Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 10, 2017 | Jun. 30, 2016 | |
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-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding (in shares) | 0 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 3,177 | $ 2,580 |
Restricted cash | 0 | 55 |
Trade receivables, net of allowance for doubtful accounts of $3,043 in 2016 and $2,762 in 2015 | 13,869 | 13,622 |
Prepaid and other current assets | 9,360 | 9,890 |
Total current assets | 26,406 | 26,147 |
Property and equipment, net of accumulated depreciation of $28,825 in 2016 and $27,057 in 2015 | 28,270 | 26,654 |
Subscriber accounts, net of accumulated amortization of $1,212,468 in 2016 and $975,795 in 2015 | 1,386,760 | 1,423,538 |
Dealer network and other intangible assets, net of accumulated amortization of $32,976 in 2016 and $73,578 in 2015 | 16,824 | 26,654 |
Goodwill | 563,549 | 563,549 |
Other assets, net | 11,908 | 3,725 |
Total assets | 2,033,717 | 2,070,267 |
Current liabilities: | ||
Accounts payable | 11,461 | 8,621 |
Accrued payroll and related liabilities | 4,068 | 3,479 |
Other accrued liabilities | 31,579 | 32,522 |
Deferred revenue | 15,147 | 16,207 |
Holdback liability | 13,916 | 16,386 |
Current portion of long-term debt | 11,000 | 5,500 |
Total current liabilities | 87,171 | 82,715 |
Non-current liabilities: | ||
Long-term debt | 1,687,778 | 1,739,147 |
Long-term holdback liability | 2,645 | 3,786 |
Derivative financial instruments | 16,948 | 13,470 |
Deferred income tax liability, net | 17,330 | 13,191 |
Other liabilities | 6,900 | 16,893 |
Total liabilities | 1,818,772 | 1,869,202 |
Commitments and contingencies | ||
Stockholder's equity: | ||
Common stock, $.01 par value. 1,000 shares authorized, issued and outstanding both at December 31, 2016 and December 31, 2015 | 0 | 0 |
Additional paid-in capital | 446,826 | 361,228 |
Accumulated deficit | (222,924) | (146,617) |
Accumulated other comprehensive income (loss) | (8,957) | (13,546) |
Total stockholder's equity | 214,945 | 201,065 |
Total liabilities and stockholder's equity | $ 2,033,717 | $ 2,070,267 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Trade Receivables, allowance for doubtful accounts | $ 3,043 | $ 2,762 |
PP&E; Accumulated Depreciation | 28,825 | 27,057 |
Subscriber Accounts, accumulated depreciation | 1,212,468 | 975,795 |
Dealer network and other intangible assets, accumulated amortization | $ 32,976 | $ 73,578 |
Par value of shares issued as a consideration (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares (in shares) | 1,000 | 1,000 |
Common stock, issued shares (in shares) | 1,000 | 1,000 |
Common Stock, outstanding shares (in shares) | 1,000 | 1,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Net revenue | $ 570,372 | $ 563,356 | $ 539,449 |
Operating expenses: | |||
Cost of services | 115,236 | 110,246 | 93,600 |
Selling, general, and administrative, including stock-based compensation | 114,152 | 106,287 | 87,943 |
Radio conversion costs | 18,422 | 14,369 | 1,113 |
Amortization of subscriber accounts, dealer network and other intangible assets | 246,753 | 258,668 | 253,403 |
Depreciation | 8,160 | 10,066 | 9,019 |
Restructuring charges | 0 | 0 | 952 |
Gain on disposal of operating assets, net | 0 | (5) | (71) |
Total operating expenses | 502,723 | 499,631 | 445,959 |
Operating income (loss) | 67,649 | 63,725 | 93,490 |
Other expense, net: | |||
Interest expense | 127,308 | 125,415 | 119,607 |
Refinancing expense | 9,500 | 4,468 | 0 |
Total other expense | 136,808 | 129,883 | 119,607 |
Loss before income taxes | (69,159) | (66,158) | (26,117) |
Income tax expense | 7,148 | 6,290 | 3,600 |
Net loss | (76,307) | (72,448) | (29,717) |
Other comprehensive income (loss): | |||
Unrealized gain (loss) on derivative contracts, net | 4,589 | (8,741) | (4,879) |
Total other comprehensive income (loss), net of tax | 4,589 | (8,741) | (4,879) |
Comprehensive loss | $ (71,718) | $ (81,189) | $ (34,596) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net loss | $ (76,307) | $ (72,448) | $ (29,717) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Amortization of subscriber accounts, dealer network and other intangible assets | 246,753 | 258,668 | 253,403 |
Depreciation | 8,160 | 10,066 | 9,019 |
Stock-based compensation | 2,598 | 2,271 | 2,068 |
Deferred income tax expense | 4,140 | 3,986 | 74 |
Gain on disposal of operating assets, net | 0 | (5) | (71) |
Amortization of debt discount and deferred debt costs | 6,936 | 6,506 | 5,485 |
Bad debt expense | 10,785 | 9,735 | 8,149 |
Refinancing expense | 9,500 | 4,468 | 0 |
Other non-cash activity, net | (4,595) | 4,715 | (183) |
Changes in assets and liabilities: | |||
Trade receivables | (11,032) | (9,378) | (8,926) |
Prepaid expenses and other assets | 446 | (4,115) | (1,306) |
Subscriber accounts - deferred contract costs | (2,947) | (1,773) | 0 |
Payables and other liabilities | (3,910) | (3,534) | (3,713) |
Net cash provided by operating activities | 190,527 | 209,162 | 234,282 |
Cash flows from investing activities: | |||
Capital expenditures | (9,178) | (12,422) | (7,769) |
Cost of subscriber accounts acquired | (201,381) | (266,558) | (268,160) |
Cash paid for acquisition, net of cash acquired | 0 | (56,778) | 0 |
Increase in restricted cash | 55 | (37) | 22 |
Proceeds from disposal of operating assets | 0 | 5 | 241 |
Other investing activities | 0 | 0 | (436) |
Net cash used in investing activities | (210,504) | (335,790) | (276,102) |
Cash flows from financing activities: | |||
Proceeds from long-term debt | 1,280,700 | 778,000 | 169,000 |
Payments on long-term debt | (1,238,059) | (666,640) | (127,166) |
Payments of financing costs | (16,946) | (6,477) | 0 |
Value of shares withheld for share-based compensation | (121) | (318) | (416) |
Contribution from Ascent Capital | 0 | 22,690 | 0 |
Dividend to Ascent Capital | (5,000) | 0 | (2,000) |
Net cash provided by financing activities | 20,574 | 127,255 | 39,418 |
Net increase (decrease) in cash and cash equivalents | 597 | 627 | (2,402) |
Cash and cash equivalents at beginning of period | 2,580 | 1,953 | 4,355 |
Cash and cash equivalents at end of period | 3,177 | 2,580 | 1,953 |
Supplemental cash flow information: | |||
State taxes paid | 2,645 | 3,245 | 2,734 |
Interest paid | 123,763 | 117,840 | 111,409 |
Cash remaining to be paid for property and equipment | $ 558 | $ 1,214 | $ 548 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholder's Equity - USD ($) $ in Thousands | Total | Common Stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Accumulated deficit |
Beginning Balance (in shares) at Dec. 31, 2013 | 1,000 | ||||
Beginning Balance at Dec. 31, 2013 | $ 292,660 | $ 337,038 | $ 74 | $ (44,452) | |
Increase (Decrease) in Stockholder's Equity | |||||
Net loss | (29,717) | (29,717) | |||
Other comprehensive loss | (4,879) | (4,879) | |||
Dividends paid to Ascent Capital | (2,000) | (2,000) | |||
Stock-based compensation | 1,918 | 1,918 | |||
Value of shares withheld for tax liability | (416) | (416) | |||
Ending Balance (in shares) at Dec. 31, 2014 | 1,000 | ||||
Ending Balance at Dec. 31, 2014 | 257,566 | 336,540 | (4,805) | (74,169) | |
Increase (Decrease) in Stockholder's Equity | |||||
Net loss | (72,448) | (72,448) | |||
Other comprehensive loss | (8,741) | (8,741) | |||
Contributions from Ascent Capital | 22,690 | 22,690 | |||
Stock-based compensation | 2,316 | 2,316 | |||
Value of shares withheld for tax liability | $ (318) | (318) | |||
Ending Balance (in shares) at Dec. 31, 2015 | 1,000 | 1,000 | |||
Ending Balance at Dec. 31, 2015 | $ 201,065 | 361,228 | (13,546) | (146,617) | |
Increase (Decrease) in Stockholder's Equity | |||||
Net loss | (76,307) | (76,307) | |||
Other comprehensive loss | 4,589 | 4,589 | |||
Dividends paid to Ascent Capital | (5,000) | (5,000) | |||
Contributions from Ascent Capital | 88,000 | 88,000 | |||
Stock-based compensation | 2,719 | 2,719 | |||
Value of shares withheld for tax liability | $ (121) | (121) | |||
Ending Balance (in shares) at Dec. 31, 2016 | 1,000 | 1,000 | |||
Ending Balance at Dec. 31, 2016 | $ 214,945 | $ 446,826 | $ (8,957) | $ (222,924) |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Monitronics International, Inc. and subsidiaries (the "Company" or "MONI") provide 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 installed by independent dealers at subscribers' premises. On December 17, 2010, Ascent Capital Group, Inc. ("Ascent Capital") acquired 100% of the outstanding capital stock of the Company through the merger of Mono Lake Merger Sub, Inc. ("Merger Sub"), a direct wholly owned subsidiary of Ascent Capital established to consummate the merger, with and into the Company, with the Company as the surviving corporation in the merger (the "MONI Acquisition"). On August 16, 2013, MONI acquired all of the equity interests of Security Networks LLC ("Security Networks”) and certain affiliated entities (the "Security Networks Acquisition"). On February 23, 2015, MONI 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"). The consolidated financial statements contained in this Annual Report have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for all periods presented. The Company has reclassed certain prior periods amounts to conform to the current period's presentation including the adoption of Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2016-09, Compensation--Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting . See note 2 Summary of Significant Accounting Policies for the changes in the presentation of those items. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Consolidation Principles The consolidated financial statements include the accounts of the Company and its majority owned subsidiaries over which the Company exercises control. All intercompany accounts and transactions have been eliminated in consolidation. Cash and Cash Equivalents The Company considers investments with original purchased maturities of three months or less when acquired to be cash equivalents. Restricted Cash Restricted cash is cash that is restricted for a specific purpose and cannot be included in the cash and cash equivalents account. Trade Receivables Trade receivables consist primarily of amounts due from customers for recurring monthly monitoring services over a wide geographical base. The Company performs extensive credit evaluations on the portfolios of subscriber accounts prior to acquisition and requires no collateral on the accounts that are acquired. The Company has established an allowance for doubtful accounts for estimated losses resulting from the inability of subscribers to make required payments. Factors such as historical-loss experience, recoveries and economic conditions are considered in determining the sufficiency of the allowance to cover potential losses. The allowance for doubtful accounts as of December 31, 2016 and 2015 was $3,043,000 and $2,762,000 , respectively. A summary of activity in the allowance for doubtful accounts is as follows (amounts in thousands): Balance Beginning of Year Charged to Expense Write-Offs and Other Balance End of Year 2016 $ 2,762 10,785 (10,504 ) 3,043 2015 $ 2,120 9,735 (9,093 ) 2,762 2014 $ 1,937 8,149 (7,966 ) 2,120 Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of trade accounts receivable. The Company performs extensive credit evaluations on the portfolios of subscriber accounts prior to acquisition and requires no collateral on the subscriber accounts that are acquired. Concentrations of credit risk with respect to trade accounts receivable are generally limited due to the large number of subscribers comprising the Company's customer base. Fair Value of Financial Instruments Fair values of cash equivalents, current accounts receivable and current accounts payable approximate the carrying amounts because of their short-term nature. The Company's debt instruments are recorded at amortized cost on the consolidated balance sheet. See note 10, Fair Value Measurements , for further fair value information on the Company’s debt instruments. Property and Equipment Property and equipment are carried at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the underlying lease. Estimated useful lives by class of asset are as follows: Leasehold improvements 15 years or lease term, if shorter Machinery and equipment 5 - 7 years Computer systems and software (included in Machinery and Equipment in note 5, Property and Equipment ) 3 - 5 years Management reviews the realizability of its property and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In evaluating the value and future benefits of long-term assets, their carrying value is compared to management’s best estimate of undiscounted future cash flows over the remaining economic life. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying value of the assets exceeds the estimated fair value of the assets. If necessary, the Company would use both the income approach and market approach to estimate fair value. Subscriber Accounts Subscriber accounts primarily relate to the cost of acquiring monitoring service contracts from independent dealers. The subscriber accounts acquired in the MONI, Security Networks and the LiveWatch acquisitions were recorded at fair value under the acquisition method of accounting. All other acquired subscriber accounts are recorded at cost. All direct and incremental costs, including bonus incentives related to account activation at LiveWatch, associated with the creation of subscriber accounts, including new subscriber contracts obtained in connection with a subscriber move, are capitalized. The costs of subscriber accounts acquired in the MONI, Security Networks and LiveWatch acquisitions, as well as certain accounts acquired in bulk purchases, are amortized using the 14 -year 235% declining balance method. The costs of all other subscriber accounts are amortized using the 15 -year 220% declining balance method, beginning in the month following the date of acquisition. The amortization methods were selected to provide an approximate matching of the amortization of the subscriber accounts intangible asset to estimated future subscriber revenues based on the projected lives of individual subscriber contracts. Amortization of subscriber accounts was $236,673,000 , $238,800,000 and $233,327,000 for the fiscal years ended December 31, 2016 , 2015 and 2014 , respectively. Based on subscriber accounts held at December 31, 2016 , estimated amortization of subscriber accounts in the succeeding five fiscal years ending December 31 is as follows (amounts in thousands): 2017 $ 215,369 2018 $ 181,708 2019 $ 153,417 2020 $ 134,817 2021 $ 120,391 The Company reviews the subscriber accounts for impairment or a change in amortization method at each reporting period. For purposes of recognition and measurement of an impairment loss, the Company views subscriber accounts as a single pool because of the assets' homogeneous characteristics, and the pool of subscriber accounts is the lowest level for which identifiable cash flows are largely independent of the cash flows of the other assets and liabilities. Dealer Network and Other Intangible Assets Dealer network is an intangible asset that relates to the dealer relationships that were acquired as part of the Security Networks Acquisition. Other intangible assets consist of non-compete agreements signed by the seller of Security Networks and certain key Security Networks executives. These intangible assets are amortized on a straight-line basis over their estimated useful lives of 5 years. The LiveWatch trade mark asset is amortized over 10 years. Amortization of dealer network and other intangible assets was $9,830,000 , $19,501,000 and $19,780,000 for the fiscal years ended December 31, 2016 , 2015 and 2014 , respectively. The Company reviews the dealer network and other intangible assets for impairment or a change in amortization method at each reporting period. Goodwill The Company accounts for its goodwill pursuant to the provisions of FASB ASC Topic 350, Intangibles — Goodwill and Other ("FASB ASC Topic 350"). In accordance with FASB ASC Topic 350, goodwill is not amortized, but rather tested for impairment at least annually. The Company assesses the recoverability of the carrying value of goodwill during the fourth quarter of its fiscal year or whenever events or changes in circumstances indicate that the carrying amount of the goodwill of a reporting unit may not be fully recoverable. Recoverability is measured at the reporting unit level based on the provisions of FASB ASC Topic 350. To the extent necessary, recoverability of goodwill at a reporting unit level is measured using a discounted cash flow model incorporating discount rates commensurate with the risks involved, which is classified as a Level 3 measurement under FASB ASC Topic 820, Fair Value Measurements and Disclosures. The key assumptions used in the discounted cash flow valuation model include discount rates, growth rates, cash flow projections and terminal value rates. Discount rates, growth rates and cash flow projections are the most sensitive and susceptible to change as they require significant management judgment. If the calculated fair value is less than the current carrying value, impairment of the reporting unit may exist. When the recoverability test indicates potential impairment, the Company will calculate an implied fair value of goodwill for the reporting unit. The implied fair value of goodwill is determined in a manner similar to how goodwill is calculated in a business combination. If the implied fair value of goodwill exceeds the carrying value of goodwill assigned to the reporting unit, there is no impairment. If the carrying value of goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment loss is recorded to write down the carrying value. An impairment loss cannot exceed the carrying value of goodwill assigned to the reporting unit but may indicate certain long-lived and amortizable intangible assets associated with the reporting unit may require additional impairment testing. Deferred Financing Costs Deferred financing costs are recorded as a reduction to long-term debt when the related debt is issued or when revolving credit lines increase the borrowing capacity of the Company. Deferred financing costs are amortized over the term of the related debt using the effective interest method. Holdback Liability The Company typically withholds payment of a designated percentage of the acquisition cost when it acquires subscriber accounts from dealers. The withheld funds are recorded as a liability until the guarantee period provided by the dealer has expired. The holdback is used as a reserve to cover any terminated subscriber accounts that are not replaced by the dealer during the guarantee period. At the end of the guarantee period, the dealer is responsible for any deficit or is paid the balance of the holdback. Derivative Financial Instruments The Company uses derivative financial instruments to manage exposure to movement in interest rates. The use of these financial instruments modifies the exposure of these risks with the intention of reducing the risk or cost. The Company does not use derivatives for speculative or trading purposes. The Company recognizes the fair value of all derivative instruments as either assets or liabilities at fair value on the consolidated balance sheets. Fair value is based on market quotes for similar instruments with the same duration. For derivative instruments that qualify for hedge accounting under the provisions of FASB ASC Topic 815, Derivatives and Hedging , unrealized gains and losses on the derivative instruments are reported in accumulated other comprehensive income (loss), to the extent the hedges are effective, until the underlying transactions are recognized in earnings. Derivative instruments that do not qualify for hedge accounting are marked to market at the end of each accounting period with the change in fair value recorded in earnings. Revenue Recognition Revenue is generated from security alarm monitoring and related services provided by the Company and its subsidiaries. Revenue related to alarm monitoring services is recognized ratably over the life of the contract. Revenue related to maintenance and other services is recognized as the services are rendered. Deferred revenue includes payments for monitoring services to be provided in future periods. Additionally, equipment sales are recognized as the equipment is shipped to the customer. Income Taxes The Company accounts for income taxes under FASB ASC Topic 740, Income Taxes ("FASB ASC Topic 740"), which prescribes an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's consolidated financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than proposed changes in the tax law or rates. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. FASB ASC Topic 740 specifies the accounting for uncertainty in income taxes recognized in a company’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In instances where the Company has taken or expects to take a tax position in its tax return and the Company believes it is more likely than not that such tax position will be upheld by the relevant taxing authority, the Company records the benefits of such tax position in its consolidated financial statements. Share-Based Compensation The Company adopted ASU 2016-09, Compensation-- Stock Compensation (Topic 718): Improvements to Employee Share Based Accounting ("ASU 2016-09"). ASU 2016-09 simplifies several aspects of accounting for employee share-based payment transactions, including accounting for income taxes, forfeitures, and statutory tax withholding requirements as well as classification of certain elements in the statement of cash flows. The adoption of ASU 2016-09 resulted in the tax effected amount of excess tax benefits of $443,000 as of December 31, 2015 (associated with the exercise of non-qualified stock options and vesting of restricted stock awards from the Company's incentive plans), that did not reduce current income taxes payable in the year deducted, being recognized as net operating loss deferred income taxes, fully offset by an increase in the valuation allowance as of December 31, 2015. The adoption of ASU 2016-09 also resulted in an increase in Net cash provided by operating activities of $318,000 and $416,000 and a decrease in Net Cash provided by financing activities $318,000 and $416,000 for the for the years ended December 31, 2015 and 2014, respectively. These amounts represent reclassifications of the value of shares withheld on vesting of certain stock awards by the Company to settle payroll tax liabilities from an operating cash flow to a financing cash flow. The Company accounts for share-based awards pursuant to FASB ASC Topic 718, Compensation — Stock Compensation ("FASB ASC Topic 718"), which requires companies to measure the cost of employee services received in exchange for an award of equity instruments (such as stock options and restricted stock) based on the grant-date fair value of the award, and to recognize that cost over the period during which the employee is required to provide service (usually the vesting period of the award). Forfeitures of awards are recognized as they occur. The grant-date fair value of the Ascent Capital stock options granted to the Company’s employees was calculated using the Black-Scholes model. The expected term of the awards was calculated using the simplified method included in FASB ASC Topic 718. The volatility used in the calculation is based on the historical volatility of peer companies and the risk-free rate is based on Treasury Bonds with a term similar to that of the subject options. A dividend rate of zero was utilized for all granted stock options. Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions and judgments that affect the reported amounts of revenue and expenses for each reporting period. The significant estimates made in preparation of the Company’s consolidated financial statements primarily relate to valuation of goodwill, other intangible assets, long-lived assets, deferred tax assets, convertible debt arrangements, 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 | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under the update, revenue will be recognized based on a five-step model. The core principle of the model is that revenue will be recognized when the transfer of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In the third quarter of 2015, the FASB deferred the effective date of the standard to annual and interim periods beginning after December 15, 2017. In March and April 2016, the FASB issued amendments to provide clarification on assessment of collectability criteria, presentation of sales taxes and measurement of non-cash consideration. In addition, the amendment provided clarification and included simplification to transaction guidance on contract modifications and completed contracts at transaction. In December 2016, the FASB issued amendments to provide clarification on codification and guidance application. The standard allows the option of either a full retrospective adoption, meaning the standard is applied to all periods presented, or modified retrospective adoption, meaning the standard is applied only to the most current period. The Company is in the process of assessing revenue recognition policies across each type of its contracts and evaluating the impact of the adoption ASU 2014-09 on its Consolidated Financial Statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 requires the lessee to recognize assets and liabilities for leases with lease terms of more than twelve months. For leases with a term of twelve months or less, the Company is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Further, the lease requires a finance lease to recognize both an interest expense and an amortization of the associated expense. Operating leases generally recognize the associated expense on a straight line basis. ASU 2016-02 requires the Company to adopt the standard using a modified retrospective approach and becomes effective on January 1, 2019. The Company is currently evaluating the impact that ASU 2016-02 will have on its financial position, results of operations and cash flows. In January 2017, the FASB issued ASU 2017-04, Intangibles--Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). Currently, the fair value of the reporting unit is compared with the carrying value of the reporting unit (identified as "Step 1"). If the fair value of the reporting unit is lower than its carrying amount then, the implied fair value of goodwill is calculated. If the implied fair value of goodwill is lower than the carrying value of goodwill an impairment is recognized (identified as "Step 2"). ASU 2017-04 eliminates Step 2 from the impairment test; therefore, a goodwill impairment will be recognized as the difference of the fair value and the carrying value. ASU 2017-04 becomes effective on January 1, 2020 with early adoption permitted. The Company is currently evaluating the impact that ASU 2017-04 will have on its financial position, results of operations and cash flows. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions The Company accounts for business combinations utilizing the acquisition method in accordance with FASB ASC Topic 805, Business Combinations . Under the acquisition method of accounting, the fair value of the consideration transferred has been allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimates of fair value. 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 included approximately $3,988,000 of cash transferred directly to LiveWatch to fund transaction bonuses payable to LiveWatch employees as of the Closing Date. The LiveWatch acquisition was funded by borrowings from the Company's revolving credit facility, as well as cash contributions from Ascent Capital. Goodwill in the amount of $36,047,000 was recognized in connection with the LiveWatch Acquisition and all of the goodwill is estimated to be deductible for tax purposes. In connection with the LiveWatch Acquisition, we entered into employment agreements with certain key members of the LiveWatch management team which provide for retention bonuses of $5,400,000 (the "LiveWatch Retention Bonuses") to be paid on the second anniversary of the Closing Date, and performance based bonus arrangements payable on the fourth anniversary of the Close Date (the "LiveWatch Performance Bonuses"). The LiveWatch Performance Bonuses are estimated to yield an aggregate payout of approximately $6,200,000 . 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. 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. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consist of the following (amounts in thousands): As of December 31, 2016 2015 Property and equipment, net: Buildings and leasehold improvements $ 1,404 $ 1,222 Machinery and equipment 55,691 52,489 57,095 53,711 Accumulated depreciation (28,825 ) (27,057 ) $ 28,270 26,654 Depreciation expense for property and equipment was $8,160,000 , $10,066,000 and $9,019,000 for the years ended December 31, 2016 , 2015 and 2014 , respectively. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The following table provides the activity and balances of goodwill (amounts in thousands): Balance at December 31, 2014 $ 527,502 LiveWatch Acquisition 36,047 Balance at December 31, 2015 563,549 Period activity — Balance at December 31, 2016 $ 563,549 The Company accounts for its goodwill pursuant to the provisions of FASB ASC Topic 350, Intangibles - Goodwill and Other ("FASB ASC Topic 350"). In accordance with FASB ASC Topic 350, goodwill is not amortized, but rather tested for impairment annually or if an event occurs, or circumstances change, that indicate the fair value of the entity may be below its carrying amount (a "triggering event"). In connection with the Company's annual goodwill impairment assessment, which is performed in the fourth quarter using October 31 balances, the estimated fair value for each of the Company's reporting units exceeded the carrying amount of the underlying assets, thus no impairment was indicated. |
Other Accrued Liabilities
Other Accrued Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Other Accrued Liabilities | Other Accrued Liabilities Other accrued liabilities consisted of the following (amounts in thousands): December 31, 2016 December 31, 2015 Interest payable $ 14,588 $ 18,226 Income taxes payable 2,947 2,603 Legal accrual 271 145 LiveWatch acquisition retention bonus 4,990 — Other 8,783 11,548 Total Other accrued liabilities $ 31,579 $ 32,522 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following (amounts in thousands): December 31, December 31, 9.125% Senior Notes due April 1, 2020 with an effective rate of 9.4% $ 578,078 $ 576,241 Promissory Note to Ascent Capital due October 1, 2020 with an effective rate of 12.5% (a) 12,000 100,000 Term loan, matures September 30, 2022, LIBOR plus 5.5% subject to a LIBOR floor of 1.00% with an effective rate of 7.2% 1,066,130 — $295 million revolving credit facility, matures September 30, 2021, LIBOR plus 4.00% subject to a LIBOR floor of 1.00% with an effective rate of 5.3% 42,570 — Term loan, mature March 23, 2018, LIBOR plus 3.25%, subject to a LIBOR floor of 1.00% with an effective rate of 5.0% — 394,938 Term loan, mature April 9, 2022, LIBOR plus 3.5%, subject to a LIBOR floor of 1.00% with an effective interest rate of 5.1% — 542,420 $315 million revolving credit facility, matures December 22, 2017, LIBOR plus 3.75%, subject to a LIBOR floor of 1.00% with an effective rate of 6.7% — 131,048 1,698,778 1,744,647 Less current portion of long-term debt (11,000 ) (5,500 ) Long-term debt $ 1,687,778 $ 1,739,147 (a) The effective rate was 9.868% until February 29, 2016. 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. As of December 31, 2016 , the senior notes had deferred financing costs, net of accumulated amortization of $6,922,000 . The Senior Notes are guaranteed by all of the Company's existing domestic subsidiaries. See note 18, Consolidating Guarantor Financial Information for further information. Ascent Intercompany Loan On February 29, 2016, the Company retired the existing intercompany loan with an outstanding principal amount of $100,000,000 and executed and delivered a Promissory Note to Ascent Capital in a principal amount of $12,000,000 (the "Ascent Intercompany Loan"), with the $88,000,000 remaining principal being treated as a capital contribution. 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 12.5% per annum, payable semi-annually in cash in arrears on January 12 and July 12 of each year. 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 September 30, 2016, the Company entered into an amendment ("Amendment No. 6") with the lenders of its existing senior secured credit agreement dated March 23, 2012, and as amended and restated on April 9, 2015, February 17, 2015, August 16, 2013, March 25, 2013, and November 7, 2012 (the "Existing Credit Agreement"). Amendment No. 6 provided for, among other things, the issuance of a new $1,100,000,000 senior secured term loan at a 1.5% discount and a new $295,000,000 super priority revolver (the Existing Credit Agreement together with Amendment No. 6, the "Credit Facility"). The Company used the net proceeds from the new term loan to retire $403,784,000 of its existing term loan due in March 2018 and $543,125,000 of its existing term loan due in April 2022. Additionally, the Company retired its existing $315,000,000 revolving credit facility in the amount of $138,900,000 . As a result of the refinancing, the Company accelerated amortization of certain deferred financing costs and debt discounts related to the extinguished term loans, and expensed certain other refinancing costs. The components of the refinancing expense is reflected below (amounts in thousands): Twelve Months Ended Accelerated amortization of deferred financing costs $ 4,160 Accelerated amortization of debt discount 3,416 Other refinancing costs 1,924 Total refinancing expense $ 9,500 As of December 31, 2016 , the Credit Facility term loan has a principal amount of $1,097,250,000 maturing on September 30, 2022. The term loan requires quarterly interest payments and quarterly principal payments of $2,750,000 . The term loan bears interest at LIBOR plus 5.5% , subject to a LIBOR floor of 1.0% . The Credit Facility revolver has a principal amount outstanding of $44,800,000 as of December 31, 2016 and matures on September 30, 2021. The Credit Facility revolver bears interest at LIBOR plus 4.0% , subject to a LIBOR floor of 1.0% . There is a commitment fee of 0.5% on unused portions of the Credit Facility revolver. As of December 31, 2016 , $ 250,200,000 is available for borrowing under the Credit Facility revolver. 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 MONI and all of its existing subsidiaries and is guaranteed by all of our existing domestic subsidiaries. Ascent Capital has not guaranteed any of our obligations under the Credit Facility, 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, MONI 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, MONI's current effective weighted average interest rate on the borrowings under the Credit Facility term loans is 7.15% . See note 9, Derivatives , for further disclosures related to these derivative instruments. The terms of the Senior Notes and the Credit Facility provide for certain financial and nonfinancial covenants. As of December 31, 2016 , 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): 2017 $ 11,000 2018 11,000 2019 11,000 2020 608,000 2021 55,800 Thereafter 1,042,250 Total principal payments 1,739,050 Less: Unamortized discounts, premium and deferred debt costs, net 40,272 Total debt on consolidated balance sheet $ 1,698,778 |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2016 | |
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 10, Fair Value Measurements , for additional information about the credit valuation adjustments. At December 31, 2016 , derivative financial instruments included one interest rate swap with a fair value of $8,521,000 that constituted an asset of the Company and seven interest rate swaps with an aggregate fair value of $16,948,000 , that constituted a liability to the Company. At December 31, 2015 , there were seven interest rate swaps with an aggregate fair value of $13,470,000 that constituted a liability to the Company. The Swaps are included in Other assets, net and Derivative financial instruments on the consolidated balance sheets. As of December 31, 2016 and 2015 no amounts were offset for certain derivatives' fair value that were recognized under a master netting agreement with the same counterparty. The objective of the swap derivative instruments was to reduce the risk associated with the Company's term loan variable interest rates. In effect, the swap derivative instruments convert variable interest rates into fixed interest rates on the Company’s term loan borrowings. 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 $5,521,000 . The Swaps' outstanding notional balance as of December 31, 2016 and terms are noted below: Notional Effective Date Maturity Date Fixed Rate Paid Variable Rate Received $ 523,875,000 March 28, 2013 March 23, 2018 1.884% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 138,837,500 March 28, 2013 March 23, 2018 1.384% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 108,542,713 September 30, 2013 March 23, 2018 1.959% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor 108,542,713 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 3.110% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 250,000,000 March 23, 2018 April 9, 2022 3.110% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 50,000,000 March 23, 2018 April 9, 2022 2.504% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor 377,000,000 March 23, 2018 September 30, 2022 1.833% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) On March 25, 2013 and September 30, 2016, the Company negotiated amendments to the terms of these interest rate swap agreements (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, 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 loss relating to the dedesignation are recognized in Interest expense over the remaining life of the Amended Swaps. The impact of the derivatives designated as cash flow hedges on the consolidated financial statements is depicted below (amounts in thousands): Year Ended December 31, 2016 2015 2014 Effective portion of gain (loss) recognized in Accumulated other comprehensive income (loss) $ (2,673 ) (16,041 ) (12,560 ) Effective portion of loss reclassified from Accumulated other comprehensive income (loss) into Net loss (a) $ (7,262 ) (7,300 ) (7,681 ) Ineffective portion of amount of gain (loss) recognized into Net loss on interest rate swaps (a) $ 423 (119 ) (46 ) (a) Amounts are included in Interest expense in the consolidated statements of operations and comprehensive income (loss). |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements According to the FASB ASC Topic 820, Fair Value Measurements , fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants and requires that assets and liabilities carried at fair value are classified and disclosed in the following three categories: • Level 1 - Quoted prices for identical instruments in active markets. • Level 2 - Quoted prices for similar instruments in active or inactive markets and valuations derived from models where all significant inputs are observable in active markets. • Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable in any market. The following summarizes the fair value level of assets and liabilities that are measured on a recurring basis at December 31, 2016 and December 31, 2015 (amounts in thousands): Level 1 Level 2 Level 3 Total December 31, 2016 Derivative financial instruments - assets (a) — 8,521 — 8,521 Derivative financial instruments - liabilities — (16,948 ) — (16,948 ) Total $ — (8,427 ) — (8,427 ) December 31, 2015 Derivative financial instruments - liabilities — (13,470 ) — (13,470 ) Total $ — (13,470 ) — (13,470 ) (a) Included in Other assets, net on the 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. As a result, the Company has determined that its derivative valuations are classified in Level 2 of the fair value hierarchy. There were no transfers between Level 2 and Level 3 during the years ended December 31, 2016 , 2015 and 2014. Carrying values and fair values of financial instruments that are not carried at fair value are as follows (amounts in thousands): December 31, 2016 December 31, 2015 Long term debt, including current portion: Carrying value $ 1,698,778 $ 1,744,647 Fair value (a) 1,716,385 1,603,375 (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. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Components of pretax income (loss) from continuing operations are as follows(amounts in thousands): Year Ended December 31, 2016 2015 2014 Current: Federal $ — — — State 3,008 2,304 3,526 3,008 2,304 3,526 Deferred: Federal 4,000 3,895 3,292 State 140 91 (3,218 ) 4,140 3,986 74 Total income tax expense $ 7,148 6,290 3,600 Income tax expense differs from the amounts computed by applying the United States federal income tax rate of 35% as a result of the following (amounts in thousands): Year Ended December 31, 2016 2015 2014 Computed expected tax benefit $ (24,206 ) (23,155 ) (9,141 ) State and local income taxes, net of federal income taxes 2,047 1,556 200 Change in valuation allowance affecting tax expense 26,892 24,149 9,322 Expense (income) not resulting in tax impact (1,585 ) (155 ) (73 ) Amortization of indefinite-lived assets 4,000 3,890 3,292 Other, net — 5 — Income tax expense $ 7,148 6,290 3,600 Components of deferred tax assets and liabilities as of December 31, 2016 and 2015 are as follows (amounts in thousands): As of December 31, 2016 2015 Accrued receivable reserves $ 1,142 $ 1,717 Accrued liabilities 9,197 8,626 Net operating loss carryforwards 204,478 166,183 Derivative financial instruments 3,283 4,994 Business credits 1,409 1,438 Other deferred tax assets 3,746 4,508 Valuation allowance (96,003 ) (65,429 ) Total deferred tax assets 127,252 122,037 Intangible assets (141,100 ) (133,248 ) Property, plant and equipment (3,482 ) (1,980 ) Total deferred tax liabilities (144,582 ) (135,228 ) Net deferred tax liabilities $ (17,330 ) $ (13,191 ) For the year ended December 31, 2016 , the valuation allowance increased by $30,574,000 . The change in the valuation allowance is attributable to an increase of $26,892,000 related to federal income tax expense, a decrease of $1,711,000 related to changes in the derivative fair values recorded in other comprehensive income and $5,393,000 of other adjustments to deferred taxes. As of December 31, 2016 , the Company had $560,585,000 of federal net operating loss carryforwards, which begin to expire, if unused, in 2024. Approximately $129,521,000 of the Company’s federal net operating losses are subject to IRC Section 382 limitations. In addition, the Company had available for federal income tax purposes an alternative minimum tax credit carryforward of $426,000 , which is available for an indefinite period. As of December 31, 2016 , the Company had available for state income tax purposes net operating loss carryforwards of $175,611,355 and state tax credits of $983,000 , the latter of which will expire in 2026. As of December 31, 2016 , the Company’s federal income tax returns for the 2013 through 2016 tax years remain subject to examination by the IRS. The Company’s state income tax returns subsequent to 2011 are subject to examination by state tax authorities. A reconciliation of the beginning and ending amount of uncertain tax positions, which is recorded in other long term liabilities, is as follows (amounts in thousands): Year Ended December 31, 2016 2015 2014 As of the beginning of the year $ 193 191 247 Increases for tax positions of current years 15 2 4 Reductions for tax positions of prior years — — (60 ) As of the end of the year $ 208 193 191 When the tax law requires interest to be paid on an underpayment of income taxes, the Company recognizes interest expense from the first period the interest would begin accruing according to the relevant tax law. Any accrual of interest and penalties related to underpayment of income taxes on uncertain tax positions is included in Income tax expense in the accompanying consolidated statements of operations. As of December 31, 2016 accrued interest and penalties related to uncertain tax positions were approximately $74,000 . The Company does no t expect a significant change in uncertain tax positions in the next twelve months. |
Stock-based and Long-Term Compe
Stock-based and Long-Term Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based and Long-Term Compensation | Stock-based and Long-Term Compensation During 2016 , 2015 and 2014 , certain employees of MONI were granted stock-based awards of Ascent Capital Series A common stock under Ascent Capital's 2008 Incentive Plan and Ascent Capital's 2015 Omnibus Incentive Plan. Stock Options Ascent Capital awards non-qualified stock options for Ascent Capital Series A common stock to the Company's executives and certain employees. The exercise price is typically granted as the closing share price for Ascent Capital Series A common stock as of the grant date. The awards generally have a life of five to seven years and vest over two to four years. The grant date fair value of the Ascent Capital stock options granted to MONI's employees was calculated using the Black-Scholes model. There were no options granted in 2016 , 2015 and 2014 . The following table presents the number and weighted average exercise price ("WAEP") of outstanding options to purchase Ascent Capital Series A common stock that were granted to certain MONI employees: Series A common stock WAEP Outstanding at January 1, 2016 202,142 $ 48.88 Granted — — Exercised — — Forfeited (36,437 ) 49.66 Outstanding at December 31, 2016 165,705 48.71 Exercisable at December 31, 2016 163,458 $ 48.54 There was no intrinsic value for both outstanding stock option awards and exercisable stock option awards at December 31, 2016 . The weighted average remaining contractual life of outstanding and exercisable awards at December 31, 2016 was 1.3 years and 1.2 years , respectively. Restricted Stock Awards and Restricted Stock Units Ascent Capital makes awards of restricted stock for its common stock to the Company’s executives and certain employees. Substantially all of these awards have been for its Series A common stock. The fair values for the restricted stock awards and restricted stock units are the closing price of Ascent Capital Series A common stock on the applicable dates of grants. Upon the grant of a restricted stock award, the recipient receives a stock certificate for the number of awards granted. The stock cannot be transfered or sold until the vesting criteria have been met. Upon the grant of a restricted stock unit award, the recipient receives the right to receive a number of shares at vesting and, as such, shares of stock are not issued until the vesting criteria have been met. The awards generally vest over two to five years The following table presents the number and weighted average fair value ("WAFV") of unvested restricted stock awards granted to certain MONI employees: Series A common stock WAFV Outstanding at January 1, 2016 98,691 $ 34.38 Granted 46,000 13.53 Vested (19,236 ) 22.24 Canceled (8,469 ) 54.77 Outstanding at December 31, 2016 116,986 $ 26.70 The following table presents the number and WAFV of unvested restricted stock units granted to certain MONI employees: Series A Restricted Stock Units WAFV Outstanding at January 1, 2016 50,000 $ 42.34 Granted 148,133 15.17 Vested (9,625 ) 40.01 Canceled — — Outstanding at December 31, 2016 188,508 $ 21.11 As of December 31, 2016 , the total compensation cost related to unvested restricted stock and stock unit awards was approximately $4,158,000 . Such amount will be recognized in the consolidated statements of operations over a period of approximately 3.25 years . |
Stockholder's Equity
Stockholder's Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholder's Equity | Stockholder's Equity Common Stock Pursuant to the MONI Acquisition, the Company deauthorized all shares of Class A and Class B common stock upon its merger with Merger Sub on December 17, 2010. The existing entity has one thousand shares of common stock issued and outstanding to Ascent Capital as of December 31, 2010. There have been no changes to the common stock issued and outstanding since the MONI Acquisition. Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) included in the consolidated balance sheets and consolidated statement of stockholder's equity reflect the aggregate fair market value adjustments to the Swaps. The change in the components of accumulated other comprehensive income (loss), net of taxes, is summarized as follows (amounts in thousands): Unrealized Gains and Losses on Derivative Instruments, net (a) Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2013 74 74 Gain (loss) through Accumulated other comprehensive income (12,560 ) (12,560 ) Reclassification into net income 7,681 7,681 Balance at December 31, 2014 (4,805 ) (4,805 ) Unrealized loss on derivatives recognized through Accumulated other comprehensive income (loss) (16,041 ) (16,041 ) Reclassifications of unrealized loss on derivatives into net income 7,300 7,300 Balance at December 31, 2015 (13,546 ) (13,546 ) Unrealized loss on derivatives recognized through Accumulated other comprehensive income (loss) (2,673 ) (2,673 ) Reclassifications of unrealized loss on derivatives into net income 7,262 7,262 Balance at December 31, 2016 $ (8,957 ) $ (8,957 ) (a) No income taxes were recorded on the unrealized loss on derivative instrument amounts for 2016 , 2015 and 2014 because the Company is subject to a full valuation allowance. Amounts reclassified into net income are included in Interest expense on the consolidated statement of operations. See note 9, Derivatives , for further information. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The Company offers a 401(k) defined contribution plan covering its full-time employees. The plan is funded by employee and employer contributions. Total 401(k) plan expense for the years ended December 31, 2016 , 2015 and 2014 was $110,000 , $127,000 and $71,000 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Contractual Obligations Future minimum lease payments under scheduled operating leases, which are primarily for buildings and equipment, having initial or remaining noncancelable terms in excess of one year are as follows (in thousands): Year ended December 31: 2017 $ 3,748 2018 3,749 2019 2,941 2020 2,832 2021 2,814 Thereafter 25,466 Minimum lease commitments $ 41,550 Rent expense for noncancelable operating leases for real property and equipment was $3,768,000 , $3,383,000 and $3,230,000 for the years ended December 31, 2016 , 2015 and 2014 , respectively. Various lease arrangements contain options to extend terms and are subject to escalation clauses. Legal The Company is involved in litigation and similar claims incidental to the conduct of its business, including from time to time, contractual disputes, claims related to alleged security system failures and claims related to alleged violations of the U.S. Telephone Consumer Protection Act. 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. The Company accrues and expenses legal fees related to loss contingency matters as incurred. |
Reportable Business Segments
Reportable Business Segments | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Reportable Business Segments | Reportable Business Segments Description of Segments The Company operates through two reportable business segments according to the nature and economic characteristics of its services as well as the manner in which the information issued internally by the Company's key decision maker, who is the Company's Chief Executive Officer. The Company's business segments are as follows: MONI The MONI segment is primarily engaged in the business of providing security alarm monitoring services: monitoring signals arising from burglaries, fires, medical alerts and other events through security systems at subscribers' premises, as well as providing customer service and technical support. MONI outsources the sales, installation and most of its field service functions to its dealers. By outsourcing the low margin, high fixed-cost elements of its business to a large network of independent service providers, MONI is able to allocate capital to growing its revenue-generating account base rather than to local offices or depreciating hard assets. LiveWatch LiveWatch is a do-it-yourself home security provider offering professionally monitored security services through a direct-to-consumer sales channel. LiveWatch offers a differentiated go-to-market strategy through direct response TV, internet and radio advertising. When a customer initiates the process to obtain monitoring services, LiveWatch pre-configures the alarm monitoring system based on customer specifications. LiveWatch then packages and ships the equipment directly to the customer. The customer self-installs the equipment on-site and activates the monitoring service over the phone. The business segment management reporting and controlling systems are based on the same accounting policies as those described in note 2, Summary of Significant Accounting Policies. As they arise, transactions between segments are recorded on an arm's length basis using relevant market prices. The following table sets forth selected data from the accompanying consolidated statements of operations for the periods indicated (amounts in thousands): MONI LiveWatch Consolidated Twelve Months Ended December 31, 2016 Net revenue $ 547,458 $ 22,914 $ 570,372 Depreciation and amortization $ 250,393 $ 4,520 $ 254,913 Loss before income taxes $ (46,728 ) $ (22,431 ) $ (69,159 ) Twelve Months Ended December 31, 2015 Net revenue $ 548,622 $ 14,734 $ 563,356 Depreciation and amortization $ 264,870 $ 3,864 $ 268,734 Loss before income taxes $ (47,793 ) $ (18,365 ) $ (66,158 ) The following table sets forth selected data from the accompanying consolidated balance sheets for the periods indicated (amounts in thousands): MONI LiveWatch Eliminations Consolidated Balance at December 31, 2016 Subscriber accounts, net of amortization $ 1,364,804 $ 21,956 $ — $ 1,386,760 Goodwill $ 527,502 $ 36,047 $ — $ 563,549 Total assets $ 2,062,838 $ 63,916 $ (93,037 ) $ 2,033,717 Balance at December 31, 2015 Subscriber accounts, net of amortization $ 1,400,515 $ 23,023 $ — $ 1,423,538 Goodwill $ 527,502 $ 36,047 $ — $ 563,549 Total assets $ 2,033,180 $ 63,267 $ (26,180 ) $ 2,070,267 Prior to the acquisition of LiveWatch in February 2015, the Company had one operating segment. |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | Quarterly Financial Information (Unaudited) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Amounts in thousands 2016 Net Revenue $ 143,268 143,656 142,765 140,683 Operating income $ 12,804 15,258 18,486 21,101 Net loss $ (20,210 ) (16,509 ) (23,002 ) (16,586 ) 2015 Net Revenue $ 138,416 141,543 141,846 141,551 Operating income $ 23,867 21,783 12,420 5,655 Net loss $ (8,334 ) (15,987 ) (21,414 ) (26,713 ) |
Consolidating Guarantor Financi
Consolidating Guarantor Financial Information | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Consolidating Guarantor Financial Information | Consolidating Guarantor Financial Information The Senior Notes were issued by MONI (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. The consolidating financial information for the Parent Issuer, the subsidiary Guarantors and the non-guarantors are as follows (amounts in thousands): MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Condensed Consolidating Balance Sheet Amounts in thousands As of December 31, 2016 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 1,739 1,438 — — $ 3,177 Restricted cash — — — — — Trade receivables, net 13,265 604 — — 13,869 Prepaid and other current assets 51,251 2,171 — (44,062 ) 9,360 Total current assets 66,255 4,213 — (44,062 ) 26,406 Investment in subsidiaries 22,533 — — (22,533 ) — Property and equipment, net 26,652 1,618 — — 28,270 Subscriber accounts, net 1,349,285 37,475 — — 1,386,760 Dealer network and other intangible assets, net 15,762 1,062 — — 16,824 Goodwill 527,191 36,358 — — 563,549 Other assets, net 11,889 19 — — 11,908 Total assets $ 2,019,567 80,745 — (66,595 ) $ 2,033,717 Liabilities and Stockholder's Equity Current liabilities: Accounts payable $ 9,919 1,542 — — $ 11,461 Accrued payroll and related liabilities 3,731 337 — — 4,068 Other accrued liabilities 25,951 49,690 — (44,062 ) 31,579 Deferred revenue 13,807 1,340 — — 15,147 Holdback liability 13,434 482 — — 13,916 Current portion of long-term debt 11,000 — — — 11,000 Total current liabilities 77,842 53,391 — (44,062 ) 87,171 Non-current liabilities: Long-term debt 1,687,778 — — — 1,687,778 Long-term holdback instruments 2,645 — — — 2,645 Derivative financial instruments 16,948 — — — 16,948 Deferred income tax liability, net 15,649 1,681 — — 17,330 Other liabilities 3,760 3,140 — — 6,900 Total liabilities 1,804,622 58,212 — (44,062 ) 1,818,772 Total stockholder's equity 214,945 22,533 — (22,533 ) 214,945 Total liabilities and stockholder's equity 2,019,567 80,745 — (66,595 ) 2,033,717 MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Condensed Consolidating Balance Sheet Amounts in thousands As of Balance at December 31, 2015 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 1,513 1,067 — — 2,580 Restricted cash 55 — — — 55 Trade receivables, net 13,224 398 — — 13,622 Prepaid and other current assets 30,542 1,807 — (22,459 ) 9,890 Total current assets 45,334 3,272 — (22,459 ) 26,147 Investment in subsidiaries 43,920 — — (43,920 ) — Property and equipment, net 25,842 812 — — 26,654 Subscriber accounts, net 1,390,493 33,045 — — 1,423,538 Dealer network and other intangible assets, net 25,462 1,192 — — 26,654 Goodwill 527,191 36,358 — — 563,549 Other assets, net 3,718 7 — — 3,725 Total assets $ 2,061,960 74,686 — (66,379 ) 2,070,267 Liabilities and Stockholder's Equity Current liabilities: Accounts payable $ 7,383 1,238 — — $ 8,621 Accrued payroll and related liabilities 2,894 585 — — 3,479 Other accrued liabilities 32,224 22,757 — (22,459 ) 32,522 Deferred revenue 15,151 1,056 — — 16,207 Holdback liability 15,986 400 — — 16,386 Current portion of long-term debt 5,500 — — — 5,500 Total current liabilities 79,138 26,036 — (22,459 ) 82,715 Non-current liabilities: Long-term debt 1,739,147 — — — 1,739,147 Long-term holdback instruments 3,786 — — — 3,786 Derivative financial instruments 13,470 — — — 13,470 Deferred income tax liability, net 12,391 800 — — 13,191 Other liabilities 12,963 3,930 — — 16,893 Total liabilities 1,860,895 30,766 — (22,459 ) 1,869,202 Total stockholder's equity 201,065 43,920 — (43,920 ) 201,065 Total liabilities and stockholder's equity $ 2,061,960 74,686 — (66,379 ) 2,070,267 MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Consolidating Statement of Operations and Comprehensive Income (Loss) Amounts in thousands Year Ended December 31, 2016 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated Net revenue $ 543,181 27,191 — — $ 570,372 Operating expenses: Cost of services 101,940 13,296 — — 115,236 Selling, general, and administrative, including stock-based compensation 86,670 27,482 — — 114,152 Radio conversion costs 18,204 218 — — 18,422 Amortization of subscriber accounts, dealer network and other intangible assets 240,568 6,185 — — 246,753 Depreciation 7,784 376 — — 8,160 Gain on disposal of operating assets — — — — — 455,166 47,557 — — 502,723 Operating income (loss) 88,015 (20,366 ) — — 67,649 Other expense: Equity in loss of subsidiaries 21,387 — — (21,387 ) — Interest expense 127,290 18 — — 127,308 Refinancing expense 9,500 — — — 9,500 158,177 18 — (21,387 ) 136,808 Loss before income taxes (70,162 ) (20,384 ) — 21,387 (69,159 ) Income tax expense 6,145 1,003 — — 7,148 Net loss (76,307 ) (21,387 ) — 21,387 (76,307 ) Other comprehensive loss: Unrealized loss on derivative contracts 4,589 — — — 4,589 Total other comprehensive loss (71,718 ) (21,387 ) — 21,387 (71,718 ) MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Consolidating Statement of Operations and Comprehensive Income (Loss) Amounts in thousands Year Ended December 31, 2015 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated Net revenue $ 546,597 16,759 — — $ 563,356 Operating expenses: Cost of services 100,233 10,013 — — 110,246 Selling, general, and administrative, including stock-based compensation 86,683 19,604 — — 106,287 Radio conversion costs 14,369 — — — 14,369 Amortization of subscriber accounts, dealer network and other intangible assets 253,773 4,895 — — 258,668 Depreciation 9,960 106 — — 10,066 Gain on disposal of operating assets (5 ) — — — (5 ) 465,013 34,618 — — 499,631 Operating income (loss) 81,584 (17,859 ) — — 63,725 Other expense: Equity in loss of subsidiaries 18,689 — — (18,689 ) — Interest expense 125,394 21 — — 125,415 Refinancing expense 4,468 — — — 4,468 148,551 21 — (18,689 ) 129,883 Loss before income taxes (66,967 ) (17,880 ) — 18,689 (66,158 ) Income tax expense 5,481 809 — — 6,290 Net loss (72,448 ) (18,689 ) — 18,689 (72,448 ) Other comprehensive loss: Unrealized loss on derivative contracts (8,741 ) — — — (8,741 ) Total other comprehensive loss (81,189 ) (18,689 ) — 18,689 (81,189 ) MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Consolidating Statements of Cash flows Amounts in thousands Year Ended December 31, 2016 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated Net cash provided by operating activities $ 181,384 9,143 — — $ 190,527 Investing activities: Capital expenditures (7,997 ) (1,181 ) — — (9,178 ) Cost of subscriber accounts acquired (193,790 ) (7,591 ) — — (201,381 ) Increase in restricted cash 55 — — — 55 Net cash used in investing activities (201,732 ) (8,772 ) — — (210,504 ) Financing activities: Proceeds from long-term debt 1,280,700 — — — 1,280,700 Payments on long-term debt (1,238,059 ) — — — (1,238,059 ) Refinance costs (16,946 ) (16,946 ) Value of shares withheld for share-based compensation (121 ) — — — (121 ) Dividend to Ascent Capital (5,000 ) — — — (5,000 ) 20,574 — — — 20,574 Net increase in cash and cash equivalents 226 371 — — 597 Cash and cash equivalents at beginning of period 1,513 1,067 — — 2,580 Cash and cash equivalents at end of period $ 1,739 1,438 — — $ 3,177 MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Consolidating Statements of Cash flows Amounts in thousands Year Ended December 31, 2015 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated Net cash provided by operating activities $ 201,477 7,685 — — $ 209,162 Investing activities: Capital expenditures (11,866 ) (556 ) — — (12,422 ) Cost of subscriber accounts acquired (260,256 ) (6,302 ) — — (266,558 ) Cash paid for acquisition, net of cash acquired (56,778 ) — — — (56,778 ) Increase in restricted cash (37 ) — — — (37 ) Proceeds from sale of assets 5 — — — 5 Net cash used in investing activities (328,932 ) (6,858 ) — — (335,790 ) Financing activities: Proceeds from long-term debt 778,000 — — — 778,000 Payments on long-term debt (666,640 ) — — — (666,640 ) Refinance costs (6,477 ) (6,477 ) Value of shares withheld for share-based compensation (318 ) — — — (318 ) Contributions from Ascent Capital 22,690 22,690 127,255 — — — 127,255 Net increase in cash and cash equivalents (200 ) 827 — — 627 Cash and cash equivalents at beginning of period 1,713 240 — — 1,953 Cash and cash equivalents at end of period $ 1,513 1,067 — — $ 2,580 |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Consolidation Principles | Consolidation Principles The consolidated financial statements include the accounts of the Company and its majority owned subsidiaries over which the Company exercises control. All intercompany accounts and transactions have been eliminated in consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers investments with original purchased maturities of three months or less when acquired to be cash equivalents. |
Restricted Cash | Restricted Cash Restricted cash is cash that is restricted for a specific purpose and cannot be included in the cash and cash equivalents account. |
Trade Receivables | Trade Receivables Trade receivables consist primarily of amounts due from customers for recurring monthly monitoring services over a wide geographical base. The Company performs extensive credit evaluations on the portfolios of subscriber accounts prior to acquisition and requires no collateral on the accounts that are acquired. The Company has established an allowance for doubtful accounts for estimated losses resulting from the inability of subscribers to make required payments. Factors such as historical-loss experience, recoveries and economic conditions are considered in determining the sufficiency of the allowance to cover potential losses. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of trade accounts receivable. The Company performs extensive credit evaluations on the portfolios of subscriber accounts prior to acquisition and requires no collateral on the subscriber accounts that are acquired. Concentrations of credit risk with respect to trade accounts receivable are generally limited due to the large number of subscribers comprising the Company's customer base. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair values of cash equivalents, current accounts receivable and current accounts payable approximate the carrying amounts because of their short-term nature. The Company's debt instruments are recorded at amortized cost on the consolidated balance sheet. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the underlying lease. Estimated useful lives by class of asset are as follows: Leasehold improvements 15 years or lease term, if shorter Machinery and equipment 5 - 7 years Computer systems and software (included in Machinery and Equipment in note 5, Property and Equipment ) 3 - 5 years Management reviews the realizability of its property and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In evaluating the value and future benefits of long-term assets, their carrying value is compared to management’s best estimate of undiscounted future cash flows over the remaining economic life. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying value of the assets exceeds the estimated fair value of the assets. If necessary, the Company would use both the income approach and market approach to estimate fair value. |
Subscriber Accounts | Subscriber Accounts Subscriber accounts primarily relate to the cost of acquiring monitoring service contracts from independent dealers. The subscriber accounts acquired in the MONI, Security Networks and the LiveWatch acquisitions were recorded at fair value under the acquisition method of accounting. All other acquired subscriber accounts are recorded at cost. All direct and incremental costs, including bonus incentives related to account activation at LiveWatch, associated with the creation of subscriber accounts, including new subscriber contracts obtained in connection with a subscriber move, are capitalized. The costs of subscriber accounts acquired in the MONI, Security Networks and LiveWatch acquisitions, as well as certain accounts acquired in bulk purchases, are amortized using the 14 -year 235% declining balance method. The costs of all other subscriber accounts are amortized using the 15 -year 220% declining balance method, beginning in the month following the date of acquisition. The amortization methods were selected to provide an approximate matching of the amortization of the subscriber accounts intangible asset to estimated future subscriber revenues based on the projected lives of individual subscriber contracts. Amortization of subscriber accounts was $236,673,000 , $238,800,000 and $233,327,000 for the fiscal years ended December 31, 2016 , 2015 and 2014 , respectively. Based on subscriber accounts held at December 31, 2016 , estimated amortization of subscriber accounts in the succeeding five fiscal years ending December 31 is as follows (amounts in thousands): 2017 $ 215,369 2018 $ 181,708 2019 $ 153,417 2020 $ 134,817 2021 $ 120,391 The Company reviews the subscriber accounts for impairment or a change in amortization method at each reporting period. For purposes of recognition and measurement of an impairment loss, the Company views subscriber accounts as a single pool because of the assets' homogeneous characteristics, and the pool of subscriber accounts is the lowest level for which identifiable cash flows are largely independent of the cash flows of the other assets and liabilities. |
Dealer Networks and Other Intangible Assets | Dealer Network and Other Intangible Assets Dealer network is an intangible asset that relates to the dealer relationships that were acquired as part of the Security Networks Acquisition. Other intangible assets consist of non-compete agreements signed by the seller of Security Networks and certain key Security Networks executives. These intangible assets are amortized on a straight-line basis over their estimated useful lives of 5 years. The LiveWatch trade mark asset is amortized over 10 years. Amortization of dealer network and other intangible assets was $9,830,000 , $19,501,000 and $19,780,000 for the fiscal years ended December 31, 2016 , 2015 and 2014 , respectively. The Company reviews the dealer network and other intangible assets for impairment or a change in amortization method at each reporting period. |
Goodwill | Goodwill The Company accounts for its goodwill pursuant to the provisions of FASB ASC Topic 350, Intangibles — Goodwill and Other ("FASB ASC Topic 350"). In accordance with FASB ASC Topic 350, goodwill is not amortized, but rather tested for impairment at least annually. The Company assesses the recoverability of the carrying value of goodwill during the fourth quarter of its fiscal year or whenever events or changes in circumstances indicate that the carrying amount of the goodwill of a reporting unit may not be fully recoverable. Recoverability is measured at the reporting unit level based on the provisions of FASB ASC Topic 350. To the extent necessary, recoverability of goodwill at a reporting unit level is measured using a discounted cash flow model incorporating discount rates commensurate with the risks involved, which is classified as a Level 3 measurement under FASB ASC Topic 820, Fair Value Measurements and Disclosures. The key assumptions used in the discounted cash flow valuation model include discount rates, growth rates, cash flow projections and terminal value rates. Discount rates, growth rates and cash flow projections are the most sensitive and susceptible to change as they require significant management judgment. If the calculated fair value is less than the current carrying value, impairment of the reporting unit may exist. When the recoverability test indicates potential impairment, the Company will calculate an implied fair value of goodwill for the reporting unit. The implied fair value of goodwill is determined in a manner similar to how goodwill is calculated in a business combination. If the implied fair value of goodwill exceeds the carrying value of goodwill assigned to the reporting unit, there is no impairment. If the carrying value of goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment loss is recorded to write down the carrying value. An impairment loss cannot exceed the carrying value of goodwill assigned to the reporting unit but may indicate certain long-lived and amortizable intangible assets associated with the reporting unit may require additional impairment testing. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs are recorded as a reduction to long-term debt when the related debt is issued or when revolving credit lines increase the borrowing capacity of the Company. Deferred financing costs are amortized over the term of the related debt using the effective interest method. |
Holdback Liability | Holdback Liability The Company typically withholds payment of a designated percentage of the acquisition cost when it acquires subscriber accounts from dealers. The withheld funds are recorded as a liability until the guarantee period provided by the dealer has expired. The holdback is used as a reserve to cover any terminated subscriber accounts that are not replaced by the dealer during the guarantee period. At the end of the guarantee period, the dealer is responsible for any deficit or is paid the balance of the holdback. |
Derivatives Financial Instruments | Derivative Financial Instruments The Company uses derivative financial instruments to manage exposure to movement in interest rates. The use of these financial instruments modifies the exposure of these risks with the intention of reducing the risk or cost. The Company does not use derivatives for speculative or trading purposes. The Company recognizes the fair value of all derivative instruments as either assets or liabilities at fair value on the consolidated balance sheets. Fair value is based on market quotes for similar instruments with the same duration. For derivative instruments that qualify for hedge accounting under the provisions of FASB ASC Topic 815, Derivatives and Hedging , unrealized gains and losses on the derivative instruments are reported in accumulated other comprehensive income (loss), to the extent the hedges are effective, until the underlying transactions are recognized in earnings. Derivative instruments that do not qualify for hedge accounting are marked to market at the end of each accounting period with the change in fair value recorded in earnings. |
Revenue Recognition | Revenue Recognition Revenue is generated from security alarm monitoring and related services provided by the Company and its subsidiaries. Revenue related to alarm monitoring services is recognized ratably over the life of the contract. Revenue related to maintenance and other services is recognized as the services are rendered. Deferred revenue includes payments for monitoring services to be provided in future periods. Additionally, equipment sales are recognized as the equipment is shipped to the customer. |
Income Taxes | Income Taxes The Company accounts for income taxes under FASB ASC Topic 740, Income Taxes ("FASB ASC Topic 740"), which prescribes an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's consolidated financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than proposed changes in the tax law or rates. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. FASB ASC Topic 740 specifies the accounting for uncertainty in income taxes recognized in a company’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In instances where the Company has taken or expects to take a tax position in its tax return and the Company believes it is more likely than not that such tax position will be upheld by the relevant taxing authority, the Company records the benefits of such tax position in its consolidated financial statements. |
Share-Based Compensation | Share-Based Compensation The Company adopted ASU 2016-09, Compensation-- Stock Compensation (Topic 718): Improvements to Employee Share Based Accounting ("ASU 2016-09"). ASU 2016-09 simplifies several aspects of accounting for employee share-based payment transactions, including accounting for income taxes, forfeitures, and statutory tax withholding requirements as well as classification of certain elements in the statement of cash flows. The adoption of ASU 2016-09 resulted in the tax effected amount of excess tax benefits of $443,000 as of December 31, 2015 (associated with the exercise of non-qualified stock options and vesting of restricted stock awards from the Company's incentive plans), that did not reduce current income taxes payable in the year deducted, being recognized as net operating loss deferred income taxes, fully offset by an increase in the valuation allowance as of December 31, 2015. The adoption of ASU 2016-09 also resulted in an increase in Net cash provided by operating activities of $318,000 and $416,000 and a decrease in Net Cash provided by financing activities $318,000 and $416,000 for the for the years ended December 31, 2015 and 2014, respectively. These amounts represent reclassifications of the value of shares withheld on vesting of certain stock awards by the Company to settle payroll tax liabilities from an operating cash flow to a financing cash flow. The Company accounts for share-based awards pursuant to FASB ASC Topic 718, Compensation — Stock Compensation ("FASB ASC Topic 718"), which requires companies to measure the cost of employee services received in exchange for an award of equity instruments (such as stock options and restricted stock) based on the grant-date fair value of the award, and to recognize that cost over the period during which the employee is required to provide service (usually the vesting period of the award). Forfeitures of awards are recognized as they occur. The grant-date fair value of the Ascent Capital stock options granted to the Company’s employees was calculated using the Black-Scholes model. The expected term of the awards was calculated using the simplified method included in FASB ASC Topic 718. The volatility used in the calculation is based on the historical volatility of peer companies and the risk-free rate is based on Treasury Bonds with a term similar to that of the subject options. |
Estimates | Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions and judgments that affect the reported amounts of revenue and expenses for each reporting period. The significant estimates made in preparation of the Company’s consolidated financial statements primarily relate to valuation of goodwill, other intangible assets, long-lived assets, deferred tax assets, convertible debt arrangements, 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 Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under the update, revenue will be recognized based on a five-step model. The core principle of the model is that revenue will be recognized when the transfer of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In the third quarter of 2015, the FASB deferred the effective date of the standard to annual and interim periods beginning after December 15, 2017. In March and April 2016, the FASB issued amendments to provide clarification on assessment of collectability criteria, presentation of sales taxes and measurement of non-cash consideration. In addition, the amendment provided clarification and included simplification to transaction guidance on contract modifications and completed contracts at transaction. In December 2016, the FASB issued amendments to provide clarification on codification and guidance application. The standard allows the option of either a full retrospective adoption, meaning the standard is applied to all periods presented, or modified retrospective adoption, meaning the standard is applied only to the most current period. The Company is in the process of assessing revenue recognition policies across each type of its contracts and evaluating the impact of the adoption ASU 2014-09 on its Consolidated Financial Statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 requires the lessee to recognize assets and liabilities for leases with lease terms of more than twelve months. For leases with a term of twelve months or less, the Company is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Further, the lease requires a finance lease to recognize both an interest expense and an amortization of the associated expense. Operating leases generally recognize the associated expense on a straight line basis. ASU 2016-02 requires the Company to adopt the standard using a modified retrospective approach and becomes effective on January 1, 2019. The Company is currently evaluating the impact that ASU 2016-02 will have on its financial position, results of operations and cash flows. In January 2017, the FASB issued ASU 2017-04, Intangibles--Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). Currently, the fair value of the reporting unit is compared with the carrying value of the reporting unit (identified as "Step 1"). If the fair value of the reporting unit is lower than its carrying amount then, the implied fair value of goodwill is calculated. If the implied fair value of goodwill is lower than the carrying value of goodwill an impairment is recognized (identified as "Step 2"). ASU 2017-04 eliminates Step 2 from the impairment test; therefore, a goodwill impairment will be recognized as the difference of the fair value and the carrying value. ASU 2017-04 becomes effective on January 1, 2020 with early adoption permitted. The Company is currently evaluating the impact that ASU 2017-04 will have on its financial position, results of operations and cash flows. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Allowance for Doubtful Accounts | A summary of activity in the allowance for doubtful accounts is as follows (amounts in thousands): Balance Beginning of Year Charged to Expense Write-Offs and Other Balance End of Year 2016 $ 2,762 10,785 (10,504 ) 3,043 2015 $ 2,120 9,735 (9,093 ) 2,762 2014 $ 1,937 8,149 (7,966 ) 2,120 |
Schedule of Property and Equipment Useful Lives | Estimated useful lives by class of asset are as follows: Leasehold improvements 15 years or lease term, if shorter Machinery and equipment 5 - 7 years Computer systems and software (included in Machinery and Equipment in note 5, Property and Equipment ) 3 - 5 years Property and equipment consist of the following (amounts in thousands): As of December 31, 2016 2015 Property and equipment, net: Buildings and leasehold improvements $ 1,404 $ 1,222 Machinery and equipment 55,691 52,489 57,095 53,711 Accumulated depreciation (28,825 ) (27,057 ) $ 28,270 26,654 |
Schedule of Future Amortization Expense | Based on subscriber accounts held at December 31, 2016 , estimated amortization of subscriber accounts in the succeeding five fiscal years ending December 31 is as follows (amounts in thousands): 2017 $ 215,369 2018 $ 181,708 2019 $ 153,417 2020 $ 134,817 2021 $ 120,391 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Estimated useful lives by class of asset are as follows: Leasehold improvements 15 years or lease term, if shorter Machinery and equipment 5 - 7 years Computer systems and software (included in Machinery and Equipment in note 5, Property and Equipment ) 3 - 5 years Property and equipment consist of the following (amounts in thousands): As of December 31, 2016 2015 Property and equipment, net: Buildings and leasehold improvements $ 1,404 $ 1,222 Machinery and equipment 55,691 52,489 57,095 53,711 Accumulated depreciation (28,825 ) (27,057 ) $ 28,270 26,654 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table provides the activity and balances of goodwill (amounts in thousands): Balance at December 31, 2014 $ 527,502 LiveWatch Acquisition 36,047 Balance at December 31, 2015 563,549 Period activity — Balance at December 31, 2016 $ 563,549 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Other Accrued Liabilities | Other accrued liabilities consisted of the following (amounts in thousands): December 31, 2016 December 31, 2015 Interest payable $ 14,588 $ 18,226 Income taxes payable 2,947 2,603 Legal accrual 271 145 LiveWatch acquisition retention bonus 4,990 — Other 8,783 11,548 Total Other accrued liabilities $ 31,579 $ 32,522 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following (amounts in thousands): December 31, December 31, 9.125% Senior Notes due April 1, 2020 with an effective rate of 9.4% $ 578,078 $ 576,241 Promissory Note to Ascent Capital due October 1, 2020 with an effective rate of 12.5% (a) 12,000 100,000 Term loan, matures September 30, 2022, LIBOR plus 5.5% subject to a LIBOR floor of 1.00% with an effective rate of 7.2% 1,066,130 — $295 million revolving credit facility, matures September 30, 2021, LIBOR plus 4.00% subject to a LIBOR floor of 1.00% with an effective rate of 5.3% 42,570 — Term loan, mature March 23, 2018, LIBOR plus 3.25%, subject to a LIBOR floor of 1.00% with an effective rate of 5.0% — 394,938 Term loan, mature April 9, 2022, LIBOR plus 3.5%, subject to a LIBOR floor of 1.00% with an effective interest rate of 5.1% — 542,420 $315 million revolving credit facility, matures December 22, 2017, LIBOR plus 3.75%, subject to a LIBOR floor of 1.00% with an effective rate of 6.7% — 131,048 1,698,778 1,744,647 Less current portion of long-term debt (11,000 ) (5,500 ) Long-term debt $ 1,687,778 $ 1,739,147 (a) The effective rate was 9.868% until February 29, 2016. |
Schedule of Components of Refinancing Expense | The components of the refinancing expense is reflected below (amounts in thousands): Twelve Months Ended Accelerated amortization of deferred financing costs $ 4,160 Accelerated amortization of debt discount 3,416 Other refinancing costs 1,924 Total refinancing expense $ 9,500 |
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): 2017 $ 11,000 2018 11,000 2019 11,000 2020 608,000 2021 55,800 Thereafter 1,042,250 Total principal payments 1,739,050 Less: Unamortized discounts, premium and deferred debt costs, net 40,272 Total debt on consolidated balance sheet $ 1,698,778 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Swaps' outstanding notional balance and terms | The Swaps' outstanding notional balance as of December 31, 2016 and terms are noted below: Notional Effective Date Maturity Date Fixed Rate Paid Variable Rate Received $ 523,875,000 March 28, 2013 March 23, 2018 1.884% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 138,837,500 March 28, 2013 March 23, 2018 1.384% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 108,542,713 September 30, 2013 March 23, 2018 1.959% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor 108,542,713 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 3.110% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 250,000,000 March 23, 2018 April 9, 2022 3.110% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 50,000,000 March 23, 2018 April 9, 2022 2.504% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor 377,000,000 March 23, 2018 September 30, 2022 1.833% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) On March 25, 2013 and September 30, 2016, the Company negotiated amendments to the terms of these interest rate swap agreements (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, 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 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 consolidated financial statements is depicted below (amounts in thousands): Year Ended December 31, 2016 2015 2014 Effective portion of gain (loss) recognized in Accumulated other comprehensive income (loss) $ (2,673 ) (16,041 ) (12,560 ) Effective portion of loss reclassified from Accumulated other comprehensive income (loss) into Net loss (a) $ (7,262 ) (7,300 ) (7,681 ) Ineffective portion of amount of gain (loss) recognized into Net loss on interest rate swaps (a) $ 423 (119 ) (46 ) (a) Amounts are included in Interest expense in the consolidated statements of operations and comprehensive income (loss). |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 December 31, 2016 and December 31, 2015 (amounts in thousands): Level 1 Level 2 Level 3 Total December 31, 2016 Derivative financial instruments - assets (a) — 8,521 — 8,521 Derivative financial instruments - liabilities — (16,948 ) — (16,948 ) Total $ — (8,427 ) — (8,427 ) December 31, 2015 Derivative financial instruments - liabilities — (13,470 ) — (13,470 ) Total $ — (13,470 ) — (13,470 ) (a) Included in Other assets, net on the 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): December 31, 2016 December 31, 2015 Long term debt, including current portion: Carrying value $ 1,698,778 $ 1,744,647 Fair value (a) 1,716,385 1,603,375 (a) T he fair value is based on valuations from third party financial institutions and is classified as Level 2 in the hierarchy. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Components of pretax income (loss) from continuing operations are as follows(amounts in thousands): Year Ended December 31, 2016 2015 2014 Current: Federal $ — — — State 3,008 2,304 3,526 3,008 2,304 3,526 Deferred: Federal 4,000 3,895 3,292 State 140 91 (3,218 ) 4,140 3,986 74 Total income tax expense $ 7,148 6,290 3,600 |
Schedule of Effective Income Tax Rate Reconciliation | Income tax expense differs from the amounts computed by applying the United States federal income tax rate of 35% as a result of the following (amounts in thousands): Year Ended December 31, 2016 2015 2014 Computed expected tax benefit $ (24,206 ) (23,155 ) (9,141 ) State and local income taxes, net of federal income taxes 2,047 1,556 200 Change in valuation allowance affecting tax expense 26,892 24,149 9,322 Expense (income) not resulting in tax impact (1,585 ) (155 ) (73 ) Amortization of indefinite-lived assets 4,000 3,890 3,292 Other, net — 5 — Income tax expense $ 7,148 6,290 3,600 |
Schedule of Deferred Tax Assets and Liabilities | Components of deferred tax assets and liabilities as of December 31, 2016 and 2015 are as follows (amounts in thousands): As of December 31, 2016 2015 Accrued receivable reserves $ 1,142 $ 1,717 Accrued liabilities 9,197 8,626 Net operating loss carryforwards 204,478 166,183 Derivative financial instruments 3,283 4,994 Business credits 1,409 1,438 Other deferred tax assets 3,746 4,508 Valuation allowance (96,003 ) (65,429 ) Total deferred tax assets 127,252 122,037 Intangible assets (141,100 ) (133,248 ) Property, plant and equipment (3,482 ) (1,980 ) Total deferred tax liabilities (144,582 ) (135,228 ) Net deferred tax liabilities $ (17,330 ) $ (13,191 ) |
Schedule of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of uncertain tax positions, which is recorded in other long term liabilities, is as follows (amounts in thousands): Year Ended December 31, 2016 2015 2014 As of the beginning of the year $ 193 191 247 Increases for tax positions of current years 15 2 4 Reductions for tax positions of prior years — — (60 ) As of the end of the year $ 208 193 191 |
Stock-based and Long-Term Com34
Stock-based and Long-Term Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule Stock Options Activity | The following table presents the number and weighted average exercise price ("WAEP") of outstanding options to purchase Ascent Capital Series A common stock that were granted to certain MONI employees: Series A common stock WAEP Outstanding at January 1, 2016 202,142 $ 48.88 Granted — — Exercised — — Forfeited (36,437 ) 49.66 Outstanding at December 31, 2016 165,705 48.71 Exercisable at December 31, 2016 163,458 $ 48.54 |
Schedule of Unvested Restricted Stock Awards | The following table presents the number and weighted average fair value ("WAFV") of unvested restricted stock awards granted to certain MONI employees: Series A common stock WAFV Outstanding at January 1, 2016 98,691 $ 34.38 Granted 46,000 13.53 Vested (19,236 ) 22.24 Canceled (8,469 ) 54.77 Outstanding at December 31, 2016 116,986 $ 26.70 |
Schedule of Unvested Restricted Stock Units | The following table presents the number and WAFV of unvested restricted stock units granted to certain MONI employees: Series A Restricted Stock Units WAFV Outstanding at January 1, 2016 50,000 $ 42.34 Granted 148,133 15.17 Vested (9,625 ) 40.01 Canceled — — Outstanding at December 31, 2016 188,508 $ 21.11 |
Stockholder's Equity (Tables)
Stockholder's Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The change in the components of accumulated other comprehensive income (loss), net of taxes, is summarized as follows (amounts in thousands): Unrealized Gains and Losses on Derivative Instruments, net (a) Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2013 74 74 Gain (loss) through Accumulated other comprehensive income (12,560 ) (12,560 ) Reclassification into net income 7,681 7,681 Balance at December 31, 2014 (4,805 ) (4,805 ) Unrealized loss on derivatives recognized through Accumulated other comprehensive income (loss) (16,041 ) (16,041 ) Reclassifications of unrealized loss on derivatives into net income 7,300 7,300 Balance at December 31, 2015 (13,546 ) (13,546 ) Unrealized loss on derivatives recognized through Accumulated other comprehensive income (loss) (2,673 ) (2,673 ) Reclassifications of unrealized loss on derivatives into net income 7,262 7,262 Balance at December 31, 2016 $ (8,957 ) $ (8,957 ) (a) No income taxes were recorded on the unrealized loss on derivative instrument amounts for 2016 , 2015 and 2014 because the Company is subject to a full valuation allowance. Amounts reclassified into net income are included in Interest expense on the consolidated statement of operations. See note 9, Derivatives , for further information. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Fiscal Year Maturity Schedule | Future minimum lease payments under scheduled operating leases, which are primarily for buildings and equipment, having initial or remaining noncancelable terms in excess of one year are as follows (in thousands): Year ended December 31: 2017 $ 3,748 2018 3,749 2019 2,941 2020 2,832 2021 2,814 Thereafter 25,466 Minimum lease commitments $ 41,550 |
Reportable Business Segments (T
Reportable Business Segments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table sets forth selected data from the accompanying consolidated balance sheets for the periods indicated (amounts in thousands): MONI LiveWatch Eliminations Consolidated Balance at December 31, 2016 Subscriber accounts, net of amortization $ 1,364,804 $ 21,956 $ — $ 1,386,760 Goodwill $ 527,502 $ 36,047 $ — $ 563,549 Total assets $ 2,062,838 $ 63,916 $ (93,037 ) $ 2,033,717 Balance at December 31, 2015 Subscriber accounts, net of amortization $ 1,400,515 $ 23,023 $ — $ 1,423,538 Goodwill $ 527,502 $ 36,047 $ — $ 563,549 Total assets $ 2,033,180 $ 63,267 $ (26,180 ) $ 2,070,267 The following table sets forth selected data from the accompanying consolidated statements of operations for the periods indicated (amounts in thousands): MONI LiveWatch Consolidated Twelve Months Ended December 31, 2016 Net revenue $ 547,458 $ 22,914 $ 570,372 Depreciation and amortization $ 250,393 $ 4,520 $ 254,913 Loss before income taxes $ (46,728 ) $ (22,431 ) $ (69,159 ) Twelve Months Ended December 31, 2015 Net revenue $ 548,622 $ 14,734 $ 563,356 Depreciation and amortization $ 264,870 $ 3,864 $ 268,734 Loss before income taxes $ (47,793 ) $ (18,365 ) $ (66,158 ) |
Quarterly Financial Informati38
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information (Unaudited) | 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Amounts in thousands 2016 Net Revenue $ 143,268 143,656 142,765 140,683 Operating income $ 12,804 15,258 18,486 21,101 Net loss $ (20,210 ) (16,509 ) (23,002 ) (16,586 ) 2015 Net Revenue $ 138,416 141,543 141,846 141,551 Operating income $ 23,867 21,783 12,420 5,655 Net loss $ (8,334 ) (15,987 ) (21,414 ) (26,713 ) |
Consolidating Guarantor Finan39
Consolidating Guarantor Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Balance Sheet | As of December 31, 2016 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 1,739 1,438 — — $ 3,177 Restricted cash — — — — — Trade receivables, net 13,265 604 — — 13,869 Prepaid and other current assets 51,251 2,171 — (44,062 ) 9,360 Total current assets 66,255 4,213 — (44,062 ) 26,406 Investment in subsidiaries 22,533 — — (22,533 ) — Property and equipment, net 26,652 1,618 — — 28,270 Subscriber accounts, net 1,349,285 37,475 — — 1,386,760 Dealer network and other intangible assets, net 15,762 1,062 — — 16,824 Goodwill 527,191 36,358 — — 563,549 Other assets, net 11,889 19 — — 11,908 Total assets $ 2,019,567 80,745 — (66,595 ) $ 2,033,717 Liabilities and Stockholder's Equity Current liabilities: Accounts payable $ 9,919 1,542 — — $ 11,461 Accrued payroll and related liabilities 3,731 337 — — 4,068 Other accrued liabilities 25,951 49,690 — (44,062 ) 31,579 Deferred revenue 13,807 1,340 — — 15,147 Holdback liability 13,434 482 — — 13,916 Current portion of long-term debt 11,000 — — — 11,000 Total current liabilities 77,842 53,391 — (44,062 ) 87,171 Non-current liabilities: Long-term debt 1,687,778 — — — 1,687,778 Long-term holdback instruments 2,645 — — — 2,645 Derivative financial instruments 16,948 — — — 16,948 Deferred income tax liability, net 15,649 1,681 — — 17,330 Other liabilities 3,760 3,140 — — 6,900 Total liabilities 1,804,622 58,212 — (44,062 ) 1,818,772 Total stockholder's equity 214,945 22,533 — (22,533 ) 214,945 Total liabilities and stockholder's equity 2,019,567 80,745 — (66,595 ) 2,033,717 MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Condensed Consolidating Balance Sheet Amounts in thousands As of Balance at December 31, 2015 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 1,513 1,067 — — 2,580 Restricted cash 55 — — — 55 Trade receivables, net 13,224 398 — — 13,622 Prepaid and other current assets 30,542 1,807 — (22,459 ) 9,890 Total current assets 45,334 3,272 — (22,459 ) 26,147 Investment in subsidiaries 43,920 — — (43,920 ) — Property and equipment, net 25,842 812 — — 26,654 Subscriber accounts, net 1,390,493 33,045 — — 1,423,538 Dealer network and other intangible assets, net 25,462 1,192 — — 26,654 Goodwill 527,191 36,358 — — 563,549 Other assets, net 3,718 7 — — 3,725 Total assets $ 2,061,960 74,686 — (66,379 ) 2,070,267 Liabilities and Stockholder's Equity Current liabilities: Accounts payable $ 7,383 1,238 — — $ 8,621 Accrued payroll and related liabilities 2,894 585 — — 3,479 Other accrued liabilities 32,224 22,757 — (22,459 ) 32,522 Deferred revenue 15,151 1,056 — — 16,207 Holdback liability 15,986 400 — — 16,386 Current portion of long-term debt 5,500 — — — 5,500 Total current liabilities 79,138 26,036 — (22,459 ) 82,715 Non-current liabilities: Long-term debt 1,739,147 — — — 1,739,147 Long-term holdback instruments 3,786 — — — 3,786 Derivative financial instruments 13,470 — — — 13,470 Deferred income tax liability, net 12,391 800 — — 13,191 Other liabilities 12,963 3,930 — — 16,893 Total liabilities 1,860,895 30,766 — (22,459 ) 1,869,202 Total stockholder's equity 201,065 43,920 — (43,920 ) 201,065 Total liabilities and stockholder's equity $ 2,061,960 74,686 — (66,379 ) 2,070,267 |
Condensed Income Statement and Comprehensive Income (Loss) | Year Ended December 31, 2016 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated Net revenue $ 543,181 27,191 — — $ 570,372 Operating expenses: Cost of services 101,940 13,296 — — 115,236 Selling, general, and administrative, including stock-based compensation 86,670 27,482 — — 114,152 Radio conversion costs 18,204 218 — — 18,422 Amortization of subscriber accounts, dealer network and other intangible assets 240,568 6,185 — — 246,753 Depreciation 7,784 376 — — 8,160 Gain on disposal of operating assets — — — — — 455,166 47,557 — — 502,723 Operating income (loss) 88,015 (20,366 ) — — 67,649 Other expense: Equity in loss of subsidiaries 21,387 — — (21,387 ) — Interest expense 127,290 18 — — 127,308 Refinancing expense 9,500 — — — 9,500 158,177 18 — (21,387 ) 136,808 Loss before income taxes (70,162 ) (20,384 ) — 21,387 (69,159 ) Income tax expense 6,145 1,003 — — 7,148 Net loss (76,307 ) (21,387 ) — 21,387 (76,307 ) Other comprehensive loss: Unrealized loss on derivative contracts 4,589 — — — 4,589 Total other comprehensive loss (71,718 ) (21,387 ) — 21,387 (71,718 ) MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Consolidating Statement of Operations and Comprehensive Income (Loss) Amounts in thousands Year Ended December 31, 2015 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated Net revenue $ 546,597 16,759 — — $ 563,356 Operating expenses: Cost of services 100,233 10,013 — — 110,246 Selling, general, and administrative, including stock-based compensation 86,683 19,604 — — 106,287 Radio conversion costs 14,369 — — — 14,369 Amortization of subscriber accounts, dealer network and other intangible assets 253,773 4,895 — — 258,668 Depreciation 9,960 106 — — 10,066 Gain on disposal of operating assets (5 ) — — — (5 ) 465,013 34,618 — — 499,631 Operating income (loss) 81,584 (17,859 ) — — 63,725 Other expense: Equity in loss of subsidiaries 18,689 — — (18,689 ) — Interest expense 125,394 21 — — 125,415 Refinancing expense 4,468 — — — 4,468 148,551 21 — (18,689 ) 129,883 Loss before income taxes (66,967 ) (17,880 ) — 18,689 (66,158 ) Income tax expense 5,481 809 — — 6,290 Net loss (72,448 ) (18,689 ) — 18,689 (72,448 ) Other comprehensive loss: Unrealized loss on derivative contracts (8,741 ) — — — (8,741 ) Total other comprehensive loss (81,189 ) (18,689 ) — 18,689 (81,189 ) |
Condensed Cash Flow Statement | Year Ended December 31, 2016 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated Net cash provided by operating activities $ 181,384 9,143 — — $ 190,527 Investing activities: Capital expenditures (7,997 ) (1,181 ) — — (9,178 ) Cost of subscriber accounts acquired (193,790 ) (7,591 ) — — (201,381 ) Increase in restricted cash 55 — — — 55 Net cash used in investing activities (201,732 ) (8,772 ) — — (210,504 ) Financing activities: Proceeds from long-term debt 1,280,700 — — — 1,280,700 Payments on long-term debt (1,238,059 ) — — — (1,238,059 ) Refinance costs (16,946 ) (16,946 ) Value of shares withheld for share-based compensation (121 ) — — — (121 ) Dividend to Ascent Capital (5,000 ) — — — (5,000 ) 20,574 — — — 20,574 Net increase in cash and cash equivalents 226 371 — — 597 Cash and cash equivalents at beginning of period 1,513 1,067 — — 2,580 Cash and cash equivalents at end of period $ 1,739 1,438 — — $ 3,177 MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES Consolidating Statements of Cash flows Amounts in thousands Year Ended December 31, 2015 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated Net cash provided by operating activities $ 201,477 7,685 — — $ 209,162 Investing activities: Capital expenditures (11,866 ) (556 ) — — (12,422 ) Cost of subscriber accounts acquired (260,256 ) (6,302 ) — — (266,558 ) Cash paid for acquisition, net of cash acquired (56,778 ) — — — (56,778 ) Increase in restricted cash (37 ) — — — (37 ) Proceeds from sale of assets 5 — — — 5 Net cash used in investing activities (328,932 ) (6,858 ) — — (335,790 ) Financing activities: Proceeds from long-term debt 778,000 — — — 778,000 Payments on long-term debt (666,640 ) — — — (666,640 ) Refinance costs (6,477 ) (6,477 ) Value of shares withheld for share-based compensation (318 ) — — — (318 ) Contributions from Ascent Capital 22,690 22,690 127,255 — — — 127,255 Net increase in cash and cash equivalents (200 ) 827 — — 627 Cash and cash equivalents at beginning of period 1,713 240 — — 1,953 Cash and cash equivalents at end of period $ 1,513 1,067 — — $ 2,580 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) | Dec. 17, 2010 |
Merger Sub | Ascent Capital | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |
Percentage of voting interests acquired | 100.00% |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||
Trade receivables, allowance for doubtful accounts | $ 3,043 | $ 2,762 | |
Amortization of intangible assets | $ 246,753 | 258,668 | $ 253,403 |
Accounting Standards Update 2016-09 | |||
Finite-Lived Intangible Assets [Line Items] | |||
Excess tax benefit, amount | 443 | ||
Net cash provided by operating activities | 318 | 416 | |
Net cash provided by financing activities | (416) | ||
Employee Stock Option | |||
Finite-Lived Intangible Assets [Line Items] | |||
Dividend rate | 0.00% | ||
Subscriber Accounts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Acquired finite-lived intangible assets, useful life | 15 years | ||
Amortization rate using declining balance method | 220.00% | ||
Amortization of intangible assets | $ 236,673 | 238,800 | 233,327 |
Dealer Networks and Other Intangible Assets | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets | $ 9,830 | $ 19,501 | $ 19,780 |
Finite-lived intangible asset, useful life | 5 years | ||
LiveWatch Trademark | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 10 years | ||
Security Networks LLC and Certain Affiliated Entities | Subscriber Accounts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Acquired finite-lived intangible assets, useful life | 14 years | ||
Amortization rate using declining balance method | 235.00% |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Roll Forward of Receivable Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance Beginning of Year | $ 2,762 | $ 2,120 | $ 1,937 |
Charged to Expense | 10,785 | 9,735 | 8,149 |
Write-Offs and Other | (10,504) | (9,093) | (7,966) |
Balance End of Year | $ 3,043 | $ 2,762 | $ 2,120 |
Summary of Significant Accoun43
Summary of Significant Accounting Policies - Property Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 15 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 7 years |
Computer systems and software (included in Machinery and Equipment in note 5, Property and Equipment) | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Computer systems and software (included in Machinery and Equipment in note 5, Property and Equipment) | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Summary of Significant Accoun44
Summary of Significant Accounting Policies - Expected Subscriber Fees (Details) - Subscriber Accounts $ in Thousands | Dec. 31, 2016USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
2,017 | $ 215,369 |
2,018 | 181,708 |
2,019 | 153,417 |
2,020 | 134,817 |
2,021 | $ 120,391 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | Feb. 23, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 563,549 | $ 563,549 | $ 527,502 | |
LiveWatch | ||||
Business Acquisition [Line Items] | ||||
Fair value of consideration | $ 61,550 | |||
Cash paid for acquisition | 3,988 | |||
Goodwill | 36,047 | |||
LiveWatch | Business Combination, Management Retention | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration arrangement | 5,400 | |||
LiveWatch | Business Combination, Performance Bonus | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration arrangement | $ 6,200 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 57,095 | $ 53,711 |
Accumulated depreciation | (28,825) | (27,057) |
Property and equipment, net: | 28,270 | 26,654 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,404 | 1,222 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 55,691 | $ 52,489 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 8,160 | $ 10,066 | $ 9,019 |
Goodwill - Schedule of Goodwill
Goodwill - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Roll Forward] | ||
Beginning of Period | $ 563,549 | $ 527,502 |
LiveWatch Acquisition | 36,047 | |
Period activity | 0 | |
Ending of Period | $ 563,549 | $ 563,549 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, Impairment Loss | $ 0 |
Other Accrued Liabilities - Sch
Other Accrued Liabilities - Schedule of other accrued liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Interest payable | $ 14,588 | $ 18,226 |
Income taxes payable | 2,947 | 2,603 |
Legal accrual | 271 | 145 |
LiveWatch acquisition retention bonus | 4,990 | 0 |
Other | 8,783 | 11,548 |
Total Other accrued liabilities | $ 31,579 | $ 32,522 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long Term Debt (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Sep. 30, 2016 | Feb. 29, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||||
Total debt on consolidated balance sheet | $ 1,698,778,000 | $ 1,744,647,000 | ||
Less current portion of long-term debt | (11,000,000) | (5,500,000) | ||
Long-term debt | 1,687,778,000 | 1,739,147,000 | ||
Convertible Debt | 9.125% Senior Notes due April 1, 2020 with an effective rate of 9.4% | ||||
Debt Instrument [Line Items] | ||||
Total debt on consolidated balance sheet | $ 578,078,000 | 576,241,000 | ||
Stated interest rate on debt | 9.125% | |||
Effective interest rate | 9.40% | |||
Senior Notes | Senior Notes 9.125 Percent Due 2020 | MONI | ||||
Debt Instrument [Line Items] | ||||
Total debt on consolidated balance sheet | $ 12,000,000 | 100,000,000 | ||
Stated interest rate on debt | 9.125% | |||
Effective interest rate | 12.50% | 9.868% | ||
Term Loan | Term Loan Due September 2022 | MONI | ||||
Debt Instrument [Line Items] | ||||
Total debt on consolidated balance sheet | $ 1,066,130,000 | |||
Effective interest rate | 7.20% | |||
Term Loan | Term Loan Due September 2022 | MONI | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Spread on variable debt | 5.50% | |||
Floor on variable debt | 1.00% | |||
Term Loan | Term Loan Due March, 2018 | MONI | ||||
Debt Instrument [Line Items] | ||||
Total debt on consolidated balance sheet | $ 0 | 394,938,000 | ||
Effective interest rate | 5.00% | |||
Term Loan | Term Loan Due March, 2018 | MONI | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Spread on variable debt | 3.25% | |||
Floor on variable debt | 1.00% | |||
Term Loan | Term Loan Due April 2022 | MONI | ||||
Debt Instrument [Line Items] | ||||
Total debt on consolidated balance sheet | $ 0 | 542,420,000 | ||
Effective interest rate | 5.10% | |||
Term Loan | Term Loan Due April 2022 | MONI | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Spread on variable debt | 3.50% | |||
Floor on variable debt | 1.00% | |||
Revolving Credit Facility | Revolving Credit Facility Due 2021 | MONI | ||||
Debt Instrument [Line Items] | ||||
Total debt on consolidated balance sheet | $ 42,570,000 | |||
Effective interest rate | 5.30% | |||
Spread on variable debt | 4.00% | |||
Borrowing capacity | $ 295,000,000 | $ 295,000,000 | ||
Revolving Credit Facility | Revolving Credit Facility Due 2021 | MONI | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Spread on variable debt | 4.00% | |||
Floor on variable debt | 1.00% | |||
Revolving Credit Facility | Revolving Credit Facility Due 2017 | MONI | ||||
Debt Instrument [Line Items] | ||||
Total debt on consolidated balance sheet | $ 0 | $ 131,048,000 | ||
Effective interest rate | 6.70% | |||
Borrowing capacity | $ 315,000,000 | |||
Revolving Credit Facility | Revolving Credit Facility Due 2017 | MONI | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Spread on variable debt | 3.75% | |||
Floor on variable debt | 1.00% |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | Sep. 30, 2016 | Feb. 29, 2016 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||||||
Proceeds from long-term debt | $ 1,280,700,000 | $ 778,000,000 | $ 169,000,000 | |||
Principal Owner | ||||||
Debt Instrument [Line Items] | ||||||
Notes payable, related parties, noncurrent, approved | $ 12,000,000 | |||||
Related party, approved principal amount contribution | $ 88,000,000 | |||||
Notes payable, related parties, noncurrent, approved stated interest rate | 12.50% | |||||
MONI | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit | 44,800,000 | |||||
Remaining borrowing on line of credit | $ 250,200,000 | |||||
MONI | LIBOR | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Unused capacity fee for line of credit | 0.50% | |||||
Ascent Capital | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from long-term debt | $ 1,280,700,000 | $ 778,000,000 | ||||
Senior Notes | Senior Notes 9.125 Percent Due 2020 | MONI | ||||||
Debt Instrument [Line Items] | ||||||
Principal | $ 585,000,000 | |||||
Stated interest rate on debt | 9.125% | |||||
Deferred financing costs, net of accumulated amortization | $ 6,922,000 | |||||
Effective interest rate | 9.868% | 12.50% | ||||
Promissory Note | 9.868% Promissory Note to Ascent Capital due October 1, 2020 | Ascent Capital | Security Networks Acquisition | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from long-term debt | $ 100,000,000 | |||||
Term Loan | Designated as Hedging Instrument | Interest Rate Swap | ||||||
Debt Instrument [Line Items] | ||||||
Effective weighted average interest rate on borrowings | 7.15% | |||||
Term Loan | Term Loan Due September 2022 | MONI | ||||||
Debt Instrument [Line Items] | ||||||
Principal | $ 1,100,000,000 | $ 1,100,000,000 | $ 1,097,250,000 | |||
Effective interest rate | 7.20% | |||||
Debt discount on purchase price, percentage | 1.50% | |||||
Line of credit facility, periodic payment | $ 2,750,000 | |||||
Term Loan | Term Loan Due September 2022 | MONI | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable debt | 5.50% | |||||
Floor on variable debt | 1.00% | |||||
Term Loan | Term Loan Due March, 2018 | MONI | ||||||
Debt Instrument [Line Items] | ||||||
Effective interest rate | 5.00% | |||||
Repayments of debt | 403,784,000 | |||||
Term Loan | Term Loan Due March, 2018 | MONI | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable debt | 3.25% | |||||
Floor on variable debt | 1.00% | |||||
Term Loan | Term Loan Due April 2022 | MONI | ||||||
Debt Instrument [Line Items] | ||||||
Effective interest rate | 5.10% | |||||
Repayments of debt | 543,125,000 | |||||
Term Loan | Term Loan Due April 2022 | MONI | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable debt | 3.50% | |||||
Floor on variable debt | 1.00% | |||||
Revolving Credit Facility | MONI | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, current borrowing capacity | 315,000,000 | $ 315,000,000 | ||||
Repayments of lines of credit | 138,900,000 | |||||
Revolving Credit Facility | Revolving Credit Facility Due 2021 | MONI | ||||||
Debt Instrument [Line Items] | ||||||
Effective interest rate | 5.30% | |||||
Maximum borrowing on line | $ 295,000,000 | $ 295,000,000 | $ 295,000,000 | |||
Basis spread on variable debt | 4.00% | |||||
Revolving Credit Facility | Revolving Credit Facility Due 2021 | MONI | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable debt | 4.00% | |||||
Floor on variable debt | 1.00% |
Long-Term Debt - Components of
Long-Term Debt - Components of Refinancing Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Total refinancing expense | $ 9,500 | $ 4,468 | $ 0 |
MONI | |||
Debt Instrument [Line Items] | |||
Accelerated amortization of deferred financing costs | 4,160 | ||
Accelerated amortization of debt discount | 3,416 | ||
Other refinancing costs | 1,924 | ||
Total refinancing expense | $ 9,500 |
Long-Term Debt - Schedule of 54
Long-Term Debt - Schedule of Long Term Debt Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
2,017 | $ 11,000 | |
2,018 | 11,000 | |
2,019 | 11,000 | |
2,020 | 608,000 | |
2,021 | 55,800 | |
Thereafter | 1,042,250 | |
Total principal payments | 1,739,050 | |
Less: | ||
Unamortized discounts, premium and deferred debt costs, net | 40,272 | |
Total debt on consolidated balance sheet | $ 1,698,778 | $ 1,744,647 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) | Dec. 31, 2016USD ($)interest_rate_swap | Dec. 31, 2015USD ($)interest_rate_swap |
Derivative [Line Items] | ||
Derivative amount not offset against collateral | $ 0 | $ 0 |
Cash flow hedge | Interest Rate Swap | ||
Derivative [Line Items] | ||
Interest rate cash flow hedge gain (loss) to be reclassified during next 12 months, net | 5,521,000 | |
Recurring | ||
Derivative [Line Items] | ||
Derivative asset | 8,521,000 | |
Derivative liability | 16,948,000 | $ 13,470,000 |
Recurring | Level 2 | ||
Derivative [Line Items] | ||
Derivative asset | $ 8,521,000 | |
Number of instruments held | interest_rate_swap | 7 | 7 |
Derivative liability | $ 16,948,000 | $ 13,470,000 |
Recurring | Level 2 | Interest Rate Swap | ||
Derivative [Line Items] | ||
Number of derivative instruments held | interest_rate_swap | 1 | |
Derivative asset | $ 8,521,000 | |
Derivative liability | $ 16,948,000 | $ 13,470,000 |
Derivatives - Summary of Outsta
Derivatives - Summary of Outstanding Swaps (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
1.884 % interest rate swaps | |
Derivative [Line Items] | |
Notional | $ 523,875,000 |
Fixed Rate Paid | 1.884% |
Variable interest rate base floor | 1.00% |
Variable interest rate base | 3 mo.USD-LIBOR-BBA |
1.384 % interest rate swaps | |
Derivative [Line Items] | |
Notional | $ 138,837,500 |
Fixed Rate Paid | 1.384% |
Variable interest rate base floor | 1.00% |
Variable interest rate base | 3 mo.USD-LIBOR-BBA |
1.959 % interest rate swaps | |
Derivative [Line Items] | |
Notional | $ 108,542,713 |
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 | |
Derivative [Line Items] | |
Notional | $ 108,542,713 |
Fixed Rate Paid | 1.85% |
Variable interest rate base floor | 1.00% |
Variable interest rate base | 3 mo.USD-LIBOR-BBA |
3.110 % interest rate swaps | |
Derivative [Line Items] | |
Notional | $ 191,475,002 |
Fixed Rate Paid | 3.11% |
Variable interest rate base floor | 1.00% |
Variable interest rate base | 3 mo.USD-LIBOR-BBA |
3.110% interest rate swaps | |
Derivative [Line Items] | |
Notional | $ 250,000,000 |
Fixed Rate Paid | 3.11% |
Variable interest rate base floor | 1.00% |
Variable interest rate base | 3 mo.USD-LIBOR-BBA |
2.504 % interest rate swaps | |
Derivative [Line Items] | |
Notional | $ 50,000,000 |
Fixed Rate Paid | 2.504% |
Variable interest rate base floor | 1.00% |
Variable interest rate base | 3 mo.USD-LIBOR-BBA |
1.833 % interest rate swaps | |
Derivative [Line Items] | |
Notional | $ 377,000,000 |
Fixed Rate Paid | 1.833% |
Variable interest rate base floor | 1.00% |
Variable interest rate base | 3 mo.USD-LIBOR-BBA |
Derivatives - Summary of Deriva
Derivatives - Summary of Derivatives Designated as Cash Flow Hedges (Details) - Interest Rate Swap - Cash flow hedge - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Impact of the Swap on the consolidated financial statements | |||
Effective portion of gain (loss) recognized in Accumulated other comprehensive income (loss) | $ (2,673) | $ (16,041) | $ (12,560) |
Effective portion of loss reclassified from Accumulated other comprehensive income (loss) into Net loss | (7,262) | (7,300) | (7,681) |
Ineffective portion of amount of gain (loss) recognized into Net loss on interest rate swaps | $ 423 | $ (119) | $ (46) |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measured On Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair value measurements | ||
Derivative financial instruments - assets | $ 8,521 | |
Derivative financial instruments - liabilities | (16,948) | $ (13,470) |
Total Derivative Assets (Liabilities) | (8,427) | (13,470) |
Level 1 | ||
Fair value measurements | ||
Derivative financial instruments - assets | 0 | |
Derivative financial instruments - liabilities | 0 | 0 |
Total Derivative Assets (Liabilities) | 0 | 0 |
Level 2 | ||
Fair value measurements | ||
Derivative financial instruments - assets | 8,521 | |
Derivative financial instruments - liabilities | (16,948) | (13,470) |
Total Derivative Assets (Liabilities) | (8,427) | (13,470) |
Level 3 | ||
Fair value measurements | ||
Derivative financial instruments - assets | 0 | |
Derivative financial instruments - liabilities | 0 | 0 |
Total Derivative Assets (Liabilities) | $ 0 | $ 0 |
Fair Value Measurements - Sch59
Fair Value Measurements - Schedule of Instruments Not Carried at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Long term debt, including current portion: | ||
Carrying value | $ 1,698,778 | $ 1,744,647 |
Fair value | $ 1,716,385 | $ 1,603,375 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 3,008 | 2,304 | 3,526 |
Total current tax expense | 3,008 | 2,304 | 3,526 |
Deferred: | |||
Federal | 4,000 | 3,895 | 3,292 |
State | 140 | 91 | (3,218) |
Total deferred tax expense | 4,140 | 3,986 | 74 |
Total income tax expense | $ 7,148 | $ 6,290 | $ 3,600 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Tax Credit Carryforward [Line Items] | |||
Effective income tax rate reconciliation, at federal statutory income tax rate, percent | 35.00% | ||
Valuation allowance, deferred tax asset, increase (decrease), amount | $ 30,574 | ||
Change in valuation allowance affecting tax expense | 26,892 | $ 24,149 | $ 9,322 |
Increase (decrease) in deferred tax assets valuation allowance related to changes in derivative fair values | (1,711) | ||
Increase (decrease) in other adjustments in deferred tax assets valuation allowance | (5,393) | ||
Operating loss carryforwards, limitation as per IRC | 129,521 | ||
Alternative minimum tax credit carryforwards | 426 | ||
Accrued interest and penalties related to uncertain tax positions | 74 | ||
Expected change in uncertain tax position | 0 | ||
Internal Revenue Service (IRS) | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 560,585 | ||
State and Local Jurisdiction | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 175,611 | ||
Tax credit carryforward | $ 983 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Computed expected tax benefit | $ (24,206) | $ (23,155) | $ (9,141) |
State and local income taxes, net of federal income taxes | 2,047 | 1,556 | 200 |
Change in valuation allowance affecting tax expense | 26,892 | 24,149 | 9,322 |
Expense (income) not resulting in tax impact | (1,585) | (155) | (73) |
Amortization of indefinite-lived assets | 4,000 | 3,890 | 3,292 |
Other, net | 0 | 5 | 0 |
Total income tax expense | $ 7,148 | $ 6,290 | $ 3,600 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Tax Assets, Net [Abstract] | ||
Accrued receivable reserves | $ 1,142 | $ 1,717 |
Accrued liabilities | 9,197 | 8,626 |
Net operating loss carryforwards | 204,478 | 166,183 |
Derivative financial instruments | 3,283 | 4,994 |
Business credits | 1,409 | 1,438 |
Other deferred tax assets | 3,746 | 4,508 |
Valuation allowance | (96,003) | (65,429) |
Total deferred tax assets | 127,252 | 122,037 |
Deferred Tax Liabilities, Net [Abstract] | ||
Intangible assets | (141,100) | (133,248) |
Property, plant and equipment | (3,482) | (1,980) |
Total deferred tax liabilities | (144,582) | (135,228) |
Net deferred tax liabilities | $ (17,330) | $ (13,191) |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefit Roll-Forward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
As of the beginning of the year | $ 193 | $ 191 | $ 247 |
Increases for tax positions of current years | 15 | 2 | 4 |
Reductions for tax positions of prior years | 0 | 0 | (60) |
As of the end of the year | $ 208 | $ 193 | $ 191 |
Stock-based and Long-Term Com65
Stock-based and Long-Term Compensation - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted (in shares) | 0 | 0 | 0 |
Exercisable options, intrinsic value | $ 0 | ||
Options outstanding, weighted average remaining contractual term | 1 year 3 months 4 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 0 | ||
Options exercisable, weighted average remaining contractual term | 1 year 2 months 26 days | ||
Employee Stock Option | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award expiration period | 5 years | ||
Award vesting period | 2 years | ||
Employee Stock Option | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award expiration period | 7 years | ||
Award vesting period | 4 years | ||
Restricted Stock | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 2 years | ||
Restricted Stock | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 5 years | ||
Restricted Stock and Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation cost not yet recognized | $ 4,158,000 | ||
Compensation cost not yet recognized, period for recognition | 3 years 3 months |
Stock-based and Long-Term Com66
Stock-based and Long-Term Compensation - Schedule of Option Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Series A common stock | |||
Stock options granted (in shares) | 0 | 0 | 0 |
Common Class A | |||
Series A common stock | |||
Beginning of Period (in shares) | 202,142 | ||
Stock options granted (in shares) | 0 | ||
Exercised (in shares) | 0 | ||
Forfeited (in shares) | (36,437) | ||
Ending of Period (in shares) | 165,705 | 202,142 | |
Exercisable, Ending of Period (in shares) | 163,458 | ||
WAEP | |||
Beginning of Period (in dollars per share) | $ 48.88 | ||
Granted (in dollars per share) | 0 | ||
Exercised (in dollars per share) | 0 | ||
Forfeited (in dollars per share) | 49.66 | ||
Ending of Period (in dollars per share) | 48.71 | $ 48.88 | |
Exercisable, Ending of Period (in dollars per share) | $ 48.54 |
Stock-based and Long-Term Com67
Stock-based and Long-Term Compensation - Schedule of Unvested Restricted Stock Awards and Restricted Stock Units (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Restricted Stock | Common Class A | |
Series A Restricted Stock Awards or Units | |
Beginning of Period (in shares) | shares | 98,691 |
Granted (in shares) | shares | 46,000 |
Vested (in shares) | shares | (19,236) |
Canceled (in shares) | shares | (8,469) |
Ending in Period (in shares) | shares | 116,986 |
WAFV | |
Beginning of Period (in dollars per share) | $ / shares | $ 34.38 |
Granted (in dollars per share) | $ / shares | 13.53 |
Vested (in dollars per share) | $ / shares | 22.24 |
Canceled (in dollars per share) | $ / shares | 54.77 |
Ending of Period (in dollars per share) | $ / shares | 26.70 |
Restricted Stock Units (RSUs) | |
WAFV | |
Beginning of Period (in dollars per share) | $ / shares | 42.34 |
Granted (in dollars per share) | $ / shares | 15.17 |
Vested (in dollars per share) | $ / shares | 40.01 |
Canceled (in dollars per share) | $ / shares | 0 |
Ending of Period (in dollars per share) | $ / shares | $ 21.11 |
Restricted Stock Units (RSUs) | Common Class A | |
Series A Restricted Stock Awards or Units | |
Beginning of Period (in shares) | shares | 50,000 |
Granted (in shares) | shares | 148,133 |
Vested (in shares) | shares | (9,625) |
Canceled (in shares) | shares | 0 |
Ending in Period (in shares) | shares | 188,508 |
Stockholder's Equity - Narrativ
Stockholder's Equity - Narrative (Details) - shares | 72 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 17, 2010 | |
Class of Stock [Line Items] | |||
Common stock, issued shares (in shares) | 1,000 | 1,000 | |
Common stock, outstanding shares (in shares) | 1,000 | 1,000 | |
Changes to the Common stock issued and outstanding since MONI acquisition (in shares) | 0 | ||
Ascent Capital | |||
Class of Stock [Line Items] | |||
Common stock, issued shares (in shares) | 1,000 | ||
Common stock, outstanding shares (in shares) | 1,000 |
Stockholder's Equity - Roll For
Stockholder's Equity - Roll Forward Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | $ 201,065,000 | $ 257,566,000 | $ 292,660,000 |
Ending Balance | 214,945,000 | 201,065,000 | 257,566,000 |
Income tax on unrealized loss on derivatives arising during period | 0 | 0 | 0 |
Unrealized Gains and Losses on Derivative Instruments, net | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | (13,546,000) | (4,805,000) | 74,000 |
Gain (loss) through Accumulated other comprehensive income | (12,560,000) | ||
Unrealized loss on derivatives recognized through Accumulated other comprehensive income (loss) | (2,673,000) | (16,041,000) | |
Reclassification into net income | 7,262,000 | 7,300,000 | 7,681,000 |
Ending Balance | (8,957,000) | (13,546,000) | (4,805,000) |
Accumulated Other Comprehensive Income (Loss) | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning Balance | (13,546,000) | (4,805,000) | 74,000 |
Gain (loss) through Accumulated other comprehensive income | (12,560,000) | ||
Unrealized loss on derivatives recognized through Accumulated other comprehensive income (loss) | (2,673,000) | (16,041,000) | |
Reclassification into net income | 7,262,000 | 7,300,000 | 7,681,000 |
Ending Balance | $ (8,957,000) | $ (13,546,000) | $ (4,805,000) |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |||
Total 401(k) plan expense | $ 110 | $ 127 | $ 71 |
Commitments and Contingencies -
Commitments and Contingencies - Summary of Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2,017 | $ 3,748 |
2,018 | 3,749 |
2,019 | 2,941 |
2,020 | 2,832 |
2,021 | 2,814 |
Thereafter | 25,466 |
Minimum lease commitments | $ 41,550 |
Commitments and Contingencies72
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense | $ 3,768 | $ 3,383 | $ 3,230 |
Reportable Business Segments (D
Reportable Business Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | $ 140,683 | $ 142,765 | $ 143,656 | $ 143,268 | $ 141,551 | $ 141,846 | $ 141,543 | $ 138,416 | $ 570,372 | $ 563,356 | $ 539,449 |
Depreciation and amortization | 254,913 | 268,734 | |||||||||
Loss before income taxes | (69,159) | (66,158) | (26,117) | ||||||||
Subscriber accounts, net of amortization | 1,386,760 | 1,423,538 | 1,386,760 | 1,423,538 | |||||||
Goodwill | 563,549 | 563,549 | 563,549 | 563,549 | $ 527,502 | ||||||
Total assets | 2,033,717 | 2,070,267 | 2,033,717 | 2,070,267 | |||||||
Operating Segments | MONI | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | 547,458 | 548,622 | |||||||||
Depreciation and amortization | 250,393 | 264,870 | |||||||||
Loss before income taxes | (46,728) | (47,793) | |||||||||
Subscriber accounts, net of amortization | 1,364,804 | 1,400,515 | 1,364,804 | 1,400,515 | |||||||
Goodwill | 527,502 | 527,502 | 527,502 | 527,502 | |||||||
Total assets | 2,062,838 | 2,033,180 | 2,062,838 | 2,033,180 | |||||||
Operating Segments | LiveWatch | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | 22,914 | 14,734 | |||||||||
Depreciation and amortization | 4,520 | 3,864 | |||||||||
Loss before income taxes | (22,431) | (18,365) | |||||||||
Subscriber accounts, net of amortization | 21,956 | 23,023 | 21,956 | 23,023 | |||||||
Goodwill | 36,047 | 36,047 | 36,047 | 36,047 | |||||||
Total assets | 63,916 | 63,267 | 63,916 | 63,267 | |||||||
Eliminations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Subscriber accounts, net of amortization | 0 | 0 | 0 | 0 | |||||||
Goodwill | 0 | 0 | 0 | 0 | |||||||
Total assets | $ (93,037) | $ (26,180) | $ (93,037) | $ (26,180) |
Reportable Business Segments -
Reportable Business Segments - Narrative (Details) - segment | Jan. 31, 2015 | Dec. 31, 2016 |
Segment Reporting [Abstract] | ||
Number of reportable segments | 2 | |
Number of operating segments | 1 |
Quarterly Financial Informati75
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net Revenue | $ 140,683 | $ 142,765 | $ 143,656 | $ 143,268 | $ 141,551 | $ 141,846 | $ 141,543 | $ 138,416 | $ 570,372 | $ 563,356 | $ 539,449 |
Operating income | 21,101 | 18,486 | 15,258 | 12,804 | 5,655 | 12,420 | 21,783 | 23,867 | $ 67,649 | $ 63,725 | $ 93,490 |
Net loss | $ (16,586) | $ (23,002) | $ (16,509) | $ (20,210) | $ (26,713) | $ (21,414) | $ (15,987) | $ (8,334) |
Condensed Consolidating Balance
Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets: | ||||
Cash and cash equivalents | $ 3,177 | $ 2,580 | $ 1,953 | $ 4,355 |
Restricted cash | 0 | 55 | ||
Trade receivables, net | 13,869 | 13,622 | ||
Prepaid and other current assets | 9,360 | 9,890 | ||
Total current assets | 26,406 | 26,147 | ||
Investment in subsidiaries | 0 | 0 | ||
Property and equipment, net | 28,270 | 26,654 | ||
Subscriber accounts, net of amortization | 1,386,760 | 1,423,538 | ||
Dealer network and other intangible assets, net | 16,824 | 26,654 | ||
Goodwill | 563,549 | 563,549 | 527,502 | |
Other assets, net | 11,908 | 3,725 | ||
Total assets | 2,033,717 | 2,070,267 | ||
Current liabilities: | ||||
Accounts payable | 11,461 | 8,621 | ||
Accrued payroll and related liabilities | 4,068 | 3,479 | ||
Other accrued liabilities | 31,579 | 32,522 | ||
Deferred revenue | 15,147 | 16,207 | ||
Holdback liability | 13,916 | 16,386 | ||
Current portion of long-term debt | 11,000 | 5,500 | ||
Total current liabilities | 87,171 | 82,715 | ||
Non-current liabilities: | ||||
Long-term debt | 1,687,778 | 1,739,147 | ||
Long-term holdback liability | 2,645 | 3,786 | ||
Derivative financial instruments | 16,948 | 13,470 | ||
Deferred income tax liability, net | 17,330 | 13,191 | ||
Other liabilities | 6,900 | 16,893 | ||
Total liabilities | 1,818,772 | 1,869,202 | ||
Stockholder's equity: | ||||
Total stockholder's equity | 214,945 | 201,065 | 257,566 | $ 292,660 |
Total liabilities and stockholder's equity | 2,033,717 | 2,070,267 | ||
Eliminations | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | 0 | |
Restricted cash | 0 | 0 | ||
Trade receivables, net | 0 | 0 | ||
Prepaid and other current assets | (44,062) | (22,459) | ||
Total current assets | (44,062) | (22,459) | ||
Investment in subsidiaries | (22,533) | (43,920) | ||
Property and equipment, net | 0 | 0 | ||
Subscriber accounts, net of amortization | 0 | 0 | ||
Dealer network and other intangible assets, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other assets, net | 0 | 0 | ||
Total assets | (66,595) | (66,379) | ||
Current liabilities: | ||||
Accounts payable | 0 | 0 | ||
Accrued payroll and related liabilities | 0 | 0 | ||
Other accrued liabilities | (44,062) | (22,459) | ||
Deferred revenue | 0 | 0 | ||
Holdback liability | 0 | 0 | ||
Current portion of long-term debt | 0 | 0 | ||
Total current liabilities | (44,062) | (22,459) | ||
Non-current liabilities: | ||||
Long-term debt | 0 | 0 | ||
Long-term holdback liability | 0 | 0 | ||
Derivative financial instruments | 0 | 0 | ||
Deferred income tax liability, net | 0 | 0 | ||
Other liabilities | 0 | 0 | ||
Total liabilities | (44,062) | (22,459) | ||
Stockholder's equity: | ||||
Total stockholder's equity | (22,533) | (43,920) | ||
Total liabilities and stockholder's equity | (66,595) | (66,379) | ||
Parent Issuer | ||||
Current assets: | ||||
Cash and cash equivalents | 1,739 | 1,513 | 1,713 | |
Restricted cash | 0 | 55 | ||
Trade receivables, net | 13,265 | 13,224 | ||
Prepaid and other current assets | 51,251 | 30,542 | ||
Total current assets | 66,255 | 45,334 | ||
Investment in subsidiaries | 22,533 | 43,920 | ||
Property and equipment, net | 26,652 | 25,842 | ||
Subscriber accounts, net of amortization | 1,349,285 | 1,390,493 | ||
Dealer network and other intangible assets, net | 15,762 | 25,462 | ||
Goodwill | 527,191 | 527,191 | ||
Other assets, net | 11,889 | 3,718 | ||
Total assets | 2,019,567 | 2,061,960 | ||
Current liabilities: | ||||
Accounts payable | 9,919 | 7,383 | ||
Accrued payroll and related liabilities | 3,731 | 2,894 | ||
Other accrued liabilities | 25,951 | 32,224 | ||
Deferred revenue | 13,807 | 15,151 | ||
Holdback liability | 13,434 | 15,986 | ||
Current portion of long-term debt | 11,000 | 5,500 | ||
Total current liabilities | 77,842 | 79,138 | ||
Non-current liabilities: | ||||
Long-term debt | 1,687,778 | 1,739,147 | ||
Long-term holdback liability | 2,645 | 3,786 | ||
Derivative financial instruments | 16,948 | 13,470 | ||
Deferred income tax liability, net | 15,649 | 12,391 | ||
Other liabilities | 3,760 | 12,963 | ||
Total liabilities | 1,804,622 | 1,860,895 | ||
Stockholder's equity: | ||||
Total stockholder's equity | 214,945 | 201,065 | ||
Total liabilities and stockholder's equity | 2,019,567 | 2,061,960 | ||
Subsidiary Guarantors | ||||
Current assets: | ||||
Cash and cash equivalents | 1,438 | 1,067 | 240 | |
Restricted cash | 0 | 0 | ||
Trade receivables, net | 604 | 398 | ||
Prepaid and other current assets | 2,171 | 1,807 | ||
Total current assets | 4,213 | 3,272 | ||
Investment in subsidiaries | 0 | 0 | ||
Property and equipment, net | 1,618 | 812 | ||
Subscriber accounts, net of amortization | 37,475 | 33,045 | ||
Dealer network and other intangible assets, net | 1,062 | 1,192 | ||
Goodwill | 36,358 | 36,358 | ||
Other assets, net | 19 | 7 | ||
Total assets | 80,745 | 74,686 | ||
Current liabilities: | ||||
Accounts payable | 1,542 | 1,238 | ||
Accrued payroll and related liabilities | 337 | 585 | ||
Other accrued liabilities | 49,690 | 22,757 | ||
Deferred revenue | 1,340 | 1,056 | ||
Holdback liability | 482 | 400 | ||
Current portion of long-term debt | 0 | 0 | ||
Total current liabilities | 53,391 | 26,036 | ||
Non-current liabilities: | ||||
Long-term debt | 0 | 0 | ||
Long-term holdback liability | 0 | 0 | ||
Derivative financial instruments | 0 | 0 | ||
Deferred income tax liability, net | 1,681 | 800 | ||
Other liabilities | 3,140 | 3,930 | ||
Total liabilities | 58,212 | 30,766 | ||
Stockholder's equity: | ||||
Total stockholder's equity | 22,533 | 43,920 | ||
Total liabilities and stockholder's equity | 80,745 | 74,686 | ||
Non-Guarantors | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | $ 0 | |
Restricted cash | 0 | 0 | ||
Trade receivables, net | 0 | 0 | ||
Prepaid and other current assets | 0 | 0 | ||
Total current assets | 0 | 0 | ||
Investment in subsidiaries | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Subscriber accounts, net of amortization | 0 | 0 | ||
Dealer network and other intangible assets, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other assets, net | 0 | 0 | ||
Total assets | 0 | 0 | ||
Current liabilities: | ||||
Accounts payable | 0 | 0 | ||
Accrued payroll and related liabilities | 0 | 0 | ||
Other accrued liabilities | 0 | 0 | ||
Deferred revenue | 0 | 0 | ||
Holdback liability | 0 | 0 | ||
Current portion of long-term debt | 0 | 0 | ||
Total current liabilities | 0 | 0 | ||
Non-current liabilities: | ||||
Long-term debt | 0 | 0 | ||
Long-term holdback liability | 0 | 0 | ||
Derivative financial instruments | 0 | 0 | ||
Deferred income tax liability, net | 0 | 0 | ||
Other liabilities | 0 | 0 | ||
Total liabilities | 0 | 0 | ||
Stockholder's equity: | ||||
Total stockholder's equity | 0 | 0 | ||
Total liabilities and stockholder's equity | $ 0 | $ 0 |
Consolidating Statement of Oper
Consolidating Statement of Operations and Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Condensed Income Statements, Captions [Line Items] | |||||||||||
Net revenue | $ 140,683 | $ 142,765 | $ 143,656 | $ 143,268 | $ 141,551 | $ 141,846 | $ 141,543 | $ 138,416 | $ 570,372 | $ 563,356 | $ 539,449 |
Operating expenses: | |||||||||||
Cost of services | 115,236 | 110,246 | 93,600 | ||||||||
Selling, general, and administrative, including stock-based compensation | 114,152 | 106,287 | 87,943 | ||||||||
Radio conversion costs | 18,422 | 14,369 | 1,113 | ||||||||
Amortization of subscriber accounts, dealer network and other intangible assets | 246,753 | 258,668 | 253,403 | ||||||||
Depreciation | 8,160 | 10,066 | 9,019 | ||||||||
Gain on disposal of operating assets, net | 0 | (5) | (71) | ||||||||
Total operating expenses | 502,723 | 499,631 | 445,959 | ||||||||
Operating income (loss) | $ 21,101 | $ 18,486 | $ 15,258 | $ 12,804 | $ 5,655 | $ 12,420 | $ 21,783 | $ 23,867 | 67,649 | 63,725 | 93,490 |
Other expense: | |||||||||||
Equity in loss of subsidiaries | 0 | 0 | |||||||||
Interest expense | 127,308 | 125,415 | 119,607 | ||||||||
Refinancing expense | 9,500 | 4,468 | 0 | ||||||||
Total other expense | 136,808 | 129,883 | 119,607 | ||||||||
Loss before income taxes | (69,159) | (66,158) | (26,117) | ||||||||
Income tax expense | 7,148 | 6,290 | 3,600 | ||||||||
Net loss | (76,307) | (72,448) | (29,717) | ||||||||
Other comprehensive loss: | |||||||||||
Unrealized gain (loss) on derivative contracts, net | 4,589 | (8,741) | (4,879) | ||||||||
Comprehensive loss | (71,718) | (81,189) | $ (34,596) | ||||||||
Eliminations | |||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||
Net revenue | 0 | 0 | |||||||||
Operating expenses: | |||||||||||
Cost of services | 0 | 0 | |||||||||
Selling, general, and administrative, including stock-based compensation | 0 | 0 | |||||||||
Radio conversion costs | 0 | 0 | |||||||||
Amortization of subscriber accounts, dealer network and other intangible assets | 0 | 0 | |||||||||
Depreciation | 0 | 0 | |||||||||
Gain on disposal of operating assets, net | 0 | 0 | |||||||||
Total operating expenses | 0 | 0 | |||||||||
Operating income (loss) | 0 | 0 | |||||||||
Other expense: | |||||||||||
Equity in loss of subsidiaries | (21,387) | (18,689) | |||||||||
Interest expense | 0 | 0 | |||||||||
Refinancing expense | 0 | 0 | |||||||||
Total other expense | (21,387) | (18,689) | |||||||||
Loss before income taxes | 21,387 | 18,689 | |||||||||
Income tax expense | 0 | 0 | |||||||||
Net loss | 21,387 | 18,689 | |||||||||
Other comprehensive loss: | |||||||||||
Unrealized gain (loss) on derivative contracts, net | 0 | 0 | |||||||||
Comprehensive loss | 21,387 | 18,689 | |||||||||
Parent Issuer | |||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||
Net revenue | 543,181 | 546,597 | |||||||||
Operating expenses: | |||||||||||
Cost of services | 101,940 | 100,233 | |||||||||
Selling, general, and administrative, including stock-based compensation | 86,670 | 86,683 | |||||||||
Radio conversion costs | 18,204 | 14,369 | |||||||||
Amortization of subscriber accounts, dealer network and other intangible assets | 240,568 | 253,773 | |||||||||
Depreciation | 7,784 | 9,960 | |||||||||
Gain on disposal of operating assets, net | 0 | (5) | |||||||||
Total operating expenses | 455,166 | 465,013 | |||||||||
Operating income (loss) | 88,015 | 81,584 | |||||||||
Other expense: | |||||||||||
Equity in loss of subsidiaries | 21,387 | 18,689 | |||||||||
Interest expense | 127,290 | 125,394 | |||||||||
Refinancing expense | 9,500 | 4,468 | |||||||||
Total other expense | 158,177 | 148,551 | |||||||||
Loss before income taxes | (70,162) | (66,967) | |||||||||
Income tax expense | 6,145 | 5,481 | |||||||||
Net loss | (76,307) | (72,448) | |||||||||
Other comprehensive loss: | |||||||||||
Unrealized gain (loss) on derivative contracts, net | 4,589 | (8,741) | |||||||||
Comprehensive loss | (71,718) | (81,189) | |||||||||
Subsidiary Guarantors | |||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||
Net revenue | 27,191 | 16,759 | |||||||||
Operating expenses: | |||||||||||
Cost of services | 13,296 | 10,013 | |||||||||
Selling, general, and administrative, including stock-based compensation | 27,482 | 19,604 | |||||||||
Radio conversion costs | 218 | 0 | |||||||||
Amortization of subscriber accounts, dealer network and other intangible assets | 6,185 | 4,895 | |||||||||
Depreciation | 376 | 106 | |||||||||
Gain on disposal of operating assets, net | 0 | 0 | |||||||||
Total operating expenses | 47,557 | 34,618 | |||||||||
Operating income (loss) | (20,366) | (17,859) | |||||||||
Other expense: | |||||||||||
Equity in loss of subsidiaries | 0 | 0 | |||||||||
Interest expense | 18 | 21 | |||||||||
Refinancing expense | 0 | 0 | |||||||||
Total other expense | 18 | 21 | |||||||||
Loss before income taxes | (20,384) | (17,880) | |||||||||
Income tax expense | 1,003 | 809 | |||||||||
Net loss | (21,387) | (18,689) | |||||||||
Other comprehensive loss: | |||||||||||
Unrealized gain (loss) on derivative contracts, net | 0 | 0 | |||||||||
Comprehensive loss | (21,387) | (18,689) | |||||||||
Non-Guarantors | |||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||
Net revenue | 0 | 0 | |||||||||
Operating expenses: | |||||||||||
Cost of services | 0 | 0 | |||||||||
Selling, general, and administrative, including stock-based compensation | 0 | 0 | |||||||||
Radio conversion costs | 0 | 0 | |||||||||
Amortization of subscriber accounts, dealer network and other intangible assets | 0 | 0 | |||||||||
Depreciation | 0 | 0 | |||||||||
Gain on disposal of operating assets, net | 0 | 0 | |||||||||
Total operating expenses | 0 | 0 | |||||||||
Operating income (loss) | 0 | 0 | |||||||||
Other expense: | |||||||||||
Equity in loss 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 | |||||||||
Other comprehensive loss: | |||||||||||
Unrealized gain (loss) on derivative contracts, net | 0 | 0 | |||||||||
Comprehensive loss | $ 0 | $ 0 |
Consolidating Statements of Cas
Consolidating Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities: | |||
Net cash provided by operating activities | $ 190,527 | $ 209,162 | $ 234,282 |
Investing activities: | |||
Capital expenditures | (9,178) | (12,422) | (7,769) |
Cost of subscriber accounts acquired | (201,381) | (266,558) | (268,160) |
Cash paid for acquisition, net of cash acquired | 0 | (56,778) | 0 |
Increase in restricted cash | 55 | (37) | 22 |
Proceeds from sale of assets | 0 | 5 | 241 |
Net cash used in investing activities | (210,504) | (335,790) | (276,102) |
Financing activities: | |||
Proceeds from long-term debt | 1,280,700 | 778,000 | 169,000 |
Payments on long-term debt | (1,238,059) | (666,640) | (127,166) |
Refinance costs | (16,946) | (6,477) | 0 |
Value of shares withheld for share-based compensation | (121) | (318) | (416) |
Dividend to Ascent Capital | (5,000) | 0 | (2,000) |
Contributions from Ascent Capital | 0 | 22,690 | 0 |
Net cash provided by financing activities | 20,574 | 127,255 | 39,418 |
Net increase (decrease) in cash and cash equivalents | 597 | 627 | (2,402) |
Cash and cash equivalents at beginning of period | 2,580 | 1,953 | 4,355 |
Cash and cash equivalents at end of period | 3,177 | 2,580 | 1,953 |
Eliminations | |||
Operating activities: | |||
Net cash provided by operating activities | 0 | 0 | |
Investing activities: | |||
Capital expenditures | 0 | 0 | |
Cost of subscriber accounts acquired | 0 | 0 | |
Cash paid for acquisition, net of cash acquired | 0 | ||
Increase in restricted cash | 0 | 0 | |
Proceeds from sale of assets | 0 | ||
Net cash used in investing activities | 0 | 0 | |
Financing activities: | |||
Proceeds from long-term debt | 0 | 0 | |
Payments on long-term debt | 0 | 0 | |
Value of shares withheld for share-based compensation | 0 | 0 | |
Dividend to Ascent Capital | 0 | ||
Net cash provided by financing activities | 0 | 0 | |
Net increase (decrease) in cash and cash equivalents | 0 | 0 | |
Cash and cash equivalents at beginning of period | 0 | 0 | |
Cash and cash equivalents at end of period | 0 | 0 | 0 |
Parent Issuer | |||
Operating activities: | |||
Net cash provided by operating activities | 181,384 | 201,477 | |
Investing activities: | |||
Capital expenditures | (7,997) | (11,866) | |
Cost of subscriber accounts acquired | (193,790) | (260,256) | |
Cash paid for acquisition, net of cash acquired | (56,778) | ||
Increase in restricted cash | 55 | (37) | |
Proceeds from sale of assets | 5 | ||
Net cash used in investing activities | (201,732) | (328,932) | |
Financing activities: | |||
Proceeds from long-term debt | 1,280,700 | 778,000 | |
Payments on long-term debt | (1,238,059) | (666,640) | |
Refinance costs | (16,946) | (6,477) | |
Value of shares withheld for share-based compensation | (121) | (318) | |
Dividend to Ascent Capital | (5,000) | ||
Contributions from Ascent Capital | 22,690 | ||
Net cash provided by financing activities | 20,574 | 127,255 | |
Net increase (decrease) in cash and cash equivalents | 226 | (200) | |
Cash and cash equivalents at beginning of period | 1,513 | 1,713 | |
Cash and cash equivalents at end of period | 1,739 | 1,513 | 1,713 |
Subsidiary Guarantors | |||
Operating activities: | |||
Net cash provided by operating activities | 9,143 | 7,685 | |
Investing activities: | |||
Capital expenditures | (1,181) | (556) | |
Cost of subscriber accounts acquired | (7,591) | (6,302) | |
Cash paid for acquisition, net of cash acquired | 0 | ||
Increase in restricted cash | 0 | 0 | |
Proceeds from sale of assets | 0 | ||
Net cash used in investing activities | (8,772) | (6,858) | |
Financing activities: | |||
Proceeds from long-term debt | 0 | 0 | |
Payments on long-term debt | 0 | 0 | |
Value of shares withheld for share-based compensation | 0 | 0 | |
Dividend to Ascent Capital | 0 | ||
Net cash provided by financing activities | 0 | 0 | |
Net increase (decrease) in cash and cash equivalents | 371 | 827 | |
Cash and cash equivalents at beginning of period | 1,067 | 240 | |
Cash and cash equivalents at end of period | 1,438 | 1,067 | 240 |
Non-Guarantors | |||
Operating activities: | |||
Net cash provided by operating activities | 0 | 0 | |
Investing activities: | |||
Capital expenditures | 0 | 0 | |
Cost of subscriber accounts acquired | 0 | 0 | |
Cash paid for acquisition, net of cash acquired | 0 | ||
Increase in restricted cash | 0 | 0 | |
Proceeds from sale of assets | 0 | ||
Net cash used in investing activities | 0 | 0 | |
Financing activities: | |||
Proceeds from long-term debt | 0 | 0 | |
Payments on long-term debt | 0 | 0 | |
Value of shares withheld for share-based compensation | 0 | 0 | |
Dividend to Ascent Capital | 0 | ||
Net cash provided by financing activities | 0 | 0 | |
Net increase (decrease) in cash and cash equivalents | 0 | 0 | |
Cash and cash equivalents at beginning of period | 0 | 0 | |
Cash and cash equivalents at end of period | $ 0 | $ 0 | $ 0 |