact of changes in accounting policies
	As reported December 31, 2018			Adjustments		Balances without adoption of Topic 606
Assets
Current assets:
Cash and cash equivalents	$	105,921		—		105,921
Restricted cash	189			—		189
Trade receivables, net of allowance for doubtful accounts	13,121			—		13,121
Prepaid and other current assets	32,202			(13,452	)	18,750
Total current assets	151,433			(13,452	)	137,981
Property and equipment, net of accumulated depreciation	36,549			—		36,549
Subscriber accounts and deferred contract acquisition costs, net of accumulated amortization	1,195,463			45,970		1,241,433
Deferred income tax asset, net	783			—		783
Other assets, net	29,316			(16,154	)	13,162
Total assets	$	1,413,544		16,364		1,429,908
Liabilities and Stockholders’ (Deficit) Equity
Current liabilities:
Accounts payable	$	12,668		—		12,668
Other accrued liabilities	36,006			—		36,006
Deferred revenue	13,060			1,347		14,407
Holdback liability	11,513			—		11,513
Current portion of long-term debt	1,895,175			—		1,895,175
Total current liabilities	1,968,422			1,347		1,969,769
Non-current liabilities:
Long-term debt	—			—		—
Long-term holdback liability	1,770			—		1,770
Derivative financial instruments	6,039			—		6,039
Other liabilities	2,742			—		2,742
Total liabilities	1,978,973			1,347		1,980,320
Commitments and contingencies
Stockholders’ (deficit) equity:
Preferred stock	—			—		—
Series A common stock	121			—		121
Series B common stock	4			—		4
Series C common stock	—			—		—
Additional paid-in capital	1,425,325			—		1,425,325
Accumulated deficit	(1,998,487		)	15,017		(1,983,470	)
Accumulated other comprehensive income, net	7,608			—		7,608
Total stockholders’ (deficit) equity	(565,429		)	15,017		(550,412	)
Total liabilities and stockholders’ (deficit) equity	$	1,413,544		16,364		1,429,908

ii. Consolidated statements of operations and comprehensive income (loss).

~~The table below represents the fair value of the assets and liabilities assumed in the LiveWatch Acquisition (dollars in thousands):~~

Cash $ 784
Trade receivables 273
Other current assets 706
Property and equipment 362
Subscriber accounts 24,900
Other intangible asset 1,300
Goodwill 36,047
Current liabilities (6,810 )
Fair value of consideration transferred $ 57,562



	Impact of changes in accounting policies
	As reported year ended December 31, 2018			Adjustments		Balances without adoption of Topic 606
Net revenue	$	540,358		(8,149	)	532,209
Operating expenses:
Cost of services	128,939			(6,263	)	122,676
Selling, general and administrative, including stock-based and long-term incentive compensation	130,637			(1,670	)	128,967
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets	211,639			7,487		219,126
Depreciation	11,457			—		11,457
Loss on goodwill impairment	563,549			—		563,549
	1,046,221			(446	)	1,045,775
Operating loss	(505,863		)	(7,703	)	(513,566	)
Other expense (income), net:
Interest income	(2,439		)	—		(2,439	)
Interest expense	191,202			—		191,202
Unrealized loss on derivative financial instruments	3,151			—		3,151
Refinancing expense	13,356			—		13,356
Other expense (income), net	(1,478		)	—		(1,478	)
	203,792			—		203,792
Loss before income taxes	(709,655		)	(7,703	)	(717,358	)
Income tax expense	(11,611		)	—		(11,611	)
Net loss	(698,044		)	(7,703	)	(705,747	)
Other comprehensive income (loss):
Foreign currency translation adjustments	758			—		758
Unrealized holding loss on marketable securities, net	(3,900		)	—		(3,900	)
Unrealized gain on derivative contracts, net	14,378			—		14,378
Total other comprehensive income, net of tax	11,236			—		11,236
Comprehensive loss	$	(686,808	)	(7,703	)	(694,511	)

~~The preliminary estimates~~iii. Consolidated statements of the fair value of assets acquired and liabilities assumed are based on available information as of the date of this report and may be revised as additional information becomes available, which primarily includes the finalization of the valuation of assets and liabilities acquired.cash flows



	Impact of changes in accounting policies
	As reported year ended December 31, 2018			Adjustments		Balances without adoption of Topic 606
Cash flows from operating activities:
Net loss	$	(698,044	)	(7,703	)	(705,747	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets	211,639			7,487		219,126
Depreciation	11,457			—		11,457
Stock-based and long-term incentive compensation	1,451			—		1,451
Deferred income tax expense	(14,094		)	—		(14,094	)
Non-cash legal settlement reserve (related insurance recovery)	(2,750		)	—		(2,750	)
Amortization of debt discount and deferred debt costs	41,430			—		41,430
Refinancing expense	13,356			—		13,356
Unrealized loss on derivative financial instruments	3,151			—		3,151
Bad debt expense	12,300			—		12,300
Goodwill impairment	563,549			—		563,549
Other non-cash activity, net	(2,199		)	—		(2,199	)
Changes in assets and liabilities:
Trade receivables	(12,776		)	—		(12,776	)
Prepaid expenses and other assets	(14,576		)	6,379		(8,197	)
Subscriber accounts - deferred contract acquisition costs	(5,418		)	89		(5,329	)
Payables and other liabilities	(15,545		)	(581	)	(16,126	)
Net cash provided by operating activities	92,931			5,671		98,602
Cash flows from investing activities:
Capital expenditures	(14,903		)	—		(14,903	)
Cost of subscriber accounts acquired	(140,450		)	(5,671	)	(146,121	)
Purchases of marketable securities	(39,022		)	—		(39,022	)
Proceeds from sale of marketable securities	143,316			—		143,316
Net cash used in investing activities	(51,059		)	(5,671	)	(56,730	)
Cash flows from financing activities:
Proceeds from long-term debt	248,800			—		248,800
Payments on long-term debt	(184,100		)	—		(184,100	)
Payments of financing costs	(10,739		)	—		(10,739	)
Value of shares withheld for share-based compensation	(188		)	—		(188	)
Net cash provided by financing activities	53,773			—		53,773
Net increase in cash, cash equivalents and restricted cash	95,645			—		95,645
Cash, cash equivalents and restricted cash at beginning of period	10,465			—		10,465
Cash, cash equivalents and restricted cash at end of period	$	106,110		—		106,110

Goodwill in the amount of $36,047,000 was recognized in connection with the LiveWatch Acquisition and was calculated as the excess of the consideration transferred over the net assets recognized and represents the value to Monitronics for LiveWatch's recurring revenue and cash flow streams and its diversified business model and marketing channel. All of the goodwill acquired in the LiveWatch Acquisition is estimated to be deductible for tax purposes.

The subscriber accounts acquired in the LiveWatch Acquisition are amortized using the 14-year 235% declining balance method. The other intangible asset acquired, which represents LiveWatch's trademark asset, is amortized on a straight-line basis over its estimated useful life of 10 years.

The Company incurred $946,000 of legal and professional services expense and other costs related to the LiveWatch Acquisition, which are included in Selling, general and administrative expense in the condensed consolidated statements of operations and comprehensive income (loss).

Ascent Capital's results of operations for the period ended December 31, 2015 include the operations of LiveWatch from the Closing Date. The effect of the LiveWatch Acquisition was not material to the Company's consolidated results for the periods presented and, accordingly, proforma financial disclosures have not been presented.

~~Security Networks Acquisition~~

On August 16, 2013 (the "Closing Date"), Monitronics acquired all of the equity interests of Security Networks and certain affiliated entities. The purchase price (the “Security Networks Purchase Price”) of $500,557,000 consisted of $481,834,000 in

~~Table of Contents~~

cash and 253,333 shares of Ascent Capital’s Series A common stock, par value $0.01 per share, with a Closing Date fair value of $18,723,000. The Security Networks Purchase Price includes post-closing adjustments of $1,057,000. The Company recognized goodwill of $177,289,000

~~(5)~~(6) Investments in Marketable Securities

In the third quarter of 2018, Ascent Capital divested of all marketable securities, which primarily consisted of diversified corporate bond funds. The following table presents a summary of amounts recorded on the ~~Consolidated Balance Sheets~~consolidated balance sheets (amounts in thousands):


										As of December 31, 2018
										Cost Basis		Unrealized Gains	Unrealized Losses	Total
Equity securities										$	—	—	—	—
Mutual funds										—		—	—	—
Ending balance										$	—	—	—	—

	As of December 31, 2015									As of December 31, 2017
	Cost Basis (b)		Unrealized Gains		Unrealized Losses			Fair Value		Cost Basis		Unrealized Gains	Unrealized Losses	Total
Equity securities	$	4,603	—		$	(1,288	)	$	3,315	$	3,432	2,039	—	5,471
Mutual funds (a)	83,333		824		(420		)	83,737		98,628		1,859	—	100,487
Ending balance	$	87,936	824		$	(1,708	)	$	87,052	$	102,060	3,898	—	105,958

	As of December 31, 2014
	Cost Basis		Unrealized Gains		Unrealized Losses			Fair Value
Equity securities	$	4,603	—		$	(398	)	$	4,205
Mutual funds (a)	114,890		1,416		(2,746		)	113,560
Corporate bonds	$	4,888	—		$	(60	)	$	4,828
Ending balance	$	124,381	$	1,416	$	(3,204	)	$	122,593


(a)	Primarily consists of corporate bond funds.


~~(b)~~	When an other-than-temporary impairment occurs, the Company reduces the cost basis of the marketable security involved. For the year end December 31, 2015, the Company recognized non-cash charges for other-than-temporary impairments on its mutual funds of $6,389,000, which are attributable to a low interest rate environment and widening credit spreads.

The following table provides the realized and unrealized investment gains and losses ~~and~~recognized in the ~~total proceeds received from the sale~~consolidated statements of ~~marketable securities~~operations (amounts in thousands):

Year end December 31,
2015 2014 2013
Gross realized gains $ 1,256
$ 146
$ 112
Gross realized losses $ 955
$ 524
$ 389
Total Proceeds $ 57,291
$ 7,842
$ 33,415

~~(6) Assets Held for Sale~~



	Year end December 31,
	2018		2017	2016
Net gains and (losses) recognized during the period on marketable securities	$	2,234	2,828	1,956
Less: Net gains and (losses) recognized during the period on marketable securities sold during the period	$	2,234	1	869
Unrealized gains and (losses) recognized during the reporting period on marketable securities still held at the reporting date	$	—	2,827	1,087

In the first and second quarters of 2015, the Company completed sales of assets held for sale with a total net book value of $18,935,000 for gains of approximately $1,151,000. At December 31, 2015, the Company has net assets held for sale of $6,265,000 on the consolidated balance sheet. The Company currently expects to complete the sale of these real estate properties during the next twelve months.

~~Table of Contents~~

(7)Property and Equipment

Property and equipment consist of the following (amounts in thousands):

As of December 31,
2015 2014
Property and equipment, net:

Land $ 4,700
9,007
Buildings and leasehold improvements 7,108
12,566
Machinery and equipment 52,790
44,467
64,598
66,040
Accumulated depreciation (32,158 ) (30,030 )
$ 32,440
36,010



	As of December 31,
	2018			2017
Property and equipment, net:
Leasehold improvements	$	776		$	1,597
Computer systems and software	73,426			66,128
Furniture and fixtures	3,174			3,013
	77,376			70,738
Accumulated depreciation	(40,827		)	(37,915		)
	$	36,549		$	32,823

Depreciation expense for property and equipment was ~~$10,444,000, $10,145,000~~$11,457,000, $8,844,000 and ~~$8,941,000~~$8,435,000 for the years ended December 31, ~~2015, 2014~~2018, 2017 and ~~2013,~~2016, respectively.

~~(8) Goodwill~~

(8)Goodwill

The following table provides the activity and balances of goodwill by reporting unit (amounts in thousands):

Balance at December 31, 2013 $ 527,502
Period activity —
Balance at December 31, 2014 527,502
LiveWatch Acquisition 36,047
Balance at December 31, 2015 $ 563,549



	MONI			LiveWatch			Brinks Home Security			Total
Balance at December 31, 2016	$	527,502		$	36,047		$	—		$	563,549
Period activity	—			—			—			—
Balance at December 31, 2017	$	527,502		$	36,047		$	—		$	563,549
Goodwill impairment	(214,400		)	—			—			(214,400		)
Reporting unit reallocation	(313,102		)	(36,047		)	349,149			—
Goodwill impairment	—			—			(349,149		)	(349,149		)
Balance at December 31, 2018	$	—		$	—		$	—		$	—

The Company accounts for its goodwill pursuant to the provisions of FASB ASC Topic 350, Intangibles - Goodwill and Other("FASB ASC Topic 350"). In accordance with FASB ASC Topic 350, goodwill is not amortized, but rather tested for impairment annually, or earlier if an event occurs, or circumstances change, that indicate the fair value of ~~the entity~~a reporting unit may be below its carrying amount (a "triggering event"). In connection with the Company's annual goodwill impairment assessment, which is performed in the fourth quarter using October 31 balances, the Company did not record an impairment loss to goodwill.amount.

As of ~~December~~May 31, ~~2015,~~2018, the Company determined that a triggering event had occurred due to a sustained decrease in the Company's ~~market capitalization.~~share price. In response to the triggering event, the Company performed a quantitative impairment test for both the MONI and LiveWatch reporting units. Fair value was determined using a combination of an income-based approach (using a discount rate of 8.50%) and a market-based approach for the MONI reporting unit and an income-based approach (using a discount rate of 8.50%) for the LiveWatch reporting unit. Based on the analysis, the fair value of the LiveWatch reporting unit substantially exceeded its carrying value, while the carrying amount of the MONI reporting unit exceeded its estimated fair value, which indicated an impairment at the MONI reporting unit.

The Company early adopted ASU 2017-04, which eliminated Step 2 from the goodwill impairment test, and as such, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. Applying this methodology, we recorded an impairment charge of $214,400,000 for the MONI reporting unit during the three months ended June 30, 2018. Factors leading to this impairment are primarily the experience of overall lower account acquisition in ~~accordance with FASB ASC Topic 350~~recent periods. Using this information, we adjusted the growth outlook for this reporting unit, which resulted in reductions in future cash flows and ~~determined that there was no impairment.~~a lower fair value calculation under the income-based approach. Additionally, decreases in observable market share prices for comparable companies in the quarter reduced the fair value calculated under the market-based approach.

In early June 2018, the reportable segments known as MONI and LiveWatch were combined and presented as Brinks Home Security. Refer to Note 1, Basis of Presentation, for further discussion on the change in reportable segments. As a result of the change in reportable segments, goodwill assigned to these former reporting units of $313,102,000 and $36,047,000, for MONI and LiveWatch, respectively, have been reallocated and combined as of June 30, 2018 under the Brinks Home Security reporting unit.

In connection with the Company's annual goodwill impairment assessment, in which the Company performed a quantitative test in the fourth quarter of its fiscal year, based on October 31 balances, the carrying amount of the Brinks Home Security reporting unit exceeded its estimated fair value. Fair value was determined using an income-based approach (using a discount rate of 8.50%) for the Brinks Home Security reporting unit. Since the carrying amount exceeded the reporting unit's fair value, we recorded an additional impairment charge of $349,149,000, the amount of the remaining carrying value of goodwill. This impairment is primarily attributable to projected decreasing cash flows resulting from a declining customer base. The Company’s projections were revised based on recent historical trends as well as other various outlook considerations, which resulted in reductions in future cash flows and enterprise valuation.

(9) Other Accrued Liabilities

Other accrued liabilities consisted of the following (amounts in thousands):


	December 31, 2015		December 31, 2014		December 31, 2018		December 31, 2017
Accrued payroll and related liabilities					$	4,957	$	3,953
Interest payable	$	15,390	$	15,594	15,537		15,927
Income taxes payable	2,665		3,577		2,742		2,950
Legal accrual	379		872
Legal settlement reserve (a)					—		23,000
Other	13,139		10,684		12,770		10,452
Total Other accrued liabilities	$	31,573	$	30,727	$	36,006	$	56,282

(a)See note 17, Commitments, Contingencies and Other Liabilities, for further information.

~~Table of Contents~~

(10)Long-Term Debt

Long-term debt consisted of the following (amounts in thousands):

December 31,
2015 December 31,
2014
Ascent Capital 4.00% Convertible Senior Notes due July 15, 2020 with an
  effective rate of 7.8%
$ 74,507
$ 75,774
Monitronics 9.125% Senior Notes due April 1, 2020 with an effective rate of 9.4% 576,455
574,768
Monitronics term loans, matures April 9, 2022, LIBOR plus 3.50%, subject to a LIBOR
  floor of 1.00% with an effective rate of 5.1%
542,420
—
Monitronics term loans, matures March 23, 2018, LIBOR plus 3.25%, subject to a LIBOR
  floor of 1.00% with an effective rate of 5.0%
394,938
885,928
Monitronics $315 million revolving credit facility, matures December 22, 2017, LIBOR
  plus 3.75%, subject to a LIBOR floor of 1.00% with an effective rate of 6.7%
131,048
68,345
1,719,368
1,604,815
Less current portion of long-term debt (5,500 ) (9,166 )
Long-term debt $ 1,713,868
$ 1,595,649



	December 31, 2018			December 31, 2017
Ascent Capital 4.00% Convertible Senior Notes due July 15, 2020 with an effective rate of 9.1%	$	90,725		$	82,614
Brinks Home Security 9.125% Senior Notes due April 1, 2020 with an effective rate of 9.5%	585,000			580,159
Brinks Home Security term loan, matures September 30, 2022, LIBOR plus 5.50%, subject to a LIBOR floor of 1.00%, with an effective rate of 8.3%	1,075,250			1,059,598
Brinks Home Security $295 million revolving credit facility, matures September 30, 2021, LIBOR plus 4.00%, subject to a LIBOR floor of 1.00%, with an effective rate of 4.8%	144,200			66,673
	1,895,175			1,789,044
Less current portion of long-term debt	(1,895,175		)	(11,000		)
Long-term debt	$	—		$	1,778,044

~~Convertible Notes~~

~~In July, 2013,~~ Ascent Capital ~~issued $103,500,000~~Convertible Senior Notes

The Ascent Capital Convertible Notes total $96,775,000 in aggregate principal amount, of 4.00% convertible senior notes due July 15, 2020 (the "Convertible Notes") in an offering registered under the Securities Act of 1933, as amended. The Convertible Notes are convertible, under certain circumstances, into cash, shares of Series A Common Stock or any combination thereof at Ascent Capital’s election. The Convertible Notes mature on July 15, 2020 and bear interest at ~~a rate~~4.00% per ~~annum of 4.00%.~~annum. Interest on the Convertible Notes is payable semi-annually on January 15 and July 15 of each year. ~~In December 2015,~~On August 30, 2018, Ascent Capital entered into a Supplemental Indenture in which the Company ~~purchased $6,725,000 in aggregate principal amount~~surrendered its right to elect to deliver shares of common stock or a combination of cash and shares of common stock upon conversion of the Convertible Notes (the "Convertible Notes Supplemental Indenture"). Following the execution of the Supplemental Indenture, the Company may satisfy its conversion obligation solely in cash.

See note 1, Basis of Presentation, for information about the potential of a delisting of our Series A Common Stock from Nasdaq, which may accelerate the due date of the entire outstanding principal amount of, and ~~retired them recognizing a gain~~any accrued and unpaid interest and accrued and unpaid additional interest on ~~extinguishment of~~all the Convertible Notes, to be due and payable immediately. Given this potential, the outstanding debt of ~~$745,000.~~the Convertible Notes has been classified as Current portion of long-term debt in the consolidated balance sheets as of December 31, 2018.

See note 17, Commitments, Contingencies and Other Liabilities, and note 19, Subsequent Events, for further explanation of the Convertible Notes repurchased pursuant to the Settlement Agreement, the Second Supplemental Indenture and the cash tender offer that all occurred subsequent to December 31, 2018.

~~Holders~~Under certain circumstances, the remaining holders of the Convertible Notes ("Noteholders") have the right, at their option, to convert all or any portion of such Convertible Notes, subject to the satisfaction of certain conditions, at an initial conversion rate of 9.7272 shares of Series A Common Stock per $1,000 principal amount of Convertible Notes (subject to adjustment in certain situations), which represents an initial conversion price per share of Series A Common Stock of approximately $102.804 ~~(the~~

(the "Conversion Price"). ~~Ascent Capital is entitled to settle any such conversion by delivery of cash, shares of Series A Common Stock or any combination thereof at Ascent’s election.~~ In addition, Noteholders have the right to submit Convertible Notes for conversion, subject to the satisfaction of certain conditions, in the event of certain corporate transactions.

In the event of a fundamental change (as such term is defined in the indenture governing the Convertible Notes) at any time prior to the maturity date, each Noteholder shall have the right, at such Noteholder’s option, to require Ascent Capital to repurchase for cash any or all of such Noteholder’s Convertible Notes on the repurchase date specified by Ascent Capital at a repurchase price equal to 100% of the principal amount thereof, together with accrued and unpaid interest, including unpaid additional interest, if any, unless the repurchase date occurs after an interest record date and on or prior to the related interest payment date, as specified in the indenture.

The Convertible Notes are within the scope of FASB ASC ~~Topic 470~~ Subtopic ~~20,~~470-20, Debt with Conversion and Other Options ~~("FASB ASC 470-20")~~, and as such are required to be separated into a liability and equity component. The carrying amount of the liability component is calculated by measuring the fair value of a similar liability (including any embedded features other than the conversion option) that does not have an associated conversion option. The carrying amount of the equity component is determined by deducting the fair value of the liability component from the initial proceeds ascribed to the Convertible Notes as a whole. The excess of the principal amount of the liability component over its carrying amount, treated as a debt discount, is amortized to interest cost over the expected life of a similar liability that does not have an associated conversion option using the effective interest method. ~~The equity component is not remeasured as long as it continues to meet~~Upon the execution of the Convertible Notes Supplemental Indenture, the conversion option no longer meets the conditions for equity classification as prescribed in FASB ASC ~~815~~ Subtopic ~~40,~~815-40, Contracts in an Entity’s Own Equity ~~("FASB ASC 815-40")~~. ~~Accordingly, upon issuance,~~As such, the ~~Company estimated fair value~~conversion option is bifurcated as a separate derivative and recorded as a liability. Given the significant variance in the Conversion Price and the current market price per share of the Series A Common Stock, the conversion option derivative liability ~~component as $72,764,000, with the remaining excess amount of $30,736,000 allocated to the equity component.~~is immaterial.

~~Table of Contents~~

The Convertible Notes are presented on the consolidated balance sheet as follows (amounts in thousands):


	As of December 31, 2015			As of December 31, 2014			As of December 31, 2018			As of December 31, 2017
Principal	$	96,775		$	103,500		$	96,775		$	96,775
Unamortized discount	(20,857		)	(25,969		)	(5,666		)	(13,263		)
Deferred debt costs	$	(1,411	)	$	(1,757	)	(384		)	(898		)
Carrying value	$	74,507		$	75,774		$	90,725		$	82,614

The Company amortized $8,111,000, $4,335,000 and $3,533,000 of the Convertible Notes debt discount and deferred financing costs into interest expense for the years ended December 31, 2018, 2017 and 2016, respectively. Included in the amortization of debt discount and deferred financing costs for the year ended December 31, 2018 is accelerated amortization of $3,128,000, which was accelerated due to the subsequent settlement of the Convertible Notes and the potential of any remaining Convertible Notes being settled at close to par given certain circumstances existing as of December 31, 2018. Prior to the acceleration of the debt discount, the Company was using an effective interest rate of 14.0% to calculate the accretion of the debt discount, which iswas being recorded as interest expense over the expected remaining term to maturity of the Convertible Notes. The Company recognized contractual interest expense of ~~$4,125,000 and $4,140,000~~$3,871,000 on the Convertible Notes for each of the years ended December 31, ~~2015~~2018, 2017 and 2014, respectively. The Company amortized $3,643,000 and $3,342,000 of the Convertible Notes debt discount into interest expense for the years ended December 31, 2015 and 2014, respectively. The Company retired $1,468,000 of unamortized debt discount and $135,000 of deferred financing costs in connection with the retirement of the Convertible Notes.2016.

Hedging Transactions Relating to the Offering of the Convertible Notes

In connection with the issuance of the Convertible Notes, Ascent Capital entered into separate privately negotiated purchased call options (the "Bond Hedge Transactions"). The Bond Hedge Transactions require the counterparties to offset Series A Common Stock deliverable or cash payments made by Ascent Capital upon conversion of the Convertible Notes in the event that the volume-weighted average price of ~~the~~ Series A Common Stock on each trading day of the relevant valuation period is greater than the strike price of $102.804, which corresponds to the Conversion Price of the Convertible Notes. The Bond Hedge Transactions cover, subject to anti-dilution adjustments, approximately 1,007,000 shares of Series A Common Stock, which is equivalent to the number of shares initially issuable upon conversion of the Convertible Notes, and are expected to reduce the potential dilution with respect to the Series A Common Stock, and/or offset potential cash payments Ascent Capital is required to make in excess of the principal amount of the Convertible Notes upon conversion. Following the execution of the Convertible Notes Supplemental Indenture, the Company may satisfy its conversion obligation relating to the Convertible Notes solely in cash.

Concurrently with the Bond Hedge Transactions, Ascent Capital also entered into separate privately negotiated warrant transactions with each of the call option counterparties (the "Warrant Transactions"). The warrants are European options, and are exercisable in tranches on consecutive trading days starting after the maturity of the Convertible Notes. The warrants cover the same initial number of shares of Series A Common Stock, subject to anti-dilution adjustments, as the Bond Hedge Transactions. The Warrant Transactions require Ascent Capital to deliver Series A Common Stock or make cash payments to the counterparties on each expiration date with a value equal to the number of warrants exercisable on that date times the excess of the volume-weighted average price of the Series A Common Stock over the strike price of $118.62, which effectively reflects a 50% conversion premium on the Convertible Notes. As such, the Warrant Transactions may have a dilutive effect with respect to the Series A Common Stock to the extent the Warrant Transactions are settled with shares of Series A Common Stock. Ascent Capital may elect to settle its delivery obligation under the Warrant Transactions in cash.

The Bond Hedge Transactions and Warrant Transactions are separate transactions entered into by Ascent Capital, are not part of the terms of the Convertible Notes and will not affect the ~~Noteholders’~~Noteholders' rights under the Convertible Notes. The Noteholders will not have any rights with respect to the Bond Hedge Transactions or the Warrant Transactions.

Ascent Capital purchased the bond hedge call option for $20,318,000 and received $14,211,000 in proceeds from the sale of the warrants, resulting in a net cost for the Bond Hedge Transactions and the Warrant Transactions of $6,107,000. In accordance with FASB ASC 815-40, the fair value of the Bond Hedge and Warrant Transactions was recognized in Additional paid-in capital on the consolidated balance sheet.

Brinks Home Security Senior Notes

The ~~senior notes~~Brinks Home Security Senior Notes total ~~585,000,000~~ ~~in principal, mature on April 1, 2020~~$585,000,000 in principal, mature on April 1, 2020, and bear interest at 9.125% per annum. Interest payments are due semi-annually on April 1 and October 1 of each year. The Senior Notes are guaranteed by all of ~~Monitronics’~~Brinks Home Security's existing domestic subsidiaries. Ascent Capital has not guaranteed any of ~~Monitronics’~~Brinks Home Security's obligations under the Senior Notes.

Potential Credit Facility covenant breaches in 2019, which may include the acceleration of the maturity of the Credit Facility term loan and the Credit Facility revolver (as described below), would be an event of default under the Senior Notes. If an event of default occurs and is continuing, the holders of the Senior Notes could declare the aggregate principal amount of the Senior Notes and any accrued interest on the Senior Notes to be due and payable immediately. As such, the outstanding debt of the Senior Notes as of December 31, ~~2015,~~2018 has been classified as Current portion of long-term debt in the ~~senior notes had~~consolidated balance sheets.

Included in the amortization of deferred financing costs ~~net of accumulated~~and debt premium related to the Senior Notes for the year ended December 31, 2018 is accelerated amortization of ~~$8,760,000.~~$2,784,000, which was accelerated as Brinks Home Security was not able to obtain a permanent waiver of the Going Concern Default under the Credit Facility as of the issuance date of these consolidated financial statements.

~~Table of Contents~~

Brinks Home Security Credit Facility

On ~~February 17, 2015, Monitronics~~September 30, 2016, Brinks Home Security entered into an amendment ("Amendment No. 4"6") with the lenders of its existing senior secured credit agreement dated March 23, 2012, and as amended and restated on April 9, 2015, February 17, 2015, August 16, 2013, March 25, 2013, and November 7, 2012 (the "Existing Credit Agreement"). Amendment No. 46 provided for, among other things, the ~~increased commitment under the revolving credit facility in a principal amount of $315,000,000.~~

~~On April 9, 2015, Monitronics entered into Amendment No. 5 ("Amendment No. 5") to its Existing Credit Agreement. Pursuant to Amendment No. 5, Monitronics completed the~~ issuance of ~~an incremental $550,000,000~~a $1,100,000,000 senior secured ~~Term Loan B offering~~term loan at a ~~0.5%~~1.5% discount ~~with~~and a ~~maturity date of April 9, 2022~~new $295,000,000 super priority revolver (the "2022 Term Loans"). Monitronics use the net proceeds to retire approximately $492,000,000 of its existing term loans due March 2018 (the "2018 Term Loans") and repaid $49,900,000 of its revolving credit facility. Amendment No 5 (the Existing Credit Agreement together with Amendment No. ~~4 and Amendment No. 5,~~6, the "Credit Facility") ~~also incorporates certain covenant changes, including the removal~~.

As of ~~the third quarter 2015 step downs of the senior secured and total leverage ratios, both as defined in~~December 31, 2018, the Credit ~~Facility.~~

Facility term loan has a principal amount of $1,075,250,000 maturing on September 30, 2022. The ~~2018 Term Loans bear~~term loan requires quarterly interest payments and quarterly principal payments of $2,750,000. The term loan bears interest at LIBOR plus ~~3.25%~~5.5%, subject to a LIBOR floor of ~~1.00%,~~1.0%. The Credit Facility revolver has a principal amount outstanding of $144,200,000 and ~~mature~~a $600,000 standby letter of credit issued as of December 31, 2018, maturing on March 23, 2018. Interest on the 2018 Term Loans are due quarterly with the principal due at maturity. The 2022 Term Loans bear interest at LIBOR plus 3.5%, subject to a LIBOR floor of 1.00% Principal payments of approximately $1,375,000 and interest on the term loans are due quarterly on the 2022 Term Loans.September 30, 2021. The Credit Facility revolver bears interest at LIBOR plus ~~3.75%~~4.0%, subject to a LIBOR floor of ~~1.00%, and matures on December 22, 2017.~~1.0%. There is ~~an annual~~a commitment fee of 0.5% on unused portions of the Credit Facility revolver. As of December 31, ~~2015, $181,750,000~~2018, subject to the recently obtained waiver by Credit Facility revolving lenders, $50,200,000 is available for borrowing under the Credit Facility revolver.

The maturity date for each of the term loan and the revolving credit ~~facility.~~facility under the Credit Facility is subject to a springing maturity 181 days prior to the scheduled maturity date of the Senior Notes, or October 3, 2019 (the "Springing Maturity"), if Brinks Home Security is unable to refinance the Senior Notes by that date.

The springing maturity date occurs less then twelve months from the balance sheet date of these consolidated financial statements and Brinks Home Security has not refinanced the Senior Notes as of the issuance date of these consolidated financial statements. As such, the outstanding debt of the Credit Facility term loan and the Credit Facility revolver as of December 31, ~~2015,~~2018 has been classified as Current portion of long-term debt in the ~~Company has deferred debt costs, net of accumulated~~consolidated balance sheets.

Included in the amortization of ~~$9,058,000~~deferred financing costs and debt discount related to the Credit ~~Facility.~~Facility for the year ended December 31, 2018 is accelerated amortization of $23,215,000, which was accelerated as Brinks Home Security was not able to obtain a permanent waiver of the Going Concern Default under the Credit Facility as of the issuance date of these consolidated financial statements.

The Credit Facility is secured by a pledge of all of the outstanding stock of ~~Monitronics~~Brinks Home Security and all of its existing subsidiaries and is guaranteed by all of ~~Monitronics’~~Brinks Home Security's existing domestic subsidiaries. Ascent Capital has not guaranteed any of ~~Monitronics’~~Brinks Home Security's obligations ~~under the Credit Facility.~~

At any time after the occurrence of an event of default under the Credit Facility, the lenders may, among other options, declare any amounts outstanding under the Credit Facility immediately due and payable and terminate any commitment to make further loans under the Credit Facility. In addition, failure to comply with restrictions contained in the Senior Notes could lead to an event of default under the Credit Facility.

In order to reduce the financial risk related to changes in interest rates associated with the floating rate term ~~loans~~loan under the Credit Facility term ~~loans, Monitronics~~loan, Brinks Home Security has entered into interest rate swap agreements with terms similar to the Credit Facility term ~~loans~~loan (all outstanding interest rate swap agreements are collectively referred to as the ~~“Swaps”~~"Swaps"). The Swaps have been designated as effective hedges of the ~~Company’s~~Company's variable rate debt and qualify for hedge accounting. As a result of these interest rate swaps, ~~Monitronics' current~~Brinks Home Security's effective weighted average interest rate (excluding the impacts of non-cash amortization of deferred debt costs and discounts) on the borrowings under the Credit Facility term ~~loans is 5.15%.~~loan was 8.08% as of December 31, 2018. See note 11, Derivatives, for further disclosures related to these derivative instruments. .

The terms of the Convertible Notes, the Senior Notes and the Credit Facility provide for certain financial and nonfinancial covenants. AsExcluding consideration of the Going Concern Default, as of December 31, ~~2015,~~2018, the Company was in compliance with all required ~~covenants.~~covenants under these financing arrangements. See note 2, Going Concern, for further disclosures related to the Going Concern Default.

~~Principal~~As of December 31, 2018, principal payments scheduled to be made on the ~~Company’s~~Company's debt obligations, assuming certain accelerated maturities due to potential events of default and subsequent transactions, are as follows (amounts in thousands):

2016 $ 5,500
2017 138,750
2018 409,284
2019 5,500
2020 687,275
2021 5,500
Thereafter 512,875
Total principal payments $ 1,764,684
Less:
Unamortized discounts, premium and deferred debt costs, net 45,316
Total debt on consolidated balance sheet $ 1,719,368

~~Table of Contents~~

~~(11) Derivatives~~



2019	$	1,901,225
2020	—
2021	—
2022	—
2023	—
Thereafter	—
Total principal payments	1,901,225
Less:
Unamortized discounts, premium and deferred debt costs, net	6,050
Total debt on consolidated balance sheet	$	1,895,175

~~The Company~~(11)Derivatives

Brinks Home Security utilizes ~~interest rate swap agreements~~Swaps to reduce the interest rate risk inherent in ~~Monitronics’~~Brinks Home Security's variable rate Credit Facility term ~~loans.~~loan. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatility. The Company incorporates credit valuation adjustments to appropriately reflect the respective ~~counterparty’s~~counterparty's nonperformance risk in the fair value measurements. See note 12, Fair Value Measurements, for additional information about the credit valuation adjustments.

At December 31, ~~2015,~~2018, derivative financial instruments ~~include seven interest rate swaps~~included two Swaps with ~~a fair value $13,470,000 that constitute a liability of the Company. At December 31, 2014, derivative financial instruments include one interest rate swap with a~~an aggregate fair value of ~~$1,123,000,~~$10,552,000 that ~~constitute~~constituted an asset of the Company and ~~three interest rate swaps~~two Swaps with an aggregate fair value of $6,039,000 that constituted a liability to the Company. At December 31, 2017, derivative financial instruments included two Swaps with a fair value ~~$5,780,000~~of $7,058,000 that ~~constitute~~constituted an asset of the Company and six Swaps with an aggregate fair value of $13,817,000 that constituted a liability to the Company. Depending on the maturity date of the ~~Company. The Swaps~~Swap and the balance sheet date, Swap asset values are included in Prepaid and other current assets or non-current Other assets, net and Swap liability values are included in current Other accrued liabilities or non-current Derivative financial instruments on the consolidated balance sheets. As of December 31, ~~2015~~2018 and ~~2014~~2017, no amounts were offset for certain derivatives' fair value that were recognized under a master netting agreement with the same counterparty.

The objective of the ~~swap~~Swap derivative instruments was to reduce the risk associated with ~~Monitronics’~~Brinks Home Security's term loan variable interest rates. In effect, the ~~swap~~Swap derivative instruments convert variable interest rates into fixed interest rates on the ~~Company’s~~Company's term loan borrowings.

All of the Swaps ~~are~~were designated and ~~qualify~~qualified as cash flow hedging instruments, with the effective portion of the Swaps' change in fair value recorded in ~~accumulated~~Accumulated other comprehensive income (loss). ~~Any ineffective portions~~However, in December of 2018, given the potential for changes in Brinks Home Security's future expected interest payments that these Swaps hedged, all of the ~~Swaps' change in fair value are recognized in current earnings in interest expense. Changes~~Swaps no longer qualified as a cash flow hedge and were dedesignated as such. Before the dedesignation, changes in the fair value of the Swaps were recognized in ~~accumulated~~Accumulated other comprehensive income (loss) ~~are~~and were reclassified to ~~interest~~Interest expense when the hedged interest payments on the underlying debt were recognized. After the dedesignation, changes in the fair value of the Swaps are ~~recognized.~~recognized in Unrealized loss on derivative financial instruments on the consolidated statements of operations and comprehensive income (loss). For the year ended December 31, 2018, the Company recorded an Unrealized loss on derivative financial instruments of $3,151,000. Amounts recognized in Accumulated other comprehensive income (loss) as of the dedesignation date will be amortized to Interest expense on the consolidated statements of operations and comprehensive income (loss) over the remaining contractual term of the Swaps. Amounts in ~~accumulated~~Accumulated other comprehensive income (loss) expected to be recognized in Interest expense in the coming 12 months total approximately ~~$7,092,000.~~$1,890,000.

~~The Swaps’ outstanding notional balance as~~As of December 31, ~~2015~~2018, the Swaps' outstanding notional balances, effective dates, maturity dates and ~~terms~~interest rates paid and received are noted below:

Notional Effective Date
Maturity
Date

Fixed
Rate Paid
Variable Rate Received
$ 529,375,000
March 28, 2013 March 23, 2018 1.884% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a)
140,287,500
March 28, 2013 March 23, 2018 1.384% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a)
109,673,367
September 30, 2013 March 23, 2018 1.959% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
109,673,367
September 30, 2013 March 23, 2018 1.850% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
191,475,002
March 23, 2018 April 9, 2022 2.924% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
250,000,000
March 23, 2018 April 9, 2022 2.810% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
50,000,000
March 23, 2018 April 9, 2022 2.504% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor



Notional		Effective Date	Maturity Date	Fixed Rate Paid	Variable Rate Received
$	189,506,107	March 23, 2018	April 9, 2022	3.110%	3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
247,500,000		March 23, 2018	April 9, 2022	3.110%	3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
49,500,000		March 23, 2018	April 9, 2022	2.504%	3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
373,230,000		March 23, 2018	September 30, 2022	1.833%	3 mo. USD-LIBOR-BBA, subject to a 1.00% floor

~~(a)~~

On March 25, 2013, Monitronics negotiated amendments to the terms of these interest rate swap agreements,which were entered into in March 2012 (the "Existing Swap Agreements," as amended, the “Amended Swaps”). The Amended Swaps are held with the same counterparties as the Existing Swap Agreements. Upon entering into the Amended Swaps, Monitronics simultaneously dedesignated the Existing Swap Agreements and redesignated the Amended Swaps as cash flow hedges for the underlying change in the swap terms. The amounts previously recognized in Accumulated other comprehensive loss relating to the dedesignation are recognized in Interest expense over the remaining life of the Amended Swaps.

~~Table of Contents~~

The impact of the derivatives designated as cash flow hedges on the consolidated financial statements is depicted below (amounts in thousands):


	Year Ended December 31,							Year Ended December 31,
	2015			2014		2013		2018			2017		2016
Effective portion of gain (loss) recognized in Accumulated other comprehensive income (loss)	$	(16,041	)	(12,560	)	7,014		$	12,882		(3,842	)	(2,673	)
Effective portion of loss reclassified from Accumulated other comprehensive income (loss) into Net loss (a)	$	(7,300	)	(7,681	)	(5,303	)	$	(1,496	)	(5,424	)	(7,262	)
Ineffective portion of amount of gain (loss) recognized into Net loss on interest rate swaps (a)	$	(119	)	(46	)	24
Ineffective portion of amount of gain recognized into Net loss on interest rate swaps (a)								$	—		88		423

(a) Amounts are included in Interest expense in the consolidated statements of operations and comprehensive income (loss). Upon the adoption of ASU 2017-12 on January 1, 2018, ineffectiveness is no longer measured or recognized.

(12)Fair Value Measurements

According to the FASB ASC Topic 820, Fair Value Measurements ~~and Disclosures Topic of the Financial Accounting Standards Board Accounting Standards Codification,~~, fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants and requires that assets and liabilities carried at fair value are classified and disclosed in the following three categories:

Level 1 - Quoted prices for identical instruments in active markets.

Level 2 - Quoted prices for similar instruments in active or inactive markets and valuations derived from models where all significant inputs are observable in active markets.

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable in any market.

The following summarizes the fair value level of assets and liabilities that are measured on a recurring basis at December 31, ~~2015~~2018 and ~~December 31, 2014~~2017 (amounts in thousands):

Level 1 Level 2 Level 3 Total
December 31, 2015

Money market funds (a) $ 2,242
—
—
2,242
Investments in marketable securities (b) 87,052
—
—
87,052
Derivative financial instruments - liabilities —
(13,470 ) —
(13,470 )
Total 89,294
(13,470 ) —
75,824
December 31, 2014

Money market funds (a) $ 8,492
—
—
8,492
Investments in marketable securities (b) 117,765
4,828
—
122,593
Derivative financial instruments - assets (c) —
1,123
—
1,123
Derivative financial instruments - liabilities —
(5,780 ) —
(5,780 )
Total 126,257
171
—
126,428



	Level 1		Level 2		Level 3	Total
December 31, 2018
Interest rate swap agreements - assets (a)	$	—	10,552		—	10,552
Interest rate swap agreements - liabilities (a)	—		(6,039	)	—	(6,039	)
Total	$	—	4,513		—	4,513
December 31, 2017
Investments in marketable securities (b)	$	105,958	—		—	105,958
Interest rate swap agreement - asset (a)	—		7,058		—	7,058
Interest rate swap agreements - liabilities (a)	—		(13,817	)	—	(13,817	)
Total	$	105,958	(6,759	)	—	99,199


(a)	~~Included~~Depending on the maturity date of the Swap and the balance sheet date, Swap asset values are included in ~~cash~~Prepaid and ~~cash equivalents~~other current assets or non-current Other assets, net and Swap liability values are included in current Other accrued liabilities or non-current Derivative financial instruments on the consolidated balance sheets.


(b)	Level 1 investments primarily consist of diversified corporate bond funds. ~~The Level 2 security represents one investment in a corporate bond which was sold in in the second quarter of 2015. All investments are classified as available-for-sale securities.~~


~~(c)~~	~~Included in Other assets, net on the consolidated balance sheets.~~

The Company has determined that the ~~majority of the~~significant inputs used to value the Swaps fall within Level 2 of the fair value hierarchy. As a result, the Company has determined that its derivative valuations are classified in Level 2 of the fair value hierarchy. There were no transfers between Level 2 and Level 3 during the years ended December 31, 2018, 2017 and 2016.

~~Table of Contents~~

Carrying values and fair values of financial instruments that are not carried at fair value are as follows (amounts in thousands):


	December 31, 2015		December 31, 2014		December 31, 2018		December 31, 2017
Long term debt, including current portion:
Carrying value	$	1,719,368	$	1,604,815	$	1,895,175	1,789,044
Fair value (a)	1,563,376		1,590,809		1,273,502		1,709,342

~~Table of Contents~~

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) (1) Financial Statements

Included in Part II of this Annual Report:

Ascent Capital Group, Inc.:



	Page No.
Reports of Independent Registered Public Accounting Firm	4043
Consolidated Balance Sheets, December 31, ~~2015~~2018 and ~~2014~~2017	4344
Consolidated Statements of Operations and Comprehensive Income (loss), Years ended December 31, ~~2015, 2014~~2018, 2017 and ~~2013~~2016	4445
Consolidated Statements of Cash Flows, Years Ended December 31, ~~2015, 2014~~2018, 2017 and ~~2013~~2016	4546
Consolidated Statements of ~~Stockholders’~~Stockholders' Equity, Years ended December 31, ~~2015, 2014~~2018, 2017 and ~~2013~~2016	4647
Notes to Consolidated Financial Statements, December 31, ~~2015, 2014~~2018, 2017 and ~~2013~~2016	4748

(a) (2) Financial Statement Schedules

(i) All schedules have been omitted because they are not applicable, not material or the required information is set forth in the consolidated financial statements or notes thereto.

~~Table of Contents~~

(a) (3) Exhibits

Listed below are the exhibits which are filed as a part of this Report (according to the number assigned to them in Item 601 of Regulation S-K):




3.1		Form of Amended and Restated Certificate of Incorporation of ~~the Company~~Ascent Media Corporation (incorporated by reference to Exhibit 3.1 to the ~~Company’s~~Registrant's Registration Statement on Form 10 (File No. 000-53280), filed with the Securities and Exchange Commission (the "Commission") on June 13, 2008 (the "Form 10")).

3.2		Certificate of Ownership and Merger dated July 7, 2011 (incorporated by reference to Exhibit 3.1 to the ~~Company’s~~Registrant’s Current Report on Form 8-K (File No. 001-34176), filed with the Commission on July 8, 2011) ~~(filed for the purpose of changing the name of the Company)~~.

3.3		Form of Bylaws of ~~the Company~~Ascent Media Corporation (incorporated by reference to Exhibit 3.2 to the Form 10).

3.4		Certificate of Elimination, dated January 27, 2014 (incorporated by reference to Exhibit 3.1 to the ~~Company’s~~Registrant's Current Report on Form 8-K (File No. 001-34176), filed with the Commission on January 27, ~~2014 (the "January 2014 8-K"))~~2014).

4.1		Specimen Certificate for shares of Series A common stock, par value $.01 per share, of ~~the Company~~Ascent Media Corporation (incorporated by reference to Exhibit 4.1 to the Form 10).

4.2		Specimen Certificate for shares of Series B common stock, par value $.01 per share, of ~~the Company~~Ascent Media Corporation (incorporated by reference to Exhibit 4.2 to the Form 10).



~~4.3~~		Indenture, dated March 23, 2012, between Monitronics, as issuer, the guarantors party thereto, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012 (File No. 001-34176), filed with the Commission on May 9, 2012 (the "March 2012 10-Q")).

~~4.4~~4.3		Credit Agreement, dated March 23, 2012, among Monitronics International, Inc. ("Monitronics"), as borrower, Bank of America, N.A., as administrative agent and letter of credit issuer, Citibank, N.A. and Credit Suisse AG, Cayman Islands Branch, as co-syndication agents, U.S. Bank National Association, as document agent and the lenders party thereto ~~(the "Credit Agreement")~~ (incorporated by reference to Exhibit 4.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012 ~~10-Q)~~(File No. 001-34176), filed with the Commission on May 9, 2012 (the "Q1 2012 10-Q")).

~~4.5~~4.4		Form of Amendment No. 1 to the Credit Agreement, dated November 7, 2012, by and among Monitronics, Bank of America, N.A., individually and as administrative agent, and the other financial institutions signatory thereto (incorporated by reference to Exhibit 4.7 to the ~~Company’s~~Registrant’s Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 001-34176), filed with the Commission on February 27, 2013 (the "2012 10-K")).

~~4.6~~4.5		Form of Amendment No. 2 to the Credit Agreement, dated March 25, 2013, by and among Monitronics, Bank of America, N.A., individually and as administrative agent, and other financial institutions signatory thereto (incorporated by reference to Exhibit 4.1 to the ~~Company’s~~Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013 (File No. 001-34176), filed with the Commission on May 10, 2013).

~~4.7~~4.6		Form of Amendment No. 3 to the Credit Agreement and Amendment No. 1 to Guaranty Agreement, dated August 16, 2013, by and among Monitronics, ~~International, Inc.,~~ Bank of America, N.A., individually and as administrative agent, and the certain lenders party thereto (incorporated by reference to Exhibit 4.4 to the ~~Company’s~~Registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 (File No. 001-34176), filed with the Commission on November 12, 2013).

~~4.8~~4.7		Form of Amendment No. 4 to the Credit Agreement, dated February 17, 2015, by and among Monitronics, ~~International, Inc.,~~ Bank of America, N.A., individually and as administrative agent, and the certain lenders party thereto (incorporated by reference to Exhibit 4.1 to the ~~Company’s~~Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015 (File No. 001-34176), filed with the Commission on May 8, 2015) (the "Q1 2015 10-Q").

~~4.9~~4.8		Form of Amendment No. 5 to the Credit Agreement, dated April 9, 2015, by and among Monitronics, ~~International, Inc.,~~the guarantors party thereto, Bank of America, N.A., individually and as administrative agent, and ~~the~~ certain lenders party thereto (including the Amended Credit Agreement) (incorporated by reference to Exhibit 4.1 to the ~~Company's~~Registrant's Current Report on Form 8-K (File No. 001-34176), filed with the Commission on April 15, 2015).

4.9		Amendment No. 6 to the Credit Agreement, dated September 30, 2016, by and among Monitronics, the guarantors party thereto, Bank of America, N.A., individually and as administrative agent, and certain lenders party thereto (including the Amended Credit Agreement) (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K (File No. 001-34176), filed with the Commission on October 3, 2016).

4.10		Amendment No. 7 to the Credit Agreement, dated December 29, 2016, by and among Monitronics and Bank of America, N.A., as administrative agent.*

4.11		Indenture, dated as of July 17, 2013, between ~~the Company,~~Ascent Capital Group, Inc. ("Ascent Capital"), as issuer, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the ~~Company’s~~Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013 (File No. 001-34176), filed with the Commission on August 9, 2013 (the ~~"June~~"Q2 2013 10-Q").

~~Table of Contents~~



~~4.11~~4.12		Supplemental Indenture, dated as of August 30, 2018, to the Indenture, dated as of July 17, 2013, between Ascent Capital, as issuer, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K (File No. 001-34176), filed with the Commission on August 31, 2018).

4.13		Second Supplemental Indenture, dated as of February 14, 2019, to the Indenture, dated as of July 17, 2013, between Ascent Capital, as issuer, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 001-34176), filed with the Commission on February 14, 2019 (the “February 14, 2019 8-K”)).

4.14		Indenture, dated March 23, 2012, between Monitronics, as issuer, the guarantors party thereto, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Q1 2012 10-Q).

4.15		Supplemental Indenture, dated as of August 16, 2013, to the Indenture, dated as of March 23, 2012, by and among Monitronics, ~~International, Inc.,~~ the Guarantors named therein and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form S-4 of Monitronics (File No. 333-191805), filed with the Commission on October 18, 2013 (the "S-4")).

~~4.12~~4.16		Second Supplemental Indenture, dated as of August 26, 2013, to the Indenture, dated as of March 23, 2012, by and among Monitronics, the Guarantors named therein and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.3 to the S-4).

10.1		~~Tax Sharing Agreement, dated as of September 17, 2008, by and among Discovery Holding Company, Discovery Communications, Inc., the Company,~~ Ascent Media Group, LLC and CSS Studios, LLC (incorporated by reference to Exhibit 10.2 to Amendment No. 8 to the Company’s Registration Statement on Form 10 (File No. 001-34176), filed with the Commission on September 17, 2008 ("Amend. No. 8 to the Form 10")).

~~10.2~~		~~Ascent Capital Group, Inc.~~Corporation 2008 Incentive Plan (incorporated by reference to Exhibit 4.4 to the ~~Company’s~~Registrant's Registration Statement on Form S-8 (File No. 333-156231), filed with the Commission on December 17, 2008).

~~10.3~~10.2		Form of Indemnification Agreement between ~~the Company~~Ascent Media Corporation and its Directors and Executive Officers (incorporated by reference to Exhibit 10.7 to ~~Amend.~~Amendment No. 1 to the Registrant's Registration Statement on Form ~~10)~~10 (File 000-53280), filed with the Commission on July 23, 2008).

~~10.4~~10.3		Ascent ~~Capital Group, Inc.~~Media Corporation 2008 Non-Employee Director Incentive Plan (incorporated by reference to Exhibit 10.13 to ~~Amend.~~Amendment No. 8 to the Registrant's Registration Statement on Form ~~10)~~10 (File No. 001-34176), filed with the Commission on September 17, 2008).

~~10.5~~10.4		Amended and Restated Employment Agreement, dated January 25, 2013, between ~~the Company~~Ascent Capital and William R. Fitzgerald (incorporated by reference to Exhibit 10.5 to the 2012 10-K).

~~10.6~~10.5		Amended and Restated Employment Agreement, dated May 31, 2011, between ~~the Company~~Ascent Media Corporation and William E. Niles (incorporated by reference to Exhibit 10.1 to the ~~Company’s~~Registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011 (File No. 001-34176), filed with the Commission on August 8, 2011).

~~10.7~~10.6		Employment Agreement, dated September 30, 2011, between the Company and Michael R. Meyers (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011 (File No. 001-34176), filed with the Commission on November 7, 2011 (the "September 2011 10-Q")).

~~10.8~~		~~Employment Agreement, dated September 30, 2011, between the Company and Michael R. Haislip (incorporated by reference to Exhibit 10.2 to the September 2011 10-Q).~~

~~10.9~~		Form of Long-Term Restricted Stock Award Agreement under the Ascent Capital ~~Group, Inc.~~ 2008 Incentive Plan ~~(the “2008 Plan”)~~ for Non-Executive Officers (incorporated by reference to Exhibit 10.1 to the ~~Company’s~~Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2012 (File No. 001-34176), filed with the Commission on August 9, 2012 (the ~~"June~~"Q2 2012 10-Q")).

~~10.10~~10.7		Form of Long-Term Non-Qualified Stock Option Agreement under the 2008 Plan for Non-Executive Officers (incorporated by reference to Exhibit 10.2 to the ~~June~~Q2 2012 10-Q).

~~10.11~~10.8		Form of Long-Term Restricted Stock Award Agreement under the 2008 Plan for Executive Officers of ~~the Company~~Ascent Capital and Monitronics (incorporated by reference to Exhibit 10.3 to the ~~June~~Q2 2012 10-Q).

~~10.12~~10.9		Form of Long-Term Non-Qualified Stock Option Agreement under the 2008 Plan for Executive Officers of ~~the Company~~Ascent Capital and Monitronics (incorporated by reference to Exhibit 10.4 to the ~~June~~Q2 2012 10-Q).

~~10.13~~10.10		Form of Short-Term Restricted Stock Award Agreement under the 2008 Plan for Executive Officers (incorporated by reference to Exhibit 10.5 to the ~~June~~Q2 2012 10-Q).

~~10.14~~10.11		~~Long-Term Restricted Stock Award Agreement under the 2008 Plan for William R. Fitzgerald, dated March 15, 2011 (incorporated by reference to Exhibit 10.6 to the June 2012 10-Q).~~

~~10.15~~		Long-Term Restricted Stock Award Agreement under the 2008 Plan for William E. Niles, dated March 15, 2011 (incorporated by reference to Exhibit 10.7 to the ~~June~~Q2 2012 10-Q).

~~10.16~~10.12		Long-Term Restricted Stock Award Agreement under the 2008 Plan for William R. Fitzgerald, dated November 30, 2012 (incorporated by reference to Exhibit 10.16 to the 2012 10-K).

~~10.17~~10.13		Long-Term Non-Qualified Stock Option Agreement under the 2008 Plan for William R. Fitzgerald, dated November 30, 2012 (incorporated by reference to Exhibit 10.17 to the 2012 10-K).

~~10.18~~10.14		Amended and Restated Ascent Capital ~~Group, Inc.~~ 2015 Omnibus Incentive Plan ~~(the "Omnibus Incentive Plan")~~ (incorporated by reference to ~~Exhibit 99.1~~Annex A to the ~~Company's Registration~~Registrant's Proxy Statement on ~~Form S-8~~Schedule 14A (File No. ~~333-203043)~~001-34176) as filed ~~with the Commission on March 26, 2015)~~April 10, 2017).

~~Table of Contents~~



~~10.19~~10.15		Form of Performance-Based Restricted Stock Unit Award Agreement under the Omnibus Incentive Plan (incorporated by reference to Exhibit 10.2 to the ~~Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31,~~Q1 2015 ~~(File No. 001-34176), filed with the Commission on May 8, 2015)~~10-Q).

~~10.20~~10.16		Amendment to Employment Agreement, dated July 20, 2015, by and between ~~the Company~~Ascent Capital and ~~Michael R. Meyers~~William E. Niles (incorporated by reference to Exhibit ~~10.1~~10.2 to the ~~Company’s~~Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 (File No. 001-34176), filed with the Commission on November 9, ~~2015)~~2015 (the "Q3 2015 10-Q")).

~~10.21~~10.17		Amendment to Employment Agreement, dated July 20, 2015, by and between the Company and William E. Niles (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 (File No. 001-34176), filed with the Commission on November 9, 2015).

~~10.22~~		~~Amendment to~~ Employment Agreement, dated August 25, 2015, by and between the Company and Michael R. Haislip (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 (File No. 001-34176), filed with the Commission on November 9, 2015).

~~10.23~~		~~Employment Agreement, dated August 25, 2015, by and between the Company~~Ascent Capital and Jeffrey R. Gardner (incorporated by reference to Exhibit 10.4 to the ~~Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30,~~Q3 2015 ~~(File No. 001-34176), filed with the Commission on November 9, 2015)~~10-Q).

~~10.24~~10.18		Performance-Based Restricted Stock Unit Award Agreement under the Ascent Capital 2015 Omnibus Incentive Plan, effective as of June 22, 2015, by and between ~~the Company~~Ascent Capital and William E. Niles (incorporated by reference to Exhibit 10.5 to the ~~Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30,~~Q3 2015 ~~(File No. 001-34176), filed with the Commission on November 9, 2015)~~10-Q).

~~10.25~~10.19		Performance-Based Restricted Stock Unit Award Agreement under the Omnibus Incentive Plan, effective as of March 24, 2015, by and between the Company and Michael R. Meyers (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 (File No. 001-34176), filed with the Commission on November 9, 2015).

~~10.26~~		Confirmation, dated July 11, 2013, of Base Issuer Warrant Transaction between Bank of America, N.A. and Ascent Capital (incorporated by reference to Exhibit 10.1 to the ~~June~~Q2 2013 10-Q).**

~~10.27~~10.20		Confirmation, dated July 11, 2013, of Base Convertible Bond Hedge Transaction between Bank of America, N.A. and Ascent Capital (incorporated by reference to Exhibit 10.2 to the ~~June~~Q2 2013 10-Q).**

~~10.28~~10.21		Confirmation, dated July 11, 2013, of Base Issuer Warrant Transaction between Credit Suisse Capital LLC and Ascent Capital (incorporated by reference to Exhibit 10.3 to the ~~June~~Q2 2013 10-Q).**

~~10.29~~10.22		Confirmation, dated July 11, 2013, of Base Convertible Bond Hedge Transaction between Credit Suisse Capital LLC and Ascent Capital (incorporated by reference to Exhibit 10.4 to the ~~June~~Q2 2013 10-Q).**

10.23		Employment Agreement, dated July 14, 2017, by and between Ascent Capital and Fred A. Graffam (incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2017 (File No. 001-34176) filed with the Commission on November 2, 2017).

10.24		Amended and Restated Employment Agreement, dated April 2, 2018, between Ascent Capital and William E. Niles (incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2018 (File No. 001-34176), filed with the Commission on August 3, 2018 (the "Q2 2018 10-Q")).

10.25		Form of Director Compensation Letter, dated May 10, 2018, from Ascent Capital to William R. Fitzgerald (incorporated by reference to Exhibit 10.2 to the Q2 2018 10-Q).

10.26		Severance Agreement and General Release, dated May 10, 2018, between Ascent Capital and William R. Fitzgerald (incorporated by reference to Exhibit 10.3 to the Q2 2018 10-Q).

10.27		Transaction Support Agreement, dated as of September 24, 2018, by and among Ascent Capital, Monitronics and certain holders of Monitronics' 9.125% Senior Notes due 2020 (the "Consenting Noteholders") (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 001-34176), filed with the Commission on September 25, 2018).

10.28		First Amendment to Transaction Support Agreement, dated as of October 16, 2018, by and among Ascent Capital, Monitronics and the Consenting Noteholders (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 001-34176), filed with the Commission on October 17, 2018).

10.29		Amended and Restated Transaction Support Agreement, dated as of October 30, 2018, by and among Ascent Capital, Monitronics, the Consenting Noteholders and a group of holders of Term B-2 Loans under Monitronics' Credit Facility (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 001-34176), filed with the Commission on October 30, 2018).

10.30		Settlement and Note Repurchase Agreement and Release, dated as of February 11, 2019, among Ascent Capital and its directors and executive officers and certain holders of Ascent Capital’s 4.00% Convertible Senior Notes due 2020 (incorporated by reference to Exhibit 10.1 to the February 14, 2019 8-K).

21		List of Subsidiaries of Ascent Capital Group, Inc.*

23		Consent of KPMG LLP, independent registered public accounting firm.*

24		Power of Attorney dated ~~February 29, 2016.~~April 1, 2019.*

31.1		Rule 13a-14(a)/15d-14(a) Certification.*

31.2		Rule 13a-14(a)/15d-14(a) Certification.*



32		Section 1350 Certification.***

101.INS		XBRL Instance Document.*

101.SCH		XBRL Taxonomy Extension Schema Document.*

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.*

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.*

101.LAB		XBRL Taxonomy Extension Label Linkbase Document.*

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.*

*~~Filed herewith.~~

~~Table of Contents~~


*	Filed herewith.


**	Pursuant to the ~~Commission’s~~Commission's Orders Granting Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended, or Rule 24(b)-2 under the Securities Exchange Act of 1934, as amended, certain confidential portions of this Exhibit were omitted by means of redacting a portion of the text.


***	Furnished herewith.

~~Table of Contents~~ITEM 16. FORM 10-K SUMMARY

Not applicable.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



		ASCENT CAPITAL GROUP, INC.

~~February 29, 2016~~Dated:	April 1, 2019	By	/s/ William ~~R. Fitzgerald~~E. Niles
			William ~~R. Fitzgerald~~E. Niles
			Chief Executive Officer, General Counsel and Secretary

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.



Signature	Title		Date

/s/ William E. Niles	Chief Executive Officer, General Counsel and Secretary		April 1, 2019
William E. Niles

/s/ William R. Fitzgerald	Chairman of the Board and Director ~~and~~		~~February 29, 2016~~April 1, 2019
William R. Fitzgerald	~~Chief Executive Officer~~

/s/ Philip J. Holthouse	Director		~~February 29, 2016~~April 1, 2019
Philip J. Holthouse

~~/s/ Brian Deevy~~	~~Director~~		~~February 29, 2016~~
~~Brian Deevy~~

/s/ Michael J. Pohl	Director		~~February 29, 2016~~April 1, 2019
Michael J. Pohl

/s/ ~~Charles Y. Tanabe~~Thomas P. McMillin	Director		~~February 29, 2016~~April 1, 2019
~~Charles Y. Tanabe~~Thomas P. McMillin

/s/ ~~Carl E. Vogel~~Jeffery R. Gardner	Director and Executive Vice President		~~February 29, 2016~~April 1, 2019
~~Carl E. Vogel~~Jeffery R. Gardner

/s/ ~~Michael R. Meyers~~Fred A. Graffam	Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)		~~February 29, 2016~~April 1, 2019
~~Michael R. Meyers~~Fred A. Graffam		~~(Principal Accounting Officer)~~

~~Table of Contents~~

~~EXHIBIT INDEX~~

~~Listed below are the exhibits which are filed as a part of this Report (according to the number assigned to them in Item 601 of Regulation S-K):~~




~~3.1~~		Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 10 (File No. 000-53280), filed with the Securities and Exchange Commission (the "Commission") on June 13, 2008 (the "Form 10")).

~~3.2~~		Certificate of Ownership and Merger, dated July 7, 2011 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-34176), filed with the Commission on July 8, 2011) (filed for the purpose of changing the name of the Company).

~~3.3~~		~~Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Form 10).~~

~~3.4~~		Certificate of Elimination, dated January 27, 2014 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-34176), filed with the Commission on January 27, 2014 (the "January 2014 8-K")).

~~4.1~~		~~Specimen Certificate for shares of Series A common stock, par value $.01 per share, of the Company (incorporated by reference to Exhibit 4.1 to the Form 10).~~

~~4.2~~		~~Specimen Certificate for shares of Series B common stock, par value $.01 per share, of the Company (incorporated by reference to Exhibit 4.2 to the Form 10).~~



~~4.3~~		Indenture, dated March 23, 2012, between Monitronics, as issuer, the guarantors party thereto, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012 (File No. 001-34176), filed with the Commission on May 9, 2012 (the “March 2012 10-Q”)).

~~4.4~~		Credit Agreement, dated March 23, 2012, among Monitronics, as borrower, Bank of America, N.A., as administrative agent and letter of credit issuer, Citibank, N.A. and Credit Suisse AG, Cayman Islands Branch, as co-syndication agents, U.S. Bank National Association, as document agent and the lenders party thereto (the "Credit Agreement") (incorporated by reference to Exhibit 4.2 to the March 2012 10-Q).

~~4.5~~		Form of Amendment No. 1 to the Credit Agreement, dated November 7, 2012, by and among Monitronics, Bank of America, N.A., individually and as administrative agent, and the other financial institutions signatory thereto (incorporated by reference to Exhibit 4.7 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 001-34176), filed with the Commission on February 27, 2013 (the "2012 10-K")).

~~4.6~~		Form of Amendment No. 2 to the Credit Agreement, dated March 25, 2013, by and among Monitronics, Bank of America, N.A., individually and as administrative agent, and other financial institutions signatory thereto (incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013 (File No. 001-34176), filed with the Commission on May 10, 2013).

~~4.7~~		Form of Amendment No. 3 to the Credit Agreement and Amendment No. 1 to Guaranty Agreement, dated August 16, 2013, by and among Monitronics International, Inc., Bank of America, N.A., individually and as administrative agent, and the certain lenders party thereto (incorporated by reference to Exhibit 4.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 (File No. 001-34176), filed with the Commission on November 12, 2013).

~~4.8~~		Form of Amendment No. 4 to the Credit Agreement, dated February 17, 2015, by and among Monitronics International, Inc., Bank of America, N.A., individually and as administrative agent, and the certain lenders party thereto (incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015 (File No. 001-34176), filed with the Commission on May 8, 2015).

~~4.9~~		Form of Amendment No. 5 to the Credit Agreement, dated April 9, 2015, by and among Monitronics International, Inc., Bank of America, N.A., individually and as administrative agent, and the certain lenders party thereto (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K (File No. 001-34176) filed with the Commission on April 15, 2015).

~~4.10~~		Indenture, dated as of July 17, 2013, between the Company, as issuer, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013 (File No. 001-34176), filed with the Commission on August 9, 2013 (the "June 2013 10-Q").

~~Table of Contents~~



~~4.11~~		Supplemental Indenture, dated as of August 16, 2013, by and among Monitronics International, Inc., the Guarantors named therein and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form S-4 of Monitronics (File No. 333-191805), filed with the Commission on October 18, 2013 (the “S-4”)).

~~4.12~~		Second Supplemental Indenture, dated as of August 26, 2013, by and among Monitronics, the Guarantors named therein and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.3 to the S-4).

~~10.1~~		Tax Sharing Agreement, dated as of September 17, 2008, by and among Discovery Holding Company, Discovery Communications, Inc., the Company, Ascent Media Group, LLC and CSS Studios, LLC (incorporated by reference to Exhibit 10.2 to Amendment No. 8 to the Company’s Registration Statement on Form 10 (File No. 001-34176), filed with the Commission on September 17, 2008 ("Amend. No. 8 to the Form 10")).

~~10.2~~		Ascent Capital Group, Inc. 2008 Incentive Plan (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-8 (File No. 333-156231), filed with the Commission on December 17, 2008).

~~10.3~~		~~Form of Indemnification Agreement between the Company and its Directors and Executive Officers (incorporated by reference to Exhibit 10.7 to Amend. No. 1 to the Form 10).~~

~~10.4~~		~~Ascent Capital Group, Inc. 2008 Non-Employee Director Incentive Plan (incorporated by reference to Exhibit 10.13 to Amend. No. 8 to the Form 10).~~

~~10.5~~		~~Amended and Restated Employment Agreement, dated January 25, 2013, between the Company and William R. Fitzgerald (incorporated by reference to Exhibit 10.5 to the 2012 10-K).~~

~~10.6~~		Amended and Restated Employment Agreement, dated May 31, 2011, between the Company and William E. Niles (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011 (File No. 001-34176), filed with the Commission on August 8, 2011).

~~10.7~~		Employment Agreement, dated September 30, 2011, between the Company and Michael R. Meyers (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011 (File No. 001-34176), filed with the Commission on November 7, 2011 (the "September 2011 10-Q")).

~~10.8~~		~~Employment Agreement, dated September 30, 2011, between the Company and Michael R. Haislip (incorporated by reference to Exhibit 10.2 to the September 2011 10-Q).~~

~~10.9~~		Form of Long-Term Restricted Stock Award Agreement under the Ascent Capital Group, Inc. 2008 Incentive Plan (the "2008 Plan") for Non-Executive Officers (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2012 (File No. 001-34176), filed with the Commission on August 9, 2012 (the "June 2012 10-Q")).

~~10.10~~		~~Form of Long-Term Non-Qualified Stock Option Agreement under the 2008 Plan for Non-Executive Officers (incorporated by reference to Exhibit 10.2 to the June 2012 10-Q).~~

~~10.11~~		~~Form of Long-Term Restricted Stock Award Agreement under the 2008 Plan for Executive Officers of the Company and Monitronics (incorporated by reference to Exhibit 10.3 to the June 2012 10-Q).~~

~~10.12~~		~~Form of Long-Term Non-Qualified Stock Option Agreement under the 2008 Plan for Executive Officers of the Company and Monitronics (incorporated by reference to Exhibit 10.4 to the June 2012 10-Q).~~

~~10.13~~		~~Form of Short-Term Restricted Stock Award Agreement under the 2008 Plan for Executive Officers (incorporated by reference to Exhibit 10.5 to the June 2012 10-Q).~~

~~10.14~~		~~Long-Term Restricted Stock Award Agreement under the 2008 Plan for William R. Fitzgerald, dated March 15, 2011 (incorporated by reference to Exhibit 10.6 to the June 2012 10-Q).~~

~~10.15~~		~~Long-Term Restricted Stock Award Agreement under the 2008 Plan for William E. Niles, dated March 15, 2011 (incorporated by reference to Exhibit 10.7 to the June 2012 10-Q).~~

~~10.16~~		~~Long-Term Restricted Stock Award Agreement under the 2008 Plan for William R. Fitzgerald, dated November 30, 2012 (incorporated by reference to Exhibit 10.16 to the 2012 10-K).~~

~~10.17~~		~~Long-Term Non-Qualified Stock Option Agreement under the 2008 Plan for William R. Fitzgerald, dated November 30, 2012 (incorporated by reference to Exhibit 10.17 to the 2012 10-K).~~

~~10.18~~		Ascent Capital Group, Inc. 2015 Omnibus Incentive Plan (the "Omnibus Incentive Plan") (incorporated by reference to Exhibit 99.1 to the Company's Registration Statement on Form S-8 (File No. 333-203043) filed with the Commission on March 26, 2015).

~~Table of Contents~~



~~10.19~~		Form of Performance-Based Restricted Stock Unit Award Agreement under the Omnibus Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015 (File No. 001-34176), filed with the Commission on May 8, 2015).

~~10.20~~		Amendment to Employment Agreement, dated July 20, 2015, by and between the Company and Michael R. Meyers (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 (File No. 001-34176), filed with the Commission on November 9, 2015).

~~10.21~~		Amendment to Employment Agreement, dated July 20, 2015, by and between the Company and William E. Niles (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 (File No. 001-34176), filed with the Commission on November 9, 2015).

~~10.22~~		Amendment to Employment Agreement, dated August 25, 2015, by and between the Company and Michael R. Haislip (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 (File No. 001-34176), filed with the Commission on November 9, 2015).

~~10.23~~		Employment Agreement, dated August 25, 2015, by and between the Company and Jeffrey R. Gardner (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 (File No. 001-34176), filed with the Commission on November 9, 2015).

~~10.24~~		Performance-Based Restricted Stock Unit Award Agreement under the Omnibus Incentive Plan, effective as of June 22, 2015, by and between the Company and William E. Niles (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 (File No. 001-34176), filed with the Commission on November 9, 2015).

~~10.25~~		Performance-Based Restricted Stock Unit Award Agreement under the Omnibus Incentive Plan, effective as of March 24, 2015, by and between the Company and Michael R. Meyers (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 (File No. 001-34176), filed with the Commission on November 9, 2015).

~~10.26~~		Confirmation, dated July 11, 2013, of Base Issuer Warrant Transaction between Bank of America, N.A. and Ascent (incorporated by reference to Exhibit 10.1 to the June 2013 10-Q).**

~~10.27~~		Confirmation, dated July 11, 2013, of Base Convertible Bond Hedge Transaction between Bank of America, N.A. and Ascent (incorporated by reference to Exhibit 10.2 to the June 2013 10-Q).**

~~10.28~~		Confirmation, dated July 11, 2013, of Base Issuer Warrant Transaction between Credit Suisse Capital LLC and Ascent (incorporated by reference to Exhibit 10.3 to the June 2013 10-Q).**

~~10.29~~		Confirmation, dated July 11, 2013, of Base Convertible Bond Hedge Transaction between Credit Suisse Capital LLC and Ascent (incorporated by reference to Exhibit 10.4 to the June 2013 10-Q).**

21		List of Subsidiaries of Ascent Capital Group, Inc.*

23		Consent of KPMG LLP, independent registered public accounting firm.*

24		Power of Attorney dated February 29, 2016.*

~~31.1~~		Rule 13a-14(a)/15d-14(a) Certification.*

~~31.2~~		Rule 13a-14(a)/15d-14(a) Certification.*

32		Section 1350 Certification.***

~~101.INS~~		XBRL Instance Document.*

~~101.SCH~~		XBRL Taxonomy Extension Schema Document.*

~~101.CAL~~		XBRL Taxonomy Extension Calculation Linkbase Document.*

~~101.DEF~~		XBRL Taxonomy Extension Definition Linkbase Document.*

~~101.LAB~~		XBRL Taxonomy Extension Label Linkbase Document.*

~~101.PRE~~		XBRL Taxonomy Extension Presentation Linkbase Document.*

*~~Filed herewith.~~

~~Table of Contents~~


**	Pursuant to the Commission’s Orders Granting Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended, or Rule 24(b)-2 under the Securities Exchange Act of 1934, as amended, certain confidential portions of this Exhibit were omitted by means of redacting a portion of the text.


~~***~~	~~Furnished herewith.~~



State of Delaware		26-2735737
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)



5251 DTC Parkway, Suite 1000
Greenwood Village, Colorado		80111
(Address of principal executive offices)		(Zip Code)



Title of each class		Name of exchange on which registered
Series A Common Stock, par value $.01 per share		The Nasdaq Stock Market LLC



Large accelerated filer xo		Accelerated filer o

Non-accelerated filer ox		Smaller reporting company ox
~~(Do not check if a smaller reporting company).~~		Emerging growth company o



		Page

PART I

Item 1.	Business	2
Item 1A.	Risk Factors	11
Item 1B.	Unresolved Staff Comments	2325
Item 2.	Properties	2325
Item 3.	Legal Proceedings	2325
Item 4.	Mine Safety Disclosures	2326

PART II

Item 5.	Market for ~~Registrant’s~~Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	2427
Item 6.	Selected Financial Data	2628
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2728
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	3740
Item 8.	Financial Statements and Supplementary Data	3841
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	3841
Item 9A.	Controls and Procedures	3841
Item 9B.	Other Information	3942

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	7077
Item 11.	Executive Compensation	7077
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	7077
Item 13.	Certain Relationships and Related Transactions, and Director Independence	7077
Item 14.	Principal Accounting Fees and Services	7077

PART IV

Item 15.	Exhibits and Financial Statement Schedules	7178
Item 16.	Form 10-K Summary	78

	Signatures	7683



	12/31/2011		12/31/2012		12/31/2013		12/31/2014		12/31/2015
ASCMA Series A	$	100.00	$	122.12	$	168.69	$	104.36	$	32.97
ASCMB Series B	$	100.00	$	146.25	$	205.00	$	144.68	$	50.00
NASDAQ Stock Market Index	$	100.00	$	115.91	$	160.32	$	181.80	$	192.21



Period	Total number of shares purchased / surrendered (1)		Average price paid per share		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) or Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
10/1/2015 - 10/31/15	86,700		$	28.05	—	(1)
11/1/2015 - 11/30/15	—		—		—
12/1/2015 - 12/31/15	6,136	(2)	16.97		—
Total	92,836		$	27.32	—



	December 31,
	2015		2014	2013	2012	2011
	(amounts in thousands)
Summary Balance Sheet Data:
Current assets	$	123,273	176,500	196,894	257,866	284,012
Property and Equipment, net	$	32,440	36,010	56,528	56,491	74,697
Total assets	$	2,173,305	2,163,342	2,191,359	1,677,780	1,619,693
Current liabilities	$	86,211	91,143	95,568	72,150	124,807
Long-term debt, excluding current portion	$	1,713,868	1,595,649	1,544,792	1,074,127	891,347
Stockholders’ equity	$	324,769	439,688	514,757	508,603	550,678



	Years ended December 31,
	2015			2014		2013		2012		2011
	(amounts in thousands, except per share amounts)
Summary Statement of Operations Data:
Net revenue	$	563,356		539,449		451,033		344,953		311,898
Operating income	$	49,367		78,198		71,556		49,642		22,341
Net loss from continuing operations	$	(86,236	)	(37,448	)	(21,600	)	(25,001	)	(28,901	)
Net income (loss) (a)	$	(83,384	)	(37,752	)	(21,471	)	(29,349	)	19,888
Basic and diluted net income (loss) per common share (b)	$	(6.44	)	(2.77	)	(1.54	)	(2.09	)	1.40


(a)	Includes canceled accounts that are contractually guaranteed to be refunded from holdback.



	Payments Due by Period
	Less than 1 Year		1-3 Years	3-5 Years	After 5 Years	Total
Operating leases	$	5,414	5,905	5,870	30,905	48,094
Long-term debt (a)	5,500		548,034	692,775	518,375	1,764,684
Other (b)	16,496		220	522	5,767	23,005
Total contractual obligations	$	27,410	554,159	699,167	555,047	1,835,783



											Additional						Accumulated Other			Total
	Preferred		Common Stock								Paid-in			Accumulated			Comprehensive			Stockholders’
	Stock		Series A			Series B			Series C		Capital			Deficit			Income (Loss)			Equity
Balance at December 31,2012	$	—	134			7			—		1,453,700			(935,708		)	(9,530		)	508,603
Net loss	—		—			—			—		—			(21,471		)	—			(21,471		)
Other comprehensive income	—		—			—			—		—			—			11,269			11,269
Stock issued as considerations for the Security Networks Acquisition	—		3			—			—		18,720			—			—			18,723
Stock awards and option exercises	—		—			—			—		171			—			—			171
Purchases and retirement of common stock	—		—			(3		)	—		(33,433		)	—			—			(33,436		)
Value of beneficial conversion option on the issuance of 4.00% Convertible Notes, net of the equity component of debt issuance costs	—		—			—			—		29,857			—			—			29,857
Bond hedge and warrant transactions, net	—		—			—			—		(6,107		)	—			—			(6,107		)
Stock-based compensation	—		—			—			—		8,174			—			—			8,174
Value of shares withheld for tax liability	—		—			—			—		(1,026		)	—			—			(1,026		)
Balance at December 31, 2013	$	—	137			4			—		1,470,056			(957,179		)	1,739			514,757
Net loss	—		—			—			—		—			(37,752		)	—			(37,752		)
Other comprehensive loss	—		—			—			—		—			—			(8,547		)	(8,547		)
Stock awards and option exercises	—		—			—			—		804			—			—			804
Purchases and retirement of common stock	—		(5		)	—			—		(35,729		)	—			—			(35,734		)
Stock-based compensation	—		—			—			—		6,894			—			—			6,894
Value of shares withheld for tax liability	—					—			—		(734		)	—			—			(734		)
Balance at December 31, 2014	$	—	132			4			—		1,441,291			(994,931		)	(6,808		)	439,688
Net loss	—		—			—			—		—			(83,384		)	—			(83,384		)
Other comprehensive loss	—		—			—			—		—			—			(8,130		)	(8,130		)
Stock awards and option exercises	—		1			—			—		(1		)	—			—			—
Purchases and retirement of common stock	—		(10		)	—			—		(29,978		)	—			—			(29,988		)
Stock-based compensation	—		—			—			—		7,509			—			—			7,509
Purchase of convertible debt	—		—			—			—		(131		)	—			—			(131		)
Value of shares withheld for tax liability	—					—			—		(795		)	—			—			(795		)
Balance at December 31, 2015	$	—	$	123		$	4		$	—	$	1,417,895		$	(1,078,315	)	$	(14,938	)	$	324,769



2016	$	220,860
2017	$	186,295
2018	$	157,168
2019	$	132,735
2020	$	117,419



Cash	$	784
Trade receivables	273
Other current assets	706
Property and equipment	362
Subscriber accounts	24,900
Other intangible asset	1,300
Goodwill	36,047
Current liabilities	(6,810		)
Fair value of consideration transferred	$	57,562



Notional		Effective Date	Maturity Date	Fixed Rate Paid	Variable Rate Received
$	529,375,000	March 28, 2013	March 23, 2018	1.884%	3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a)
140,287,500		March 28, 2013	March 23, 2018	1.384%	3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a)
109,673,367		September 30, 2013	March 23, 2018	1.959%	3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
109,673,367		September 30, 2013	March 23, 2018	1.850%	3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
191,475,002		March 23, 2018	April 9, 2022	2.924%	3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
250,000,000		March 23, 2018	April 9, 2022	2.810%	3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
50,000,000		March 23, 2018	April 9, 2022	2.504%	3 mo. USD-LIBOR-BBA, subject to a 1.00% floor


(a)	The fair value is based on ~~valuations~~market quotations from third party financial institutions and is classified as Level 2 in the hierarchy.



	December 31, 2014		Additions	Payments		Other	December 31, 2015
2013 Restructuring Plan
Severance and retention	$	134	—	(134	)	—	—



	December 31, 2013		Additions	Payments		Other	December 31, 2014
2013 Restructuring Plan
Severance and retention	$	1,570	952	(2,388	)	—	134



	December 31, 2012		Additions	Payments		Other		December 31, 2013
2013 Restructuring Plan
Severance and retention	$	—	1,111	(33	)	492	(a)	1,570


	Series A Common Stock Options		WAEP		Series A Common Stock Options		WAEP
Outstanding at January 1, 2015	1,262,887		$	41.50
Outstanding at January 1, 2018					1,043,532		$	39.89
Granted	—		$	—	—		$	—
Exercised	—		$	—	—		$	—
Forfeited	(20,268	)	$	54.11	(13,605	)	$	54.51
Outstanding at December 31, 2015	1,242,619		$	41.29
Exercisable at December 31, 2015	922,856		$	33.74
Expired					(572,712	)	$	26.69
Outstanding at December 31, 2018					457,215		$	56.00
Exercisable at December 31, 2018					457,215		$	56.00


	Series A Restricted Stock Awards		WAFV		Series A Restricted Stock Awards		WAFV
Outstanding at January 1, 2015	229,644		$	59.12
Outstanding at January 1, 2018					105,160		$	22.57
Granted	118,313		$	27.41	23,947		$	3.68
Vested	(89,202	)	$	52.44	(68,651	)	$	26.77
Canceled	(15,962	)	$	53.19	(11,283	)	$	12.74
Outstanding at December 31, 2015	242,793		$	45.15
Outstanding at December 31, 2018					49,173		$	9.75


	Series A Restricted Stock Units		WAFV		Series A Restricted Stock Units		WAFV
Outstanding at January 1, 2015	—		$	—
Outstanding at January 1, 2018					272,040		$	22.21
Granted	137,485		$	38.38	616,305		$	3.68
Vested	—		$	—	(111,642	)	$	22.98
Canceled	(22,500	)	$	26.30	(72,463	)	$	13.80
Outstanding at December 31, 2015	114,985		$	40.74
Outstanding at December 31, 2018					704,240		$	6.74


	Series A Common Stock		Series B Common Stock		Series A Common Stock		Series B Common Stock
Balance at December 31, 2012	13,389,821		737,166
Conversion from Series B to Series A shares	1,220		(1,220	)
Issuance of restricted stock	42,804		—
Restricted stock canceled for forfeitures and tax withholding	(18,035	)	—
Stock option exercises	3,531		—
Stock issuance as consideration for Security Networks Acquisition	253,333		—
Repurchases and retirement of Series B Shares	—		(351,734	)
Balance at December 31, 2013	13,672,674		384,212
Conversion from Series B to Series A shares	126		(126	)
Issuance of restricted stock	36,797		—
Restricted stock canceled for forfeitures and tax withholding	(12,442	)	—
Stock option exercises	22,249		—
Repurchases and retirements of Series A shares	(557,309	)
Balance at December 31, 2014	13,162,095		384,086
Balance at December 31, 2015					12,301,248		382,359
Conversion from Series B to Series A shares	1,727		(1,727	)	500		(500	)
Issuance of restricted stock	118,313		—		91,859		—
Restricted stock canceled for forfeitures and tax withholding	(40,158	)	—		(35,276	)	—
Repurchases and retirements of Series A shares	(940,729	)	—		(389,179	)	—
Balance at December 31, 2015	12,301,248		382,359
Balance at December 31, 2016					11,969,152		381,859
Conversion from Series B to Series A shares					331		(331	)
Issuance of stock awards					106,142		—
Restricted stock canceled for forfeitures and tax withholding					(75,995	)	—
Balance at December 31, 2017					11,999,630		381,528
Issuance of stock awards					135,589		—
Restricted stock canceled for forfeitures and tax withholding					(54,536	)	—
Balance at December 31, 2018					12,080,683		381,528


	Foreign Currency Translation Adjustments (a)			Unrealized Holding Gains and Losses, net (b)		Unrealized Gains and Losses on Derivative Instruments, net (c)		Accumulated Other Comprehensive Income (Loss)		Foreign Currency Translation Adjustments (a)			Unrealized Holding Gains and Losses, net (b)		Unrealized Gains and Losses on Derivative Instruments, net (c)		Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2012	$	46		2,667		(12,243	)	(9,530	)
Balance at December 31, 2015										$	(508	)	(884	)	(13,546	)	(14,938	)
Gain (loss) through Accumulated other comprehensive loss	121			(1,446	)	7,014		5,689		(1,032		)	2,991		(2,673	)	(714	)
Reclassifications of loss (gains) into net income	—			277		5,303		5,580		—			(1,035	)	7,262		6,227
Balance at December 31, 2013	167			1,498		74		1,739
Balance at December 31, 2016										$	(1,540	)	1,072		(8,957	)	(9,425	)
Gain (loss) through Accumulated other comprehensive loss	(382		)	(3,664	)	(12,560	)	(16,606	)	782			2,609		(3,842	)	(451	)
Reclassifications of loss (gains) into net income	—			378		7,681		8,059		—			219		5,424		5,643
Balance at December 31, 2014	(215		)	(1,788	)	(4,805	)	(6,808	)
Balance at December 31, 2017										$	(758	)	3,900		(7,375	)	(4,233	)
Impact of adoption of ASU 2017-12										—			—		605		605
Adjusted balance at January 1, 2018										$	(758	)	3,900		(6,770	)	(3,628	)
Gain (loss) through Accumulated other comprehensive loss	(293		)	6,991		(16,041	)	(9,343	)	—			(1,625	)	12,882		11,257
Reclassifications of loss (gains) into net income	—			(6,087	)	7,300		1,213		758			(2,275	)	1,496		(21	)
Balance at December 31, 2015	$	(508	)	(884	)	(13,546	)	(14,938	)
Balance at December 31, 2018										$	—		—		7,608		7,608


Year Ended December 31:
2016	$	5,414
2017	2,974
2018	2,931
2019	2,943			$	4,739
2020	2,927			4,263
2021				3,093
2022				3,068
2023				3,087
Thereafter	30,905			20,329
Sublease income	(1,609		)
Minimum lease commitments	$	46,485		$	38,579



	Monitronics			LiveWatch			Other			Consolidated
Net revenue	$	548,622		$	14,734		$	—		$	563,356
Depreciation and amortization	$	264,870		$	3,864		$	378		$	269,112
Net loss from continuing operations before income taxes	$	(47,793	)	$	(18,365	)	$	(13,573	)	$	(79,731	)



	1st Quarter			2nd Quarter		3rd Quarter		4th Quarter
	Amounts in thousands, except per share amounts
2015:
Net revenue	$	138,416		141,543		141,846		141,551
Operating income	$	20,641		17,798		8,907		2,021
Net loss	$	(9,835	)	(18,409	)	(24,330	)	(30,810	)
Basic and diluted net loss per common share	$	(0.74	)	(1.40	)	(1.87	)	(2.48	)
2014:
Net revenue	$	132,864		134,696		136,027		135,862
Operating income	$	19,152		18,847		19,939		20,260
Net income (loss)	$	(9,732	)	(10,278	)	(11,125	)	(6,617	)
Basic and diluted net income (loss) per common share	$	(0.70	)	(0.75	)	(0.82	)	(0.50	)



	1st Quarter			2nd Quarter		3rd Quarter		4th Quarter
	(Amounts in thousands, except per share amounts)
2018:
Net revenue	$	133,753		135,013		137,156		134,436
Operating income (loss)	$	6,614		(203,583	)	8,341		(317,235	)
Net loss	$	(30,838	)	(244,367	)	(40,095	)	(382,744	)
Basic and diluted net loss per common share	$	(2.51	)	(19.82	)	(3.24	)	(30.87	)
2017:
Net revenue	$	141,200		140,498		138,211		133,546
Operating income (loss)	$	19,718		(1,485	)	10,571		12,706
Net loss	$	(18,853	)	(43,526	)	(29,160	)	(16,020	)
Basic and diluted net loss per common share	$	(1.55	)	(3.58	)	(2.39	)	(1.30	)