Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 12, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | MONITRONICS INTERNATIONAL INC | |
Entity Central Index Key | 1,265,107 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 0 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 3,688 | $ 1,953 |
Restricted cash | 53 | 18 |
Trade receivables, net of allowance for doubtful accounts of $2,233 in 2015 and $2,120 in 2014 | 13,864 | 13,796 |
Deferred income tax assets, net | 6,567 | 6,567 |
Prepaid and other current assets | 8,501 | 7,559 |
Total current assets | 32,673 | 29,893 |
Property and equipment, net of accumulated depreciation of $29,035 in 2015 and $24,254 in 2014 | 27,015 | 23,280 |
Subscriber accounts, net of accumulated amortization of $853,307 in 2015 and $736,824 in 2014 | 1,409,143 | 1,373,630 |
Dealer network and other intangible assets, net of accumulated amortization of $64,048 in 2015 and $54,077 in 2014 | 36,185 | 44,855 |
Goodwill | 563,468 | 527,502 |
Other assets, net | 25,431 | 25,487 |
Total assets | 2,093,915 | 2,024,647 |
Current liabilities: | ||
Accounts payable | 7,833 | 6,710 |
Accrued payroll and related liabilities | 3,439 | 3,604 |
Other accrued liabilities | 30,891 | 31,094 |
Deferred revenue | 15,580 | 14,945 |
Holdback liability | 17,952 | 19,046 |
Current portion of long-term debt | 5,500 | 9,166 |
Total current liabilities | 81,195 | 84,565 |
Non-current liabilities: | ||
Long-term debt | 1,712,911 | 1,640,542 |
Long-term holdback liability | 4,433 | 5,156 |
Derivative financial instruments | 8,460 | 5,780 |
Deferred income tax liability, net | 17,835 | 15,771 |
Other liabilities | 15,843 | 15,267 |
Total liabilities | $ 1,840,677 | $ 1,767,081 |
Commitments and contingencies | ||
Stockholder's equity: | ||
Common stock, $.01 par value. 1,000 shares authorized, issued and outstanding both at June 30, 2015 and December 31, 2014 | $ 0 | $ 0 |
Additional paid-in capital | 359,994 | 336,540 |
Accumulated deficit | (98,490) | (74,169) |
Accumulated other comprehensive loss | (8,266) | (4,805) |
Total stockholder's equity | 253,238 | 257,566 |
Total liabilities and stockholder's equity | $ 2,093,915 | $ 2,024,647 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Trade receivables, allowance for doubtful accounts (in dollars) | $ 2,233 | $ 2,120 |
Property and equipment, accumulated depreciation (in dollars) | 29,035 | 24,254 |
Subscriber accounts, accumulated amortization (in dollars) | 853,307 | 736,824 |
Dealer network and other intangible assets, accumulated amortization (in dollars) | $ 64,048 | $ 54,077 |
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 Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement [Abstract] | ||||
Net revenue | $ 141,543 | $ 134,696 | $ 279,959 | $ 267,560 |
Operating expenses: | ||||
Cost of services | 28,053 | 22,982 | 53,743 | 45,072 |
Selling, general, and administrative, including stock-based compensation | 25,697 | 23,127 | 49,121 | 46,099 |
Amortization of subscriber accounts, dealer network and other intangible assets | 63,526 | 63,261 | 126,667 | 125,041 |
Depreciation | 2,484 | 2,198 | 4,781 | 4,581 |
Restructuring charges | 0 | 371 | 0 | 918 |
Gain on disposal of operating assets | 0 | (69) | (3) | (69) |
Total operating expenses | 119,760 | 111,870 | 234,309 | 221,642 |
Operating income | 21,783 | 22,826 | 45,650 | 45,918 |
Other expense: | ||||
Interest expense | 31,291 | 29,638 | 61,531 | 58,982 |
Refinancing expense | 4,468 | 0 | 4,468 | 0 |
Total other expense | 35,759 | 29,638 | 65,999 | 58,982 |
Loss before income taxes | (13,976) | (6,812) | (20,349) | (13,064) |
Income tax expense | 2,011 | 1,713 | 3,972 | 3,312 |
Net loss | (15,987) | (8,525) | (24,321) | (16,376) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on derivative contracts, net | 1,002 | (4,468) | (3,461) | (6,139) |
Total other comprehensive income (loss), net of tax | 1,002 | (4,468) | (3,461) | (6,139) |
Comprehensive loss | $ (14,985) | $ (12,993) | $ (27,782) | $ (22,515) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (24,321) | $ (16,376) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Amortization of subscriber accounts, dealer network and other intangible assets | 126,667 | 125,041 |
Depreciation | 4,781 | 4,581 |
Stock-based compensation | 829 | 896 |
Deferred income tax expense | 2,050 | 1,691 |
Long-term debt amortization | 643 | 531 |
Gain on disposal of operating assets | (3) | (69) |
Refinancing expense | 4,468 | 0 |
Other non-cash activity, net | 9,454 | 5,693 |
Changes in assets and liabilities: | ||
Trade receivables | (4,440) | (3,967) |
Prepaid expenses and other assets | (2,642) | 391 |
Payables and other liabilities | (6,185) | (4,055) |
Net cash provided by operating activities | 111,301 | 114,357 |
Cash flows from investing activities: | ||
Capital expenditures | (8,165) | (3,212) |
Cost of subscriber accounts acquired | (129,544) | (126,640) |
Cash paid for acquisition, net of cash acquired | (56,343) | 0 |
Increase in restricted cash | (35) | (72) |
Proceeds from the disposal of operating assets | 3 | 241 |
Other investing activities | 0 | (347) |
Net cash used in investing activities | (194,084) | (130,030) |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 674,050 | 75,200 |
Payments on long-term debt | (605,990) | (57,783) |
Payments of financing costs | (6,232) | 0 |
Contribution from Ascent Capital | 22,690 | 0 |
Net cash provided by financing activities | 84,518 | 17,417 |
Net increase in cash and cash equivalents | 1,735 | 1,744 |
Cash and cash equivalents at beginning of period | 1,953 | 4,355 |
Cash and cash equivalents at end of period | 3,688 | 6,099 |
Supplemental cash flow information: | ||
State taxes paid | 3,485 | 2,658 |
Interest paid | $ 57,952 | $ 54,869 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Stockholder's Equity - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands | Total | Common Stock | Additional paid-in capital | Accumulated other comprehensive loss | Accumulated deficit |
Beginning Balance at Dec. 31, 2014 | $ 257,566 | $ 336,540 | $ (4,805) | $ (74,169) | |
Beginning Balance (in shares) at Dec. 31, 2014 | 1,000 | 1,000 | |||
Increase (Decrease) in Stockholder's Equity | |||||
Net loss | $ (24,321) | (24,321) | |||
Other comprehensive loss | (3,461) | (3,461) | |||
Stock-based compensation | 974 | 974 | |||
Value of shares withheld for minimum tax liability | (210) | (210) | |||
Contribution from Ascent Capital | $ 22,690 | 22,690 | |||
Ending Balance (in shares) at Jun. 30, 2015 | 1,000 | 1,000 | |||
Ending Balance at Jun. 30, 2015 | $ 253,238 | $ 359,994 | $ (8,266) | $ (98,490) |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2015 | |
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 February 23, 2015, the Company acquired LiveWatch Security, LLC ("LiveWatch"), a Do-It-Yourself home security firm, offering professionally monitored security services through a direct-to-consumer sales channel (the "LiveWatch Acquisition"). On August 16, 2013, the Company acquired all of the equity interest 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, 2015 , and for the three and six months ended June 30, 2015 and 2014 , 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, 2014 , filed with the SEC on March 6, 2015 (the “2014 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. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2015 | |
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. In the third quarter of 2015, the FASB decided to defer 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. |
LiveWatch Acquisition
LiveWatch Acquisition | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
LiveWatch Acquisition | LiveWatch Acquisition On February 23, 2015 (the "Closing Date"), the Company 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 the Company's revolving credit facility, as well as cash contributions from Ascent Capital. In connection with the LiveWatch Acquisition, the Company entered into employment agreements with certain key members of the LiveWatch management team which provide for retention bonuses of $6,000,000 (the "LiveWatch Retention Bonuses") to be paid on the second anniversary of the Closing Date, and performance based bonus arrangements payable on the fourth anniversary of the Closing Date, assuming certain performance metrics are met by LiveWatch during the first four years following the Closing Date (the "LiveWatch Performance Bonuses"). The LiveWatch Performance Bonuses are estimated to yield an aggregate payout of approximately $8,500,000 . The LiveWatch Retention Bonuses 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 period based on the estimated value of the payouts. For the three and six months ended June 30, 2015 , the Company recognized $1,276,000 and $1,795,000 , respectively, related to the LiveWatch Acquisition Contingent Bonuses, which are included in Selling, general and administrative expense in the condensed consolidated statements of operations and comprehensive income (loss). The LiveWatch Acquisition was accounted for as a business combination utilizing the acquisition method in accordance with FASB Accounting Standards Codification ("ASC") Topic 805, Business Combinations . Under the acquisition method of accounting, the fair value of the consideration transferred has been allocated to LiveWatch's tangible and identifiable intangible assets acquired and liabilities assumed based on their preliminary estimates of fair value as follows (amounts in thousands): Cash $ 784 Trade receivables 273 Other current assets 617 Property and equipment 362 Subscriber accounts 24,900 Other intangible asset 1,300 Goodwill 35,966 Current liabilities (6,640 ) Fair value of consideration transferred $ 57,562 The Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015 (File No. 333-110025), filed with the SEC on May 12, 2015 (the "March 2015 10-Q"), included an initial allocation of the purchase price. Subsequent to filing the Company's March 2015 10-Q, an adjustment was made to increase goodwill by $457,000 . The increase to goodwill is primarily related to the increase in the LiveWatch Purchase Price as discussed above. Other adjustments relate to working capital adjustments to LiveWatch's acquired other current assets and liabilities. The preliminary estimates 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. Goodwill in the amount of $35,966,000 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 the Company 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 . As of June 30, 2015 , 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). The Company's results of operations for the three and six months ended June 30, 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. |
Other Accrued Liabilities
Other Accrued Liabilities | 6 Months Ended |
Jun. 30, 2015 | |
Payables and Accruals [Abstract] | |
Other Accrued Liabilities | Other Accrued Liabilities Other accrued liabilities consisted of the following (amounts in thousands): June 30, 2015 December 31, 2014 Interest payable $ 18,205 $ 18,251 Income taxes payable 1,969 3,494 Legal accrual 164 222 Other 10,553 9,127 Total Other accrued liabilities $ 30,891 $ 31,094 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following (amounts in thousands): June 30, December 31, 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 April 9, 2022, LIBOR plus 3.5%, subject to a LIBOR floor of 1.00% (4.50%) 545,946 — Term loans, mature March 23, 2018, LIBOR plus 3.25%, subject to a LIBOR floor of 1.00% (4.25%) 400,265 894,208 $315 million revolving credit facility, matures December 22, 2017, LIBOR plus 3.75%, subject to a LIBOR floor of 1.00% (4.75%) 87,200 70,500 1,718,411 1,649,708 Less current portion of long-term debt (5,500 ) (9,166 ) Long-term debt $ 1,712,911 $ 1,640,542 Senior Notes The senior notes total $585,000,000 in principal, mature on April 1, 2020 and bear interest at 9.125% per annum (the "Senior Notes"). 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 February 17, 2015, the Company entered into an amendment (“Amendment No. 4”) with the lenders of its existing senior secured credit agreement dated March 23, 2012, and as amended and restated on August 16, 2013, March 25, 2013 and November 7, 2012 (the “Existing Credit Agreement”). Amendment No. 4 provided for, among other things, an increase in the commitments under the revolving credit facility in a principal amount of $90,000,000 . On April 9, 2015, the Company entered into Amendment No. 5 (“Amendment No. 5”) to its Existing Credit Agreement. Pursuant to Amendment No. 5, the Company completed the issuance of an incremental $550,000,000 senior secured Term Loan B offering at a 0.5% discount with a maturity date of April 9, 2022 (the "2022 Term Loans"). The Company used 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, the "Credit Facility") also incorporates certain covenant changes, including the removal of the third quarter 2015 step downs of the senior secured and total leverage ratios, both as defined in the Credit Facility. The 2018 Term Loans bear interest at LIBOR plus 3.25% , subject to a LIBOR floor of 1.00% , and mature on March 23, 2018. Interest payments on the 2018 Term Loans are due quarterly with the princpal due at maturity. The 2022 Term Loans bear interest at LIBOR plus 3.50% , 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. 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 0.50% on unused portions of the Credit Facility revolver. As of June 30, 2015 , $227,800,000 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, 2015 , the Company has deferred financing costs, net of accumulated amortization, of $20,464,000 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. As a result of Amendment No. 5 to Monitronics Credit Facility, the Company incurred Refinancing expense of $4,468,000 for the three and six months ended June 30, 2015 , which were primarily related to bank arrangement fees and other professional fees incurred to complete the amendment. In order to reduce the financial risk related to changes in interest rates associated with the floating rate term loans under the Credit Facility term loans, the Company has entered into interest rate swap agreements with terms similar to the Credit Facility term loans (all outstanding interest rate swap agreements are collectively referred to as the “Swaps”). The Swaps have been designated as effective hedges of the Company’s variable rate debt and qualify for hedge accounting. As a result of these interest rate swaps, the Company's current effective weighted average interest rate on the borrowings under the Credit Facility term loans is 5.15% . See note 6, Derivatives, for further disclosures related to these derivative instruments. The terms of the Senior Notes and Credit Facility provide for certain financial and nonfinancial covenants. As of June 30, 2015 , the Company was in compliance with all required covenants. As of June 30, 2015 , principal payments scheduled to be made on the Company’s debt obligations are as follows (amounts in thousands): Remainder of 2015 $ 2,750 2016 5,500 2017 92,700 2018 409,284 2019 5,500 2020 690,500 Thereafter 518,375 Total principal payments 1,724,609 Less: Unamortized discount on the Credit Facility term loans 6,198 Total debt on condensed consolidated balance sheet $ 1,718,411 |
Derivatives
Derivatives | 6 Months Ended |
Jun. 30, 2015 | |
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. As of June 30, 2015 the Swaps’ outstanding notional balances, effective dates, maturity dates and interest rates paid and received are noted below: Notional Effective Date Maturity Date Fixed Rate Paid Variable Rate Received $ 532,125,000 March 28, 2013 March 23, 2018 1.884% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 141,012,500 March 28, 2013 March 23, 2018 1.384% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 110,238,693 September 30, 2013 March 23, 2018 1.959% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor 110,238,693 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 (a) On March 25, 2013, the Company 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. 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 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 loss are reclassified to Interest expense when the hedged interest payments on the underlying debt are recognized. Amounts in Accumulated other comprehensive loss expected to be recognized in Interest expense in the coming 12 months total approximately $7,299,000 . 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 2015 2014 2015 2014 Effective portion of loss recognized in Accumulated other comprehensive loss $ (820 ) (6,234 ) $ (7,088 ) (9,605 ) Effective portion of loss reclassified from Accumulated other comprehensive loss into Net loss (a) $ (1,822 ) (1,766 ) $ (3,627 ) (3,466 ) Ineffective portion of amount of gain (loss) recognized into Net loss on interest rate swaps (a) $ 83 (2 ) $ (1 ) (3 ) (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, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements According to the FASB ASC Topic 820, Fair Value Measurement , 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, 2015 and December 31, 2014 (amounts in thousands): Level 1 Level 2 Level 3 Total June 30, 2015 Derivative financial instruments — assets (a) $ — 370 — $ 370 Derivative financial instruments - liabilities — (8,460 ) — (8,460 ) Total $ — (8,090 ) — $ (8,090 ) December 31, 2014 Derivative financial instruments - assets (a) $ — 1,123 — $ 1,123 Derivative financial instruments - liabilities — (5,780 ) — (5,780 ) Total $ — (4,657 ) — $ (4,657 ) (a) Included in Other assets, net on the condensed consolidated balance sheets. The Company has determined that 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. Carrying values and fair values of financial instruments that are not carried at fair value are as follows (amounts in thousands): June 30, 2015 December 31, 2014 Long term debt, including current portion: Carrying value $ 1,718,411 $ 1,649,708 Fair value (a) 1,704,043 1,605,255 (a) T he fair value is based on market quotations 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, 2015 | |
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 provided certain Security Networks' employees with a severance package that entitled 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. No restructuring charges were recognized during the three and six months ended June 30, 2015 . During the three and six months ended June 30, 2014 , the Company recognized $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. The following tables provide the activity and balances of the 2013 Restructuring Plan (amounts in thousands): December 31, 2014 Additions Payments June 30, 2015 2013 Restructuring Plan Severance and retention $ 134 — (134 ) $ — December 31, 2013 Additions Payments June 30, 2014 2013 Restructuring Plan Severance and retention $ 1,570 918 (2,042 ) $ 446 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following table provides a summary of the changes in Accumulated other comprehensive loss for the period presented (amounts in thousands): Accumulated other comprehensive loss As of December 31, 2014 $ (4,805 ) Unrealized loss on derivatives recognized through Accumulated other comprehensive loss (7,088 ) Reclassifications of unrealized loss on derivatives into net income (a) 3,627 As of June 30, 2015 $ (8,266 ) (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, 2015 | |
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 Financi
Consolidating Guarantor Financial Information | 6 Months Ended |
Jun. 30, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Consolidating Guarantor Financial Information | Consolidating Guarantor Financial Information The Senior Notes were issued by Monitronics (the “Parent Issuer”) and are fully and unconditionally guaranteed, on a joint and several basis, by all of the Company’s existing domestic subsidiaries (“Subsidiary Guarantors”). Ascent Capital has not guaranteed any of the Company’s obligations under the Senior Notes. Consolidating guarantor financial information has not been presented for the condensed consolidated balance sheet as of December 31, 2014, for the condensed consolidated statement of operations and other comprehensive income (loss) for the three and six months ended June 30, 2014 and for the condensed consolidated statement of cash flows for the sixth months ended June 30, 2014, as substantially all of the Company’s operations were 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. The unaudited condensed consolidating financial information for the Parent Issuer, the Subsidiary Guarantors and the non-guarantors are as follows: MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Condensed Consolidating Balance Sheet (unaudited) As of June 30, 2015 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Assets Current assets: Cash and cash equivalents $ 2,561 1,127 — — $ 3,688 Restricted cash 53 — — — 53 Trade receivables, net 13,494 370 — — 13,864 Deferred income tax assets, net 6,567 — — — 6,567 Prepaid and other current assets 17,465 933 — (9,897 ) 8,501 Total current assets 40,140 2,430 — (9,897 ) 32,673 Investment in subsidiaries 55,907 — — (55,907 ) — Property and equipment, net 26,537 478 — — 27,015 Subscriber accounts, net 1,378,487 30,656 — — 1,409,143 Dealer network and other intangible assets, net 34,928 1,257 — — 36,185 Goodwill 527,191 36,277 — — 563,468 Other assets, net 25,428 3 — — 25,431 Total assets $ 2,088,618 71,101 — (65,804 ) $ 2,093,915 Liabilities and Stockholder's Equity Current liabilities: Accounts payable $ 6,250 1,583 — — $ 7,833 Accrued payroll and related liabilities 3,159 280 — — 3,439 Other accrued liabilities 30,686 10,102 — (9,897 ) 30,891 Deferred revenue 14,749 831 — — 15,580 Holdback liability 17,753 199 — — 17,952 Current portion of long-term debt 5,500 — — — 5,500 Total current liabilities 78,097 12,995 — (9,897 ) 81,195 Non-current liabilities: Long-term debt 1,712,911 — — — 1,712,911 Long-term holdback liability 4,433 — — — 4,433 Derivative financial instruments 8,460 — — — 8,460 Deferred income tax liability, net 17,431 404 — — 17,835 Other liabilities 14,048 1,795 — — 15,843 Total liabilities 1,835,380 15,194 — (9,897 ) 1,840,677 Total stockholder's equity 253,238 55,907 — (55,907 ) 253,238 Total liabilities and stockholder's equity $ 2,088,618 71,101 — (65,804 ) $ 2,093,915 MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) (unaudited) Three Months Ended June 30, 2015 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Net revenue $ 137,051 4,492 — — $ 141,543 0 Operating expenses: 0 Cost of services 25,388 2,665 — — 28,053 Selling, general, and administrative, including stock-based compensation 20,630 5,067 — — 25,697 Amortization of subscriber accounts, dealer network and other intangible assets 62,233 1,293 — — 63,526 Depreciation 2,463 21 — — 2,484 Gain on disposal of operating assets — — 0 — — 110,714 9,046 — — 119,760 Operating income (loss) 26,337 (4,554 ) — — 21,783 Other expense: Equity in loss of subsidiaries 4,773 — — (4,773 ) — Interest expense 31,280 11 — — 31,291 Refinancing expense 4,468 — — — 4,468 40,521 11 — (4,773 ) 35,759 Loss before income taxes (14,184 ) (4,565 ) — 4,773 (13,976 ) Income tax expense 1,803 208 — — 2,011 Net loss (15,987 ) (4,773 ) — 4,773 (15,987 ) Other comprehensive income: Unrealized gain on derivative contracts 1,002 — — — 1,002 Total other comprehensive income 1,002 — — — 1,002 Comprehensive loss $ (14,985 ) (4,773 ) — 4,773 $ (14,985 ) MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) (unaudited) Six Months Ended June 30, 2015 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Net revenue $ 273,651 6,308 — — $ 279,959 0 Operating expenses: 0 Cost of services 50,096 3,647 — — 53,743 Selling, general, and administrative, including stock-based compensation 42,130 6,991 — — 49,121 Amortization of subscriber accounts, dealer network and other intangible assets 124,741 1,926 — — 126,667 Depreciation 4,754 27 — — 4,781 Gain on disposal of operating assets (3 ) — — — (3 ) 221,718 12,591 — — 234,309 Operating income (loss) 51,933 (6,283 ) — — 45,650 Other expense: Equity in loss of subsidiaries 6,704 — — (6,704 ) — Interest expense 61,518 13 — — 61,531 Refinancing expense 4,468 — — — 4,468 72,690 13 — (6,704 ) 65,999 Loss before income taxes (20,757 ) (6,296 ) — 6,704 (20,349 ) Income tax expense 3,564 408 — — 3,972 Net loss (24,321 ) (6,704 ) — 6,704 (24,321 ) Other comprehensive loss: Unrealized loss on derivative contracts (3,461 ) — — — (3,461 ) Total other comprehensive loss (3,461 ) — — — (3,461 ) Comprehensive loss $ (27,782 ) (6,704 ) — 6,704 $ (27,782 ) MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Condensed Consolidating Statement of Cash Flows (unaudited) Six Months Ended June 30, 2015 Parent Issuer Subsidiary Guarantors Non- Guarantors Eliminations Consolidated (amounts in thousands) Net cash provided by (used in) operating activities $ 112,060 (759 ) — — $ 111,301 Investing activities: Capital expenditures (8,021 ) (144 ) — — (8,165 ) Cost of subscriber accounts acquired (126,562 ) (2,982 ) — — (129,544 ) Cash acquired (paid) on acquisition (61,115 ) 4,772 (56,343 ) Increase in restricted cash (35 ) — — — (35 ) Proceeds from disposal of operating assets 3 — — — 3 Net cash provided by (used in) investing activities (195,730 ) 1,646 — — (194,084 ) Financing activities: Proceeds from long-term debt 674,050 — — — 674,050 Payments on long-term debt (605,990 ) — — — (605,990 ) Payments of financing costs (6,232 ) — — — (6,232 ) Contribution from Ascent Capital 22,690 — — — 22,690 Net cash provided by financing activities 84,518 — — — 84,518 Net increase in cash and cash equivalents 848 887 — — 1,735 Cash and cash equivalents at beginning of period 1,713 240 — — 1,953 Cash and cash equivalents at end of period $ 2,561 1,127 — — $ 3,688 |
LiveWatch Acquisition (Tables)
LiveWatch Acquisition (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions | The LiveWatch Acquisition was accounted for as a business combination utilizing the acquisition method in accordance with FASB Accounting Standards Codification ("ASC") Topic 805, Business Combinations . Under the acquisition method of accounting, the fair value of the consideration transferred has been allocated to LiveWatch's tangible and identifiable intangible assets acquired and liabilities assumed based on their preliminary estimates of fair value as follows (amounts in thousands): Cash $ 784 Trade receivables 273 Other current assets 617 Property and equipment 362 Subscriber accounts 24,900 Other intangible asset 1,300 Goodwill 35,966 Current liabilities (6,640 ) Fair value of consideration transferred $ 57,562 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of other accrued liabilities | Other accrued liabilities consisted of the following (amounts in thousands): June 30, 2015 December 31, 2014 Interest payable $ 18,205 $ 18,251 Income taxes payable 1,969 3,494 Legal accrual 164 222 Other 10,553 9,127 Total Other accrued liabilities $ 30,891 $ 31,094 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consisted of the following (amounts in thousands): June 30, December 31, 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 April 9, 2022, LIBOR plus 3.5%, subject to a LIBOR floor of 1.00% (4.50%) 545,946 — Term loans, mature March 23, 2018, LIBOR plus 3.25%, subject to a LIBOR floor of 1.00% (4.25%) 400,265 894,208 $315 million revolving credit facility, matures December 22, 2017, LIBOR plus 3.75%, subject to a LIBOR floor of 1.00% (4.75%) 87,200 70,500 1,718,411 1,649,708 Less current portion of long-term debt (5,500 ) (9,166 ) Long-term debt $ 1,712,911 $ 1,640,542 |
Schedule of maturities of long-term debt including short term borrowings | As of June 30, 2015 , principal payments scheduled to be made on the Company’s debt obligations are as follows (amounts in thousands): Remainder of 2015 $ 2,750 2016 5,500 2017 92,700 2018 409,284 2019 5,500 2020 690,500 Thereafter 518,375 Total principal payments 1,724,609 Less: Unamortized discount on the Credit Facility term loans 6,198 Total debt on condensed consolidated balance sheet $ 1,718,411 |
Derivatives (Tables)
Derivatives (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Swaps' outstanding notional balance and terms | As of June 30, 2015 the Swaps’ outstanding notional balances, effective dates, maturity dates and interest rates paid and received are noted below: Notional Effective Date Maturity Date Fixed Rate Paid Variable Rate Received $ 532,125,000 March 28, 2013 March 23, 2018 1.884% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 141,012,500 March 28, 2013 March 23, 2018 1.384% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 110,238,693 September 30, 2013 March 23, 2018 1.959% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor 110,238,693 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 (a) On March 25, 2013, the Company 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. |
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 2015 2014 2015 2014 Effective portion of loss recognized in Accumulated other comprehensive loss $ (820 ) (6,234 ) $ (7,088 ) (9,605 ) Effective portion of loss reclassified from Accumulated other comprehensive loss into Net loss (a) $ (1,822 ) (1,766 ) $ (3,627 ) (3,466 ) Ineffective portion of amount of gain (loss) recognized into Net loss on interest rate swaps (a) $ 83 (2 ) $ (1 ) (3 ) (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, 2015 | |
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, 2015 and December 31, 2014 (amounts in thousands): Level 1 Level 2 Level 3 Total June 30, 2015 Derivative financial instruments — assets (a) $ — 370 — $ 370 Derivative financial instruments - liabilities — (8,460 ) — (8,460 ) Total $ — (8,090 ) — $ (8,090 ) December 31, 2014 Derivative financial instruments - assets (a) $ — 1,123 — $ 1,123 Derivative financial instruments - liabilities — (5,780 ) — (5,780 ) Total $ — (4,657 ) — $ (4,657 ) (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): June 30, 2015 December 31, 2014 Long term debt, including current portion: Carrying value $ 1,718,411 $ 1,649,708 Fair value (a) 1,704,043 1,605,255 (a) T he fair value is based on market quotations 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, 2015 | |
Restructuring and Related Activities [Abstract] | |
Schedule of activity and balance of the restructuring plan | The following tables provide the activity and balances of the 2013 Restructuring Plan (amounts in thousands): December 31, 2014 Additions Payments June 30, 2015 2013 Restructuring Plan Severance and retention $ 134 — (134 ) $ — December 31, 2013 Additions Payments June 30, 2014 2013 Restructuring Plan Severance and retention $ 1,570 918 (2,042 ) $ 446 |
Accumulated Other Comprehensi24
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Summary of the changes in Accumulated other comprehensive loss | The following table provides a summary of the changes in Accumulated other comprehensive loss for the period presented (amounts in thousands): Accumulated other comprehensive loss As of December 31, 2014 $ (4,805 ) Unrealized loss on derivatives recognized through Accumulated other comprehensive loss (7,088 ) Reclassifications of unrealized loss on derivatives into net income (a) 3,627 As of June 30, 2015 $ (8,266 ) (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. |
Consolidating Guarantor Finan25
Consolidating Guarantor Financial Information (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Balance Sheet | MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Condensed Consolidating Balance Sheet (unaudited) As of June 30, 2015 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Assets Current assets: Cash and cash equivalents $ 2,561 1,127 — — $ 3,688 Restricted cash 53 — — — 53 Trade receivables, net 13,494 370 — — 13,864 Deferred income tax assets, net 6,567 — — — 6,567 Prepaid and other current assets 17,465 933 — (9,897 ) 8,501 Total current assets 40,140 2,430 — (9,897 ) 32,673 Investment in subsidiaries 55,907 — — (55,907 ) — Property and equipment, net 26,537 478 — — 27,015 Subscriber accounts, net 1,378,487 30,656 — — 1,409,143 Dealer network and other intangible assets, net 34,928 1,257 — — 36,185 Goodwill 527,191 36,277 — — 563,468 Other assets, net 25,428 3 — — 25,431 Total assets $ 2,088,618 71,101 — (65,804 ) $ 2,093,915 Liabilities and Stockholder's Equity Current liabilities: Accounts payable $ 6,250 1,583 — — $ 7,833 Accrued payroll and related liabilities 3,159 280 — — 3,439 Other accrued liabilities 30,686 10,102 — (9,897 ) 30,891 Deferred revenue 14,749 831 — — 15,580 Holdback liability 17,753 199 — — 17,952 Current portion of long-term debt 5,500 — — — 5,500 Total current liabilities 78,097 12,995 — (9,897 ) 81,195 Non-current liabilities: Long-term debt 1,712,911 — — — 1,712,911 Long-term holdback liability 4,433 — — — 4,433 Derivative financial instruments 8,460 — — — 8,460 Deferred income tax liability, net 17,431 404 — — 17,835 Other liabilities 14,048 1,795 — — 15,843 Total liabilities 1,835,380 15,194 — (9,897 ) 1,840,677 Total stockholder's equity 253,238 55,907 — (55,907 ) 253,238 Total liabilities and stockholder's equity $ 2,088,618 71,101 — (65,804 ) $ 2,093,915 |
Condensed Income Statement | MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) (unaudited) Three Months Ended June 30, 2015 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Net revenue $ 137,051 4,492 — — $ 141,543 0 Operating expenses: 0 Cost of services 25,388 2,665 — — 28,053 Selling, general, and administrative, including stock-based compensation 20,630 5,067 — — 25,697 Amortization of subscriber accounts, dealer network and other intangible assets 62,233 1,293 — — 63,526 Depreciation 2,463 21 — — 2,484 Gain on disposal of operating assets — — 0 — — 110,714 9,046 — — 119,760 Operating income (loss) 26,337 (4,554 ) — — 21,783 Other expense: Equity in loss of subsidiaries 4,773 — — (4,773 ) — Interest expense 31,280 11 — — 31,291 Refinancing expense 4,468 — — — 4,468 40,521 11 — (4,773 ) 35,759 Loss before income taxes (14,184 ) (4,565 ) — 4,773 (13,976 ) Income tax expense 1,803 208 — — 2,011 Net loss (15,987 ) (4,773 ) — 4,773 (15,987 ) Other comprehensive income: Unrealized gain on derivative contracts 1,002 — — — 1,002 Total other comprehensive income 1,002 — — — 1,002 Comprehensive loss $ (14,985 ) (4,773 ) — 4,773 $ (14,985 ) MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) (unaudited) Six Months Ended June 30, 2015 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Net revenue $ 273,651 6,308 — — $ 279,959 0 Operating expenses: 0 Cost of services 50,096 3,647 — — 53,743 Selling, general, and administrative, including stock-based compensation 42,130 6,991 — — 49,121 Amortization of subscriber accounts, dealer network and other intangible assets 124,741 1,926 — — 126,667 Depreciation 4,754 27 — — 4,781 Gain on disposal of operating assets (3 ) — — — (3 ) 221,718 12,591 — — 234,309 Operating income (loss) 51,933 (6,283 ) — — 45,650 Other expense: Equity in loss of subsidiaries 6,704 — — (6,704 ) — Interest expense 61,518 13 — — 61,531 Refinancing expense 4,468 — — — 4,468 72,690 13 — (6,704 ) 65,999 Loss before income taxes (20,757 ) (6,296 ) — 6,704 (20,349 ) Income tax expense 3,564 408 — — 3,972 Net loss (24,321 ) (6,704 ) — 6,704 (24,321 ) Other comprehensive loss: Unrealized loss on derivative contracts (3,461 ) — — — (3,461 ) Total other comprehensive loss (3,461 ) — — — (3,461 ) Comprehensive loss $ (27,782 ) (6,704 ) — 6,704 $ (27,782 ) |
Condensed Cash Flow Statement | MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Condensed Consolidating Statement of Cash Flows (unaudited) Six Months Ended June 30, 2015 Parent Issuer Subsidiary Guarantors Non- Guarantors Eliminations Consolidated (amounts in thousands) Net cash provided by (used in) operating activities $ 112,060 (759 ) — — $ 111,301 Investing activities: Capital expenditures (8,021 ) (144 ) — — (8,165 ) Cost of subscriber accounts acquired (126,562 ) (2,982 ) — — (129,544 ) Cash acquired (paid) on acquisition (61,115 ) 4,772 (56,343 ) Increase in restricted cash (35 ) — — — (35 ) Proceeds from disposal of operating assets 3 — — — 3 Net cash provided by (used in) investing activities (195,730 ) 1,646 — — (194,084 ) Financing activities: Proceeds from long-term debt 674,050 — — — 674,050 Payments on long-term debt (605,990 ) — — — (605,990 ) Payments of financing costs (6,232 ) — — — (6,232 ) Contribution from Ascent Capital 22,690 — — — 22,690 Net cash provided by financing activities 84,518 — — — 84,518 Net increase in cash and cash equivalents 848 887 — — 1,735 Cash and cash equivalents at beginning of period 1,713 240 — — 1,953 Cash and cash equivalents at end of period $ 2,561 1,127 — — $ 3,688 |
LiveWatch Acquisition - Narrati
LiveWatch Acquisition - Narrative (Details) - USD ($) $ in Thousands | Feb. 23, 2015 | Jun. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 563,468 | $ 563,468 | $ 527,502 | ||
LiveWatch Security, LLC | |||||
Business Acquisition [Line Items] | |||||
Fair value of consideration | $ 61,550 | ||||
Cash paid for acquisition | 3,988 | ||||
Contingent consideration recognized in earnings | 1,276 | 1,795 | |||
Adjustment to goodwill subsequent to acquisition | 457 | ||||
Goodwill | $ 35,966 | ||||
Amortization rate of acquired intangible assets | 235.00% | ||||
Acquisition related costs | 946 | ||||
LiveWatch Security, LLC | Subscriber accounts | |||||
Business Acquisition [Line Items] | |||||
Useful life of acquired intangible assets | 14 years | ||||
LiveWatch Security, LLC | Other intangible asset | |||||
Business Acquisition [Line Items] | |||||
Useful life of acquired intangible assets | 10 years | ||||
LiveWatch Security, LLC | Management retention bonus | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration liability | $ 6,000 | ||||
Term of contingent consideration | 2 years | ||||
LiveWatch Security, LLC | Performance bonus | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration liability | $ 8,500 | $ 8,500 | |||
Term of contingent consideration | 4 years | ||||
Scenario, Forecast | LiveWatch Security, LLC | |||||
Business Acquisition [Line Items] | |||||
Adjustment to consideration paid for acquisition | $ 435 |
LiveWatch Acquisition - Schedul
LiveWatch Acquisition - Schedule of Business Acquisitions (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Feb. 23, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||
Goodwill | $ 563,468 | $ 527,502 | |
LiveWatch Security, LLC | |||
Business Acquisition [Line Items] | |||
Cash | $ 784 | ||
Trade receivables | 273 | ||
Other current assets | 617 | ||
Property and equipment | 362 | ||
Goodwill | 35,966 | ||
Current liabilities | (6,640) | ||
Fair value of consideration transferred | 57,562 | ||
Subscriber accounts | LiveWatch Security, LLC | |||
Business Acquisition [Line Items] | |||
Intangible assets, other than goodwill, acquired | 24,900 | ||
Other intangible asset | LiveWatch Security, LLC | |||
Business Acquisition [Line Items] | |||
Intangible assets, other than goodwill, acquired | $ 1,300 |
Other Accrued Liabilities - Sch
Other Accrued Liabilities - Schedule of other accrued liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Interest payable | $ 18,205 | $ 18,251 |
Income taxes payable | 1,969 | 3,494 |
Legal accrual | 164 | 222 |
Other | 10,553 | 9,127 |
Total Other accrued liabilities | $ 30,891 | $ 31,094 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long Term Debt (Details) - USD ($) | Apr. 09, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | |||
Total debt on condensed consolidated balance sheet | $ 1,718,411,000 | $ 1,649,708,000 | |
Current portion of long-term debt | (5,500,000) | (9,166,000) | |
Long-term debt | 1,712,911,000 | 1,640,542,000 | |
Senior Notes | Senior Notes 9.125 Percent Due 2020 | |||
Debt Instrument [Line Items] | |||
Total debt on condensed consolidated balance sheet | $ 585,000,000 | 585,000,000 | |
Debt interest rate | 9.125% | ||
Promissory Note | 9.868% Promissory Note to Ascent Capital due October 1, 2020 | |||
Debt Instrument [Line Items] | |||
Total debt on condensed consolidated balance sheet | $ 100,000,000 | 100,000,000 | |
Debt interest rate | 9.868% | ||
Term Loan | Term Loan Due April 2022 | |||
Debt Instrument [Line Items] | |||
Total debt on condensed consolidated balance sheet | $ 545,946,000 | 0 | |
Term Loan | Term Loan Due April 2022 | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable debt | 3.50% | 3.50% | |
Floor on variable debt | 1.00% | 1.00% | |
Minimum interest rate | 4.50% | ||
Term Loan | Term Loan Due March, 2018 | |||
Debt Instrument [Line Items] | |||
Total debt on condensed consolidated balance sheet | $ 400,265,000 | 894,208,000 | |
Term Loan | Term Loan Due March, 2018 | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable debt | 3.25% | 3.25% | |
Floor on variable debt | 1.00% | 1.00% | |
Minimum interest rate | 4.25% | ||
Revolving Credit Facility | Revolving Credit Facility Due 2017 | |||
Debt Instrument [Line Items] | |||
Total debt on condensed consolidated balance sheet | $ 87,200,000 | $ 70,500,000 | |
Maximum borrowing on line | $ 315,000,000 | ||
Revolving Credit Facility | Revolving Credit Facility Due 2017 | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable debt | 3.75% | 3.75% | |
Floor on variable debt | 1.00% | 1.00% | |
Minimum interest rate | 4.75% |
Long-Term Debt - Schedule of 30
Long-Term Debt - Schedule of Long Term Debt Maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Debt Disclosure [Abstract] | ||
Remainder of 2015 | $ 2,750 | |
2,016 | 5,500 | |
2,017 | 92,700 | |
2,018 | 409,284 | |
2,019 | 5,500 | |
2,020 | 690,500 | |
Thereafter | 518,375 | |
Total principal payments | 1,724,609 | |
Unamortized discount on the Credit Facility term loans | 6,198 | |
Total debt on condensed consolidated balance sheet | $ 1,718,411 | $ 1,649,708 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | Apr. 09, 2015 | Feb. 17, 2015 | Aug. 16, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 |
Debt Instrument [Line Items] | |||||||
Proceeds from long-term debt | $ 674,050,000 | $ 75,200,000 | |||||
Remaining borrowing on line of credit | $ 227,800,000 | 227,800,000 | |||||
Deferred Finance Costs, Net | 20,464,000 | 20,464,000 | |||||
Refinancing expense | 4,468,000 | $ 0 | 4,468,000 | $ 0 | |||
Senior Notes | Senior Notes 9.125 Percent Due 2020 | |||||||
Debt Instrument [Line Items] | |||||||
Debt issue amount | $ 585,000,000 | $ 585,000,000 | |||||
Debt interest rate | 9.125% | 9.125% | |||||
Promissory Note | 9.868% Promissory Note to Ascent Capital due October 1, 2020 | |||||||
Debt Instrument [Line Items] | |||||||
Debt interest rate | 9.868% | 9.868% | |||||
Revolving Credit Facility | Revolving Credit Facility Due 2017 | |||||||
Debt Instrument [Line Items] | |||||||
Increase in borrowing capacity of credit line | $ 90,000,000 | ||||||
Repayment on line | $ 49,900,000 | ||||||
Unused capacity fee for line of credit | 0.50% | ||||||
Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Discount on debt purchase price | 0.50% | ||||||
Extinguishment of debt | $ 492,000,000 | ||||||
Term Loan | Term Loan Due April 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Debt issue amount | 550,000,000 | ||||||
Term Loan | Term Loan Due March, 2018 | |||||||
Debt Instrument [Line Items] | |||||||
Periodic payments for line of credit | $ 1,375,000 | ||||||
Security Networks Acquisition | Promissory Note | 9.868% Promissory Note to Ascent Capital due October 1, 2020 | |||||||
Debt Instrument [Line Items] | |||||||
Debt interest rate | 9.868% | ||||||
Proceeds from long-term debt | $ 100,000,000 | ||||||
Interest Rate Swap | Designated as Hedging Instrument | Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Fixed Rate Paid | 5.15% | 5.15% | |||||
LIBOR | Revolving Credit Facility | Revolving Credit Facility Due 2017 | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable debt | 3.75% | 3.75% | |||||
Floor on variable debt | 1.00% | 1.00% | |||||
LIBOR | Term Loan | Term Loan Due April 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable debt | 3.50% | 3.50% | |||||
Floor on variable debt | 1.00% | 1.00% | |||||
LIBOR | Term Loan | Term Loan Due March, 2018 | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable debt | 3.25% | 3.25% | |||||
Floor on variable debt | 1.00% | 1.00% |
Derivatives - Summary of Outsta
Derivatives - Summary of Outstanding Swaps (Details) - Jun. 30, 2015 - USD ($) | Total | |
1.884 % interest rate swaps | ||
Derivatives | ||
Notional | $ 532,125,000 | |
Fixed Rate Paid | [1] | 1.884% |
Variable interest rate base floor | 1.00% | |
Variable interest rate base | 3 mo.USD-LIBOR-BBA | |
1.384 % interest rate swaps | ||
Derivatives | ||
Notional | $ 141,012,500 | |
Fixed Rate Paid | [1] | 1.384% |
Variable interest rate base floor | 1.00% | |
Variable interest rate base | 3 mo.USD-LIBOR-BBA | |
1.959 % interest rate swaps | ||
Derivatives | ||
Notional | $ 110,238,693 | |
Fixed Rate Paid | 1.959% | |
Variable interest rate base floor | 1.00% | |
Variable interest rate base | 3 mo.USD-LIBOR-BBA | |
1.850 % interest rate swaps | ||
Derivatives | ||
Notional | $ 110,238,693 | |
Fixed Rate Paid | 1.85% | |
Variable interest rate base floor | 1.00% | |
Variable interest rate base | 3 mo.USD-LIBOR-BBA | |
2.924 % interest rate swaps | ||
Derivatives | ||
Notional | $ 191,475,002 | |
Fixed Rate Paid | 2.924% | |
Variable interest rate base floor | 1.00% | |
Variable interest rate base | 3 mo.USD-LIBOR-BBA | |
[1] | On March 25, 2013, the Company 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. |
Derivatives - Summary of Deriva
Derivatives - Summary of Derivatives Designated as Cash Flow Hedges (Details) - Interest Rate Swap - Cash flow hedge - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Impact of the Swap on the consolidated financial statements | |||||
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net | $ 7,299 | $ 7,299 | |||
Effective portion of loss recognized in Accumulated other comprehensive loss | (820) | $ (6,234) | (7,088) | $ (9,605) | |
Effective portion of loss reclassified from Accumulated other comprehensive loss into Net loss (a) | [1] | (1,822) | (1,766) | (3,627) | (3,466) |
Ineffective portion of amount of gain (loss) recognized into Net loss on interest rate swaps (a) | [1] | $ 83 | $ (2) | $ (1) | $ (3) |
[1] | Amounts are included in Interest expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss). |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measured On Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | |
Fair value measurements | |||
Derivative financial instruments — assets (a) | [1] | $ 370 | $ 1,123 |
Derivative financial instruments - liabilities | (8,460) | (5,780) | |
Total | (8,090) | (4,657) | |
Level 1 | |||
Fair value measurements | |||
Derivative financial instruments — assets (a) | [1] | 0 | 0 |
Derivative financial instruments - liabilities | 0 | 0 | |
Total | 0 | 0 | |
Level 2 | |||
Fair value measurements | |||
Derivative financial instruments — assets (a) | [1] | 370 | 1,123 |
Derivative financial instruments - liabilities | (8,460) | (5,780) | |
Total | (8,090) | (4,657) | |
Level 3 | |||
Fair value measurements | |||
Derivative financial instruments — assets (a) | [1] | 0 | 0 |
Derivative financial instruments - liabilities | 0 | 0 | |
Total | $ 0 | $ 0 | |
[1] | Included in Other assets, net on the condensed consolidated balance sheets. |
Fair Value Measurements - Sch35
Fair Value Measurements - Schedule of Instruments Not Carried at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | |
Long term debt, including current portion: | |||
Carrying value | $ 1,718,411 | $ 1,649,708 | |
Fair value (a) | [1] | $ 1,704,043 | $ 1,605,255 |
[1] | T he fair value is based on market quotations 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 ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Change in activity of restructuring reserves during the period | ||||
Additions | $ 0 | $ 371 | $ 0 | $ 918 |
2013 Restructuring Plan | Severance and retention | ||||
Change in activity of restructuring reserves during the period | ||||
Opening balance | 134 | 1,570 | ||
Additions | 0 | 918 | ||
Payments | (134) | (2,042) | ||
Ending balance | $ 0 | $ 446 | $ 0 | $ 446 |
Restructuring Charges - Narrati
Restructuring Charges - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Restructuring and Related Activities [Abstract] | ||||
Additions | $ 0 | $ 371 | $ 0 | $ 918 |
Accumulated Other Comprehensi38
Accumulated Other Comprehensive Loss - Summary of Accumulated Other Comprehensive Income (Loss) (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015USD ($) | ||
Changes in Accumulated other comprehensive income (loss) | ||
December 31, 2014 | $ (4,805) | |
Unrealized loss on derivatives recognized through Accumulated other comprehensive loss | (7,088) | |
Reclassifications of unrealized loss on derivatives into net income (a) | [1] | 3,627 |
June 30, 2015 | $ (8,266) | |
[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. |
Consolidating Guarantor Finan39
Consolidating Guarantor Financial Information (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Cash and cash equivalents | $ 3,688 | $ 1,953 | $ 6,099 | $ 4,355 |
Restricted cash | 53 | 18 | ||
Trade receivables, net | 13,864 | 13,796 | ||
Deferred income tax assets, net | 6,567 | 6,567 | ||
Prepaid and other current assets | 8,501 | 7,559 | ||
Total current assets | 32,673 | 29,893 | ||
Investment in subsidiaries | 0 | |||
Property and equipment, net | 27,015 | 23,280 | ||
Subscriber accounts, net | 1,409,143 | 1,373,630 | ||
Dealer network and other intangible assets, net | 36,185 | 44,855 | ||
Goodwill | 563,468 | 527,502 | ||
Other assets, net | 25,431 | 25,487 | ||
Total assets | 2,093,915 | 2,024,647 | ||
Accounts payable | 7,833 | 6,710 | ||
Accrued payroll and related liabilities | 3,439 | 3,604 | ||
Other accrued liabilities | 30,891 | 31,094 | ||
Deferred revenue | 15,580 | 14,945 | ||
Holdback liability | 17,952 | 19,046 | ||
Current portion of long-term debt | 5,500 | 9,166 | ||
Total current liabilities | 81,195 | 84,565 | ||
Long-term debt | 1,712,911 | 1,640,542 | ||
Long-term holdback liability | 4,433 | 5,156 | ||
Derivative financial instruments | 8,460 | 5,780 | ||
Deferred income tax liability, net | 17,835 | 15,771 | ||
Other liabilities | 15,843 | 15,267 | ||
Total liabilities | 1,840,677 | 1,767,081 | ||
Total stockholder's equity | 253,238 | 257,566 | ||
Total liabilities and stockholder's equity | 2,093,915 | 2,024,647 | ||
Monitronics | ||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Cash and cash equivalents | 2,561 | 1,713 | ||
Restricted cash | 53 | |||
Trade receivables, net | 13,494 | |||
Deferred income tax assets, net | 6,567 | |||
Prepaid and other current assets | 17,465 | |||
Total current assets | 40,140 | |||
Investment in subsidiaries | 55,907 | |||
Property and equipment, net | 26,537 | |||
Subscriber accounts, net | 1,378,487 | |||
Dealer network and other intangible assets, net | 34,928 | |||
Goodwill | 527,191 | |||
Other assets, net | 25,428 | |||
Total assets | 2,088,618 | |||
Accounts payable | 6,250 | |||
Accrued payroll and related liabilities | 3,159 | |||
Other accrued liabilities | 30,686 | |||
Deferred revenue | 14,749 | |||
Holdback liability | 17,753 | |||
Current portion of long-term debt | 5,500 | |||
Total current liabilities | 78,097 | |||
Long-term debt | 1,712,911 | |||
Long-term holdback liability | 4,433 | |||
Derivative financial instruments | 8,460 | |||
Deferred income tax liability, net | 17,431 | |||
Other liabilities | 14,048 | |||
Total liabilities | 1,835,380 | |||
Total stockholder's equity | 253,238 | |||
Total liabilities and stockholder's equity | 2,088,618 | |||
Guarantor Subsidiaries | ||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Cash and cash equivalents | 1,127 | 240 | ||
Restricted cash | 0 | |||
Trade receivables, net | 370 | |||
Deferred income tax assets, net | 0 | |||
Prepaid and other current assets | 933 | |||
Total current assets | 2,430 | |||
Investment in subsidiaries | 0 | |||
Property and equipment, net | 478 | |||
Subscriber accounts, net | 30,656 | |||
Dealer network and other intangible assets, net | 1,257 | |||
Goodwill | 36,277 | |||
Other assets, net | 3 | |||
Total assets | 71,101 | |||
Accounts payable | 1,583 | |||
Accrued payroll and related liabilities | 280 | |||
Other accrued liabilities | 10,102 | |||
Deferred revenue | 831 | |||
Holdback liability | 199 | |||
Current portion of long-term debt | 0 | |||
Total current liabilities | 12,995 | |||
Long-term debt | 0 | |||
Long-term holdback liability | 0 | |||
Derivative financial instruments | 0 | |||
Deferred income tax liability, net | 404 | |||
Other liabilities | 1,795 | |||
Total liabilities | 15,194 | |||
Total stockholder's equity | 55,907 | |||
Total liabilities and stockholder's equity | 71,101 | |||
Non-Guarantor Subsidiaries | ||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Cash and cash equivalents | 0 | 0 | ||
Restricted cash | 0 | |||
Trade receivables, net | 0 | |||
Deferred income tax assets, net | 0 | |||
Prepaid and other current assets | 0 | |||
Total current assets | 0 | |||
Investment in subsidiaries | 0 | |||
Property and equipment, net | 0 | |||
Subscriber accounts, net | 0 | |||
Dealer network and other intangible assets, net | 0 | |||
Goodwill | 0 | |||
Other assets, net | 0 | |||
Total assets | 0 | |||
Accounts payable | 0 | |||
Accrued payroll and related liabilities | 0 | |||
Other accrued liabilities | 0 | |||
Deferred revenue | 0 | |||
Holdback liability | 0 | |||
Current portion of long-term debt | 0 | |||
Total current liabilities | 0 | |||
Long-term debt | 0 | |||
Long-term holdback liability | 0 | |||
Derivative financial instruments | 0 | |||
Deferred income tax liability, net | 0 | |||
Other liabilities | 0 | |||
Total liabilities | 0 | |||
Total stockholder's equity | 0 | |||
Total liabilities and stockholder's equity | 0 | |||
Eliminations | ||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Cash and cash equivalents | 0 | $ 0 | ||
Restricted cash | 0 | |||
Trade receivables, net | 0 | |||
Deferred income tax assets, net | 0 | |||
Prepaid and other current assets | (9,897) | |||
Total current assets | (9,897) | |||
Investment in subsidiaries | (55,907) | |||
Property and equipment, net | 0 | |||
Subscriber accounts, net | 0 | |||
Dealer network and other intangible assets, net | 0 | |||
Goodwill | 0 | |||
Other assets, net | 0 | |||
Total assets | (65,804) | |||
Accounts payable | 0 | |||
Accrued payroll and related liabilities | 0 | |||
Other accrued liabilities | (9,897) | |||
Deferred revenue | 0 | |||
Holdback liability | 0 | |||
Current portion of long-term debt | 0 | |||
Total current liabilities | (9,897) | |||
Long-term debt | 0 | |||
Long-term holdback liability | 0 | |||
Derivative financial instruments | 0 | |||
Deferred income tax liability, net | 0 | |||
Other liabilities | 0 | |||
Total liabilities | (9,897) | |||
Total stockholder's equity | (55,907) | |||
Total liabilities and stockholder's equity | $ (65,804) |
Consolidating Guarantor Finan40
Consolidating Guarantor Financial Information - Condensed Income and Comprehensive Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Condensed Income Statements, Captions [Line Items] | ||||
Net revenue | $ 141,543 | $ 134,696 | $ 279,959 | $ 267,560 |
Cost of services | 28,053 | 22,982 | 53,743 | 45,072 |
Selling, general, and administrative, including stock-based compensation | 25,697 | 23,127 | 49,121 | 46,099 |
Amortization of subscriber accounts, dealer network and other intangible assets | 63,526 | 63,261 | 126,667 | 125,041 |
Depreciation | 2,484 | 2,198 | 4,781 | 4,581 |
Gain on disposal of operating assets | 0 | (69) | (3) | (69) |
Total operating expenses | 119,760 | 111,870 | 234,309 | 221,642 |
Operating income | 21,783 | 22,826 | 45,650 | 45,918 |
Equity in income of subsidiaries | 0 | 0 | ||
Interest expense | 31,291 | 29,638 | 61,531 | 58,982 |
Refinancing expense | 4,468 | 0 | 4,468 | 0 |
Total other expense | 35,759 | 29,638 | 65,999 | 58,982 |
Loss before income taxes | (13,976) | (6,812) | (20,349) | (13,064) |
Income tax expense | 2,011 | 1,713 | 3,972 | 3,312 |
Net loss | (15,987) | (8,525) | (24,321) | (16,376) |
Unrealized gain (loss) on derivative contracts, net | 1,002 | (4,468) | (3,461) | (6,139) |
Total other comprehensive income (loss), net of tax | 1,002 | (4,468) | (3,461) | (6,139) |
Comprehensive loss | (14,985) | $ (12,993) | (27,782) | $ (22,515) |
Eliminations | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Net revenue | 0 | 0 | ||
Cost of services | 0 | 0 | ||
Selling, general, and administrative, including stock-based compensation | 0 | 0 | ||
Amortization of subscriber accounts, dealer network and other intangible assets | 0 | 0 | ||
Depreciation | 0 | 0 | ||
Gain on disposal of operating assets | 0 | 0 | ||
Total operating expenses | 0 | 0 | ||
Operating income | 0 | 0 | ||
Equity in income of subsidiaries | (4,773) | (6,704) | ||
Interest expense | 0 | 0 | ||
Refinancing expense | 0 | 0 | ||
Total other expense | (4,773) | (6,704) | ||
Loss before income taxes | 4,773 | 6,704 | ||
Income tax expense | 0 | 0 | ||
Net loss | 4,773 | 6,704 | ||
Unrealized gain (loss) on derivative contracts, net | 0 | 0 | ||
Total other comprehensive income (loss), net of tax | 0 | 0 | ||
Comprehensive loss | 4,773 | 6,704 | ||
Monitronics | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Net revenue | 137,051 | 273,651 | ||
Cost of services | 25,388 | 50,096 | ||
Selling, general, and administrative, including stock-based compensation | 20,630 | 42,130 | ||
Amortization of subscriber accounts, dealer network and other intangible assets | 62,233 | 124,741 | ||
Depreciation | 2,463 | 4,754 | ||
Gain on disposal of operating assets | 0 | (3) | ||
Total operating expenses | 110,714 | 221,718 | ||
Operating income | 26,337 | 51,933 | ||
Equity in income of subsidiaries | 4,773 | 6,704 | ||
Interest expense | 31,280 | 61,518 | ||
Refinancing expense | 4,468 | 4,468 | ||
Total other expense | 40,521 | 72,690 | ||
Loss before income taxes | (14,184) | (20,757) | ||
Income tax expense | 1,803 | 3,564 | ||
Net loss | (15,987) | (24,321) | ||
Unrealized gain (loss) on derivative contracts, net | 1,002 | (3,461) | ||
Total other comprehensive income (loss), net of tax | 1,002 | (3,461) | ||
Comprehensive loss | (14,985) | (27,782) | ||
Guarantor Subsidiaries | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Net revenue | 4,492 | 6,308 | ||
Cost of services | 2,665 | 3,647 | ||
Selling, general, and administrative, including stock-based compensation | 5,067 | 6,991 | ||
Amortization of subscriber accounts, dealer network and other intangible assets | 1,293 | 1,926 | ||
Depreciation | 21 | 27 | ||
Gain on disposal of operating assets | 0 | 0 | ||
Total operating expenses | 9,046 | 12,591 | ||
Operating income | (4,554) | (6,283) | ||
Equity in income of subsidiaries | 0 | 0 | ||
Interest expense | 11 | 13 | ||
Refinancing expense | 0 | 0 | ||
Total other expense | 11 | 13 | ||
Loss before income taxes | (4,565) | (6,296) | ||
Income tax expense | 208 | 408 | ||
Net loss | (4,773) | (6,704) | ||
Unrealized gain (loss) on derivative contracts, net | 0 | 0 | ||
Total other comprehensive income (loss), net of tax | 0 | 0 | ||
Comprehensive loss | (4,773) | (6,704) | ||
Non-Guarantor Subsidiaries | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Net revenue | 0 | 0 | ||
Cost of services | 0 | 0 | ||
Selling, general, and administrative, including stock-based compensation | 0 | 0 | ||
Amortization of subscriber accounts, dealer network and other intangible assets | 0 | 0 | ||
Depreciation | 0 | 0 | ||
Gain on disposal of operating assets | 0 | 0 | ||
Total operating expenses | 0 | 0 | ||
Operating income | 0 | 0 | ||
Equity in income of subsidiaries | 0 | 0 | ||
Interest expense | 0 | 0 | ||
Refinancing expense | 0 | 0 | ||
Total other expense | 0 | 0 | ||
Loss before income taxes | 0 | 0 | ||
Income tax expense | 0 | 0 | ||
Net loss | 0 | 0 | ||
Unrealized gain (loss) on derivative contracts, net | 0 | 0 | ||
Total other comprehensive income (loss), net of tax | 0 | 0 | ||
Comprehensive loss | $ 0 | $ 0 |
Consolidating Guarantor Finan41
Consolidating Guarantor Financial Information - Condensed Cash Flow Statement (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | $ 111,301 | $ 114,357 |
Capital expenditures | (8,165) | (3,212) |
Cost of subscriber accounts acquired | (129,544) | (126,640) |
Cash paid for acquisition, net of cash acquired | (56,343) | 0 |
Increase in restricted cash | (35) | (72) |
Proceeds from the disposal of operating assets | 3 | 241 |
Net cash used in investing activities | (194,084) | (130,030) |
Proceeds from long-term debt | 674,050 | 75,200 |
Payments on long-term debt | (605,990) | (57,783) |
Payments of financing costs | (6,232) | 0 |
Contribution from Ascent Capital | 22,690 | 0 |
Net cash provided by financing activities | 84,518 | 17,417 |
Net increase in cash and cash equivalents | 1,735 | 1,744 |
Cash and cash equivalents at beginning of period | 1,953 | 4,355 |
Cash and cash equivalents at end of period | 3,688 | $ 6,099 |
Eliminations | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | 0 | |
Capital expenditures | 0 | |
Cost of subscriber accounts acquired | $ 0 | |
Cash paid for acquisition, net of cash acquired | ||
Increase in restricted cash | $ 0 | |
Proceeds from the disposal of operating assets | 0 | |
Net cash used in investing activities | 0 | |
Proceeds from long-term debt | 0 | |
Payments on long-term debt | 0 | |
Payments of financing costs | 0 | |
Contribution from Ascent Capital | 0 | |
Net cash provided by financing activities | 0 | |
Net increase in cash and cash equivalents | 0 | |
Cash and cash equivalents at beginning of period | 0 | |
Cash and cash equivalents at end of period | 0 | |
Monitronics | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | 112,060 | |
Capital expenditures | (8,021) | |
Cost of subscriber accounts acquired | (126,562) | |
Cash paid for acquisition, net of cash acquired | (61,115) | |
Increase in restricted cash | (35) | |
Proceeds from the disposal of operating assets | 3 | |
Net cash used in investing activities | (195,730) | |
Proceeds from long-term debt | 674,050 | |
Payments on long-term debt | (605,990) | |
Payments of financing costs | (6,232) | |
Contribution from Ascent Capital | 22,690 | |
Net cash provided by financing activities | 84,518 | |
Net increase in cash and cash equivalents | 848 | |
Cash and cash equivalents at beginning of period | 1,713 | |
Cash and cash equivalents at end of period | 2,561 | |
Guarantor Subsidiaries | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | (759) | |
Capital expenditures | (144) | |
Cost of subscriber accounts acquired | (2,982) | |
Cash paid for acquisition, net of cash acquired | 4,772 | |
Increase in restricted cash | 0 | |
Proceeds from the disposal of operating assets | 0 | |
Net cash used in investing activities | 1,646 | |
Proceeds from long-term debt | 0 | |
Payments on long-term debt | 0 | |
Payments of financing costs | 0 | |
Contribution from Ascent Capital | 0 | |
Net cash provided by financing activities | 0 | |
Net increase in cash and cash equivalents | 887 | |
Cash and cash equivalents at beginning of period | 240 | |
Cash and cash equivalents at end of period | 1,127 | |
Non-Guarantor Subsidiaries | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | 0 | |
Capital expenditures | 0 | |
Cost of subscriber accounts acquired | $ 0 | |
Cash paid for acquisition, net of cash acquired | ||
Increase in restricted cash | $ 0 | |
Proceeds from the disposal of operating assets | 0 | |
Net cash used in investing activities | 0 | |
Proceeds from long-term debt | 0 | |
Payments on long-term debt | 0 | |
Payments of financing costs | 0 | |
Contribution from Ascent Capital | 0 | |
Net cash provided by financing activities | 0 | |
Net increase in cash and cash equivalents | 0 | |
Cash and cash equivalents at beginning of period | 0 | |
Cash and cash equivalents at end of period | $ 0 |