Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 13, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'MONITRONICS INTERNATIONAL INC | ' |
Entity Central Index Key | '0001265107 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Amendment Flag | 'false | ' |
Entity Common Stock, Shares Outstanding | ' | 0 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $6,099 | $4,355 |
Restricted cash | 112 | 40 |
Trade receivables, net of allowance for doubtful accounts of $1,983 in 2014 and $1,937 in 2013 | 13,298 | 13,019 |
Deferred income tax assets, net | 8,530 | 8,530 |
Prepaid and other current assets | 5,751 | 6,319 |
Total current assets | 33,790 | 32,263 |
Property and equipment, net of accumulated depreciation of $21,438 in 2014 and $17,514 in 2013 | 23,004 | 24,561 |
Subscriber accounts, net of accumulated amortization of $618,564 in 2014 and $503,497 in 2013 | 1,349,594 | 1,340,954 |
Dealer network and other intangible assets, net of accumulated amortization of $44,187 in 2014 and $34,297 in 2013 | 54,745 | 64,635 |
Goodwill | 527,502 | 527,502 |
Other assets, net | 27,332 | 29,611 |
Total assets | 2,015,967 | 2,019,526 |
Current liabilities: | ' | ' |
Accounts payable | 5,487 | 6,895 |
Accrued payroll and related liabilities | 4,351 | 3,179 |
Other accrued liabilities | 29,841 | 33,454 |
Deferred revenue | 14,987 | 14,379 |
Holdback liability | 18,164 | 19,758 |
Current portion of long-term debt | 9,166 | 9,166 |
Total current liabilities | 81,996 | 86,831 |
Non-current liabilities: | ' | ' |
Long-term debt | 1,615,575 | 1,597,627 |
Long-term holdback liability | 6,239 | 6,698 |
Derivative financial instruments | 6,748 | 2,013 |
Deferred income tax liability, net | 19,323 | 17,632 |
Other liabilities | 15,251 | 16,065 |
Total liabilities | 1,745,132 | 1,726,866 |
Commitments and contingencies | ' | ' |
Stockholder's equity: | ' | ' |
Common stock, $.01 par value. 1,000 shares authorized, issued and outstanding both at June 30, 2014 and December 31, 2013 | 0 | 0 |
Additional paid-in capital | 337,728 | 337,038 |
Accumulated deficit | -60,828 | -44,452 |
Accumulated other comprehensive income (loss) | -6,065 | 74 |
Total stockholder’s equity | 270,835 | 292,660 |
Total liabilities and stockholder’s equity | $2,015,967 | $2,019,526 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Trade receivables, allowance for doubtful accounts (in dollars) | $1,983 | $1,937 |
Property and equipment, accumulated depreciation (in dollars) | 21,438 | 17,514 |
Subscriber accounts, accumulated amortization (in dollars) | 618,564 | 503,497 |
Dealer network and other intangible assets, accumulated amortization (in dollars) | $44,187 | $34,297 |
Par value of shares issued as a consideration (in dollars per share) | $0.01 | $0.01 |
Common stock, authorized shares | 1,000 | 1,000 |
Common stock, issued shares | 1,000 | 1,000 |
Common stock, outstanding shares | 1,000 | 1,000 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Income Statement [Abstract] | ' | ' | ' | ' |
Net revenue | $134,696 | $102,273 | $267,560 | $202,431 |
Operating expenses: | ' | ' | ' | ' |
Cost of services | 22,982 | 15,594 | 45,072 | 30,796 |
Selling, general, and administrative, including stock-based compensation | 23,127 | 18,113 | 46,099 | 34,016 |
Amortization of subscriber accounts, dealer network and other intangible assets | 63,261 | 45,998 | 125,041 | 90,313 |
Depreciation | 2,198 | 1,721 | 4,581 | 3,209 |
Restructuring charges | 371 | 0 | 918 | 0 |
Gain on disposal of operating assets, net | -69 | -2 | -69 | -2 |
Total operating expenses | 111,870 | 81,424 | 221,642 | 158,332 |
Operating income | 22,826 | 20,849 | 45,918 | 44,099 |
Other expense: | ' | ' | ' | ' |
Interest expense | 29,638 | 19,466 | 58,982 | 40,593 |
Total other expense | 29,638 | 19,466 | 58,982 | 40,593 |
Income (loss) before income taxes | -6,812 | 1,383 | -13,064 | 3,506 |
Income tax expense | 1,713 | 791 | 3,312 | 1,565 |
Net income (loss) | -8,525 | 592 | -16,376 | 1,941 |
Other comprehensive income (loss): | ' | ' | ' | ' |
Unrealized gain (loss) on derivative contracts, net | -4,468 | 11,671 | -6,139 | 11,930 |
Total other comprehensive income (loss), net of tax | -4,468 | 11,671 | -6,139 | 11,930 |
Comprehensive income (loss) | ($12,993) | $12,263 | ($22,515) | $13,871 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Cash flows from operating activities: | ' | ' |
Net income (loss) | ($16,376) | $1,941 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ' | ' |
Amortization of subscriber accounts, dealer network and other intangible assets | 125,041 | 90,313 |
Depreciation | 4,581 | 3,209 |
Stock-based compensation | 896 | 763 |
Deferred income tax expense | 1,691 | 204 |
Long-term debt amortization | 531 | 387 |
Gain on disposal of operating assets, net | -69 | -2 |
Other non-cash activity, net | 5,693 | 4,712 |
Changes in assets and liabilities: | ' | ' |
Trade receivables | -3,967 | -4,126 |
Prepaid expenses and other assets | 391 | 1,928 |
Payables and other liabilities | -4,055 | 1,385 |
Net cash provided by operating activities | 114,357 | 100,714 |
Cash flows from investing activities: | ' | ' |
Capital expenditures | -3,212 | -3,978 |
Cost of subscriber accounts acquired | -126,640 | -113,199 |
Increase in restricted cash | -72 | 0 |
Proceeds from disposal of operating assets | 241 | 2 |
Other investing activities | -347 | 0 |
Net cash used in investing activities | -130,030 | -117,175 |
Cash flows from financing activities: | ' | ' |
Proceeds from long-term debt | 75,200 | 62,100 |
Payments on long-term debt | -57,783 | -44,764 |
Payments of financing costs | 0 | -1,771 |
Dividend to Ascent | 0 | -1,000 |
Net cash provided by financing activities | 17,417 | 14,565 |
Net increase (decrease) in cash and cash equivalents | 1,744 | -1,896 |
Cash and cash equivalents at beginning of period | 4,355 | 3,433 |
Cash and cash equivalents at end of period | 6,099 | 1,537 |
Supplemental cash flow information: | ' | ' |
State taxes paid | 2,658 | 2,350 |
Interest paid | $54,869 | $38,648 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Stockholder's Equity (USD $) | Total | Common Stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Accumulated deficit |
In Thousands, except Share data, unless otherwise specified | USD ($) | USD ($) | USD ($) | USD ($) | |
Beginning Balance at Dec. 31, 2013 | $292,660 | ' | $337,038 | $74 | ($44,452) |
Beginning Balance (in shares) at Dec. 31, 2013 | 1,000 | 1,000 | ' | ' | ' |
Increase (Decrease) in Stockholder's Equity | ' | ' | ' | ' | ' |
Net loss | -16,376 | ' | ' | ' | -16,376 |
Other comprehensive loss | -6,139 | ' | ' | -6,139 | ' |
Stock-based compensation | 896 | ' | 896 | ' | ' |
Value of shares withheld for tax liability | -206 | ' | -206 | ' | ' |
Ending Balance at Jun. 30, 2014 | $270,835 | ' | $337,728 | ($6,065) | ($60,828) |
Ending Balance (in shares) at Jun. 30, 2014 | 1,000 | 1,000 | ' | ' | ' |
Basis_of_Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
Monitronics International, Inc. and its subsidiaries (collectively, the “Company” or “Monitronics”) are wholly owned subsidiaries of Ascent Capital Group, Inc. (“Ascent Capital”). On August 16, 2013, the Company acquired all of the equity interests of Security Networks LLC (“Security Networks”) and certain affiliated entities (the “Security Networks Acquisition”). The Company provides security alarm monitoring and related services to residential and business subscribers throughout the United States and parts of Canada. The Company monitors signals arising from burglaries, fires, medical alerts and other events through security systems at subscribers’ premises, as well as provides customer service and technical support. | |
The unaudited interim financial information of the Company has been prepared in accordance with Article 10 of the Securities and Exchange Commission’s (the “SEC”) Regulation S-X. Accordingly, it does not include all of the information required by generally accepted accounting principles in the United States (“U.S. GAAP”) for complete financial statements. The Company’s unaudited condensed consolidated financial statements as of June 30, 2014, and for the three and six months ended June 30, 2014 and 2013, include Monitronics and all of its direct and indirect subsidiaries. The accompanying interim condensed consolidated financial statements are unaudited but, in the opinion of management, reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the results for such periods. The results of operations for any interim period are not necessarily indicative of results for the full year. These condensed consolidated financial statements should be read in conjunction with the Monitronics Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC on March 4, 2014 (the “2013 Form 10-K”). | |
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of revenue and expenses for each reporting period. The significant estimates made in preparation of the Company’s condensed consolidated financial statements primarily relate to valuation of goodwill, other intangible assets, long-lived assets, deferred tax assets, derivative financial instruments, and the amount of the allowance for doubtful accounts. These estimates are based on 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. | |
The Company has reclassified certain prior period amounts to conform to the current period’s presentation. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2014 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ' |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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 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. The ASU is effective 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. |
Security_Networks_Acquisition
Security Networks Acquisition | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Business Combinations [Abstract] | ' | |||||||
Security Networks Acquisition | ' | |||||||
Security Networks Acquisition | ||||||||
On August 16, 2013 (the “Closing Date”), the Company 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 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 cash portion of the Security Networks Purchase Price was funded by cash contributions from Ascent Capital, the proceeds of the Company’s issuance of $175,000,000 in aggregate principal amount of 9.125% Senior Notes due 2020, the proceeds of incremental term loans of $225,000,000 issued under the Company’s existing credit facility and the proceeds of a $100,000,000 intercompany loan from Ascent Capital. | ||||||||
The Security Networks Acquisition was accounted for as a business combination utilizing the acquisition method in accordance with FASB Accounting Standards Codification Topic 805, Business Combinations ("FASB ASC Topic 805"). Under the acquisition method of accounting, the Security Networks Purchase Price has been allocated to Security Networks’ tangible and identifiable intangible assets acquired and liabilities assumed based on their estimates of fair value as follows (amounts in thousands): | ||||||||
Cash | $ | 3,096 | ||||||
Trade receivables | 1,305 | |||||||
Other current assets | 1,677 | |||||||
Property and equipment | 1,404 | |||||||
Subscriber accounts | 307,800 | |||||||
Dealer network and other intangible assets | 48,500 | |||||||
Goodwill | 177,289 | |||||||
Holdback liability, current and non-current | (9,620 | ) | ||||||
Deferred income tax liabilities | (5,097 | ) | ||||||
Other current and non-current liabilities | (25,797 | ) | ||||||
Fair value of consideration | $ | 500,557 | ||||||
The Company’s 2013 Form 10-K included an initial allocation of the purchase price based on preliminary data. Subsequent to filing the Company’s 2013 Form 10-K, an adjustment was made to increase goodwill by $989,000, which is reflected in the revised December 31, 2013 consolidated balance sheet in accordance with FASB ASC Topic 805. The increase to goodwill is related to adjustments to the deferred income tax liabilities acquired as a result of obtaining Security Networks' final short period federal and state income tax returns for 2013, which were filed in the second quarter of 2014. The increase to the acquired deferred income tax liabilities resulted in a $936,000 reduction in the Company's valuation allowance. The corresponding decrease in income tax expense related to the reduction in valuation allowance has been retrospectively applied to the revised December 31, 2013 consolidated balance sheet in accordance with FASB ASC Topic 805. | ||||||||
The following table includes unaudited pro-forma information for the Company, which includes the historical operating results of Security Networks prior to ownership by the Company. This pro-forma information gives effect to certain adjustments, including increased amortization to reflect the fair value assigned to the subscriber accounts and dealer network and other intangible assets acquired and increased interest expense relating to the debt transactions entered into to fund the Security Networks Acquisition. The pro-forma results assume that the Security Networks Acquisition and the debt transactions had occurred on January 1, 2012 for all periods presented. They are not necessarily indicative of the results of operations that would have occurred if the acquisition had been made at the beginning of the periods presented or that may be obtained in the future. | ||||||||
Three Months Ended | Six Months Ended | |||||||
June 30, 2013 | June 30, 2013 | |||||||
(amounts in thousands) | ||||||||
As reported: | ||||||||
Net revenue | $ | 102,273 | $ | 202,431 | ||||
Net income | 592 | 1,941 | ||||||
Supplemental pro-forma: | ||||||||
Net revenue | $ | 127,424 | $ | 250,838 | ||||
Net loss | (8,304 | ) | (14,109 | ) |
Other_Accrued_Liabilities
Other Accrued Liabilities | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Other Accrued Liabilities | ' | |||||||
Other Accrued Liabilities | ||||||||
Other accrued liabilities consisted of the following (amounts in thousands): | ||||||||
30-Jun-14 | 31-Dec-13 | |||||||
Interest payable | $ | 18,089 | $ | 17,258 | ||||
Income taxes payable | 1,645 | 2,647 | ||||||
Legal accrual | 599 | 705 | ||||||
Other | 9,508 | 12,844 | ||||||
Total Other accrued liabilities | $ | 29,841 | $ | 33,454 | ||||
LongTerm_Debt
Long-Term Debt | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Long-Term Debt | ' | |||||||
Long-Term Debt | ||||||||
Long-term debt consisted of the following (amounts in thousands): | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
9.125% Senior Notes due April 1, 2020 | $ | 585,000 | $ | 585,000 | ||||
9.868% Promissory Note to Ascent Capital due October 1, 2020 | 100,000 | 100,000 | ||||||
Term loans, mature March 23, 2018, LIBOR plus 3.25%, subject to a LIBOR floor of 1.00% (a) | 898,241 | 902,293 | ||||||
$225 million revolving credit facility, matures December 22, 2017, LIBOR plus 3.75%, subject to a LIBOR floor of 1.00% (a) | 41,500 | 19,500 | ||||||
1,624,741 | 1,606,793 | |||||||
Less current portion of long-term debt | (9,166 | ) | (9,166 | ) | ||||
Long-term debt | $ | 1,615,575 | $ | 1,597,627 | ||||
(a) | The interest rate on the term loan and the revolving credit facility was LIBOR plus 4.25%, subject to a LIBOR floor of 1.25%, until March 25, 2013. | |||||||
Senior Notes | ||||||||
On July 17, 2013, the Company closed on a $175,000,000 privately placed debt offering of 9.125% Senior Notes (the “New Senior Notes”). In December 2013, the Company completed an exchange of the New Senior Notes for identical securities in a registered offering under the Securities Act of 1933, as amended. | ||||||||
The New Senior Notes, together with the existing $410,000,000 of 9.125% senior notes due 2020 (collectively, the “Senior Notes”), total $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 the Company’s existing domestic subsidiaries. Ascent Capital has not guaranteed any of the Company’s obligations under the Senior Notes. | ||||||||
Ascent Intercompany Loan | ||||||||
On August 16, 2013, in connection with the Security Networks Acquisition, the Company executed and delivered a Promissory Note to Ascent Capital in a principal amount of $100,000,000 (the “Ascent Intercompany Loan”). The entire principal amount under the Ascent Intercompany Loan is due on October 1, 2020. The Company may prepay any portion of the balance of the Ascent Intercompany Loan at any time from time to time without fee, premium or penalty (subject to certain financial covenants associated with the Company’s other indebtedness). Any unpaid balance of the Ascent Intercompany Loan bears interest at a rate equal to 9.868%% per annum, payable semi-annually in cash in arrears on January 12 and July 12 of each year, commencing on January 12, 2014. Borrowings under the Ascent Intercompany Loan constitute unsecured obligations of the Company and are not guaranteed by any of the Company’s subsidiaries. | ||||||||
Credit Facility | ||||||||
On March 25, 2013, the Company entered into an amendment (“Amendment No. 2”) with the lenders of its existing senior secured credit agreement dated March 23, 2012, and as amended and restated on November 7, 2012 (the “Existing Credit Agreement”). Pursuant to Amendment No. 2, the Company repriced the interest rates applicable to the Existing Credit Agreement’s facility (the “Repricing”), which is comprised of the term loans and revolving credit facility noted in the table above. Concurrently with the Repricing, the Company extended the maturity of the revolving credit facility by nine months to December 22, 2017. | ||||||||
On August 16, 2013, in connection with the Security Networks Acquisition, the Company entered into a third amendment (“Amendment No. 3”) to the Existing Credit Agreement to provide for, among other things, (i) an increase in the commitments under the revolving credit facility in a principal amount of $75,000,000, resulting in an aggregate principal amount of $225,000,000, (ii) new term loans in an aggregate principal amount of $225,000,000 (the “Incremental Term Loans”) at a 0.5% discount and (iii) certain other amendments to the Existing Credit Agreement, each as set forth in Amendment No. 3 (the Existing Credit Agreement together with Amendment No. 2 and Amendment No. 3, the “Credit Facility”). | ||||||||
The Credit Facility term loans bear interest at LIBOR plus 3.25%, subject to a LIBOR floor of 1.00%, and mature on March 23, 2018. Principal payments of approximately $2,292,000 and interest on the term loans are due quarterly. The Credit Facility revolver bears interest at LIBOR plus 3.75%, subject to a LIBOR floor of 1.00%, and matures on December 22, 2017. There is an annual commitment fee of 0.5% on unused portions of the Credit Facility revolver. As of June 30, 2014, $183,500,000 is available for borrowing under the revolving 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. | ||||||||
The Credit Facility is secured by a pledge of all of the outstanding stock of the Company and all of its existing subsidiaries and is guaranteed by all of the Company’s existing domestic subsidiaries. Ascent Capital has not guaranteed any of the Company’s obligations under the Credit Facility. | ||||||||
As of June 30, 2014, the Company has deferred financing costs, net of accumulated amortization, of $23,159,000 related to the Senior Notes and the Credit Facility. These costs are included in Other assets, net on the accompanying consolidated balance sheet and will be amortized over the remaining term of the respective debt instruments using the effective-interest method. | ||||||||
In order to reduce the financial risk related to changes in interest rates associated with the floating rate term loans under the Credit Facility, the Company has entered into interest rate swap agreements with terms similar to the Credit Facility term loans. On March 25, 2013, the Company negotiated amendments to the terms of its existing swap agreements to coincide with the Repricing. In the third quarter of 2013, the Company entered into additional interest rate swap agreements in conjunction with the Incremental Term Loans (all outstanding interest rate swap agreements are collectively referred to as the “Swaps”). | ||||||||
The Swaps have a maturity date of March 23, 2018 to match the term of the Credit Facility term loans. The Swaps have been designated as effective hedges of the Company’s variable rate debt and qualify for hedge accounting. See note 6, Derivatives, for further disclosures related to these derivative instruments. As a result of the Swaps, the interest rate on the borrowings under the Credit Facility term loans have been effectively converted from a variable rate to a weighted average fixed rate of 5.06%. | ||||||||
The terms of the Senior Notes and Credit Facility provide for certain financial and nonfinancial covenants. As of June 30, 2014, the Company was in compliance with all required covenants. | ||||||||
Principal payments scheduled to be made on the Company’s debt obligations are as follows (amounts in thousands): | ||||||||
Remainder of 2014 | $ | 4,583 | ||||||
2015 | 9,166 | |||||||
2016 | 9,166 | |||||||
2017 | 50,667 | |||||||
2018 | 870,800 | |||||||
2019 | — | |||||||
Thereafter | 685,000 | |||||||
Total principal payments | 1,629,382 | |||||||
Less: | ||||||||
Unamortized discount on the Credit Facility term loans | 4,641 | |||||||
Total debt on condensed consolidated balance sheet | $ | 1,624,741 | ||||||
Derivatives
Derivatives | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||
Derivatives | ' | |||||||||||||
Derivatives | ||||||||||||||
The Company utilizes interest rate swap agreements to reduce the interest rate risk inherent in the Company’s variable rate Credit Facility term loans. 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 nonperformance risk in the fair value measurements. See note 7, Fair Value Measurements, for additional information about the credit valuation adjustments. | ||||||||||||||
The Swaps’ outstanding notional balance as of June 30, 2014 and terms are noted below: | ||||||||||||||
Notional | Effective Date | Fixed | Variable Rate Received | |||||||||||
Rate Paid | ||||||||||||||
$ | 537,625,000 | March 28, 2013 | 1.88% | 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) | ||||||||||
142,462,500 | March 28, 2013 | 1.38% | 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) | |||||||||||
111,369,347 | September 30, 2013 | 1.96% | 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor | |||||||||||
111,369,347 | September 30, 2013 | 1.85% | 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor | |||||||||||
(a) | On March 25, 2013, the Company negotiated amendments to the terms of these interest rate swap agreements to coincide with the Repricing (the “Amended Swaps”). The Amended Swaps are held with the same counterparties as the Existing Swap Agreements. Upon entering into the Amended Swaps, the Company 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 income (loss) relating to the dedesignation will be recognized in Interest expense over the remaining life of the Amended Swaps. | |||||||||||||
All of the Swaps are designated and qualify as cash flow hedging instruments, with the effective portion of the Swaps change in fair value recorded in Accumulated other comprehensive income (loss). Any ineffective portions of the Swaps' change in fair value are recognized in current earnings in Interest expense. Changes in the fair value of the Swaps recognized in Accumulated other comprehensive income (loss) are reclassified to Interest expense when the hedged interest payments on the underlying debt are recognized. Amounts in Accumulated other comprehensive income (loss) expected to be recognized in Interest expense in the coming 12 months total approximately $6,616,000. | ||||||||||||||
The impact of the derivatives designated as cash flow hedges on the condensed consolidated financial statements is depicted below (amounts in thousands): | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Effective portion of gain (loss) recognized in Accumulated other comprehensive income (loss) | $ | (6,234 | ) | 10,473 | $ | (9,605 | ) | 9,564 | ||||||
Effective portion of gain (loss) reclassified from Accumulated other comprehensive income (loss) into Net income (loss) (a) | $ | (1,766 | ) | (1,198 | ) | $ | (3,466 | ) | (2,366 | ) | ||||
Ineffective portion of amount of gain (loss) recognized into Net income (loss) on interest rate swaps (a) | $ | (2 | ) | 61 | $ | (3 | ) | 80 | ||||||
(a) | Amounts are included in Interest expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss). |
Fair_Value_Measurements
Fair Value Measurements | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||
Fair Value Measurements | ' | ||||||||||||
Fair Value Measurements | |||||||||||||
According to the 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 June 30, 2014 and December 31, 2013 (amounts in thousands): | |||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||
30-Jun-14 | |||||||||||||
Derivative financial instruments — assets (a) | $ | — | 1,273 | — | 1,273 | ||||||||
Derivative financial instruments - liabilities | — | (6,748 | ) | — | (6,748 | ) | |||||||
Total | $ | — | (5,475 | ) | — | (5,475 | ) | ||||||
31-Dec-13 | |||||||||||||
Derivative financial instruments - assets (a) | $ | — | 2,495 | — | 2,495 | ||||||||
Derivative financial instruments - liabilities | — | (2,013 | ) | — | (2,013 | ) | |||||||
Total | $ | — | 482 | — | 482 | ||||||||
(a) | Included in Other assets, net on the condensed consolidated balance sheets. | ||||||||||||
The Company has determined that the majority of the inputs used to value the Swaps fall within Level 2 of the fair value hierarchy. The credit valuation adjustments associated with the derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by their counterparties. As the counterparties have publicly available credit information, the credit spreads over LIBOR used in the calculations represent implied credit default swap spreads obtained from a third-party credit data provider. However, as of June 30, 2014, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of the Swaps. As a result, the Company has determined that its derivative valuations are classified in Level 2 of the fair value hierarchy. | |||||||||||||
Carrying values and fair values of financial instruments that are not carried at fair value are as follows (amounts in thousands): | |||||||||||||
30-Jun-14 | 31-Dec-13 | ||||||||||||
Long term debt, including current portion: | |||||||||||||
Carrying value | $ | 1,624,741 | $ | 1,606,793 | |||||||||
Fair value (a) | 1,672,256 | 1,656,797 | |||||||||||
(a) | T he fair value is based on valuations from third party financial institutions and is classified as Level 2 in the hierarchy. | ||||||||||||
The Company’s other financial instruments, including cash and cash equivalents, accounts receivable and accounts payable are carried at cost, which approximates their fair value because of their short-term maturity. |
Restructuring_Charges
Restructuring Charges | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||
Restructuring Charges | ' | ||||||||||||
Restructuring Charges | |||||||||||||
In connection with the Security Networks Acquisition, management approved a restructuring plan to transition Security Networks’ operations in West Palm Beach and Kissimmee, Florida to Dallas, Texas (the “2013 Restructuring Plan”). The 2013 Restructuring Plan provides certain employees with a severance package that entitles them to receive benefits upon completion of the transition in 2014. Severance costs related to the 2013 Restructuring Plan were recognized ratably over the future service period. During the three and six months ended June 30, 2014, the Company recorded $371,000 and $918,000, respectively, of restructuring charges related to employee termination benefits under the 2013 Restructuring Plan. The transition of Security Networks' operations to Dallas was completed in the second quarter of 2014. | |||||||||||||
There were no restructuring charges recorded for the three and six months ended June 30, 2013. | |||||||||||||
The following table provides the activity and balance of the Company’s restructuring plan (amounts in thousands): | |||||||||||||
31-Dec-13 | Additions | Payments | 30-Jun-14 | ||||||||||
2013 Restructuring Plan | |||||||||||||
Severance and retention | $ | 1,570 | 918 | (2,042 | ) | 446 | |||||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 6 Months Ended | |||
Jun. 30, 2014 | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ' | |||
Accumulated Other Comprehensive Income (Loss) | ' | |||
Accumulated Other Comprehensive Income (Loss) | ||||
The following table provides a summary of the changes in Accumulated other comprehensive income (loss) for the period presented (amounts in thousands): | ||||
Accumulated | ||||
other | ||||
comprehensive | ||||
income (loss) | ||||
As of December 31, 2013 | $ | 74 | ||
Unrealized loss on derivatives recognized through Accumulated other comprehensive income (loss) | (9,605 | ) | ||
Reclassifications of unrealized loss on derivatives into net income (a) | 3,466 | |||
As of June 30, 2014 | $ | (6,065 | ) | |
(a) | Amounts reclassified into net income are included in Interest expense on the condensed consolidated statement of operations. See note 6, Derivatives, for further information. |
Commitments_Contingencies_and_
Commitments, Contingencies and Other Liabilities | 6 Months Ended |
Jun. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments, Contingencies and Other Liabilities | ' |
Commitments, Contingencies and Other Liabilities | |
The Company is involved in litigation and similar claims incidental to the conduct of its business. Matters that are probable of unfavorable outcome to the Company and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, management’s estimate of the outcomes of such matters and experience in contesting, litigating and settling similar matters. In management’s opinion, none of the pending actions is likely to have a material adverse impact on the Company’s financial position or results of operations. |
Consolidating_Guarantor_Financ
Consolidating Guarantor Financial Information | 6 Months Ended |
Jun. 30, 2014 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ' |
Consolidating Guarantor Financial Information | ' |
Consolidating Guarantor Financial Information | |
The Senior Notes were issued and the Credit Facility was entered into by Monitronics (the “Parent Issuer”) and both are guaranteed by all of the Company’s existing domestic subsidiaries. Ascent Capital has not guaranteed any of the Company’s obligations under the Senior Notes or Credit Facility. | |
Consolidating guarantor financial information has not been presented in this Form 10-Q as substantially all of the Company’s operations are now conducted by the Parent Issuer entity. The Company believes that disclosing such information would not provide investors with any additional information that would be material in evaluating the sufficiency of the guarantees. |
Security_Networks_Acquisition_
Security Networks Acquisition (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Business Combinations [Abstract] | ' | |||||||
Schedule of purchase price allocation | ' | |||||||
Under the acquisition method of accounting, the Security Networks Purchase Price has been allocated to Security Networks’ tangible and identifiable intangible assets acquired and liabilities assumed based on their estimates of fair value as follows (amounts in thousands): | ||||||||
Cash | $ | 3,096 | ||||||
Trade receivables | 1,305 | |||||||
Other current assets | 1,677 | |||||||
Property and equipment | 1,404 | |||||||
Subscriber accounts | 307,800 | |||||||
Dealer network and other intangible assets | 48,500 | |||||||
Goodwill | 177,289 | |||||||
Holdback liability, current and non-current | (9,620 | ) | ||||||
Deferred income tax liabilities | (5,097 | ) | ||||||
Other current and non-current liabilities | (25,797 | ) | ||||||
Fair value of consideration | $ | 500,557 | ||||||
Schedule of unaudited pro forma information | ' | |||||||
The following table includes unaudited pro-forma information for the Company, which includes the historical operating results of Security Networks prior to ownership by the Company. This pro-forma information gives effect to certain adjustments, including increased amortization to reflect the fair value assigned to the subscriber accounts and dealer network and other intangible assets acquired and increased interest expense relating to the debt transactions entered into to fund the Security Networks Acquisition. The pro-forma results assume that the Security Networks Acquisition and the debt transactions had occurred on January 1, 2012 for all periods presented. They are not necessarily indicative of the results of operations that would have occurred if the acquisition had been made at the beginning of the periods presented or that may be obtained in the future. | ||||||||
Three Months Ended | Six Months Ended | |||||||
June 30, 2013 | June 30, 2013 | |||||||
(amounts in thousands) | ||||||||
As reported: | ||||||||
Net revenue | $ | 102,273 | $ | 202,431 | ||||
Net income | 592 | 1,941 | ||||||
Supplemental pro-forma: | ||||||||
Net revenue | $ | 127,424 | $ | 250,838 | ||||
Net loss | (8,304 | ) | (14,109 | ) |
Other_Accrued_Liabilities_Tabl
Other Accrued Liabilities (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Schedule of other accrued liabilities | ' | |||||||
Other accrued liabilities consisted of the following (amounts in thousands): | ||||||||
30-Jun-14 | 31-Dec-13 | |||||||
Interest payable | $ | 18,089 | $ | 17,258 | ||||
Income taxes payable | 1,645 | 2,647 | ||||||
Legal accrual | 599 | 705 | ||||||
Other | 9,508 | 12,844 | ||||||
Total Other accrued liabilities | $ | 29,841 | $ | 33,454 | ||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Schedule of long-term debt | ' | |||||||
Long-term debt consisted of the following (amounts in thousands): | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
9.125% Senior Notes due April 1, 2020 | $ | 585,000 | $ | 585,000 | ||||
9.868% Promissory Note to Ascent Capital due October 1, 2020 | 100,000 | 100,000 | ||||||
Term loans, mature March 23, 2018, LIBOR plus 3.25%, subject to a LIBOR floor of 1.00% (a) | 898,241 | 902,293 | ||||||
$225 million revolving credit facility, matures December 22, 2017, LIBOR plus 3.75%, subject to a LIBOR floor of 1.00% (a) | 41,500 | 19,500 | ||||||
1,624,741 | 1,606,793 | |||||||
Less current portion of long-term debt | (9,166 | ) | (9,166 | ) | ||||
Long-term debt | $ | 1,615,575 | $ | 1,597,627 | ||||
(a) | The interest rate on the term loan and the revolving credit facility was LIBOR plus 4.25%, subject to a LIBOR floor of 1.25%, until March 25, 2013. | |||||||
Schedule of maturities of long-term debt including short term borrowings | ' | |||||||
Principal payments scheduled to be made on the Company’s debt obligations are as follows (amounts in thousands): | ||||||||
Remainder of 2014 | $ | 4,583 | ||||||
2015 | 9,166 | |||||||
2016 | 9,166 | |||||||
2017 | 50,667 | |||||||
2018 | 870,800 | |||||||
2019 | — | |||||||
Thereafter | 685,000 | |||||||
Total principal payments | 1,629,382 | |||||||
Less: | ||||||||
Unamortized discount on the Credit Facility term loans | 4,641 | |||||||
Total debt on condensed consolidated balance sheet | $ | 1,624,741 | ||||||
Derivatives_Tables
Derivatives (Tables) | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||
Schedule of Swaps' outstanding notional balance and terms | ' | |||||||||||||
The Swaps’ outstanding notional balance as of June 30, 2014 and terms are noted below: | ||||||||||||||
Notional | Effective Date | Fixed | Variable Rate Received | |||||||||||
Rate Paid | ||||||||||||||
$ | 537,625,000 | March 28, 2013 | 1.88% | 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) | ||||||||||
142,462,500 | March 28, 2013 | 1.38% | 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) | |||||||||||
111,369,347 | September 30, 2013 | 1.96% | 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor | |||||||||||
111,369,347 | September 30, 2013 | 1.85% | 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor | |||||||||||
(a) | On March 25, 2013, the Company negotiated amendments to the terms of these interest rate swap agreements to coincide with the Repricing (the “Amended Swaps”). The Amended Swaps are held with the same counterparties as the Existing Swap Agreements. Upon entering into the Amended Swaps, the Company 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 income (loss) relating to the dedesignation will be recognized in Interest expense over the remaining life of the Amended Swaps. | |||||||||||||
Schedule of impact of the derivatives designated as cash flow hedges on the condensed consolidated financial statements | ' | |||||||||||||
The impact of the derivatives designated as cash flow hedges on the condensed consolidated financial statements is depicted below (amounts in thousands): | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Effective portion of gain (loss) recognized in Accumulated other comprehensive income (loss) | $ | (6,234 | ) | 10,473 | $ | (9,605 | ) | 9,564 | ||||||
Effective portion of gain (loss) reclassified from Accumulated other comprehensive income (loss) into Net income (loss) (a) | $ | (1,766 | ) | (1,198 | ) | $ | (3,466 | ) | (2,366 | ) | ||||
Ineffective portion of amount of gain (loss) recognized into Net income (loss) on interest rate swaps (a) | $ | (2 | ) | 61 | $ | (3 | ) | 80 | ||||||
(a) | Amounts are included in Interest expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss). |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||
Schedule of fair value level of assets and liabilities that are measured on a recurring basis | ' | ||||||||||||
The following summarizes the fair value level of assets and liabilities that are measured on a recurring basis at June 30, 2014 and December 31, 2013 (amounts in thousands): | |||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||
30-Jun-14 | |||||||||||||
Derivative financial instruments — assets (a) | $ | — | 1,273 | — | 1,273 | ||||||||
Derivative financial instruments - liabilities | — | (6,748 | ) | — | (6,748 | ) | |||||||
Total | $ | — | (5,475 | ) | — | (5,475 | ) | ||||||
31-Dec-13 | |||||||||||||
Derivative financial instruments - assets (a) | $ | — | 2,495 | — | 2,495 | ||||||||
Derivative financial instruments - liabilities | — | (2,013 | ) | — | (2,013 | ) | |||||||
Total | $ | — | 482 | — | 482 | ||||||||
(a) | Included in Other assets, net on the condensed consolidated balance sheets. | ||||||||||||
Schedule of Carrying values and fair values of financial instruments that are not carried at fair value | ' | ||||||||||||
Carrying values and fair values of financial instruments that are not carried at fair value are as follows (amounts in thousands): | |||||||||||||
30-Jun-14 | 31-Dec-13 | ||||||||||||
Long term debt, including current portion: | |||||||||||||
Carrying value | $ | 1,624,741 | $ | 1,606,793 | |||||||||
Fair value (a) | 1,672,256 | 1,656,797 | |||||||||||
(a) | T he fair value is based on valuations from third party financial institutions and is classified as Level 2 in the hierarchy. |
Restructuring_Charges_Tables
Restructuring Charges (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||
Schedule of activity and balance of the restructuring plan | ' | ||||||||||||
The following table provides the activity and balance of the Company’s restructuring plan (amounts in thousands): | |||||||||||||
31-Dec-13 | Additions | Payments | 30-Jun-14 | ||||||||||
2013 Restructuring Plan | |||||||||||||
Severance and retention | $ | 1,570 | 918 | (2,042 | ) | 446 | |||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 6 Months Ended | |||
Jun. 30, 2014 | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ' | |||
Summary of the changes in Accumulated other comprehensive income (loss) | ' | |||
The following table provides a summary of the changes in Accumulated other comprehensive income (loss) for the period presented (amounts in thousands): | ||||
Accumulated | ||||
other | ||||
comprehensive | ||||
income (loss) | ||||
As of December 31, 2013 | $ | 74 | ||
Unrealized loss on derivatives recognized through Accumulated other comprehensive income (loss) | (9,605 | ) | ||
Reclassifications of unrealized loss on derivatives into net income (a) | 3,466 | |||
As of June 30, 2014 | $ | (6,065 | ) | |
(a) | Amounts reclassified into net income are included in Interest expense on the condensed consolidated statement of operations. See note 6, Derivatives, for further information. |
Security_Networks_Acquisition_1
Security Networks Acquisition - Schedule of Assets Acquired and Liabilities Assumed (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Aug. 16, 2013 | Aug. 16, 2013 | Aug. 16, 2013 |
In Thousands, unless otherwise specified | Security Networks Acquisition | Subscriber accounts | Dealer Networks and Other Intangible Assets | ||
Security Networks Acquisition | Security Networks Acquisition | ||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' |
Cash | ' | ' | $3,096 | ' | ' |
Trade receivables | ' | ' | 1,305 | ' | ' |
Other current assets | ' | ' | 1,677 | ' | ' |
Property and equipment | ' | ' | 1,404 | ' | ' |
Finite-Lived Intangibles | ' | ' | ' | 307,800 | 48,500 |
Goodwill | 527,502 | 527,502 | 177,289 | ' | ' |
Holdback liability, current and non-current | ' | ' | 9,620 | ' | ' |
Deferred income tax liabilities | ' | ' | 5,097 | ' | ' |
Other current and non-current liabilities | ' | ' | 25,797 | ' | ' |
Fair value of consideration | ' | ' | $500,557 | ' | ' |
Security_Networks_Acquisition_2
Security Networks Acquisition - Pro Forma (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Business Combinations [Abstract] | ' | ' | ' | ' |
Net revenue | $134,696 | $102,273 | $267,560 | $202,431 |
Net loss | -8,525 | 592 | -16,376 | 1,941 |
Business Acquisition, Pro Forma Revenue | ' | 127,424 | ' | 250,838 |
Business Acquisition, Pro Forma Income (Loss) from Continuing Operations before Changes in Accounting and Extraordinary Items, Net of Tax | ' | ($8,304) | ' | ($14,109) |
Security_Networks_Acquisition_3
Security Networks Acquisition - Narrative (Details) (USD $) | 6 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | ||||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Aug. 16, 2013 | Jun. 30, 2014 | Aug. 16, 2013 | Jun. 30, 2014 | Aug. 16, 2013 | Aug. 16, 2013 | Aug. 16, 2013 | |
Security Networks Acquisition | Security Networks Acquisition | Ascent Capital | Monitronics International Inc and Subsidiaries | 9.125% Senior Notes due April 1, 2020 | Term Loan Due March, 2018 | 9.868% Promissory Note to Ascent Capital due October 1, 2020 | ||||
Security Networks Acquisition | Security Networks Acquisition | Security Networks Acquisition | Security Networks Acquisition | Security Networks Acquisition | ||||||
Common Class A | ||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill, Purchase Accounting Adjustments | ' | ' | ' | ' | $989,000 | ' | ' | ' | ' | ' |
Fair value of consideration | ' | ' | ' | 500,557,000 | ' | ' | ' | ' | ' | ' |
Payments to Acquire Businesses, Gross | ' | ' | ' | 481,834,000 | ' | ' | ' | ' | ' | ' |
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | ' | ' | ' | ' | ' | 253,333 | ' | ' | ' | ' |
Par value of shares issued as a consideration (in dollars per share) | $0.01 | ' | $0.01 | ' | ' | $0.01 | ' | ' | ' | ' |
Equity Issued in Business Combination, Fair Value Disclosure | ' | ' | ' | ' | ' | 18,723,000 | ' | ' | ' | ' |
Business Combination Consideration Post Closing Working Capital Adjustment | ' | ' | ' | 1,057,000 | ' | ' | ' | ' | ' | ' |
Proceeds from long-term debt | 75,200,000 | 62,100,000 | ' | ' | ' | ' | ' | 175,000,000 | 225,000,000 | 100,000,000 |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | ' | ' | ' | ' | 9.13% | ' | ' |
Valuation Allowance, Deferred Tax Asset, Change in Amount | ' | ' | ' | ' | ' | ' | ($936,000) | ' | ' | ' |
Other_Accrued_Liabilities_Sche
Other Accrued Liabilities - Schedule of other accrued liabilities (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Payables and Accruals [Abstract] | ' | ' |
Interest payable | $18,089 | $17,258 |
Income taxes payable | 1,645 | 2,647 |
Legal accrual | 599 | 705 |
Other | 9,508 | 12,844 |
Total Other accrued liabilities | $29,841 | $33,454 |
LongTerm_Debt_Schedule_of_Long
Long-Term Debt - Schedule of Long Term Debt (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jul. 17, 2013 | Jun. 30, 2014 | Mar. 25, 2013 | Aug. 16, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Aug. 16, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Aug. 16, 2013 |
In Thousands, unless otherwise specified | 9.125% Senior Notes due April 1, 2020 | 9.125% Senior Notes due April 1, 2020 | 9.125% Senior Notes due April 1, 2020 | Promissory Note | Term Loan | Term Loan | Term Loan | Term Loan | Term Loan | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Ascent Capital | Ascent Capital | Ascent Capital | ||
Senior Notes 9.125 Percent Due 2020 | Senior Notes 9.125 Percent Due 2020 | Senior Notes 9.125 Percent Due 2020 | 9.868% Promissory Note to Ascent Capital due October 1, 2020 | LIBOR | Term Loan Due March, 2018 | Term Loan Due March, 2018 | Term Loan Due March, 2018 | Term Loan Due March, 2018 | Revolving Credit Facility Due 2017 | Revolving Credit Facility Due 2017 | Revolving Credit Facility Due 2017 | Revolving Credit Facility Due 2017 | Promissory Note | Promissory Note | Promissory Note | |||
LIBOR | LIBOR | 9.868% Promissory Note to Ascent Capital due October 1, 2020 | 9.868% Promissory Note to Ascent Capital due October 1, 2020 | 9.868% Promissory Note to Ascent Capital due October 1, 2020 | ||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total debt on condensed consolidated balance sheet | $1,624,741 | $1,606,793 | $585,000 | $585,000 | ' | ' | ' | ' | $898,241 | $902,293 | ' | ' | $41,500 | $19,500 | ' | $100,000 | $100,000 | ' |
Current portion of long-term debt | 9,166 | 9,166 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt | $1,615,575 | $1,597,627 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument Floor of Variable Rate Basis | ' | ' | ' | ' | ' | ' | 1.25% | 1.00% | ' | ' | 1.00% | 1.00% | ' | ' | 1.00% | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | 9.13% | ' | 9.13% | 9.87% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9.87% |
Debt Instrument, Basis Spread on Variable Rate | ' | ' | ' | ' | ' | ' | 4.25% | 3.25% | ' | ' | 3.25% | 3.75% | ' | ' | 3.75% | ' | ' | ' |
LongTerm_Debt_Schedule_of_Long1
Long-Term Debt - Schedule of Long Term Debt Maturity (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Disclosure [Abstract] | ' | ' |
Remainder of 2014 | $4,583 | ' |
2015 | 9,166 | ' |
2016 | 9,166 | ' |
2017 | 50,667 | ' |
2018 | 870,800 | ' |
2019 | 0 | ' |
Thereafter | 685,000 | ' |
Total principal payments | 1,629,382 | ' |
Unamortized discount on the Credit Facility term loans | 4,641 | ' |
Total debt on condensed consolidated balance sheet | $1,624,741 | $1,606,793 |
LongTerm_Debt_Narrative_Detail
Long-Term Debt - Narrative (Details) (USD $) | 6 Months Ended | 0 Months Ended | 0 Months Ended | ||||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jul. 17, 2013 | Mar. 23, 2012 | Jun. 30, 2014 | Aug. 16, 2013 | Aug. 16, 2013 | Aug. 16, 2013 | Aug. 16, 2013 | Aug. 16, 2013 | Aug. 16, 2013 | Jun. 30, 2014 | |
9.125% Senior Notes due April 1, 2020 | 9.125% Senior Notes due April 1, 2020 | 9.125% Senior Notes due April 1, 2020 | Promissory Note | Revolving Credit Facility | Term Loan | Security Networks Acquisition | Security Networks Acquisition | Ascent Capital | Ascent Capital | Interest Rate Swap | |||
Senior Notes 9.125 Percent Due 2020 | Senior Notes 9.125 Percent Due 2020 | Senior Notes 9.125 Percent Due 2020 | 9.868% Promissory Note to Ascent Capital due October 1, 2020 | Revolving Credit Facility Due 2017 | Term Loan Due March, 2018 | 9.125% Senior Notes due April 1, 2020 | Revolving Credit Facility | Promissory Note | Security Networks Acquisition | Designated as Hedging Instrument | |||
Revolving Credit Facility Due 2017 | 9.868% Promissory Note to Ascent Capital due October 1, 2020 | Promissory Note | Term Loan | ||||||||||
9.868% Promissory Note to Ascent Capital due October 1, 2020 | |||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Face Amount | ' | ' | $585,000,000 | $175,000,000 | $410,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | 9.13% | 9.13% | ' | 9.87% | ' | ' | 9.13% | ' | 9.87% | ' | ' |
Proceeds from long-term debt | 75,200,000 | 62,100,000 | ' | ' | ' | ' | ' | ' | 175,000,000 | ' | ' | 100,000,000 | ' |
Line of Credit Facility, Increase in Maximum Borrowing Capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75,000,000 | ' | ' | ' |
Line of Credit Facility, Maximum Borrowing Capacity | ' | ' | ' | ' | ' | ' | 225,000,000 | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Discount Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | ' | ' | ' |
Debt Instrument, Basis Spread on Variable Rate | ' | ' | ' | ' | ' | ' | 3.75% | 3.25% | ' | ' | ' | ' | ' |
Debt Instrument Floor of Variable Rate Basis | ' | ' | ' | ' | ' | ' | 1.00% | 1.00% | ' | ' | ' | ' | ' |
Line of Credit Facility, Periodic Payment, Principal | ' | ' | ' | ' | ' | ' | ' | 2,292,000 | ' | ' | ' | ' | ' |
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | ' | ' | ' | ' | ' | ' | 0.50% | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Remaining Borrowing Capacity | 183,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred Finance Costs, Net | $23,159,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Rate Paid (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.06% |
Derivatives_Summary_of_Outstan
Derivatives - Summary of Outstanding Swaps (Details) (USD $) | 3 Months Ended | |
Jun. 30, 2014 | ||
1.884 % interest rate swaps | ' | |
Derivatives | ' | |
Notional | $537,625,000 | |
Rate Paid (as a percent) | 1.88% | |
Variable interest rate base floor | 1.00% | |
Variable interest rate base | '3 mo.USD-LIBOR-BBA | [1] |
1.384 % interest rate swaps | ' | |
Derivatives | ' | |
Notional | 142,462,500 | |
Rate Paid (as a percent) | 1.38% | |
Variable interest rate base floor | 1.00% | |
Variable interest rate base | '3 mo.USD-LIBOR-BBA | [1] |
1.959 % interest rate swaps | ' | |
Derivatives | ' | |
Notional | 111,369,347 | |
Rate Paid (as a percent) | 1.96% | |
Variable interest rate base floor | 1.00% | |
Variable interest rate base | '3 mo.USD-LIBOR-BBA | |
1.850 % interest rate swaps | ' | |
Derivatives | ' | |
Notional | $111,369,347 | |
Rate Paid (as a percent) | 1.85% | |
Variable interest rate base floor | 1.00% | |
Variable interest rate base | '3 mo.USD-LIBOR-BBA | |
[1] | (a) On March 25, 2013, the Company negotiated amendments to the terms of these interest rate swap agreements to coincide with the Repricing (the “Amended Swapsâ€). The Amended Swaps are held with the same counterparties as the Existing Swap Agreements. Upon entering into the Amended Swaps, the Company 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 income (loss) relating to the dedesignation will be recognized in Interest expense over the remaining life of the Amended Swaps. |
Derivatives_Summary_of_Derivat
Derivatives - Summary of Derivatives Designated as Cash Flow Hedges (Details) (Interest Rate Swap, Cash flow hedge, USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||||
Interest Rate Swap | Cash flow hedge | ' | ' | ' | ' | ||||
Impact of the Swap on the consolidated financial statements | ' | ' | ' | ' | ||||
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net | $6,616 | ' | $6,616 | ' | ||||
Effective portion of gain (loss) recognized in Accumulated other comprehensive income (loss) | -6,234 | 10,473 | -9,605 | 9,564 | ||||
Effective portion of gain (loss) reclassified from Accumulated other comprehensive income (loss) into Net income | -1,766 | [1] | -1,198 | [1] | -3,466 | [1] | -2,366 | [1] |
Ineffective portion of amount of gain (loss) recognized into Net income (loss) on interest rate swaps | ($2) | [1] | $61 | [1] | ($3) | [1] | $80 | [1] |
[1] | (a)Â Amounts are included in Interest expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss). |
Fair_Value_Measurements_Schedu
Fair Value Measurements - Schedule of Fair Value Measured On Recurring Basis (Details) (Recurring, USD $) | Jun. 30, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Fair value measurements | ' | ' | ||
Derivative financial instruments - assets | $1,273 | [1] | $2,495 | [1] |
Derivative financial instruments - liabilities | -6,748 | -2,013 | ||
Total | -5,475 | 482 | ||
Level 1 | ' | ' | ||
Fair value measurements | ' | ' | ||
Derivative financial instruments - assets | 0 | [1] | 0 | [1] |
Derivative financial instruments - liabilities | 0 | 0 | ||
Total | 0 | 0 | ||
Level 2 | ' | ' | ||
Fair value measurements | ' | ' | ||
Derivative financial instruments - assets | 1,273 | [1] | 2,495 | [1] |
Derivative financial instruments - liabilities | -6,748 | -2,013 | ||
Total | -5,475 | 482 | ||
Level 3 | ' | ' | ||
Fair value measurements | ' | ' | ||
Derivative financial instruments - assets | 0 | [1] | 0 | [1] |
Derivative financial instruments - liabilities | 0 | 0 | ||
Total | $0 | $0 | ||
[1] | (a)Included in Other assets, net on the condensed consolidated balance sheets. |
Fair_Value_Measurements_Schedu1
Fair Value Measurements - Schedule of Instruments Not Carried at Fair Value (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Long term debt, including current portion: | ' | ' | ||
Carrying value | $1,624,741 | $1,606,793 | ||
Fair value | $1,672,256 | [1] | $1,656,797 | [1] |
[1] | (a)TÂ he fair value is based on valuations from third party financial institutions and is classified as Level 2 in the hierarchy. |
Restructuring_Charges_Summary_
Restructuring Charges - Summary of Restructuring Charges (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Restructuring and Related Activities [Abstract] | ' | ' | ' | ' |
Restructuring charges | $371,000 | $0 | $918,000 | $0 |
Change in activity of restructuring reserves during the period | ' | ' | ' | ' |
Restructuring Charges | 371,000 | 0 | 918,000 | 0 |
2013 Restructuring Plan | Severance and retention | ' | ' | ' | ' |
Restructuring and Related Activities [Abstract] | ' | ' | ' | ' |
Restructuring charges | 371,000 | 0 | 918,000 | 0 |
Change in activity of restructuring reserves during the period | ' | ' | ' | ' |
Opening balance | ' | ' | 1,570,000 | ' |
Restructuring Charges | 371,000 | 0 | 918,000 | 0 |
Payments | ' | ' | -2,042,000 | ' |
Ending balance | $446,000 | ' | $446,000 | ' |
Restructuring_Charges_Narrativ
Restructuring Charges - Narrative (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Restructuring Charges | $371,000 | $0 | $918,000 | $0 |
Severance and retention | 2013 Restructuring Plan | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Restructuring Charges | $371,000 | $0 | $918,000 | $0 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income - Summary of Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | |
Changes in Accumulated other comprehensive income (loss) | ' | |
31-Dec-13 | $74 | |
Unrealized loss on derivatives recognized through Accumulated other comprehensive income (loss) | -9,605 | |
Reclassifications of unrealized loss on derivatives into net income | 3,466 | [1] |
30-Jun-14 | ($6,065) | |
[1] | Amounts reclassified into net income are included in Interest expense on the condensed consolidated statement of operations. See note 6, Derivatives, for further information. |