Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 01, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | ck0001584423 | |
Entity Registrant Name | APX Group Holdings, Inc. | |
Entity Central Index Key | 1,584,423 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 100 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 112,966 | $ 3,872 |
Accounts and notes receivable, net | 51,996 | 40,721 |
Inventories | 73,086 | 115,222 |
Prepaid expenses and other current assets | 17,475 | 16,150 |
Total current assets | 255,523 | 175,965 |
Property, plant and equipment, net | 75,882 | 78,081 |
Capitalized contract costs, net | 1,163,480 | 0 |
Subscriber acquisition costs, net | 0 | 1,308,558 |
Deferred financing costs, net | 2,318 | 3,099 |
Intangible assets, net | 278,494 | 377,451 |
Goodwill | 836,290 | 836,970 |
Long-term notes receivables and other assets, net | 122,766 | 88,723 |
Total assets | 2,734,753 | 2,868,847 |
Current Liabilities: | ||
Accounts payable | 71,364 | 107,347 |
Accrued payroll and commissions | 118,913 | 57,752 |
Accrued expenses and other current liabilities | 155,818 | 74,321 |
Deferred revenue | 184,226 | 88,337 |
Current portion of capital lease obligations | 8,511 | 10,614 |
Total current liabilities | 538,832 | 338,371 |
Notes payable, net | 2,979,268 | 2,760,297 |
Notes payable, net - related party | 58,905 | 0 |
Revolving credit facility | 0 | 60,000 |
Capital lease obligations, net of current portion | 7,325 | 11,089 |
Deferred revenue, net of current portion | 328,168 | 264,555 |
Other long-term obligations | 95,553 | 79,020 |
Deferred income tax liabilities | 8,816 | 9,041 |
Total liabilities | 4,016,867 | 3,522,373 |
Commitments and contingencies (See Note 11) | ||
Stockholders’ deficit: | ||
Common stock, $0.01 par value, 100 shares authorized; 100 shares issued and outstanding | 0 | 0 |
Additional paid-in capital | 736,328 | 732,346 |
Accumulated deficit | (1,991,153) | (1,358,571) |
Accumulated other comprehensive loss | (27,289) | (27,301) |
Total stockholders’ deficit | (1,282,114) | (653,526) |
Total liabilities and stockholders’ deficit | $ 2,734,753 | $ 2,868,847 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 100 | 100 |
Common stock, issued (in shares) | 100 | 100 |
Common stock, outstanding (in shares) | 100 | 100 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues: | ||||
Revenues | $ 272,335 | $ 228,658 | $ 773,899 | $ 646,137 |
Costs and expenses: | ||||
Operating expenses (exclusive of depreciation and amortization shown separately below) | 92,703 | 81,108 | 265,784 | 229,776 |
Selling expenses (exclusive of amortization of deferred commissions of $40,030; $21,769; $121,609; and $61,193, respectively, which are included in depreciation and amortization shown separately below) | 41,970 | 53,821 | 166,872 | 134,894 |
General and administrative expenses | 50,542 | 49,416 | 150,715 | 127,179 |
Depreciation and amortization | 130,636 | 84,460 | 381,767 | 241,425 |
Restructuring expenses | 542 | 0 | 4,683 | 0 |
Total costs and expenses | 316,393 | 268,805 | 969,821 | 733,274 |
Loss from operations | (44,058) | (40,147) | (195,922) | (87,137) |
Other expenses (income): | ||||
Interest expense | 61,881 | 58,005 | 180,998 | 166,644 |
Interest income | 0 | 0 | (31) | (104) |
Other loss (income), net | 14,510 | 8,611 | (25,999) | 18,808 |
Loss before income taxes | (120,449) | (106,763) | (350,890) | (272,485) |
Income tax (benefit) expense | (223) | 1,157 | (1,562) | 2,308 |
Net loss | (120,226) | (107,920) | (349,328) | (274,793) |
Recurring and other revenue | ||||
Revenues: | ||||
Revenues | 272,335 | 219,111 | 773,899 | 618,752 |
Service and other sales revenue | ||||
Revenues: | ||||
Revenues | 0 | 6,764 | 0 | 18,513 |
Activation fees | ||||
Revenues: | ||||
Revenues | $ 0 | $ 2,783 | $ 0 | $ 8,872 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations(unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Amortization of deferred commissions | $ 43,030 | $ 21,769 | $ 121,609 | $ 61,193 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (120,226) | $ (107,920) | $ (349,328) | $ (274,793) |
Other comprehensive income (loss), net of tax effects: | ||||
Foreign currency translation adjustment | 406 | 1,967 | (670) | 3,543 |
Unrealized gain on marketable securities | 0 | (413) | 0 | (671) |
Total other comprehensive income (loss) | 406 | 1,554 | (670) | 2,872 |
Comprehensive loss | $ (119,820) | $ (106,366) | $ (349,998) | $ (271,921) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (349,328) | $ (274,793) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of capitalized contract costs | 294,802 | 0 |
Amortization of subscriber acquisition costs | 0 | 149,933 |
Amortization of customer relationships | 63,163 | 71,108 |
Depreciation and amortization of property, plant and equipment and other intangible assets | 23,802 | 20,384 |
Amortization of deferred financing costs and bond premiums and discounts | 3,944 | 5,201 |
Gain on fair value changes of equity securities | (1,385) | 0 |
(Gain) loss on sale or disposal of assets | (49,942) | 338 |
Loss on early extinguishment of debt | 14,571 | 23,040 |
Stock-based compensation | 1,651 | 1,287 |
Provision for doubtful accounts | 14,318 | 14,723 |
Deferred income taxes | 0 | (378) |
Changes in operating assets and liabilities: | ||
Accounts and notes receivable, net | (26,830) | (35,578) |
Inventories | 42,053 | (59,500) |
Prepaid expenses and other current assets | (1,327) | (9,792) |
Capitalized contract costs, net | (439,711) | 0 |
Subscriber acquisition costs, net | 0 | (367,300) |
Long-term notes receivables and other assets, net | (30,231) | (68,117) |
Accounts payable | (31,781) | 42,435 |
Accrued payroll and commissions, expenses and other current and long-term liabilities | 168,953 | 132,649 |
Deferred revenue | 173,255 | 205,092 |
Net cash used in operating activities | (130,023) | (149,268) |
Cash flows from investing activities: | ||
Capital expenditures | (15,355) | (14,842) |
Proceeds from the sale of intangible assets | 53,693 | 0 |
Proceeds from the sale of capital assets | 185 | 275 |
Acquisition of intangible assets | (1,068) | (1,057) |
Acquisition of other assets | 0 | (156) |
Net cash provided by (used in) investing activities | 37,455 | (15,780) |
Cash flows from financing activities: | ||
Proceeds from notes payable | 759,000 | 724,750 |
Proceeds from notes payable - related party | 51,000 | 0 |
Repayment of notes payable | (520,166) | (450,000) |
Borrowings from revolving credit facility | 201,000 | 124,000 |
Repayments on revolving credit facility | (261,000) | (124,000) |
Proceeds from capital contribution | 4,700 | 0 |
Repayments of capital lease obligations | (9,882) | (7,161) |
Payments of other long-term obligations | 0 | (2,065) |
Financing costs | (11,317) | (17,771) |
Deferred financing costs | (9,302) | (10,730) |
Return of capital | (2,369) | 0 |
Net cash provided by financing activities | 201,664 | 237,023 |
Effect of exchange rate changes on cash | (2) | 72 |
Net increase in cash and cash equivalents | 109,094 | 72,047 |
Cash and cash equivalents: | ||
Beginning of period | 3,872 | 43,520 |
End of period | 112,966 | 115,567 |
Supplemental non-cash investing and financing activities: | ||
Capital lease additions | 4,432 | 8,285 |
Intangible assets acquisitions included within accounts payable | 424 | 923 |
Capital expenditures included within accounts payable and accrued expenses and other current liabilities | 352 | 2,502 |
Change in fair value of equity securities | 0 | 293 |
Financing costs included within accounts payable and accrued expenses and other current liabilities | $ 974 | $ 982 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Unaudited Interim Financial Statements The accompanying interim unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared by APX Group Holdings, Inc. and subsidiaries (the “Company”) without audit. The accompanying consolidated financial statements include the accounts of APX Group Holdings, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The information as of December 31, 2017 included in the unaudited condensed consolidated balance sheets was derived from the Company’s audited consolidated financial statements. The unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments (all of which are considered of a normal recurring nature) considered necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods and dates presented. The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 . These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and related notes as set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 , as filed with the Securities and Exchange Commission (“SEC”) on March 6, 2018, which is available on the SEC’s website at www.sec.gov. Basis of Presentation The unaudited condensed consolidated financial statements of the Company are presented for APX Group Holdings, Inc. (“Holdings") and its wholly-owned subsidiaries. The Company has prepared the accompanying unaudited condensed consolidated financial statements pursuant to GAAP. Preparing financial statements requires the Company to make estimates and assumptions that affect the amounts that are reported in the consolidated financial statements and accompanying disclosures. Although these estimates are based on the Company’s best knowledge of current events and actions that the Company may undertake in the future, actual results may be different from the Company’s estimates. The results of operations presented herein are not necessarily indicative of the Company’s results for any future period. Vivint Flex Pay In January 2017, the Company announced the introduction of the Vivint Flex Pay plan (“Vivint Flex Pay”), which became the Company's primary sales model beginning in March 2017. Under Vivint Flex Pay, customers pay separately for the products (including control panel, security peripheral equipment, smart home equipment, and related installation) (“Products”) and Vivint's smart home and security services (“Services”). The customer has the following three options to pay for the Products: (1) qualified customers in the United States may finance the purchase of Products through a third-party financing provider (“Consumer Financing Program”), (2) customers not eligible for the Consumer Financing Program, but who qualify under the Company's underwriting criteria, may enter into a retail installment contract (“RIC”) directly with Vivint, or (3) customers may purchase the Products at the outset of the service contract by check, automatic clearing house payments (“ACH”), credit or debit card. Although customers pay separately for Products and Services under the Vivint Flex Pay plan, the Company has determined that the shift in model does not change the Company's conclusion that the sale of Products and Services are one single performance obligation. As a result, all forms of transactions under Vivint Flex Pay create deferred revenue for the gross amount of Products sold. Gross deferred revenues are reduced by imputed interest on the RICs and the present value of expected payments due to the third-party financing provider under the Consumer Financing Program. Under the Consumer Financing Program, qualified customers are eligible for installment loans provided by a third-party financing provider of up to $4,000 for either 42 or 60 months. The Company pays a monthly fee to the third-party financing provider based on the average daily outstanding balance of the installment loans. Additionally, the Company shares liability for credit losses depending on the credit quality of the customer. Because of the nature of these provisions under the Consumer Financing Program, the Company records a derivative liability at its fair value when the third-party financing provider originates installment loans to customers, which reduces the amount of estimated revenue recognized on the provision of the services. The derivative liability is reduced as payments are made from the Company to the third-party financing provider. Subsequent changes to the fair value of the derivative liability are realized through other loss/(income), net in the Condensed Consolidated Statement of Operations. (See Note 8 ). Retail Installment Contract Receivables For customers that enter into a RIC under the Vivint Flex Pay plan, the Company records a receivable for the amount financed. The RIC receivables are recorded at their present value, net of the imputed interest. At the time of installation, the Company records a long-term note receivable within long-term notes receivables and other assets, net on the condensed consolidated balance sheets for the present value of the receivables that are expected to be collected beyond 12 months of the reporting date. The unbilled receivable amounts that are expected to be collected within 12 months of the reporting date are included as a short-term notes receivable within accounts and notes receivable, net on the condensed consolidated balance sheets. The billed amounts of notes receivables are included in accounts receivable within accounts and notes receivable, net on the condensed consolidated balance sheets. The Company imputes the interest on the RIC receivable using a risk adjusted market interest rate and records it as an adjustment to deferred revenue and as an adjustment to the face amount of the related receivable. The imputed interest discount considers a number of factors, including collection experience, aging of the remaining RIC receivable portfolios, credit quality of the subscriber base and other qualitative considerations, including macro-economic factors. The imputed interest income is recognized over the term of the RIC contract as recurring and other revenue on the condensed consolidated statement of operations. When the Company determines that there are RIC receivables that have become uncollectible, the Company records an adjustment to the imputed interest discount and reduce the related note receivable balance. Account balances are written-off if collection efforts are unsuccessful and future collection is unlikely based on the length of time from the day accounts become past due. Accounts Receivable Accounts receivable consists primarily of amounts due from customers for recurring monthly monitoring Services and the billed portion of RIC receivables. The accounts receivable are recorded at invoiced amounts and are non-interest bearing and are included within accounts and notes receivable, net on the condensed consolidated balance sheets. Accounts receivable totaled $22.6 million and $24.3 million at September 30, 2018 and December 31, 2017 , respectively net of the allowance for doubtful accounts of $5.6 million and $5.4 million at September 30, 2018 and December 31, 2017 , respectively. The Company estimates this allowance based on historical collection experience and subscriber attrition rates. When the Company determines that there are accounts receivable that are uncollectible, they are charged off against the allowance for doubtful accounts. As of September 30, 2018 and December 31, 2017 , no accounts receivable were classified as held for sale. The provision for doubtful accounts is included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations and totaled $5.9 million and $5.0 million for the three months ended September 30, 2018 and 2017 , respectively, and $14.3 million and $14.7 million for the nine months ended September 30, 2018 and 2017 , respectively. The changes in the Company’s allowance for accounts receivable were as follows for the periods ended (in thousands): Nine Months Ended September 30, 2018 Twelve Months Ended December 31, 2017 Beginning balance $ 5,356 $ 4,138 Provision for doubtful accounts 14,318 22,465 Write-offs and adjustments (14,026 ) (21,247 ) Balance at end of period $ 5,648 $ 5,356 Revenue Recognition The Company offers its customers smart home services combining Products, including a proprietary control panel, door and window sensors, door locks, security cameras and smoke alarms; installation; and a proprietary back-end cloud platform software and Services. These together create an integrated system that allows the Company’s customers to monitor, control and protect their home (“Smart Home Services”). The Company’s customers are buying this integrated system that provides them with these Smart Home Services. The number and type of Products purchased by a customer depends on their desired functionality. Because the Products and Services included in the customer’s contract are integrated and highly interdependent, and because they must work together to deliver the Smart Home Services, the Company has concluded that installed Products, related installation and Services contracted for by the customer are generally not distinct within the context of the contract and, therefore, constitute a single, combined performance obligation. Revenues for this single, combined performance obligation are recognized on a straight-line basis over the customer’s contract term. The Company has determined that certain contracts that do not require a long-term commitment for monitoring services by the customer contain a material right to renew the contract, because the customer does not have to purchase Products upon renewal. Proceeds allocated to the material right are recognized over the period benefit, which is generally three years. The majority of the Company’s subscription contracts are between three and five years in length and are non-cancelable. These contracts with customers generally convert into month-to-month agreements at the end of the initial term, and some customer contracts are month-to-month from inception. Payment for recurring monitoring and other Smart Home Services is generally due in advance on a monthly basis. Sales of Products and other one-time fees such as service fees or installation fees are invoiced to the customer at the time of sale. Revenues for wireless internet service provided by Vivint Wireless Inc. (“Wireless Internet” or “Wireless”) and any Products or Services that are considered separate performance obligations are recognized when those Products or Services are delivered. Taxes collected from customers and remitted to governmental authorities are not included in revenue. Payments received or amounts billed in advance of revenue recognition are reported as deferred revenue. Deferred Revenue The Company's deferred revenues primarily consist of amounts for sales (including upfront proceeds) of Smart Home Services. Deferred revenues are recognized over the term of the related performance obligation. Capitalized Contract Costs Capitalized contract costs represent the costs directly related and incremental to the origination of new contracts, modification of existing contracts or to the fulfillment of the related customer contracts. These include commissions, other compensation and related costs paid directly for the origination and installation of new or upgraded customer contracts, as well as the cost of Products installed in the customer home at the commencement or modification of the contract. These costs are deferred and amortized on a straight-line basis over the expected period of benefit that the Company has determined to be five years . Amortization of capitalized contract costs is included in “Depreciation and Amortization” on the consolidated statements of operations. These deferred costs are periodically reviewed for impairment. Contract costs not directly related and incremental to the origination of new contracts, modification of existing contracts or to the fulfillment of the related customer contracts are expensed as incurred. These costs include those associated with housing, marketing and recruiting, non-direct lead generation costs, certain portions of sales commissions and residuals, overhead and other costs considered not directly and specifically tied to the origination of a particular subscriber. On the condensed consolidated statement of cash flows, capitalized contract costs are classified as operating activities and reported as “Capitalized contract costs – deferred contract costs” as these assets represent deferred costs associated with customer contracts. Cash and Cash Equivalents Cash and cash equivalents consists of highly liquid investments with remaining maturities when purchased of three months or less. Inventories Inventories, which are comprised of smart home and security system Products and parts, are stated at the lower of cost or net realizable value with cost determined under the first-in, first-out (FIFO) method. The Company adjusts the inventory balance based on anticipated obsolescence, usage and historical write-offs. Long-lived Assets and Intangibles Property, plant and equipment are stated at cost and depreciated on the straight-line method over the estimated useful lives of the assets or the lease term for assets under capital leases, whichever is shorter. Intangible assets with definite lives are amortized over the remaining estimated economic life of the underlying technology or relationships, which ranges from five to ten years . Definite-lived intangible assets are amortized on the straight-line method over the estimated useful life of the asset or in a pattern in which the economic benefits of the intangible asset are consumed. Amortization expense associated with leased assets is included with depreciation expense. Routine repairs and maintenance are charged to expense as incurred. The Company reviews long-lived assets, including property, plant and equipment, capitalized contract costs, and definite-lived intangibles for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company considers whether or not indicators of impairment exist on a regular basis and as part of each quarterly and annual financial statement close process. Factors the Company considers in determining whether or not indicators of impairment exist include market factors and patterns of customer attrition. If indicators of impairment are identified, the Company estimates the fair value of the assets. An impairment loss is recognized if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value. The Company conducts an indefinite-lived intangible impairment analysis annually as of October 1, and as necessary if changes in facts and circumstances indicate that the fair value of the Company’s indefinite-lived intangibles may be less than the carrying amount. When indicators of impairment do not exist and certain accounting criteria are met, the Company is able to evaluate indefinite-lived intangible impairment using a qualitative approach. When necessary, the Company’s quantitative impairment test consists of two steps. The first step requires that the Company compare the estimated fair value of its indefinite-lived intangibles to the carrying value. If the fair value is greater than the carrying value, the intangibles are not considered to be impaired and no further testing is required. If the fair value is less than the carrying value, an impairment loss in an amount equal to the difference is recorded. During the three and nine months ended September 30, 2018 and 2017 , no impairments to long-lived assets or intangibles were recorded. The Company’s depreciation and amortization included in the consolidated statements of operations consisted of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Amortization of capitalized contract costs $ 101,498 $ — $ 294,802 $ — Amortization of subscriber acquisition costs — 53,730 — 149,933 Amortization of definite-lived intangibles 22,741 25,547 68,193 76,267 Depreciation of property, plant and equipment 6,397 5,183 18,772 15,225 Total depreciation and amortization $ 130,636 $ 84,460 $ 381,767 $ 241,425 Wireless Spectrum Licenses The Company had capitalized, as an intangible asset, wireless spectrum licenses that its subsidiary, Vivint Wireless, acquired from a third party. The cost basis of the wireless spectrum asset included the purchase price paid for the licenses at the time of acquisition, plus costs incurred to acquire the licenses. The asset and related liability were recorded at the net present value of future cash outflows using the Company's incremental borrowing rate at the time of acquisition. The Company determined that the wireless spectrum licenses met the definition of indefinite-lived intangible assets because the licenses were able to be renewed periodically for a nominal fee, provided that the Company continued to meet the service and geographic coverage provisions. In January 2018, the Company terminated the wireless spectrum licenses for cash consideration. See Note 7 for further discussion. Long-term Investments The Company’s long-term investments are comprised of equity securities in both privately held and public companies. As of September 30, 2018 and December 31, 2017 , the Company's equity investments totaled $4.8 million and $3.4 million , respectively. Management determines the appropriate fair value measurement of its investments at the time of purchase and reevaluates the fair value measurement at each balance sheet date. Equity securities are classified as either short-term or long-term, based on the nature of each security and its availability for use in current operations. The Company’s equity securities are carried at fair value, with gains and losses reported in other income or loss within the statement of operations. The Company's equity investments without readily determinable fair values totaled $0.7 million as of September 30, 2018 and December 31, 2017 , respectively. The Company performs impairment analyses of its investments without readily determinable fair values when events occur or circumstances change that would, more likely than not, reduce the fair value of the investment below its carrying value. When indicators of impairment do not exist, the Company evaluates impairment using a qualitative approach. Additionally, increases or decreases in the carrying amount resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer are adjusted through the statement of operations as needed. As of September 30, 2018 and December 31, 2017 , no indicators of impairment or changes in observable prices existed associated with investments without readily determinable fair values. Deferred Financing Costs Certain costs incurred in connection with obtaining debt financing are deferred and amortized utilizing the straight-line method, which approximates the effective-interest method, over the life of the related financing. Deferred financing costs associated with obtaining APX Group, Inc.’s (“APX”) revolving credit facility are amortized over the amended maturity dates discussed in Note 3 . Deferred financing costs included in the accompanying unaudited condensed consolidated balance sheets within deferred financing costs, net at September 30, 2018 and December 31, 2017 were $2.3 million and $3.1 million , net of accumulated amortization of $9.4 million and $8.6 million , respectively. Deferred financing costs included in the accompanying unaudited condensed consolidated balance sheets within notes payable, net at September 30, 2018 and December 31, 2017 were $34.6 million and $35.7 million , net of accumulated amortization of $52.4 million and $45.2 million , respectively. Amortization expense on deferred financing costs recognized and included in interest expense in the accompanying unaudited condensed consolidated statements of operations, totaled $2.6 million and $2.8 million for the three months ended September 30, 2018 and 2017 , respectively and $7.9 million and $8.7 million for the nine months ended September 30, 2018 and 2017 , respectively (See Note 3 ). Residual Income Plans The Company has a program that allows certain third-party sales channel partners to receive additional compensation based on the performance of the underlying contracts they create (the “Channel Partner Plan”). In addition, during the three months ended June 30, 2018, the Company introduced a new residual sales compensation plan (the “Residual Plan”). Under the Residual Plan, the Company's sales personnel (each, a “Plan Participant”) have the option to convert up to a specified portion of their earnings (as defined in the Residual Plan) into the right to receive monthly residual compensation payable over the life of the subscriber accounts sold by such Plan Participant. For both the Channel Partner Plan and Residual Plan, the Company calculates the present value of the expected future residual payments and records a liability for this amount in the period the subscriber account is originated. These costs are recorded to capitalized contract costs. The Company monitors actual payments and customer attrition on a periodic basis and, when necessary, makes adjustments to the liability. The amount included in accrued payroll and commissions for these plans was $4.4 million and $3.3 million at September 30, 2018 and December 31, 2017 , respectively, and the amount included in other long-term obligations was $24.9 million and $18.5 million at September 30, 2018 and December 31, 2017 , respectively, representing the present value of the estimated amounts owed to third-party sales channel partners. Stock-Based Compensation The Company measures compensation costs based on the grant-date fair value of the award and recognizes that cost over the requisite service period of the awards (See Note 10 ). Advertising Expense Advertising costs are expensed as incurred. Advertising costs were $13.1 million and $12.6 million for the three months ended September 30, 2018 and 2017 , respectively and $34.8 million and $33.7 million for the nine months ended September 30, 2018 and 2017 , respectively. Income Taxes The Company accounts for income taxes based on the asset and liability method. Under the asset and liability method, deferred tax assets and deferred tax liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets when it is determined that it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. The Company recognizes the effect of an uncertain income tax position on the income tax return at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company’s policy for recording interest and penalties is to record such items as a component of the provision for income taxes. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of receivables and cash. At times during the year, the Company maintains cash balances in excess of insured limits. The Company is not dependent on any single customer or geographic location. The loss of a customer would not adversely impact the Company’s operating results or financial position. Concentrations of Supply Risk As of September 30, 2018 , approximately 78% of the Company’s installed panels were SkyControl panels and 20% were 2GIG Go!Control panels. During the three months ended March 31, 2018 the Company transitioned to a new panel supplier. The loss of the Company's panel supplier could potentially impact its operating results or financial position. Fair Value Measurement Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities subject to on-going fair value measurement are categorized and disclosed into one of three categories depending on observable or unobservable inputs employed in the measurement. These two types of inputs have created the following fair value hierarchy: Level 1: Quoted prices in active markets that are accessible at the measurement date for assets and liabilities. Level 2: Observable prices that are based on inputs not quoted in active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. This hierarchy requires the Company to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value. The Company recognizes transfers between levels of the hierarchy based on the fair values of the respective financial measurements at the end of the reporting period in which the transfer occurred. There were no transfers between levels of the fair value hierarchy during the nine months ended September 30, 2018 and 2017 . The carrying amounts of the Company’s accounts receivable, accounts payable and accrued and other liabilities approximate their fair values due to their short maturities. Goodwill The Company conducts a goodwill impairment analysis annually in the fourth fiscal quarter, as of October 1, and as necessary if changes in facts and circumstances indicate that the fair value of the Company’s reporting units may be less than their carrying amounts. When indicators of impairment do not exist and certain accounting criteria are met, the Company is able to evaluate goodwill impairment using a qualitative approach. When necessary, the Company’s quantitative goodwill impairment test consists of two steps. The first step requires that the Company compare the estimated fair value of its reporting units to the carrying value of the reporting unit’s net assets, including goodwill. If the fair value of the reporting unit is greater than the carrying value of its net assets, goodwill is not considered to be impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value of its net assets, the Company would be required to complete the second step of the test by analyzing the fair value of its goodwill. If the carrying value of the goodwill exceeds its fair value, an impairment charge is recorded. The Company’s reporting units are determined based on its current reporting structure, which as of December 31, 2017 and September 30, 2018 consisted of two reporting units. As of September 30, 2018 , there were no changes in facts and circumstances since the most recent annual impairment analysis to indicate impairment existed. Foreign Currency Translation and Other Comprehensive Income The functional currency of Vivint Canada, Inc. is the Canadian dollar. Accordingly, Vivint Canada, Inc. assets and liabilities are translated from their respective functional currencies into U.S. dollars at period-end rates and Vivint Canada, Inc. revenue and expenses are translated at the weighted-average exchange rates for the period. Adjustments resulting from this translation process are classified as other comprehensive income (loss) and shown as a separate component of equity. When intercompany foreign currency transactions between entities included in the consolidated financial statements are of a long term investment nature (i.e., those for which settlement is not planned or anticipated in the foreseeable future) foreign currency translation adjustments resulting from those transactions are included in stockholders’ deficit as accumulated other comprehensive loss or income. When intercompany transactions are deemed to be of a short term nature, translation adjustments are required to be included in the condensed consolidated statement of operations. The Company has determined that settlement of Vivint Canada, Inc. intercompany balances is anticipated and therefore such balances are deemed to be of a short term nature. Translation activity included in the statement of operations in other loss, net related to intercompany balances was as follows: (in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Translation (gain) loss $ (1,459 ) $ (3,076 ) $ 2,175 $ (5,545 ) Letters of Credit As of September 30, 2018 and December 31, 2017 , the Company had $11.3 million and $9.5 million , respectively, of letters of credit issued in the ordinary course of business, all of which are undrawn. Restructuring and Asset Impairment Charges Restructuring and asset impairment charges represent expenses incurred in relation to activities to exit or dispose of portions of the Company's business that do not qualify as discontinued operations. Liabilities associated with restructuring are measured at their fair value when the liability is incurred. Expenses for related termination benefits are recognized at the date the Company notifies the employee, unless the employee must provide future service, in which case the benefits are expensed ratably over the future service period. Liabilities related to termination of a contract are measured and recognized at fair value when the contract does not have any future economic benefit to the entity and the fair value of the liability is determined based on the present value of the remaining obligation. The Company expenses all other costs related to an exit or disposal activity as incurred (See Note 14 ). Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13, “Financial Instruments—Credit Losses (Topic 326)” which modifies the measurement of expected credit losses of certain financial instruments. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019 and must be applied using a modified-retrospective approach, with early adoption permitted. The Company is evaluating the adoption of ASU 2016-13 and plans to provide additional information about its expected impact at a future date. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 326)” to increase transparency and comparability among organizations as it relates to lease assets and lease liabilities. The update requires that lease assets and lease liabilities be recognized on the balance sheet, and that key information about leasing arrangements be disclosed. Prior to this update, GAAP did not require operating leases to be recognized as lease assets and lease liabilities on the balance sheet. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In July 2018, the FASB issued ASU 2018-11 which provides companies the option to adopt using a modified retrospective approach or a prospective adoption approach. The Company is continuing its evaluation of the impact of ASU 2016-02 on its accounting policies, processes, and system requirements. The Company’s current operating lease portfolio is primarily comprised of network, real estate, and equipment leases. Upon adoption of this standard, the Company expects the balance sheet to include a right of use asset |
Revenue and Capitalized Contrac
Revenue and Capitalized Contract Costs | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue and Capitalized Contract Costs | Revenue and Capitalized Contract Costs Customers are typically invoiced for Smart Home Services in advance or at the time the Company delivers the related Smart Home Services. The majority of customers pay at the time of invoice via credit card, debit card or ACH. The Company does not generally record any contract assets. Deferred revenue relates to the advance consideration received from customers, which precedes the Company’s satisfaction of the associated performance obligation. The Company’s deferred revenues primarily result from customer payments received in advance for recurring monthly monitoring and other Smart Home Services, or other one-time fees, because these performance obligations are satisfied over time. The Company records deferred revenues when cash payments are received or due in advance of performance of the Company's obligations, including amounts which are refundable. The increase in the deferred revenue balance during the nine months ended September 30, 2018 is primarily driven by cash payments received or due in advance of satisfying the Company's performance obligations, offset by $132.4 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2017 . Transaction Price Allocated to the Remaining Performance Obligations As of September 30, 2018 , approximately $2.3 billion of revenue is expected to be recognized from remaining performance obligations for subscription contracts. The Company expects to recognize approximately 62% of the revenue related to these remaining performance obligations over the next 24 months, with the remaining balance recognized over an additional 36 months. Financial Statement Impact of Adopting Topic 606 The Company adopted Topic 606 using the cumulative catch-up transition method. The cumulative effect of applying the new standard to all contracts with customers that were not completed as of January 1, 2018 was recorded as an adjustment to accumulated deficit as of the adoption date. As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to select consolidated balance sheet line items as of January 1, 2018 (in thousands): Condensed Consolidated Balance Sheets (unaudited) As Reported Adjustments Adjusted December 31, 2017 January 1, 2018 Assets Capitalized contract costs, net $ — $ 1,020,408 $ 1,020,408 Subscriber acquisition costs, net 1,308,558 (1,308,558 ) — Long-term notes receivables and other assets, net 88,723 2,713 91,436 Liabilities and Stockholders' Deficit Accrued expenses and other current liabilities 74,321 10,329 84,650 Deferred revenue 88,337 39,868 128,205 Deferred revenue, net of current portion 264,555 (53,062 ) 211,493 Accumulated deficit (1,358,571 ) (282,572 ) (1,641,143 ) The following tables compare the select reported condensed consolidated balance sheets, statements of operations and cash flows line items to the amounts had the previous guidance been in effect (in thousands): Condensed Consolidated Balance Sheets (unaudited) September 30, 2018 As Reported Balances Without Adoption of Topic 606 Effect of Change Higher/(Lower) Assets Capitalized contract costs, net $ 1,163,480 $ — $ 1,163,480 Subscriber acquisition costs, net — 1,540,097 (1,540,097 ) Liabilities and Stockholders' Deficit Accrued expenses and other current liabilities 155,818 145,680 10,138 Deferred revenue 184,226 126,797 57,429 Deferred revenue, net of current portion 328,168 429,248 (101,080 ) Accumulated deficit (1,991,153 ) (1,647,493 ) (343,660 ) Accumulated other comprehensive loss (27,289 ) (27,845 ) 556 Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) Three months ended September 30, 2018 Nine months ended September 30, 2018 As Reported Balances Without Adoption of Topic 606 Effect of Change Higher/(Lower) As Reported Balances Without Adoption of Topic 606 Effect of Change Higher/(Lower) Revenues: Recurring and other revenue $ 272,335 $ 243,733 $ 28,602 $ 773,899 $ 703,807 $ 70,092 Service and other sales revenue — 15,200 (15,200 ) — 31,998 (31,998 ) Activation fees — 2,314 (2,314 ) — 7,455 (7,455 ) Costs and expenses: Operating expenses 92,703 103,199 (10,496 ) 265,784 286,214 (20,430 ) Depreciation and amortization 130,636 94,509 36,127 381,767 272,319 109,448 Loss before income taxes (120,449 ) (105,906 ) (14,543 ) (350,890 ) (292,511 ) (58,379 ) Net loss (120,226 ) (105,683 ) (14,543 ) (349,328 ) (290,949 ) (58,379 ) Other comprehensive loss, net of tax effects: Foreign currency translation adjustment 406 (150 ) 556 (670 ) (1,226 ) 556 Total other comprehensive income (loss) 406 (150 ) 556 (670 ) (1,226 ) 556 Comprehensive loss (119,820 ) (105,833 ) (13,987 ) (349,998 ) (292,175 ) (57,823 ) Condensed Consolidated Statements of Cashflows (unaudited) Nine Months Ended September 30, 2018 As Reported Balances Without Adoption of Topic 606 Effect of Change Cash flows from operating activities: Net loss $ (349,328 ) $ (290,949 ) $ (58,379 ) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of capitalized contract costs 294,802 — 294,802 Amortization of subscriber acquisition costs — 185,354 (185,354 ) Changes in operating assets and liabilities: Capitalized contract costs – deferred contract costs (439,711 ) — (439,711 ) Subscriber acquisition costs – deferred contract costs — (419,281 ) 419,281 Deferred revenue 173,255 203,894 (30,639 ) Net cash used in operating activities (130,023 ) (130,023 ) — Timing of Revenue Recognition The Company previously recognized certain service and other sales revenue when the Services were provided or when title to Products sold transferred to the customer. Revenue from the sale of Products that were not part of the service offering (i.e., those Products sold subsequent to the date of the initial installation) were also generally recognized upon delivery of Products. Under the new standard, the Company considers Products, related installation, and its proprietary back-end cloud platform software and services an integrated system that allows the Company’s customers to monitor, control and protect their homes. These Smart Home Services are accounted for as a single performance obligation that is recognized over the customer’s contract term. Accordingly, the Company now defers a larger portion of certain Smart Home Services revenue, as prior to the adoption of Topic 606 certain of this revenue was recognized at the time services were provided or upon delivery. The Company previously amortized deferred revenues related to sales of Products and activation fees on subscriber contracts over the expected life of the customer, which was 15 years using a 240% declining balance method. Under the new standard , activation fees are included in the transaction price allocated to the single Smart Home Service performance obligation and recognized straight-line over the customer’s contract term, which is generally three to five years . Capitalized Contract Costs Capitalized contract costs generally include commissions, other compensation and related costs paid directly for the generation and installation of new or modified customer contracts, as well as the cost of Products installed in the customer home at the commencement or modification of the contract. The Company previously deferred and amortized these costs for new customer contracts in a pattern that reflected the estimated life of subscriber relationships and generally expensed all costs associated with modified customer contracts. Under the new standard, the Company defers and amortizes these costs for new or modified customer contracts on a straight-line basis over the expected period of benefit of five years . |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Notes Payable 2019 Notes On November 16, 2012, APX issued $925.0 million aggregate principal amount of 6.375% senior secured notes due 2019 (the “2019 notes”) with a maturity date of December 1, 2019 which were secured on a first-priority lien basis by substantially all of the tangible and intangible assets whether now owned or hereafter acquired by the Company, subject to permitted liens and exceptions. The Company repurchased $205.5 million , $300.0 million and $150.0 million aggregate principal amount of the outstanding 2019 notes in May 2016, February 2017, and August 2017, respectively. In September 2018, the Company redeemed in full the entire remaining $269.5 million outstanding aggregate principal amount of the 2019 notes. 2020 Notes On November 16, 2012, APX issued $380.0 million aggregate principal amount of 8.75% senior notes due 2020 (the “2020 notes”) with a maturity date of December 1, 2020 which are secured on a first-priority lien basis by substantially all of the tangible and intangible assets whether now owned or hereafter acquired by the Company, subject to permitted liens and exceptions. During 2013, APX completed two offerings of additional 2020 notes under the indenture dated November 16, 2012. On May 31, 2013, APX issued $200.0 million of 2020 notes at a price of 101.75% and on December 13, 2013, APX issued an additional $250.0 million of 2020 notes at a price of 101.50% . During 2014, APX issued an additional $100.0 million of 2020 notes at a price of 102.00% . In September 2018, the Company repurchased $250.7 million outstanding aggregate principal amount of the 2020 notes. 2022 Private Placement Notes In October 2015, APX issued $300.0 million aggregate principal amount of 8.875% senior secured notes due 2022 (the “2022 private placement notes”), pursuant to a note purchase agreement dated as of October 19, 2015 in a private placement exempt from registration under the Securities Act. The 2022 private placement notes will mature on December 1, 2022, unless on September 1, 2020 (the 91st day prior to the maturity of the 2020 notes) more than an aggregate principal amount of $190.0 million of such 2020 notes remain outstanding or have not been refinanced as permitted under the note purchase agreement for the 2022 private placement notes, in which case the 2022 private placement notes will mature on September 1, 2020. The 2022 private placement notes are secured, on a pari passu basis, by the collateral securing obligations under the 2019 notes, the 2022 private placement notes, the 2022 notes (as defined below), and the 2023 notes (as defined below), and the revolving credit facilities and the Term Loan (as defined below), in each case, subject to certain exceptions and permitted liens. In May 2016, the Company repurchased $29.5 million outstanding aggregate principal amount of the 2022 private placement notes. 2022 Notes In May 2016, APX issued $500.0 million aggregate principal amount of 7.875% senior secured notes due 2022 (the “2022 notes”), pursuant to an indenture dated as of May 26, 2016 among APX, the guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral agent. The 2022 notes will mature on December 1, 2022, or on such earlier date when any outstanding pari passu lien indebtedness matures as a result of the operation of any “Springing Maturity” provision set forth in the agreements governing such pari passu lien indebtedness. The 2022 notes are secured, on a pari passu basis, by the collateral securing obligations under the 2019 notes and 2022 private placement notes, the revolving credit facilities and the Term Loan, in all cases, subject to certain exceptions and permitted liens. APX used a portion of the net proceeds from the issuance of the 2022 notes to repurchase approximately $235 million aggregate principal amount of the outstanding 2019 notes and 2022 private placement notes in privately negotiated transactions and repaid borrowings under the existing revolving credit facility. In August 2016, APX issued an additional $100.0 million aggregate principal amount of the 2022 notes at a price of 104.00% . In February 2017, APX issued an additional $300.0 million aggregate principal amount of the 2022 notes at a price of 108.25% (“February 2017 issuance”). A portion of the net proceeds from the offering of these 2022 notes were used to redeem $300.0 million aggregate principal amount of the existing 2019 notes and pay the related accrued interest and redemption premium, and to pay all fees and expenses related thereto and any remaining proceeds will be used for general corporate purposes. 2023 Notes In August 2017, APX issued $400.0 million aggregate principal amount of the 7.625% senior notes due 2023 (the “2023 notes” and, together with the 2019 notes, the 2020 notes and the 2022 private placement notes, the “Notes”) (“August 2017 issuance”). The proceeds from the outstanding 2023 notes offering were used to redeem $150.0 million aggregate principal amount of the outstanding 2019 notes and pay the related accrued interest and redemption premium, and to pay all fees and expenses related thereto. Any remaining net proceeds have been or will be used for general corporate purposes, which may include the repayment of outstanding borrowings under the revolving credit facility. The Notes are fully and unconditionally guaranteed, jointly and severally by APX and each of APX’s existing restricted subsidiaries that guarantee indebtedness under APX’s revolving credit facility or the Company's other indebtedness. Interest accrues at the rate of 8.75% per annum for the 2020 notes, 8.875% per annum for the 2022 private placement notes, 7.875% per annum for the 2022 notes and 7.625% per annum for the 2023 notes. Interest on the 2020 notes, 2022 private placement notes and 2022 notes is payable semiannually in arrears on each June 1 and December 1. Interest on the 2023 notes is payable semiannually in arrears on each March 1 and September 1. APX may redeem the Notes at the prices and on the terms specified in the applicable indenture, note purchase agreement or credit agreement. Term Loan In September 2018, APX entered into a credit agreement (the “September 2018 issuance”) for total term loans of $810.0 million (the “Term Loan”). The Company is required to make quarterly amortization payments under the Term Loan in an amount equal to 0.25% of the aggregate principal amount of Term Loan outstanding on the closing date thereof. The remaining principal amount outstanding under the Term Loan will be due and payable in full on March 31, 2024, or earlier if certain springing maturity conditions apply. The net proceeds from the Term Loan were used in-part to redeem in full the entire $269.5 million outstanding aggregate principal amount of the 2019 Notes and pay the related accrued interest and redemption premium, to repurchase approximately $250.7 million aggregate principal amount of the outstanding 2020 Notes, to repay the outstanding borrowings under the revolving credit facility and to pay fees and expenses related to the Term Loan and the transactions described above. Borrowings under the Term Loan bear interest at a rate per annum equal to an applicable margin plus, at the Company's option, either (1) the base rate determined by reference to the highest of (a) the federal funds rate plus 0.50% , (b) the prime rate of Bank of America, N.A. and (c) the LIBOR rate determined by reference to the costs of funds for U.S. dollar deposits for an interest period of one month, plus 1.00% or (2) the LIBOR rate determined by reference to the London interbank offered rate for dollars for the interest period relevant to such borrowing. The applicable margin for base rate-based borrowings is 4.0% per annum and the applicable margin for LIBOR rate-based borrowings is 5.0% per annum. APX may prepay the Term Loan at the prices and on the terms specified in the credit agreement covering the Term Loan. Debt Modifications and Extinguishments In accordance with ASC 470-50 Debt – Modifications and Extinguishments, the Company performed analyses for the September 2018, August 2017 and February 2017 issuances to determine if the repurchased notes were substantially different than the notes issued to determine the appropriate accounting treatment of associated issuance fees. As a result of these analyses the company recorded the following amounts of other expense and loss on extinguishment and deferred financing costs (in thousands): Other expense and loss on extinguishment Deferred financing costs Original premium extinguished Previously deferred financing costs extinguished New financing costs Total other expense and loss on extinguishment Previously deferred financing costs rolled over New deferred financing costs Total deferred financing costs Three and nine months ended September 30, 2018 September 2018 issuance $ (953 ) $ 4,207 $ 11,317 $ 14,571 $ — $ 10,275 $ 10,275 Three months ended September 30, 2017 August 2017 issuance $ — $ 1,408 $ 8,881 $ 10,289 $ 473 $ 4,556 $ 5,029 Nine months ended September 30, 2017 August 2017 issuance $ — $ 1,408 $ 8,881 $ 10,289 $ 473 $ 4,556 $ 5,029 February 2017 issuance — 3,259 9,491 12,750 1,476 6,077 7,553 Total $ — $ 4,667 $ 18,372 $ 23,039 $ 1,949 $ 10,633 $ 12,582 Deferred financing costs are amortized to interest expense over the life of the issued debt. The following table presents deferred financing activity for the nine months ended September 30, 2018 and year ended December 31, 2017 (in thousands): Unamortized Deferred Financing Costs Balance December 31, 2017 Additions Refinances Early Extinguishment Amortized Balance September 30, 2018 Revolving Credit Facility $ 3,099 $ — $ — $ — $ (781 ) $ 2,318 2019 Notes 2,877 — — (1,876 ) (1,001 ) — 2020 Notes 11,209 — — (2,331 ) (2,796 ) 6,082 2022 Private Placement Notes 752 — — — (113 ) 639 2022 Notes 16,067 — — — (2,451 ) 13,616 2023 Notes 4,762 — — — (630 ) 4,132 Term Loan — 10,275 — — (153 ) 10,122 Total Deferred Financing Costs $ 38,766 $ 10,275 $ — $ (4,207 ) $ (7,925 ) $ 36,909 Unamortized Deferred Financing Costs Balance December 31, 2016 Additions Refinances Early Extinguishment Amortized Balance December 31, 2017 Revolving Credit Facility $ 4,420 $ 399 $ — $ — $ (1,720 ) $ 3,099 2019 Notes 11,693 — (1,949 ) (4,667 ) (2,200 ) 2,877 2020 Notes 15,053 — — — (3,844 ) 11,209 2022 Private Placement Notes 903 — — — (151 ) 752 2022 Notes 11,714 6,076 1,476 — (3,199 ) 16,067 2023 Notes — 4,569 473 — (280 ) 4,762 Total Deferred Financing Costs $ 43,783 $ 11,044 $ — $ (4,667 ) $ (11,394 ) $ 38,766 Revolving Credit Facility On November 16, 2012, APX entered into a $200.0 million senior secured revolving credit facility, with a five year maturity. On March 6, 2015, APX amended and restated the credit agreement governing the revolving credit facility to provide for, among other things, (1) an increase in the aggregate commitments previously available to APX thereunder from $200.0 million to $289.4 million (“Revolving Commitments”) and (2) the extension of the maturity date with respect to certain of the previously available commitments. On August 10, 2017, APX further amended and restated the credit agreement governing the revolving credit facility to provide for, among other things, (1) an increase in the aggregate commitments previously available to the Company from $289.4 million to $324.3 million and (2) the extension of the maturity date with respect to certain of the previously available commitments. Borrowings under the amended and restated revolving credit facility bear interest at a rate per annum equal to an applicable margin plus, at APX’s option, either (1) the base rate determined by reference to the highest of (a) the Federal Funds rate plus 0.50% , (b) the prime rate of Bank of America, N.A. and (c) the LIBOR rate determined by reference to the costs of funds for U.S. dollar deposits for an interest period of one month, plus 1.00% or (2) the LIBOR rate determined by reference to the London interbank offered rate for dollars for the interest period relevant to such borrowing. The applicable margin for base rate-based borrowings (1)(a) under the Series A Revolving Commitments of approximately $267.0 million and Series D Revolving Commitments of approximately $15.4 million is currently 2.0% per annum and (b) under the Series B Revolving Commitments of approximately $21.2 million is currently 3.0% and (2)(a) the applicable margin for LIBOR rate-based borrowings (a) under the Series A Revolving Commitments, Series C Revolving Commitments, and Series D Revolving Commitments is currently 3.0% per annum and (b) under the Series B Revolving Commitments is currently 4.0% . The applicable margin for borrowings under the revolving credit facility is subject to one step-down of 25 basis points based on APX meeting a consolidated first lien net leverage ratio test at the end of each fiscal quarter. In November 2017, previous commitments of $20.8 million under the Series C Revolving Commitments had expired. Outstanding borrowings under the amended and restated revolving credit facility are allocated on a pro-rata basis between each Series based on the total Revolving Commitments. In addition to paying interest on outstanding principal under the revolving credit facility, APX is required to pay a quarterly commitment fee (which will be subject to one interest rate step-down of 12.5 basis points, based on APX meeting a consolidated first lien net leverage ratio test) to the lenders under the revolving credit facility in respect of the unutilized commitments thereunder. APX also pays customary letter of credit and agency fees. APX is not required to make any scheduled amortization payments under the revolving credit facility. The principal amount outstanding under the revolving credit facility will be due and payable in full on (1) with respect to the non-extended commitments under the Series D, March 31, 2019 and (2) with respect to the extended commitments under the Series A Revolving Credit Facility and Series B Revolving Credit Facility, March 31, 2021 . As of September 30, 2018 there were no outstanding borrowings under the credit facility. As of December 31, 2017 , there was $60.0 million of outstanding borrowings under the credit facility. As of September 30, 2018 the Company had $292.3 million of availability under our revolving credit facility (after giving effect to $11.3 million of letters of credit outstanding and no borrowings). The Company’s debt at September 30, 2018 and December 31, 2017 consisted of the following (in thousands): September 30, 2018 Outstanding Principal Unamortized Premium (Discount) Unamortized Deferred Financing Costs (1) Net Carrying Amount 8.75% Senior Notes due 2020 679,299 2,495 (6,082 ) 675,712 8.875% Senior Secured Notes Due 2022 270,000 (2,234 ) (639 ) 267,127 7.875% Senior Secured Notes Due 2022 900,000 21,304 (13,616 ) 907,688 7.625% Senior Notes Due 2023 400,000 — (4,132 ) 395,868 Term Loan 801,900 — (10,122 ) 791,778 Total Long-Term Debt $ 3,051,199 $ 21,565 $ (34,591 ) $ 3,038,173 December 31, 2017 Outstanding Principal Unamortized Premium (Discount) Unamortized Deferred Financing Costs (1) Net Carrying Amount Series D Revolving Credit Facility Due 2019 $ 3,000 $ — $ — $ 3,000 Series A, B Revolving Credit Facilities Due 2021 57,000 — — 57,000 6.375% Senior Secured Notes due 2019 269,465 — (2,877 ) 266,588 8.75% Senior Notes due 2020 930,000 4,465 (11,209 ) 923,256 8.875% Senior Secured Notes due 2022 270,000 (2,559 ) (752 ) 266,689 7.875% Senior Secured Notes due 2022 900,000 24,593 (16,067 ) 908,526 7.625% Senior Secured Notes Due 2023 400,000 — (4,762 ) 395,238 Total Long-Term Debt $ 2,829,465 $ 26,499 $ (35,667 ) $ 2,820,297 (1) Unamortized deferred financing costs related to the revolving credit facilities included in deferred financing costs, net on the condensed consolidated balance sheets at September 30, 2018 and December 31, 2017 was $2.3 million and $3.1 million , respectively. |
Retail Installment Contract Rec
Retail Installment Contract Receivables | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Retail Installment Contract Receivables | Retail Installment Contract Receivables Certain subscribers have the option to purchase Products under a RIC, payable over either 42 or 60 months. Short-term RIC receivables are recorded in accounts and notes receivable, net and long-term RIC receivables are recorded in long-term notes receivables and other assets, net in the condensed consolidated unaudited balance sheets. The following table summarizes the installment receivables (in thousands): September 30, 2018 December 31, 2017 RIC receivables, gross $ 181,353 $ 131,024 Deferred interest (41,006 ) (36,048 ) RIC receivables, net of deferred interest $ 140,347 $ 94,976 Classified on the condensed consolidated unaudited balance sheets as: Accounts and notes receivable, net $ 29,350 $ 16,469 Long-term notes receivables and other assets, net 110,997 78,507 RIC receivables, net $ 140,347 $ 94,976 Activity in the deferred interest for the RIC receivables was as follows (in thousands): Nine months ended September 30, 2018 Twelve months ended December 31, 2017 Deferred interest, beginning of period $ 36,048 $ — Write-offs, net of recoveries (19,105 ) (6,055 ) Change in deferred interest on short-term and long-term RIC receivables 24,063 42,103 Deferred interest, end of period $ 41,006 $ 36,048 The amount of RIC imputed interest income recognized in recurring and other revenue was $4.1 million and $2.8 million during the three months ended September 30, 2018 and 2017 , respectively, and $10.9 million and $4.0 million during the nine months ended September 30, 2018 and 2017 , respectively. |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | Balance Sheet Components The following table presents material balance sheet component balances (in thousands): September 30, 2018 December 31, 2017 Prepaid expenses and other current assets Prepaid expenses $ 9,021 $ 8,000 Deposits 1,976 1,596 Other 6,478 6,554 Total prepaid expenses and other current assets $ 17,475 $ 16,150 Capitalized contract costs Capitalized contract costs $ 2,310,922 $ — Accumulated amortization (1,147,442 ) — Capitalized contract costs, net $ 1,163,480 $ — Subscriber acquisition costs Subscriber acquisition costs $ — $ 1,837,388 Accumulated amortization — (528,830 ) Subscriber acquisition costs, net $ — $ 1,308,558 Long-term notes receivables and other assets RIC receivables, gross $ 152,003 $ 114,556 RIC deferred interest (41,006 ) (36,049 ) Security deposits 6,652 6,427 Investments 4,800 3,429 Other 317 360 Total long-term notes receivables and other assets, net $ 122,766 $ 88,723 Accrued payroll and commissions Accrued commissions $ 86,398 $ 27,485 Accrued payroll 32,515 30,267 Total accrued payroll and commissions $ 118,913 $ 57,752 Accrued expenses and other current liabilities Accrued interest payable $ 60,496 $ 28,737 Current portion of derivative liability 58,864 25,473 Service warranty accrual 8,938 — Current portion of notes payable 8,100 — Accrued taxes 2,854 4,585 Spectrum license obligation — 3,861 Accrued payroll taxes and withholdings 3,542 3,185 Loss contingencies 3,131 2,156 Blackstone monitoring fee, a related party 4,000 933 Other 5,893 5,391 Total accrued expenses and other current liabilities $ 155,818 $ 74,321 |
Property Plant and Equipment
Property Plant and Equipment | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property Plant and Equipment | Property Plant and Equipment Property, plant and equipment consisted of the following (in thousands): September 30, 2018 December 31, 2017 Estimated Useful Lives Vehicles $ 45,448 $ 42,008 3 - 5 years Computer equipment and software 51,384 46,651 3 - 5 years Leasehold improvements 25,950 20,783 2 - 15 years Office furniture, fixtures and equipment 19,000 17,202 7 years Build-to-suit lease building 8,268 8,268 10.5 years Construction in process 2,671 4,299 Property, plant and equipment, gross 152,721 139,211 Accumulated depreciation and amortization (76,839 ) (61,130 ) Property, plant and equipment, net $ 75,882 $ 78,081 Property, plant and equipment, net includes approximately $25.5 million and $26.2 million of assets under capital lease obligations at September 30, 2018 and December 31, 2017 , respectively, net of accumulated amortization of $20.8 million and $16.6 million at September 30, 2018 and December 31, 2017 , respectively. Depreciation and amortization expense on all property, plant and equipment was $6.4 million and $5.2 million for the three months ended September 30, 2018 and 2017 , respectively, and $18.8 million and $14.9 million for the nine months ended September 30, 2018 and 2017 , respectively. Amortization expense relates to assets under capital leases and is included in depreciation and amortization expense. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill As of September 30, 2018 and December 31, 2017 , the Company had a goodwill balance of $836.3 million and $837.0 million , respectively. The change in the carrying amount of goodwill during the nine months ended September 30, 2018 was the result of foreign currency translation adjustments. Intangible assets, net The following table presents intangible asset balances (in thousands): September 30, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Definite-lived intangible assets: Customer contracts $ 968,203 $ (699,652 ) $ 268,551 $ 970,147 $ (637,780 ) $ 332,367 10 years 2GIG 2.0 technology 17,000 (14,788 ) 2,212 17,000 (13,274 ) 3,726 8 years Other technology 2,917 (1,563 ) 1,354 2,917 (1,250 ) 1,667 5 - 7 years Space Monkey technology 7,100 (5,333 ) 1,767 7,100 (4,066 ) 3,034 6 years Patents 11,720 (7,733 ) 3,987 10,616 (5,835 ) 4,781 5 years Total definite-lived intangible assets: $ 1,006,940 $ (729,069 ) $ 277,871 $ 1,007,780 $ (662,205 ) $ 345,575 Indefinite-lived intangible assets: Spectrum licenses $ — $ — $ — $ 31,253 $ — $ 31,253 IP addresses 564 — 564 564 — 564 Domain names 59 — 59 59 — 59 Total Indefinite-lived intangible assets 623 — 623 31,876 — 31,876 Total intangible assets, net $ 1,007,563 $ (729,069 ) $ 278,494 $ 1,039,656 $ (662,205 ) $ 377,451 During the year ended December 31, 2016, Vivint Wireless entered into leasing agreements with Nextlink Wireless, LLC (“Nextlink”) for designated radio frequency spectrum in 40 mid-sized metropolitan markets. The lease term was for seven years, with an option to become the licensor of record with the Federal Communications Commission (“FCC”) with respect to the applicable spectrum licenses at the end of this term for a nominal fee. The Company acquired $31.3 million of spectrum licenses, measured using the present value of the lease payments, and recorded an intangible asset and a corresponding liability within other long-term obligations. While licenses are issued for only a fixed time, such licenses are subject to renewal by the FCC. On January 10, 2018, Vivint Wireless and Verizon consummated the transactions contemplated by a termination agreement to which the parties agreed, among other things, to terminate the spectrum leases between Vivint Wireless and Nextlink, a subsidiary of Verizon, in exchange for a cash payment by Verizon to Vivint Wireless. The calculation of the gain recorded included cash proceeds of $55.0 million , extinguishment of the spectrum license liability of $27.9 million , offset by the write-off of the spectrum license asset in the amount of $31.3 million and regulatory costs associated with the sale of $1.3 million for a total net gain on sale of $50.4 million which is included in other income, net in the condensed consolidated statement of operations. Amortization expense related to intangible assets was approximately $22.7 million and $25.5 million for the three months ended September 30, 2018 and 2017 , respectively, and $68.2 million and $76.3 million during the nine months ended September 30, 2018 and 2017 , respectively. As of September 30, 2018 , the remaining weighted-average amortization period for definite-lived intangible assets was 4.1 years . Estimated future amortization expense of intangible assets, excluding approximately $0.2 million in patents currently in process, is as follows as of September 30, 2018 (in thousands): 2018 - Remaining Period $ 22,791 2019 79,218 2020 67,980 2021 58,765 2022 48,844 Thereafter 69 Total estimated amortization expense $ 277,667 |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | Financial Instruments Cash, Cash Equivalents and Equity Securities Cash equivalents and equity securities with readily available determinable fair values (“Corporate Securities”) are classified as level 1 assets, as they have readily available market prices in an active market. As of September 30, 2018 and December 31, 2017 , the Company held an immaterial amount of money market funds. As of September 30, 2018 and December 31, 2017 , the company held $4.1 million and $2.7 million , respectively, of Corporate Securities classified as level 1 investments. The following tables set forth the Company’s cash and cash equivalents and Corporate Securities’ adjusted cost, gross unrealized gains, gross unrealized losses, gross realized gains, gross realized losses and fair value by significant investment category recorded as cash and cash equivalents or long-term notes receivables and other assets, net as of September 30, 2018 and December 31, 2017 (in thousands): September 30, 2018 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Long-Term Notes Receivables and Other Assets, net Cash $ 7,960 $ — $ — $ 7,960 $ 7,960 $ — Level 1: Money market funds 105,006 — — 105,006 105,006 — Corporate securities 2,703 1,385 — 4,088 — 4,088 Subtotal 107,709 1,385 — 109,094 105,006 4,088 Total $ 115,669 $ 1,385 $ — $ 117,054 $ 112,966 $ 4,088 December 31, 2017 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Long-Term Notes Receivables and Other Assets, net Cash $ 3,866 $ — $ — $ 3,866 $ 3,866 $ — Level 1: Money market funds 6 — — 6 6 — Corporate securities 4,018 — (1,315 ) 2,703 — 2,703 Subtotal 4,024 — (1,315 ) 2,709 6 2,703 Total $ 7,890 $ — $ (1,315 ) $ 6,575 $ 3,872 $ 2,703 The Corporate Securities represents the Company's investment of $3.0 million in publicly traded common stock of a non-affiliated company (“investee”). During the three months ended September 30, 2018 and 2017 , the Company recorded an unrealized gain of $0.6 million and an unrealized loss of $0.5 million , respectively, associated with the change in fair value of the investee's stock. During the nine months ended September 30, 2018 and 2017 , the Company recorded an unrealized gain of $1.4 million and an unrealized loss of $0.3 million , respectively, associated with the change in fair value of the investee's stock. As of September 30, 2018 the Company had no accumulated other comprehensive income associated with unrealized gains and losses for the change in fair value of the investment as a result of the adoption of ASU 2016-01. The balance of accumulated other comprehensive income associated with unrealized gains and losses for the change in fair value totaled net losses of $0.3 million at December 31, 2017 . The carrying amounts of the Company’s accounts and notes receivable, accounts payable and accrued and other liabilities approximate their fair values. Long-Term Debt Components of long-term debt including the associated interest rates and related fair values are as follows (in thousands, except interest rates): September 30, 2018 December 31, 2017 Stated Interest Rate Issuance Face Value Estimated Fair Value Face Value Estimated Fair Value 2019 Notes $ — $ — $ 269,465 $ 273,507 6.375 % 2020 Notes 679,299 680,114 930,000 952,134 8.75 % 2022 Private Placement Notes 270,000 276,692 270,000 276,486 8.875 % 2022 Notes 900,000 920,250 900,000 966,420 7.875 % 2023 Notes 400,000 370,000 400,000 425,000 7.625 % Term Loan 801,900 801,900 — — N/A Total $ 3,051,199 $ 3,048,956 $ 2,769,465 $ 2,893,547 The fair values of the 2019 notes, the 2020 notes, the 2022 private placement notes, the 2022 notes, the 2023 notes are fixed-rate debt and were considered Level 2 measurements as the values were determined using observable market inputs, such as current interest rates, prices observable from less active markets, as well as prices observable from comparable securities. The Term Loan is floating-rate debt and approximates the carrying value as interest accrues at floating rates based on market rates. Derivative Financial Instruments Under the Consumer Financing Program, the Company pays a monthly fee to a third-party financing provider based on the average daily outstanding balance of the installment loans and shares the liability for credit losses, depending on the credit quality of the customer. Because of the nature of certain provisions under the Consumer Financing Program, the Company records a derivative liability that is not designated as a hedging instrument and is adjusted to fair value, measured using the present value of the estimated future payments. Changes to the fair value are recorded through other loss (income), net in the Consolidated Statement of Operations. The following represent the contractual obligations with the third-party financing provider under the Consumer Financing Program that are components of the derivative: • The Company pays a monthly fee based on the average daily outstanding balance of the installment loans • The Company shares the liability for credit losses depending on the credit quality of the customer • The Company pays transactional fees associated with customer payment processing The derivative is classified as a Level 3 instrument. The derivative positions are valued using a discounted cash flow model, with inputs consisting of available market data, such as market yield discount rates, as well as unobservable internally derived assumptions, such as collateral prepayment rates, collateral default rates and loss severity rates. These derivatives are priced quarterly using a credit valuation adjustment methodology. In summary, the fair value represents an estimate of the present value of the cash flows the Company will be obligated to pay to the third-party financing provider for each component of the derivative. The following table summarizes the fair value and the notional amount of the Company’s outstanding derivative instrument as of September 30, 2018 and December 31, 2017 (in thousands): September 30, 2018 December 31, 2017 Consumer Financing Program Contractual Obligations: Fair value $ 112,554 $ 46,496 Notional amount 355,527 163,032 Classified on the condensed consolidated unaudited balance sheets as: Accrued expenses and other current liabilities 58,864 25,473 Other long-term obligations 53,690 21,023 Total Consumer Financing Program Contractual Obligation $ 112,554 $ 46,496 Changes in Level 3 Fair Value Measurements The following table summarizes the change in the fair value of the Level 3 outstanding derivative liability instrument for the nine months ended September 30, 2018 and the twelve months ended December 31, 2017 (in thousands): Nine months ended September 30, 2018 Twelve months ended December 31, 2017 Balance, beginning of period $ 46,496 $ — Additions 78,995 44,913 Settlements (22,805 ) (7,972 ) Losses included in earnings 9,868 9,555 Balance, end of period $ 112,554 $ 46,496 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes In order to determine the quarterly provision for income taxes, the Company uses an estimated annual effective tax rate, which is based on expected annual income and statutory tax rates in the various jurisdictions in which the Company operates. Certain significant or unusual items are separately recognized in the quarter during which they occur and can be a source of variability in the effective tax rates from quarter to quarter. The Company’s effective income tax rate for the nine months ended September 30, 2018 and 2017 was approximately 0.45% and a negative 0.85% , respectively. Income tax expense for the nine months ended September 30, 2018 was affected by year to date loss in Canada and estimated minimum state taxes in the US. Both the 2018 and 2017 effective tax rates differ from the statutory rate primarily due to the combination of not benefiting from expected pre-tax US losses, a result of changes to the valuation allowance, and recognizing current state income tax expense for minimum state taxes. On December 22, 2017, the U.S. Tax Cuts and Jobs Act of 2017 (“Tax Reform”) was signed into law. Among other changes in the Tax Reform, effective January 1, 2018, the U.S. statutory tax rate was lowered from 35% to 21% , the deduction for net business interest is limited to 30% of adjusted taxable income, business deductions are disallowed for entertainment expenses, limitation of net operating losses generated after fiscal 2017 to 80% of taxable income, and certain exceptions for performance-based compensation and commissions were eliminated from the definition of applicable employee remuneration subject to a $1.0 million deduction limit. In December 2017, the SEC issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which provides guidance on accounting for the tax effects of Tax Reform. SAB 118 provides a measurement period that should not extend beyond one year from the enactment date for companies to complete the accounting relating to Tax Reform under ASC Topic 740. In accordance with SAB 118, to the extent that a company’s accounting for certain income tax effects of Tax Reform is incomplete, but it is able to determine a reasonable estimate, the company should report a provisional estimate in its financial statements. Where a reasonable estimate cannot be determined, a company should continue to apply ASC Topic 740 based on the provisions of the tax laws that were in effect immediately before the enactment of Tax Reform. The Company has not fully completed its accounting for the income tax effects of Tax Reform but will have an updated analysis at year end. Items for which a reasonable estimate has been determined include the impact of the change in the corporate tax rate from 35% to 21%, limitation on the current deductibility of net interest expense in excess of 30 percent of adjusted taxable income, changes to the non-deductible executive compensation provisions, and entertainment and other expense deduction limitations. Other significant provisions that did not have an impact on the interim provision but may impact income taxes at the Company’s year-end or in future years include: a limitation of net operating losses generated after fiscal 2017 to 80% of taxable income, 100% bonus depreciation on certain assets, and the impact of the inclusion of any global intangible low-taxed income, the potential deductions on foreign-derived intangible income and the GILTI inclusion amount, and the base erosion and anti-abuse tax. Significant judgment is required in determining the Company’s provision for income taxes, recording valuation allowances against deferred tax assets, and evaluating the Company’s uncertain tax positions. In evaluating the ability to realize its deferred tax assets, in full or in part, the Company considers all available positive and negative evidence, including past operating results, forecasted future earnings, and prudent and feasible tax planning strategies. Due to historical net losses incurred and the uncertainty of realizing the deferred tax assets, for all the periods presented, the Company has maintained a valuation allowance against the domestic deferred tax assets that remain after offset by domestic deferred tax liabilities. The Company has not recorded a valuation allowance against its foreign deferred tax assets due to being in a net deferred tax liability position. |
Stock-Based Compensation and Eq
Stock-Based Compensation and Equity | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation and Equity | Stock-Based Compensation and Equity 313 Incentive Units The Company’s indirect parent, 313 Acquisition LLC (“313”), which is majority owned by Blackstone, has authorized the award of profits interests, representing the right to share a portion of the value appreciation on the initial capital contributions to 313 (“Incentive Units”). As of September 30, 2018 , 85,362,836 Incentive Units had been awarded, and were outstanding, to current and former members of senior management and a board member, of which 42,169,456 were outstanding to the Company’s Chief Executive Officer and President. In June 2018, the Incentive Units and SARs (defined below) vesting terms were modified (“Modification”). Prior to the Modification, the Incentive Units were subject to time-based and performance-based vesting conditions, with (1) one-third subject to ratable time-based vesting over a five year period from the applicable vesting reference date and (2) two-thirds subject to the achievement of certain investment return thresholds by The Blackstone Group, L.P. and its affiliates (“Blackstone”). Pursuant to the Modification the Incentive Units are subject to time-based and performance-based vesting conditions, with (1) one-third subject to ratable time-based vesting over a five year period from the applicable vesting reference date, (2) one-third subject to the achievement of certain investment return thresholds by Blackstone and (3) one-third subject to ratable time-based vesting over a five year period from the applicable vesting reference date or June 2018 for those granted prior to the modification. The Company has not recorded any expense related to the performance-based portion of the awards, as the achievement of the vesting condition is not yet deemed probable. The fair value of stock-based awards is measured at the grant date, or the Modification date, and is recognized as expense over the employee’s requisite service period. The grant date fair value was primarily determined using a Monte Carlo simulation valuation approach with the following assumptions: expected volatility varies from 55% to 125% ; expected exercise term between 3.96 and 6.00 years ; and risk-free rates between 0.62% and 2.61% . Vivint Stock Appreciation Rights The Company’s subsidiary, Vivint Group, Inc. (“Vivint Group”), has awarded Stock Appreciation Rights (“SARs”) to various levels of key employees and board members, pursuant to an omnibus incentive plan. The purpose of the SARs is to attract and retain personnel and provide an opportunity to acquire an equity interest of Vivint Group. Prior to the Modification in June 2018, the SARs were subject to time-based and performance-based vesting conditions, with (1) one-third subject to ratable time-based vesting over a five year period from the applicable vesting reference date and (2) two-thirds subject to the achievement of certain investment return thresholds by Blackstone. Pursuant to the Modification the Incentive Units are subject to time-based and performance-based vesting conditions, with (1) one-third subject to ratable time-based vesting over a five year period from the applicable vesting reference date, (2) one-third subject to the achievement of certain investment return thresholds by Blackstone and (3) one-third subject to ratable time-based vesting over a five year period from the applicable vesting reference date or June 2018 for those granted prior to the modification. The Company has not recorded any expense related to the performance-based portion of the awards, as the achievement of the vesting condition is not yet deemed probable. In connection with this plan, 39,151,490 SARs were outstanding as of September 30, 2018 . In addition, 53,621,891 SARs have been set aside for funding incentive compensation pools pursuant to long-term sales and installation employee incentive plans established by the Company. The fair value of the Vivint Group awards is measured at the grant date, or the Modification date, and is recognized as expense over the employee’s requisite service period. The fair value is determined using a Black-Scholes option valuation model with the following assumptions: expected volatility varies from 55% to 125% , expected dividends of 0% ; expected exercise term between 6.00 and 6.47 years ; and risk-free rates between 0.61% and 2.61% . Due to the lack of historical exercise data, the Company used the simplified method in determining the estimated exercise term, for all Vivint Group awards. Restricted Stock Units In June 2018, the Company’s subsidiary, Vivint Group, awarded 360,000 Restricted Stock Units (“RSUs”) to certain board members, pursuant to an omnibus incentive plan. The purpose of the RSUs is to compensate board members for their board service and align their interests of those of the Company's shareholders. The RSUs are subject to a three year time-based ratable vesting period. Stock-based compensation expense in connection with all stock-based awards is presented as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Operating expenses $ 102 $ 9 $ 147 $ 49 Selling expenses 235 55 361 165 General and administrative expenses 770 337 1,143 1,073 Total stock-based compensation $ 1,107 $ 401 $ 1,651 $ 1,287 The increase in total stock-based compensation for the three and nine months ended September 30, 2018 was primarily due to the Modification in June 2018. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Indemnification Subject to certain limitations, the Company is obligated to indemnify its current and former directors, officers and employees with respect to certain litigation matters and investigations that arise in connection with their service to the Company. These obligations arise under the terms of its certificate of incorporation, its bylaws, applicable contracts, and Delaware and California law. The obligation to indemnify generally means that the Company is required to pay or reimburse these individuals’ reasonable legal expenses and possibly damages and other liabilities incurred in connection with these matters. Legal The Company is named from time to time as a party to lawsuits arising in the ordinary course of business related to its sales, marketing, and the provision of its services and equipment claims. Actions filed against the Company include commercial, intellectual property, customer, and labor and employment related claims, including complaints of alleged wrongful termination and potential class action lawsuits regarding alleged violations of federal and state wage and hour and other laws. In general, litigation can be expensive and disruptive to normal business operations. Moreover, the results of legal proceedings are difficult to predict and the costs incurred in litigation can be substantial. The Company believes the amounts provided in its financial statements are adequate in light of the probable and estimated liabilities. Factors that the Company considers in the determination of the likelihood of a loss and the estimate of the range of that loss in respect of legal matters include the merits of a particular matter, the nature of the matter, the length of time the matter has been pending, the procedural posture of the matter, how the Company intends to defend the matter, the likelihood of settling the matter and the anticipated range of a possible settlement. Because such matters are subject to many uncertainties, the ultimate outcomes are not predictable and there can be no assurances that the actual amounts required to satisfy alleged liabilities from the matters described above will not exceed the amounts reflected in the Company’s financial statements or that the matters will not have a material adverse effect on the Company’s results of operations, financial condition or cash flows. The Company regularly reviews outstanding legal claims and actions to determine if reserves for expected negative outcomes of such claims and actions are necessary. The Company had reserves for all such matters of approximately $3.1 million and $2.2 million as of September 30, 2018 and December 31, 2017 , respectively. In conjunction with one of the settlements, the Company is obligated to pay certain future royalties, based on sales of future Products. Operating Leases The Company leases office and warehouse space, certain equipment, towers, wireless spectrum, software and an aircraft under operating leases with related and unrelated parties expiring in various years through 2028 . The leases require the Company to pay additional rent for increases in operating expenses and real estate taxes and contain renewal options. The Company's operating lease arrangements and related terms consisted of the following (in thousands): Rent Expense For the three months ended, For the nine months ended , September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Lease Term Arrangement Warehouse, office space and other $ 3,731 $ 3,489 $ 10,410 $ 9,374 11 - 15 years Wireless towers and spectrum 1,056 1,169 3,144 3,513 1 - 10 years Total Rent Expense $ 4,787 $ 4,658 $ 13,554 $ 12,887 Capital Leases The Company also enters into certain capital leases with expiration dates through May 2022 . On an ongoing basis, the Company enters into vehicle lease agreements under a Fleet Lease Agreement. The lease agreements are typically 36 month leases for each vehicle and the average remaining life for the fleet is 11 months , as of September 30, 2018 . As of September 30, 2018 and December 31, 2017 , the capital lease obligation balance was $15.8 million and $21.7 million , respectively. Build-to-Suit Lease Arrangements In April 2017, construction on the Logan Facility was completed and the Company commenced occupancy. The building asset totaled $7.3 million and $8.0 million , respectively, net of accumulated depreciation of $1.0 million and $0.3 million , respectively, as of September 30, 2018 and December 31, 2017 . |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Transactions with Vivint Solar The Company and Vivint Solar, Inc. (“Solar”) have entered into agreements under which the Company provided certain ongoing administrative services to Solar through September 2017, and the Sales Dealer Agreement (as defined below). During the three months ended September 30, 2018 and 2017 , the Company charged $6.1 million and $0.7 million , respectively, and $10.8 million and $1.8 million for nine months ended September 30, 2018 and 2017 , respectively, of net expenses to Solar in connection with these agreements. The balance due from Solar in connection with these agreements and other expenses paid on Solar’s behalf was $0.1 million , and $0.2 million at September 30, 2018 and December 31, 2017 , respectively, and is included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets. In connection with Solar’s initial public offering in 2014, the Company entered into a number of agreements with Solar related to services and other support that it has provided and will provide to Solar including: • A Master Intercompany Framework Agreement which establishes a framework for the ongoing relationship between the Company and Solar and contains master terms regarding the protection of each other’s confidential information, and master procedural terms, such as notice procedures, restrictions on assignment, interpretive provisions, governing law and dispute resolution; • A Non-Competition Agreement in which the Company and Solar each define their current areas of business and their competitors, and agree not to directly or indirectly engage in the other’s business for three years; • A Transition Services Agreement pursuant to which the Company will provide to Solar various enterprise services, including services relating to information technology and infrastructure, human resources and employee benefits, administration services and facilities-related services; • A Marketing and Customer Relations Agreement which governs various cross-marketing initiatives between the Company and Solar, in particularly the provision of sales leads from each company to the other; and • A Trademark License Agreement pursuant to which the licensor, a special purpose subsidiary majority-owned by the Company and minority-owned by Solar, will grant Solar a royalty-free exclusive license to the trademark “VIVINT SOLAR” in the field of selling renewable energy or energy storage products and services. In 2016, the Company and Solar amended the Marketing and Customer Relations Agreement to update certain terms and conditions governing existing cross-marketing initiatives and to implement new cross-marketing initiatives, including a pilot program with the purpose of exploring potential opportunities for each company to offer, sell and integrate the other company’s respective products and services with its standard product offering. In 2017, the Company and Solar entered into a Sales Dealer Agreement (the “Sales Dealer Agreement”), pursuant to which each party will act as a non-exclusive dealer for the other party to market, promote and sell each other’s products. The agreement has an initial two-year term, which will be automatically renewed for successive one-year terms unless written notice of termination is provided by one of the parties to the other no less than 90 days prior to the end of the then current term. The products, territories and consideration that is payable by each party to the other will be determined in accordance with the agreement. The Sales Dealer Agreement governs and replaces substantially all of the activities that were previously undertaken under the Marketing and Customer Relations Agreement described above, including the pilot program. The Company and Solar also agreed to extend the term of the non-solicitation provisions under the existing Non-Competition Agreement to match the term of the Sales Dealer Agreement. Other Related-party Transactions Long-term notes receivables and other assets, includes amounts due for non-interest bearing advances made to employees that are expected to be repaid in excess of one year. Amounts due from employees as of both September 30, 2018 and December 31, 2017 , amounted to approximately $0.3 million . As of September 30, 2018 and December 31, 2017 , this amount was fully reserved. Prepaid expenses and other current assets at September 30, 2018 and December 31, 2017 included a receivable for $0.3 million and $0.5 million , respectively, from certain members of management in regards to their personal use of the corporate jet. The Company incurred additional expenses of $0.3 million and $0.4 million during the three months ended September 30, 2018 and 2017 , respectively, and $1.5 million and $1.2 million during the nine months ended September 30, 2018 and 2017 , respectively, for other related-party transactions including contributions to the charitable organization Vivint Gives Back, legal fees, and other services. Accrued expenses and other current liabilities at September 30, 2018 and December 31, 2017 , included a net payable associated with these related-party transactions of $0.7 million and $1.4 million , respectively. On November 16, 2012, the Company was acquired by an investor group comprised of certain investment funds affiliated with Blackstone Capital Partners VI L.P., and certain co-investors and management investors through certain mergers and related reorganization transactions (collectively, the “Merger”). In connection with the Merger, the Company engaged Blackstone Management Partners L.L.C. (“BMP”) to provide monitoring, advisory and consulting services on an ongoing basis. In consideration for these services, the Company agreed to pay an annual monitoring fee equal to the greater of (i) a minimum base fee of $2.7 million , subject to adjustments if the Company engages in a business combination or disposition that is deemed significant and (ii) the amount of the monitoring fee paid in respect of the immediately preceding fiscal year, without regard to any post-fiscal year “true-up” adjustments as determined by the agreement. The Company incurred expenses for such services of approximately $1.1 million and $1.2 million during the three months ended September 30, 2018 and 2017 , respectively, and $3.2 million and $3.6 million during the nine months ended September 30, 2018 and 2017 , respectively. Accrued expenses and other current liabilities at September 30, 2018 included a liability for $4.0 million to BMP in regards to the monitoring fee. Under the support and services agreement, the Company also engaged BMP to arrange for Blackstone’s portfolio operations group to provide support services customarily provided by Blackstone’s portfolio operations group to Blackstone’s private equity portfolio companies of a type and amount determined by such portfolio services group to be warranted and appropriate. BMP will invoice the Company for such services based on the time spent by the relevant personnel providing such services during the applicable period but in no event shall the Company be obligated to pay more than $1.5 million during any calendar year. During the three and nine months ended September 30, 2018 and 2017 the Company incurred no costs associated with such services. Blackstone Advisory Partners L.P. participated as one of the initial purchasers in the issuance of 2022 notes in February 2017, the 2023 notes in August 2017 and the Term Loan in September 2018 and received approximately $1.5 million of total fees associated with these issuances. In September 2018, GSO Capital Partners, an affiliate of the Sponsor, participated as a lender in the Term Loan. As of September 30, 2018 , GSO Capital Partners holds $59.5 million of outstanding aggregate principal of the Term Loan. In September 2018, Vivint Smart Home, Inc. contributed $4.7 million to the Company as a capital contribution. From time to time, the Company does business with a number of other companies affiliated with Blackstone. Transactions involving related parties cannot be presumed to be carried out at an arm’s-length basis. |
Employee Benefit Plan
Employee Benefit Plan | 9 Months Ended |
Sep. 30, 2018 | |
Postemployment Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit Plan The Company offers eligible employees the opportunity to contribute a percentage of their earned income into company-sponsored 401(k) plans. Beginning in January 2018, participants in the 401(k) plans are eligible for the Company's matching program. Under this new matching program, the Company matches an employee’s contributions to the 401(k) savings plan dollar-for-dollar up to 1% of such employee’s eligible earnings and $0.50 for every $1.00 for the next 5% of such employee’s eligible earnings. The maximum match available under the 401(k) plan is 3.5% of the employee’s eligible earnings. For employees who have been employed by the Company for less than two years, matching contributions vest on the second anniversary of their date of hire. The Company's matching contributions to employees who have been employed by the Company for two years or more are fully vested. Matching contributions that were made to the plans during the three and nine months ended September 30, 2018 totaled $1.4 million and $4.4 million , respectively. No matching contributions were made to the plans during the three and nine months ended September 30, 2017 . |
Restructuring and Asset Impairm
Restructuring and Asset Impairment Charges | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Asset Impairment Charges | Restructuring and Asset Impairment Charges In July 2018, the Company announced a number of cost reduction initiatives that are expected to reduce certain of the Company’s General and Administrative, Customer Service, and Sales Support fixed costs. The Company completed the majority of these cost reduction initiatives in the second and third quarters of 2018, with the remainder by the end of 2018. In addition to resulting in meaningful cost reductions, the Company’s initiatives are expected to streamline operations, focus engineering and innovation and provide a better focus on driving customer satisfaction. As part of these initiatives, the Company and Best Buy agreed in principle to end the co-branded Best Buy Smart Home by Vivint arrangement, which resulted in the elimination of in-store sales positions. In addition, the Company eliminated other general and administrative positions. These actions resulted in one-time cash employee severance and termination benefits expenses of $0.5 million and $4.7 million during the three and nine months ended September 30, 2018 , respectively. The following table presents accrued restructuring activity for the nine months ended September 30, 2018 and the twelve months ended December 31, 2017 (in thousands): Contract termination costs Employee severance and termination benefits Total Accrued restructuring balance as of December 31, 2016 $ 649 $ — $ 649 Cash payments (91 ) — (91 ) Accrued restructuring balance as of December 31, 2017 558 — 558 Restructuring charges — 4,683 4,683 Cash payments (68 ) (3,992 ) (4,060 ) Accrued restructuring balance as of September 30, 2018 $ 490 $ 691 $ 1,181 Contract termination costs represent ongoing contractual commitments related to the 2015 restructuring of the Company's Wireless Internet Business. Additional charges may be incurred in the future for facility-related or other restructuring activities as the Company continues to align resources to meet the needs of the business. |
Segment Reporting and Business
Segment Reporting and Business Concentrations | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting and Business Concentrations | Segment Reporting and Business Concentrations For the three and nine months ended September 30, 2018 and 2017 , the Company conducted business through one operating segment, Vivint. The Company primarily operated in two geographic regions: United States and Canada. Revenues disaggregated by geographic region were as follows (in thousands): United States Canada Total Revenue from external customers Three months ended September 30, 2018 $ 253,635 $ 18,700 $ 272,335 Three months ended September 30, 2017 211,077 17,581 228,658 Nine months ended September 30, 2018 719,690 54,209 773,899 Nine months ended September 30, 2017 597,842 48,295 646,137 |
Guarantor and Non-Guarantor Sup
Guarantor and Non-Guarantor Supplemental Financial Information | 9 Months Ended |
Sep. 30, 2018 | |
Guarantor And Non Guarantor Supplemental Financial Information [Abstract] | |
Guarantor and Non-Guarantor Supplemental Financial Information | Guarantor and Non-Guarantor Supplemental Financial Information The Notes were issued by APX and are fully and unconditionally guaranteed, jointly and severally by Holdings and each of APX’s existing and future material wholly-owned U.S. restricted subsidiaries. APX’s existing and future foreign subsidiaries are not expected to guarantee the Notes. Presented below is the condensed consolidating financial information of APX, subsidiaries of APX that are guarantors (the “Guarantor Subsidiaries”), and APX’s subsidiaries that are not guarantors (the “Non-Guarantor Subsidiaries”) as of September 30, 2018 and December 31, 2017 and for the three and nine months ended September 30, 2018 and 2017 . The unaudited condensed consolidating financial information reflects the investments of APX in the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries using the equity method of accounting. Supplemental Condensed Consolidating Balance Sheet September 30, 2018 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets $ — $ 110,625 $ 292,080 $ 89,026 $ (236,208 ) $ 255,523 Property, plant and equipment, net — — 75,346 536 — 75,882 Capitalized contract costs, net — — 1,086,964 76,516 — 1,163,480 Deferred financing costs, net — 2,318 — — — 2,318 Investment in subsidiaries — 1,711,422 — — (1,711,422 ) — Intercompany receivable — — 6,303 — (6,303 ) — Intangible assets, net — — 257,383 21,111 — 278,494 Goodwill — — 809,678 26,612 — 836,290 Long-term notes receivables and other assets — 106 104,566 18,200 (106 ) 122,766 Total Assets $ — $ 1,824,471 $ 2,632,320 $ 232,001 $ (1,954,039 ) $ 2,734,753 Liabilities and Stockholders’ (Deficit) Equity Current liabilities $ — $ 68,412 $ 530,668 $ 175,960 $ (236,208 ) $ 538,832 Intercompany payable — — — 6,303 (6,303 ) — Notes payable and revolving credit facility, net of current portion — 3,038,173 — — — 3,038,173 Capital lease obligations, net of current portion — — 7,283 42 — 7,325 Deferred revenue, net of current portion — — 309,634 18,534 — 328,168 Other long-term obligations — — 95,553 — — 95,553 Accumulated losses of investee, net 1,282,114 (1,282,114 ) — Deferred income tax liability — — 106 8,816 (106 ) 8,816 Total (deficit) equity (1,282,114 ) (1,282,114 ) 1,689,076 22,346 (429,308 ) (1,282,114 ) Total liabilities and stockholders’ (deficit) equity $ — $ 1,824,471 $ 2,632,320 $ 232,001 $ (1,954,039 ) $ 2,734,753 Supplemental Condensed Consolidating Balance Sheet December 31, 2017 (in thousands) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets $ — $ 4,150 $ 284,293 $ 49,935 $ (162,413 ) $ 175,965 Property, plant and equipment, net — — 77,345 736 — 78,081 Subscriber acquisition costs, net — — 1,214,678 93,880 — 1,308,558 Deferred financing costs, net — 3,099 — — — 3,099 Investment in subsidiaries — 2,188,221 — — (2,188,221 ) — Intercompany receivable — — 6,303 — (6,303 ) — Intangible assets, net — — 350,710 26,741 — 377,451 Goodwill — — 809,678 27,292 — 836,970 Long-term notes receivables and other assets — 106 78,173 10,550 (106 ) 88,723 Total Assets $ — $ 2,195,576 $ 2,821,180 $ 209,134 $ (2,357,043 ) $ 2,868,847 Liabilities and Stockholders’ (Deficit) Equity Current liabilities $ — $ 28,805 $ 343,398 $ 128,581 $ (162,413 ) $ 338,371 Intercompany payable — — — 6,303 (6,303 ) — Notes payable and revolving credit facility, net of current portion — 2,820,297 — — — 2,820,297 Capital lease obligations, net of current portion — — 10,791 298 — 11,089 Deferred revenue, net of current portion — — 248,643 15,912 — 264,555 Accumulated Losses of Investee, net 653,526 (653,526 ) — Other long-term obligations — — 79,020 — — 79,020 Deferred income tax liability — — 106 9,041 (106 ) 9,041 Total (deficit) equity (653,526 ) (653,526 ) 2,139,222 48,999 (1,534,695 ) (653,526 ) Total liabilities and stockholders’ (deficit) equity $ — $ 2,195,576 $ 2,821,180 $ 209,134 $ (2,357,043 ) $ 2,868,847 Supplemental Condensed Consolidating Statements of Operations and Comprehensive Loss For the Three Months Ended September 30, 2018 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ — $ 260,462 $ 12,512 $ (639 ) $ 272,335 Costs and expenses — — 303,009 14,023 (639 ) 316,393 Loss from operations — — (42,547 ) (1,511 ) — (44,058 ) Loss from subsidiaries (120,226 ) (44,640 ) — — 164,866 — Other expense (income), net — 75,586 2,227 (1,422 ) — 76,391 Loss before income tax expenses (120,226 ) (120,226 ) (44,774 ) (89 ) 164,866 (120,449 ) Income tax expense (benefit) — — 55 (278 ) — (223 ) Net (loss) income (120,226 ) (120,226 ) (44,829 ) 189 164,866 (120,226 ) Other comprehensive loss, net of tax effects: Net (loss) income (120,226 ) (120,226 ) (44,829 ) 189 164,866 (120,226 ) Foreign currency translation adjustment 406 406 — 406 (812 ) 406 Total other comprehensive loss 406 406 — 406 (812 ) 406 Comprehensive (loss) income $ (119,820 ) $ (119,820 ) $ (44,829 ) $ 595 $ 164,054 $ (119,820 ) Supplemental Condensed Consolidating Statements of Operations and Comprehensive Loss For the Three Months Ended September 30, 2017 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ — $ 216,560 $ 12,770 $ (672 ) $ 228,658 Costs and expenses — — 257,988 11,489 (672 ) 268,805 (Loss) income from operations — — (41,428 ) 1,281 — (40,147 ) Loss from subsidiaries (107,920 ) (40,608 ) — — 148,528 — Other expense (income), net — 67,312 2,356 (3,052 ) — 66,616 (Loss) income before income tax expenses (107,920 ) (107,920 ) (43,784 ) 4,333 148,528 (106,763 ) Income tax (benefit) expense — — (34 ) 1,191 — 1,157 Net (loss) income (107,920 ) (107,920 ) (43,750 ) 3,142 148,528 (107,920 ) Other comprehensive loss, net of tax effects: Net (loss) income (107,920 ) (107,920 ) (43,750 ) 3,142 148,528 (107,920 ) Foreign currency translation adjustment — 1,967 — 1,967 (1,967 ) 1,967 Unrealized gain on marketable securities — (413 ) (413 ) — 413 (413 ) Total other comprehensive income — 1,554 (413 ) 1,967 (1,554 ) 1,554 Comprehensive (loss) income $ (107,920 ) $ (106,366 ) $ (44,163 ) $ 5,109 $ 146,974 $ (106,366 ) Supplemental Condensed Consolidating Statements of Operations and Comprehensive Loss For the Nine Months Ended September 30, 2018 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ — $ 738,250 $ 37,590 $ (1,941 ) $ 773,899 Costs and expenses — — 930,065 41,697 (1,941 ) 969,821 Loss from operations — — (191,815 ) (4,107 ) — (195,922 ) Loss from subsidiaries (349,328 ) (155,883 ) — — 505,211 — Other expense (income), net — 193,445 (40,737 ) 2,260 — 154,968 Loss before income tax expenses (349,328 ) (349,328 ) (151,078 ) (6,367 ) 505,211 (350,890 ) Income tax expense (benefit) — — 157 (1,719 ) — (1,562 ) Net loss (349,328 ) (349,328 ) (151,235 ) (4,648 ) 505,211 (349,328 ) Other comprehensive loss, net of tax effects: Net loss (349,328 ) (349,328 ) (151,235 ) (4,648 ) 505,211 (349,328 ) Foreign currency translation adjustment (670 ) (670 ) — (670 ) 1,340 (670 ) Total other comprehensive loss (670 ) (670 ) — (670 ) 1,340 (670 ) Comprehensive loss $ (349,998 ) $ (349,998 ) $ (151,235 ) $ (5,318 ) $ 506,551 $ (349,998 ) Supplemental Condensed Consolidating Statements of Operations and Comprehensive Loss For the Nine Months Ended September 30, 2017 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ — $ 612,075 $ 36,085 $ (2,023 ) $ 646,137 Costs and expenses — — 703,656 31,641 (2,023 ) 733,274 (Loss) income from operations — — (91,581 ) 4,444 — (87,137 ) Loss from subsidiaries (274,793 ) (88,104 ) — — 362,897 — Other expense (income), net — 186,689 4,097 (5,438 ) — 185,348 (Loss) income before income tax expenses (274,793 ) (274,793 ) (95,678 ) 9,882 362,897 (272,485 ) Income tax (benefit) expense — — (303 ) 2,611 — 2,308 Net (loss) income (274,793 ) (274,793 ) (95,375 ) 7,271 362,897 (274,793 ) Other comprehensive loss, net of tax effects: Net (loss) income (274,793 ) (274,793 ) (95,375 ) 7,271 362,897 (274,793 ) Foreign currency translation adjustment — 3,543 — 3,543 (3,543 ) 3,543 Unrealized gain on marketable securities — (671 ) (671 ) — 671 (671 ) Total other comprehensive income — 2,872 (671 ) 3,543 (2,872 ) 2,872 Comprehensive (loss) income $ (274,793 ) $ (271,921 ) $ (96,046 ) $ 10,814 $ 360,025 $ (271,921 ) Supplemental Condensed Consolidating Statements of Cash Flows For the Nine Months Ended September 30, 2018 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net cash used in operating activities $ — $ — $ (130,718 ) $ 695 $ — $ (130,023 ) Cash flows from investing activities: Capital expenditures — — (15,355 ) — — (15,355 ) Proceeds from sale of intangibles — — 53,693 — — 53,693 Proceeds from sale of capital assets — — 185 — — 185 Investment in subsidiary (2,331 ) (104,906 ) — — 107,237 — Acquisition of intangible assets — — (1,068 ) — — (1,068 ) Net cash (used in) provided by investing activities (2,331 ) (104,906 ) 37,455 — 107,237 37,455 Cash flows from financing activities: Proceeds from notes payable — 810,000 — — — 810,000 Repayment on notes payable — (520,166 ) — — — (520,166 ) Borrowings from revolving credit facility — 201,000 — — — 201,000 Repayments on revolving credit facility — (261,000 ) — — — (261,000 ) Proceeds from capital contribution 4,700 4,700 107,275 — (111,975 ) 4,700 Repayments of capital lease obligations — — (9,611 ) (271 ) — (9,882 ) Financing costs — (11,317 ) — — — (11,317 ) Deferred financing costs — (9,302 ) — — — (9,302 ) Return of capital (2,369 ) (2,369 ) (2,369 ) — 4,738 (2,369 ) Net cash provided by (used in) financing activities 2,331 211,546 95,295 (271 ) (107,237 ) 201,664 Effect of exchange rate changes on cash — — — (2 ) — (2 ) Net increase in cash and cash equivalents — 106,640 2,032 422 — 109,094 Cash and cash equivalents: Beginning of period — 3,661 (572 ) 783 — 3,872 End of period $ — $ 110,301 $ 1,460 $ 1,205 $ — $ 112,966 Supplemental Condensed Consolidating Statements of Cash Flows For the Nine Months Ended September 30, 2017 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net cash (used in) provided by operating activities $ — $ — $ (154,360 ) $ 5,092 $ — $ (149,268 ) Cash flows from investing activities: Capital expenditures — — (14,842 ) — — (14,842 ) Investment in subsidiary — (157,400 ) — — 157,400 — Acquisition of intangible assets — — (1,057 ) — — (1,057 ) Proceeds from sale of capital assets — — 275 — — 275 Acquisition of other assets — — (156 ) — — (156 ) Net cash used in investing activities — (157,400 ) (15,780 ) — 157,400 (15,780 ) Cash flows from financing activities: Proceeds from notes payable — 724,750 — — — 724,750 Repayment on notes payable — (450,000 ) — — — (450,000 ) Borrowings from revolving credit facility — 124,000 — — — 124,000 Repayments on revolving credit facility — (124,000 ) — — — (124,000 ) Intercompany receivable — — 3,621 — (3,621 ) — Intercompany payable — — — (3,621 ) 3,621 — Proceeds from capital contributions — — 157,400 — (157,400 ) — Repayments of capital lease obligations — — (6,899 ) (262 ) — (7,161 ) Payments of other long-term obligations — — (2,065 ) — — (2,065 ) Financing costs — (17,771 ) — — — (17,771 ) Deferred financing costs — (10,730 ) — — — (10,730 ) Net cash provided by (used in) financing activities — 246,249 152,057 (3,883 ) (157,400 ) 237,023 Effect of exchange rate changes on cash — — — 72 — 72 Net increase (decrease) in cash and cash equivalents — 88,849 (18,083 ) 1,281 — 72,047 Cash and cash equivalents: Beginning of period — 24,680 18,186 654 — 43,520 End of period $ — $ 113,529 $ 103 $ 1,935 $ — $ 115,567 |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements of the Company are presented for APX Group Holdings, Inc. (“Holdings") and its wholly-owned subsidiaries. The Company has prepared the accompanying unaudited condensed consolidated financial statements pursuant to GAAP. Preparing financial statements requires the Company to make estimates and assumptions that affect the amounts that are reported in the consolidated financial statements and accompanying disclosures. Although these estimates are based on the Company’s best knowledge of current events and actions that the Company may undertake in the future, actual results may be different from the Company’s estimates. The results of operations presented herein are not necessarily indicative of the Company’s results for any future period. |
Vivint Flex Pay | Vivint Flex Pay In January 2017, the Company announced the introduction of the Vivint Flex Pay plan (“Vivint Flex Pay”), which became the Company's primary sales model beginning in March 2017. Under Vivint Flex Pay, customers pay separately for the products (including control panel, security peripheral equipment, smart home equipment, and related installation) (“Products”) and Vivint's smart home and security services (“Services”). The customer has the following three options to pay for the Products: (1) qualified customers in the United States may finance the purchase of Products through a third-party financing provider (“Consumer Financing Program”), (2) customers not eligible for the Consumer Financing Program, but who qualify under the Company's underwriting criteria, may enter into a retail installment contract (“RIC”) directly with Vivint, or (3) customers may purchase the Products at the outset of the service contract by check, automatic clearing house payments (“ACH”), credit or debit card. Although customers pay separately for Products and Services under the Vivint Flex Pay plan, the Company has determined that the shift in model does not change the Company's conclusion that the sale of Products and Services are one single performance obligation. As a result, all forms of transactions under Vivint Flex Pay create deferred revenue for the gross amount of Products sold. Gross deferred revenues are reduced by imputed interest on the RICs and the present value of expected payments due to the third-party financing provider under the Consumer Financing Program. Under the Consumer Financing Program, qualified customers are eligible for installment loans provided by a third-party financing provider of up to $4,000 for either 42 or 60 months. The Company pays a monthly fee to the third-party financing provider based on the average daily outstanding balance of the installment loans. Additionally, the Company shares liability for credit losses depending on the credit quality of the customer. Because of the nature of these provisions under the Consumer Financing Program, the Company records a derivative liability at its fair value when the third-party financing provider originates installment loans to customers, which reduces the amount of estimated revenue recognized on the provision of the services. The derivative liability is reduced as payments are made from the Company to the third-party financing provider. Subsequent changes to the fair value of the derivative liability are realized through other loss/(income), net in the Condensed Consolidated Statement of Operations. (See Note 8 ). |
Retail Installment Contract Receivables | Retail Installment Contract Receivables For customers that enter into a RIC under the Vivint Flex Pay plan, the Company records a receivable for the amount financed. The RIC receivables are recorded at their present value, net of the imputed interest. At the time of installation, the Company records a long-term note receivable within long-term notes receivables and other assets, net on the condensed consolidated balance sheets for the present value of the receivables that are expected to be collected beyond 12 months of the reporting date. The unbilled receivable amounts that are expected to be collected within 12 months of the reporting date are included as a short-term notes receivable within accounts and notes receivable, net on the condensed consolidated balance sheets. The billed amounts of notes receivables are included in accounts receivable within accounts and notes receivable, net on the condensed consolidated balance sheets. The Company imputes the interest on the RIC receivable using a risk adjusted market interest rate and records it as an adjustment to deferred revenue and as an adjustment to the face amount of the related receivable. The imputed interest discount considers a number of factors, including collection experience, aging of the remaining RIC receivable portfolios, credit quality of the subscriber base and other qualitative considerations, including macro-economic factors. The imputed interest income is recognized over the term of the RIC contract as recurring and other revenue on the condensed consolidated statement of operations. When the Company determines that there are RIC receivables that have become uncollectible, the Company records an adjustment to the imputed interest discount and reduce the related note receivable balance. Account balances are written-off if collection efforts are unsuccessful and future collection is unlikely based on the length of time from the day accounts become past due. |
Accounts Receivable | Accounts Receivable Accounts receivable consists primarily of amounts due from customers for recurring monthly monitoring Services and the billed portion of RIC receivables. The accounts receivable are recorded at invoiced amounts and are non-interest bearing and are included within accounts and notes receivable, net on the condensed consolidated balance sheets. Accounts receivable totaled $22.6 million and $24.3 million at September 30, 2018 and December 31, 2017 , respectively net of the allowance for doubtful accounts of $5.6 million and $5.4 million at September 30, 2018 and December 31, 2017 , respectively. The Company estimates this allowance based on historical collection experience and subscriber attrition rates. When the Company determines that there are accounts receivable that are uncollectible, they are charged off against the allowance for doubtful accounts. As of September 30, 2018 and December 31, 2017 , no accounts receivable were classified as held for sale. The provision for doubtful accounts is included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations and totaled $5.9 million and $5.0 million for the three months ended September 30, 2018 and 2017 , respectively, and $14.3 million and $14.7 million for the nine months ended September 30, 2018 and 2017 , respectively. |
Revenue Recognition | Revenue Recognition The Company offers its customers smart home services combining Products, including a proprietary control panel, door and window sensors, door locks, security cameras and smoke alarms; installation; and a proprietary back-end cloud platform software and Services. These together create an integrated system that allows the Company’s customers to monitor, control and protect their home (“Smart Home Services”). The Company’s customers are buying this integrated system that provides them with these Smart Home Services. The number and type of Products purchased by a customer depends on their desired functionality. Because the Products and Services included in the customer’s contract are integrated and highly interdependent, and because they must work together to deliver the Smart Home Services, the Company has concluded that installed Products, related installation and Services contracted for by the customer are generally not distinct within the context of the contract and, therefore, constitute a single, combined performance obligation. Revenues for this single, combined performance obligation are recognized on a straight-line basis over the customer’s contract term. The Company has determined that certain contracts that do not require a long-term commitment for monitoring services by the customer contain a material right to renew the contract, because the customer does not have to purchase Products upon renewal. Proceeds allocated to the material right are recognized over the period benefit, which is generally three years. The majority of the Company’s subscription contracts are between three and five years in length and are non-cancelable. These contracts with customers generally convert into month-to-month agreements at the end of the initial term, and some customer contracts are month-to-month from inception. Payment for recurring monitoring and other Smart Home Services is generally due in advance on a monthly basis. Sales of Products and other one-time fees such as service fees or installation fees are invoiced to the customer at the time of sale. Revenues for wireless internet service provided by Vivint Wireless Inc. (“Wireless Internet” or “Wireless”) and any Products or Services that are considered separate performance obligations are recognized when those Products or Services are delivered. Taxes collected from customers and remitted to governmental authorities are not included in revenue. Payments received or amounts billed in advance of revenue recognition are reported as deferred revenue. |
Deferred Revenue | Deferred Revenue The Company's deferred revenues primarily consist of amounts for sales (including upfront proceeds) of Smart Home Services. Deferred revenues are recognized over the term of the related performance obligation. |
Subscriber Acquisition Costs | Capitalized Contract Costs Capitalized contract costs represent the costs directly related and incremental to the origination of new contracts, modification of existing contracts or to the fulfillment of the related customer contracts. These include commissions, other compensation and related costs paid directly for the origination and installation of new or upgraded customer contracts, as well as the cost of Products installed in the customer home at the commencement or modification of the contract. These costs are deferred and amortized on a straight-line basis over the expected period of benefit that the Company has determined to be five years . Amortization of capitalized contract costs is included in “Depreciation and Amortization” on the consolidated statements of operations. These deferred costs are periodically reviewed for impairment. Contract costs not directly related and incremental to the origination of new contracts, modification of existing contracts or to the fulfillment of the related customer contracts are expensed as incurred. These costs include those associated with housing, marketing and recruiting, non-direct lead generation costs, certain portions of sales commissions and residuals, overhead and other costs considered not directly and specifically tied to the origination of a particular subscriber. On the condensed consolidated statement of cash flows, capitalized contract costs are classified as operating activities and reported as “Capitalized contract costs – deferred contract costs” as these assets represent deferred costs associated with customer contracts. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consists of highly liquid investments with remaining maturities when purchased of three months or less. |
Inventories | Inventories Inventories, which are comprised of smart home and security system Products and parts, are stated at the lower of cost or net realizable value with cost determined under the first-in, first-out (FIFO) method. The Company adjusts the inventory balance based on anticipated obsolescence, usage and historical write-offs. |
Long-lived Assets and Intangibles, Property, Plant and Equipment | Long-lived Assets and Intangibles Property, plant and equipment are stated at cost and depreciated on the straight-line method over the estimated useful lives of the assets or the lease term for assets under capital leases, whichever is shorter. Intangible assets with definite lives are amortized over the remaining estimated economic life of the underlying technology or relationships, which ranges from five to ten years . Definite-lived intangible assets are amortized on the straight-line method over the estimated useful life of the asset or in a pattern in which the economic benefits of the intangible asset are consumed. Amortization expense associated with leased assets is included with depreciation expense. Routine repairs and maintenance are charged to expense as incurred. The Company reviews long-lived assets, including property, plant and equipment, capitalized contract costs, and definite-lived intangibles for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company considers whether or not indicators of impairment exist on a regular basis and as part of each quarterly and annual financial statement close process. Factors the Company considers in determining whether or not indicators of impairment exist include market factors and patterns of customer attrition. If indicators of impairment are identified, the Company estimates the fair value of the assets. An impairment loss is recognized if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value. |
Long-lived Assets and Intangibles, Intangible Assets | Wireless Spectrum Licenses The Company had capitalized, as an intangible asset, wireless spectrum licenses that its subsidiary, Vivint Wireless, acquired from a third party. The cost basis of the wireless spectrum asset included the purchase price paid for the licenses at the time of acquisition, plus costs incurred to acquire the licenses. The asset and related liability were recorded at the net present value of future cash outflows using the Company's incremental borrowing rate at the time of acquisition. The Company determined that the wireless spectrum licenses met the definition of indefinite-lived intangible assets because the licenses were able to be renewed periodically for a nominal fee, provided that the Company continued to meet the service and geographic coverage provisions. In January 2018, the Company terminated the wireless spectrum licenses for cash consideration. Long-lived Assets and Intangibles Property, plant and equipment are stated at cost and depreciated on the straight-line method over the estimated useful lives of the assets or the lease term for assets under capital leases, whichever is shorter. Intangible assets with definite lives are amortized over the remaining estimated economic life of the underlying technology or relationships, which ranges from five to ten years . Definite-lived intangible assets are amortized on the straight-line method over the estimated useful life of the asset or in a pattern in which the economic benefits of the intangible asset are consumed. Amortization expense associated with leased assets is included with depreciation expense. Routine repairs and maintenance are charged to expense as incurred. The Company reviews long-lived assets, including property, plant and equipment, capitalized contract costs, and definite-lived intangibles for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company considers whether or not indicators of impairment exist on a regular basis and as part of each quarterly and annual financial statement close process. Factors the Company considers in determining whether or not indicators of impairment exist include market factors and patterns of customer attrition. If indicators of impairment are identified, the Company estimates the fair value of the assets. An impairment loss is recognized if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value. The Company conducts an indefinite-lived intangible impairment analysis annually as of October 1, and as necessary if changes in facts and circumstances indicate that the fair value of the Company’s indefinite-lived intangibles may be less than the carrying amount. When indicators of impairment do not exist and certain accounting criteria are met, the Company is able to evaluate indefinite-lived intangible impairment using a qualitative approach. When necessary, the Company’s quantitative impairment test consists of two steps. The first step requires that the Company compare the estimated fair value of its indefinite-lived intangibles to the carrying value. If the fair value is greater than the carrying value, the intangibles are not considered to be impaired and no further testing is required. If the fair value is less than the carrying value, an impairment loss in an amount equal to the difference is recorded. |
Long-term Investments | Long-term Investments The Company’s long-term investments are comprised of equity securities in both privately held and public companies. As of September 30, 2018 and December 31, 2017 , the Company's equity investments totaled $4.8 million and $3.4 million , respectively. Management determines the appropriate fair value measurement of its investments at the time of purchase and reevaluates the fair value measurement at each balance sheet date. Equity securities are classified as either short-term or long-term, based on the nature of each security and its availability for use in current operations. The Company’s equity securities are carried at fair value, with gains and losses reported in other income or loss within the statement of operations. The Company's equity investments without readily determinable fair values totaled $0.7 million as of September 30, 2018 and December 31, 2017 , respectively. The Company performs impairment analyses of its investments without readily determinable fair values when events occur or circumstances change that would, more likely than not, reduce the fair value of the investment below its carrying value. When indicators of impairment do not exist, the Company evaluates impairment using a qualitative approach. Additionally, increases or decreases in the carrying amount resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer are adjusted through the statement of operations as needed. As of September 30, 2018 and December 31, 2017 , no indicators of impairment or changes in observable prices existed associated with investments without readily determinable fair values. |
Deferred Financing Costs | Deferred Financing Costs Certain costs incurred in connection with obtaining debt financing are deferred and amortized utilizing the straight-line method, which approximates the effective-interest method, over the life of the related financing. Deferred financing costs associated with obtaining APX Group, Inc.’s (“APX”) revolving credit facility are amortized over the amended maturity dates discussed in Note 3 . |
Residual Income Plans | Residual Income Plans The Company has a program that allows certain third-party sales channel partners to receive additional compensation based on the performance of the underlying contracts they create (the “Channel Partner Plan”). In addition, during the three months ended June 30, 2018, the Company introduced a new residual sales compensation plan (the “Residual Plan”). Under the Residual Plan, the Company's sales personnel (each, a “Plan Participant”) have the option to convert up to a specified portion of their earnings (as defined in the Residual Plan) into the right to receive monthly residual compensation payable over the life of the subscriber accounts sold by such Plan Participant. For both the Channel Partner Plan and Residual Plan, the Company calculates the present value of the expected future residual payments and records a liability for this amount in the period the subscriber account is originated. These costs are recorded to capitalized contract costs. The Company monitors actual payments and customer attrition on a periodic basis and, when necessary, makes adjustments to the liability. |
Stock-Based Compensation | Stock-Based Compensation The Company measures compensation costs based on the grant-date fair value of the award and recognizes that cost over the requisite service period of the awards (See Note 10 ). |
Advertising Expense | Advertising Expense Advertising costs are expensed as incurred. |
Income Taxes | Income Taxes The Company accounts for income taxes based on the asset and liability method. Under the asset and liability method, deferred tax assets and deferred tax liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets when it is determined that it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. The Company recognizes the effect of an uncertain income tax position on the income tax return at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company’s policy for recording interest and penalties is to record such items as a component of the provision for income taxes. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of receivables and cash. At times during the year, the Company maintains cash balances in excess of insured limits. The Company is not dependent on any single customer or geographic location. The loss of a customer would not adversely impact the Company’s operating results or financial position. |
Concentrations of Supply Risk | Concentrations of Supply Risk As of September 30, 2018 , approximately 78% of the Company’s installed panels were SkyControl panels and 20% were 2GIG Go!Control panels. During the three months ended March 31, 2018 the Company transitioned to a new panel supplier. The loss of the Company's panel supplier could potentially impact its operating results or financial position. |
Fair Value Measurement | Fair Value Measurement Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities subject to on-going fair value measurement are categorized and disclosed into one of three categories depending on observable or unobservable inputs employed in the measurement. These two types of inputs have created the following fair value hierarchy: Level 1: Quoted prices in active markets that are accessible at the measurement date for assets and liabilities. Level 2: Observable prices that are based on inputs not quoted in active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. This hierarchy requires the Company to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value. The Company recognizes transfers between levels of the hierarchy based on the fair values of the respective financial measurements at the end of the reporting period in which the transfer occurred. There were no transfers between levels of the fair value hierarchy during the nine months ended September 30, 2018 and 2017 . The carrying amounts of the Company’s accounts receivable, accounts payable and accrued and other liabilities approximate their fair values due to their short maturities. |
Goodwill | Goodwill The Company conducts a goodwill impairment analysis annually in the fourth fiscal quarter, as of October 1, and as necessary if changes in facts and circumstances indicate that the fair value of the Company’s reporting units may be less than their carrying amounts. When indicators of impairment do not exist and certain accounting criteria are met, the Company is able to evaluate goodwill impairment using a qualitative approach. When necessary, the Company’s quantitative goodwill impairment test consists of two steps. The first step requires that the Company compare the estimated fair value of its reporting units to the carrying value of the reporting unit’s net assets, including goodwill. If the fair value of the reporting unit is greater than the carrying value of its net assets, goodwill is not considered to be impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value of its net assets, the Company would be required to complete the second step of the test by analyzing the fair value of its goodwill. If the carrying value of the goodwill exceeds its fair value, an impairment charge is recorded. The Company’s reporting units are determined based on its current reporting structure, which as of December 31, 2017 and September 30, 2018 consisted of two reporting units. As of September 30, 2018 , there were no changes in facts and circumstances since the most recent annual impairment analysis to indicate impairment existed. |
Foreign Currency Translation and Other Comprehensive Income | Foreign Currency Translation and Other Comprehensive Income The functional currency of Vivint Canada, Inc. is the Canadian dollar. Accordingly, Vivint Canada, Inc. assets and liabilities are translated from their respective functional currencies into U.S. dollars at period-end rates and Vivint Canada, Inc. revenue and expenses are translated at the weighted-average exchange rates for the period. Adjustments resulting from this translation process are classified as other comprehensive income (loss) and shown as a separate component of equity. When intercompany foreign currency transactions between entities included in the consolidated financial statements are of a long term investment nature (i.e., those for which settlement is not planned or anticipated in the foreseeable future) foreign currency translation adjustments resulting from those transactions are included in stockholders’ deficit as accumulated other comprehensive loss or income. When intercompany transactions are deemed to be of a short term nature, translation adjustments are required to be included in the condensed consolidated statement of operations. |
Letters of Credit | Letters of Credit As of September 30, 2018 and December 31, 2017 , the Company had $11.3 million and $9.5 million , respectively, of letters of credit issued in the ordinary course of business, all of which are undrawn. |
Restructuring and Asset Impairment Charges | Restructuring and Asset Impairment Charges Restructuring and asset impairment charges represent expenses incurred in relation to activities to exit or dispose of portions of the Company's business that do not qualify as discontinued operations. Liabilities associated with restructuring are measured at their fair value when the liability is incurred. Expenses for related termination benefits are recognized at the date the Company notifies the employee, unless the employee must provide future service, in which case the benefits are expensed ratably over the future service period. Liabilities related to termination of a contract are measured and recognized at fair value when the contract does not have any future economic benefit to the entity and the fair value of the liability is determined based on the present value of the remaining obligation. The Company expenses all other costs related to an exit or disposal activity as incurred (See Note 14 ). |
New Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13, “Financial Instruments—Credit Losses (Topic 326)” which modifies the measurement of expected credit losses of certain financial instruments. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019 and must be applied using a modified-retrospective approach, with early adoption permitted. The Company is evaluating the adoption of ASU 2016-13 and plans to provide additional information about its expected impact at a future date. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 326)” to increase transparency and comparability among organizations as it relates to lease assets and lease liabilities. The update requires that lease assets and lease liabilities be recognized on the balance sheet, and that key information about leasing arrangements be disclosed. Prior to this update, GAAP did not require operating leases to be recognized as lease assets and lease liabilities on the balance sheet. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In July 2018, the FASB issued ASU 2018-11 which provides companies the option to adopt using a modified retrospective approach or a prospective adoption approach. The Company is continuing its evaluation of the impact of ASU 2016-02 on its accounting policies, processes, and system requirements. The Company’s current operating lease portfolio is primarily comprised of network, real estate, and equipment leases. Upon adoption of this standard, the Company expects the balance sheet to include a right of use asset and liability related to substantially all operating lease arrangements. The Company has assigned internal resources to perform the evaluation. Furthermore, the Company has made and will continue to make investments in systems to enable timely and accurate reporting under the new standard. While the Company continues to assess the potential impacts of ASU 2016-02, including the areas described above, and anticipates this standard could have a material impact on the consolidated financial statements, the Company does not know or cannot reasonably estimate quantitative information related to the impact of the new standard on the financial statements at this time. The Company anticipates adopting this standard on January 1, 2019 using the prospective adoption approach and electing substantially all the practical expedients allowed under the standard. Recently Adopted Accounting Standards ASU 2016-01 In January 2016, the FASB issued ASU 2016-01, "Financial Instruments-Overall (Subtopic 825-10)" which enhances the reporting model for financial instruments by addressing certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. Key provisions require equity investments (except those accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income (loss). In addition, the exit price notion must be used when measuring the fair value of financial instruments for disclosure purposes. ASU 2016-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company adopted ASU 2016-01 on January 1, 2018, with a cumulative-effect adjustment to increase accumulated deficit by $0.7 million for the net unrealized losses within accumulated other comprehensive income related to equity investments. During the three and nine months ended September 30, 2018 , the Company recorded a net gain of $0.6 million and $1.4 million , respectively, to other income associated with the change in fair value of equity investments. ASU 2014-09 In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605).” Under Topic 606, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, Topic 606 requires enhanced disclosures, including disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Topic 606 also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers, which requires the deferral of incremental costs of obtaining a contract with a customer. Collectively, the Company refers to Topic 606 and Subtopic 340-40 as the “new standard”. The Company adopted the new standard as of January 1, 2018, utilizing the modified retrospective method of transition (the cumulative catch-up transition method). Adoption of the new standard resulted in changes to the accounting policies for revenue recognition, deferred revenue, and capitalized contract costs (formerly subscriber acquisition costs). The cumulative effect of applying the new standard to all contracts with customers that were not completed as of January 1, 2018 was recorded as an adjustment to accumulated deficit as of the adoption date. The comparative information has not been adjusted and continues to be reported under Topic 605. See Note 2 "Revenue and Capitalized Contract Costs" for additional information related to the impact of adopting this standard and a discussion of the Company's updated policies related to revenue recognition and accounting for costs to obtain and fulfill a customer contract. |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Changes in Company's Allowance for Accounts Receivable | The changes in the Company’s allowance for accounts receivable were as follows for the periods ended (in thousands): Nine Months Ended September 30, 2018 Twelve Months Ended December 31, 2017 Beginning balance $ 5,356 $ 4,138 Provision for doubtful accounts 14,318 22,465 Write-offs and adjustments (14,026 ) (21,247 ) Balance at end of period $ 5,648 $ 5,356 The following table summarizes the installment receivables (in thousands): September 30, 2018 December 31, 2017 RIC receivables, gross $ 181,353 $ 131,024 Deferred interest (41,006 ) (36,048 ) RIC receivables, net of deferred interest $ 140,347 $ 94,976 Classified on the condensed consolidated unaudited balance sheets as: Accounts and notes receivable, net $ 29,350 $ 16,469 Long-term notes receivables and other assets, net 110,997 78,507 RIC receivables, net $ 140,347 $ 94,976 |
Schedule Of Depreciation And Amortization Expense | The Company’s depreciation and amortization included in the consolidated statements of operations consisted of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Amortization of capitalized contract costs $ 101,498 $ — $ 294,802 $ — Amortization of subscriber acquisition costs — 53,730 — 149,933 Amortization of definite-lived intangibles 22,741 25,547 68,193 76,267 Depreciation of property, plant and equipment 6,397 5,183 18,772 15,225 Total depreciation and amortization $ 130,636 $ 84,460 $ 381,767 $ 241,425 |
Schedule Of Foreign Translation Activity | Translation activity included in the statement of operations in other loss, net related to intercompany balances was as follows: (in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Translation (gain) loss $ (1,459 ) $ (3,076 ) $ 2,175 $ (5,545 ) |
Revenue and Capitalized Contr_2
Revenue and Capitalized Contract Costs (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to select consolidated balance sheet line items as of January 1, 2018 (in thousands): Condensed Consolidated Balance Sheets (unaudited) As Reported Adjustments Adjusted December 31, 2017 January 1, 2018 Assets Capitalized contract costs, net $ — $ 1,020,408 $ 1,020,408 Subscriber acquisition costs, net 1,308,558 (1,308,558 ) — Long-term notes receivables and other assets, net 88,723 2,713 91,436 Liabilities and Stockholders' Deficit Accrued expenses and other current liabilities 74,321 10,329 84,650 Deferred revenue 88,337 39,868 128,205 Deferred revenue, net of current portion 264,555 (53,062 ) 211,493 Accumulated deficit (1,358,571 ) (282,572 ) (1,641,143 ) The following tables compare the select reported condensed consolidated balance sheets, statements of operations and cash flows line items to the amounts had the previous guidance been in effect (in thousands): Condensed Consolidated Balance Sheets (unaudited) September 30, 2018 As Reported Balances Without Adoption of Topic 606 Effect of Change Higher/(Lower) Assets Capitalized contract costs, net $ 1,163,480 $ — $ 1,163,480 Subscriber acquisition costs, net — 1,540,097 (1,540,097 ) Liabilities and Stockholders' Deficit Accrued expenses and other current liabilities 155,818 145,680 10,138 Deferred revenue 184,226 126,797 57,429 Deferred revenue, net of current portion 328,168 429,248 (101,080 ) Accumulated deficit (1,991,153 ) (1,647,493 ) (343,660 ) Accumulated other comprehensive loss (27,289 ) (27,845 ) 556 Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) Three months ended September 30, 2018 Nine months ended September 30, 2018 As Reported Balances Without Adoption of Topic 606 Effect of Change Higher/(Lower) As Reported Balances Without Adoption of Topic 606 Effect of Change Higher/(Lower) Revenues: Recurring and other revenue $ 272,335 $ 243,733 $ 28,602 $ 773,899 $ 703,807 $ 70,092 Service and other sales revenue — 15,200 (15,200 ) — 31,998 (31,998 ) Activation fees — 2,314 (2,314 ) — 7,455 (7,455 ) Costs and expenses: Operating expenses 92,703 103,199 (10,496 ) 265,784 286,214 (20,430 ) Depreciation and amortization 130,636 94,509 36,127 381,767 272,319 109,448 Loss before income taxes (120,449 ) (105,906 ) (14,543 ) (350,890 ) (292,511 ) (58,379 ) Net loss (120,226 ) (105,683 ) (14,543 ) (349,328 ) (290,949 ) (58,379 ) Other comprehensive loss, net of tax effects: Foreign currency translation adjustment 406 (150 ) 556 (670 ) (1,226 ) 556 Total other comprehensive income (loss) 406 (150 ) 556 (670 ) (1,226 ) 556 Comprehensive loss (119,820 ) (105,833 ) (13,987 ) (349,998 ) (292,175 ) (57,823 ) Condensed Consolidated Statements of Cashflows (unaudited) Nine Months Ended September 30, 2018 As Reported Balances Without Adoption of Topic 606 Effect of Change Cash flows from operating activities: Net loss $ (349,328 ) $ (290,949 ) $ (58,379 ) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of capitalized contract costs 294,802 — 294,802 Amortization of subscriber acquisition costs — 185,354 (185,354 ) Changes in operating assets and liabilities: Capitalized contract costs – deferred contract costs (439,711 ) — (439,711 ) Subscriber acquisition costs – deferred contract costs — (419,281 ) 419,281 Deferred revenue 173,255 203,894 (30,639 ) Net cash used in operating activities (130,023 ) (130,023 ) — |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Other Expense and Loss on Extinguishment and Deferred Financing Costs | As a result of these analyses the company recorded the following amounts of other expense and loss on extinguishment and deferred financing costs (in thousands): Other expense and loss on extinguishment Deferred financing costs Original premium extinguished Previously deferred financing costs extinguished New financing costs Total other expense and loss on extinguishment Previously deferred financing costs rolled over New deferred financing costs Total deferred financing costs Three and nine months ended September 30, 2018 September 2018 issuance $ (953 ) $ 4,207 $ 11,317 $ 14,571 $ — $ 10,275 $ 10,275 Three months ended September 30, 2017 August 2017 issuance $ — $ 1,408 $ 8,881 $ 10,289 $ 473 $ 4,556 $ 5,029 Nine months ended September 30, 2017 August 2017 issuance $ — $ 1,408 $ 8,881 $ 10,289 $ 473 $ 4,556 $ 5,029 February 2017 issuance — 3,259 9,491 12,750 1,476 6,077 7,553 Total $ — $ 4,667 $ 18,372 $ 23,039 $ 1,949 $ 10,633 $ 12,582 |
Schedule of Deferred Financing Activity | The following table presents deferred financing activity for the nine months ended September 30, 2018 and year ended December 31, 2017 (in thousands): Unamortized Deferred Financing Costs Balance December 31, 2017 Additions Refinances Early Extinguishment Amortized Balance September 30, 2018 Revolving Credit Facility $ 3,099 $ — $ — $ — $ (781 ) $ 2,318 2019 Notes 2,877 — — (1,876 ) (1,001 ) — 2020 Notes 11,209 — — (2,331 ) (2,796 ) 6,082 2022 Private Placement Notes 752 — — — (113 ) 639 2022 Notes 16,067 — — — (2,451 ) 13,616 2023 Notes 4,762 — — — (630 ) 4,132 Term Loan — 10,275 — — (153 ) 10,122 Total Deferred Financing Costs $ 38,766 $ 10,275 $ — $ (4,207 ) $ (7,925 ) $ 36,909 Unamortized Deferred Financing Costs Balance December 31, 2016 Additions Refinances Early Extinguishment Amortized Balance December 31, 2017 Revolving Credit Facility $ 4,420 $ 399 $ — $ — $ (1,720 ) $ 3,099 2019 Notes 11,693 — (1,949 ) (4,667 ) (2,200 ) 2,877 2020 Notes 15,053 — — — (3,844 ) 11,209 2022 Private Placement Notes 903 — — — (151 ) 752 2022 Notes 11,714 6,076 1,476 — (3,199 ) 16,067 2023 Notes — 4,569 473 — (280 ) 4,762 Total Deferred Financing Costs $ 43,783 $ 11,044 $ — $ (4,667 ) $ (11,394 ) $ 38,766 |
Summary of Debt | The Company’s debt at September 30, 2018 and December 31, 2017 consisted of the following (in thousands): September 30, 2018 Outstanding Principal Unamortized Premium (Discount) Unamortized Deferred Financing Costs (1) Net Carrying Amount 8.75% Senior Notes due 2020 679,299 2,495 (6,082 ) 675,712 8.875% Senior Secured Notes Due 2022 270,000 (2,234 ) (639 ) 267,127 7.875% Senior Secured Notes Due 2022 900,000 21,304 (13,616 ) 907,688 7.625% Senior Notes Due 2023 400,000 — (4,132 ) 395,868 Term Loan 801,900 — (10,122 ) 791,778 Total Long-Term Debt $ 3,051,199 $ 21,565 $ (34,591 ) $ 3,038,173 December 31, 2017 Outstanding Principal Unamortized Premium (Discount) Unamortized Deferred Financing Costs (1) Net Carrying Amount Series D Revolving Credit Facility Due 2019 $ 3,000 $ — $ — $ 3,000 Series A, B Revolving Credit Facilities Due 2021 57,000 — — 57,000 6.375% Senior Secured Notes due 2019 269,465 — (2,877 ) 266,588 8.75% Senior Notes due 2020 930,000 4,465 (11,209 ) 923,256 8.875% Senior Secured Notes due 2022 270,000 (2,559 ) (752 ) 266,689 7.875% Senior Secured Notes due 2022 900,000 24,593 (16,067 ) 908,526 7.625% Senior Secured Notes Due 2023 400,000 — (4,762 ) 395,238 Total Long-Term Debt $ 2,829,465 $ 26,499 $ (35,667 ) $ 2,820,297 (1) Unamortized deferred financing costs related to the revolving credit facilities included in deferred financing costs, net on the condensed consolidated balance sheets at September 30, 2018 and December 31, 2017 was $2.3 million and $3.1 million , respectively. |
Retail Installment Contract R_2
Retail Installment Contract Receivables (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Schedule of Installment Receivables | The changes in the Company’s allowance for accounts receivable were as follows for the periods ended (in thousands): Nine Months Ended September 30, 2018 Twelve Months Ended December 31, 2017 Beginning balance $ 5,356 $ 4,138 Provision for doubtful accounts 14,318 22,465 Write-offs and adjustments (14,026 ) (21,247 ) Balance at end of period $ 5,648 $ 5,356 The following table summarizes the installment receivables (in thousands): September 30, 2018 December 31, 2017 RIC receivables, gross $ 181,353 $ 131,024 Deferred interest (41,006 ) (36,048 ) RIC receivables, net of deferred interest $ 140,347 $ 94,976 Classified on the condensed consolidated unaudited balance sheets as: Accounts and notes receivable, net $ 29,350 $ 16,469 Long-term notes receivables and other assets, net 110,997 78,507 RIC receivables, net $ 140,347 $ 94,976 |
Allowance for Credit Losses on Financing Receivables | Activity in the deferred interest for the RIC receivables was as follows (in thousands): Nine months ended September 30, 2018 Twelve months ended December 31, 2017 Deferred interest, beginning of period $ 36,048 $ — Write-offs, net of recoveries (19,105 ) (6,055 ) Change in deferred interest on short-term and long-term RIC receivables 24,063 42,103 Deferred interest, end of period $ 41,006 $ 36,048 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Company's Balance Sheet Components | The following table presents material balance sheet component balances (in thousands): September 30, 2018 December 31, 2017 Prepaid expenses and other current assets Prepaid expenses $ 9,021 $ 8,000 Deposits 1,976 1,596 Other 6,478 6,554 Total prepaid expenses and other current assets $ 17,475 $ 16,150 Capitalized contract costs Capitalized contract costs $ 2,310,922 $ — Accumulated amortization (1,147,442 ) — Capitalized contract costs, net $ 1,163,480 $ — Subscriber acquisition costs Subscriber acquisition costs $ — $ 1,837,388 Accumulated amortization — (528,830 ) Subscriber acquisition costs, net $ — $ 1,308,558 Long-term notes receivables and other assets RIC receivables, gross $ 152,003 $ 114,556 RIC deferred interest (41,006 ) (36,049 ) Security deposits 6,652 6,427 Investments 4,800 3,429 Other 317 360 Total long-term notes receivables and other assets, net $ 122,766 $ 88,723 Accrued payroll and commissions Accrued commissions $ 86,398 $ 27,485 Accrued payroll 32,515 30,267 Total accrued payroll and commissions $ 118,913 $ 57,752 Accrued expenses and other current liabilities Accrued interest payable $ 60,496 $ 28,737 Current portion of derivative liability 58,864 25,473 Service warranty accrual 8,938 — Current portion of notes payable 8,100 — Accrued taxes 2,854 4,585 Spectrum license obligation — 3,861 Accrued payroll taxes and withholdings 3,542 3,185 Loss contingencies 3,131 2,156 Blackstone monitoring fee, a related party 4,000 933 Other 5,893 5,391 Total accrued expenses and other current liabilities $ 155,818 $ 74,321 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Components of Property Plant and Equipment | Property, plant and equipment consisted of the following (in thousands): September 30, 2018 December 31, 2017 Estimated Useful Lives Vehicles $ 45,448 $ 42,008 3 - 5 years Computer equipment and software 51,384 46,651 3 - 5 years Leasehold improvements 25,950 20,783 2 - 15 years Office furniture, fixtures and equipment 19,000 17,202 7 years Build-to-suit lease building 8,268 8,268 10.5 years Construction in process 2,671 4,299 Property, plant and equipment, gross 152,721 139,211 Accumulated depreciation and amortization (76,839 ) (61,130 ) Property, plant and equipment, net $ 75,882 $ 78,081 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Indefinite-Lived Intangible Assets | The following table presents intangible asset balances (in thousands): September 30, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Definite-lived intangible assets: Customer contracts $ 968,203 $ (699,652 ) $ 268,551 $ 970,147 $ (637,780 ) $ 332,367 10 years 2GIG 2.0 technology 17,000 (14,788 ) 2,212 17,000 (13,274 ) 3,726 8 years Other technology 2,917 (1,563 ) 1,354 2,917 (1,250 ) 1,667 5 - 7 years Space Monkey technology 7,100 (5,333 ) 1,767 7,100 (4,066 ) 3,034 6 years Patents 11,720 (7,733 ) 3,987 10,616 (5,835 ) 4,781 5 years Total definite-lived intangible assets: $ 1,006,940 $ (729,069 ) $ 277,871 $ 1,007,780 $ (662,205 ) $ 345,575 Indefinite-lived intangible assets: Spectrum licenses $ — $ — $ — $ 31,253 $ — $ 31,253 IP addresses 564 — 564 564 — 564 Domain names 59 — 59 59 — 59 Total Indefinite-lived intangible assets 623 — 623 31,876 — 31,876 Total intangible assets, net $ 1,007,563 $ (729,069 ) $ 278,494 $ 1,039,656 $ (662,205 ) $ 377,451 |
Schedule of Definite-Lived Intangible Assets | The following table presents intangible asset balances (in thousands): September 30, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Definite-lived intangible assets: Customer contracts $ 968,203 $ (699,652 ) $ 268,551 $ 970,147 $ (637,780 ) $ 332,367 10 years 2GIG 2.0 technology 17,000 (14,788 ) 2,212 17,000 (13,274 ) 3,726 8 years Other technology 2,917 (1,563 ) 1,354 2,917 (1,250 ) 1,667 5 - 7 years Space Monkey technology 7,100 (5,333 ) 1,767 7,100 (4,066 ) 3,034 6 years Patents 11,720 (7,733 ) 3,987 10,616 (5,835 ) 4,781 5 years Total definite-lived intangible assets: $ 1,006,940 $ (729,069 ) $ 277,871 $ 1,007,780 $ (662,205 ) $ 345,575 Indefinite-lived intangible assets: Spectrum licenses $ — $ — $ — $ 31,253 $ — $ 31,253 IP addresses 564 — 564 564 — 564 Domain names 59 — 59 59 — 59 Total Indefinite-lived intangible assets 623 — 623 31,876 — 31,876 Total intangible assets, net $ 1,007,563 $ (729,069 ) $ 278,494 $ 1,039,656 $ (662,205 ) $ 377,451 |
Schedule of Estimated Future Amortization Expense of Intangible Assets Excluding Patents Currently in Process | Estimated future amortization expense of intangible assets, excluding approximately $0.2 million in patents currently in process, is as follows as of September 30, 2018 (in thousands): 2018 - Remaining Period $ 22,791 2019 79,218 2020 67,980 2021 58,765 2022 48,844 Thereafter 69 Total estimated amortization expense $ 277,667 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | The following tables set forth the Company’s cash and cash equivalents and Corporate Securities’ adjusted cost, gross unrealized gains, gross unrealized losses, gross realized gains, gross realized losses and fair value by significant investment category recorded as cash and cash equivalents or long-term notes receivables and other assets, net as of September 30, 2018 and December 31, 2017 (in thousands): September 30, 2018 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Long-Term Notes Receivables and Other Assets, net Cash $ 7,960 $ — $ — $ 7,960 $ 7,960 $ — Level 1: Money market funds 105,006 — — 105,006 105,006 — Corporate securities 2,703 1,385 — 4,088 — 4,088 Subtotal 107,709 1,385 — 109,094 105,006 4,088 Total $ 115,669 $ 1,385 $ — $ 117,054 $ 112,966 $ 4,088 December 31, 2017 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Long-Term Notes Receivables and Other Assets, net Cash $ 3,866 $ — $ — $ 3,866 $ 3,866 $ — Level 1: Money market funds 6 — — 6 6 — Corporate securities 4,018 — (1,315 ) 2,703 — 2,703 Subtotal 4,024 — (1,315 ) 2,709 6 2,703 Total $ 7,890 $ — $ (1,315 ) $ 6,575 $ 3,872 $ 2,703 |
Schedule of Long-term Debt Instruments | Components of long-term debt including the associated interest rates and related fair values are as follows (in thousands, except interest rates): September 30, 2018 December 31, 2017 Stated Interest Rate Issuance Face Value Estimated Fair Value Face Value Estimated Fair Value 2019 Notes $ — $ — $ 269,465 $ 273,507 6.375 % 2020 Notes 679,299 680,114 930,000 952,134 8.75 % 2022 Private Placement Notes 270,000 276,692 270,000 276,486 8.875 % 2022 Notes 900,000 920,250 900,000 966,420 7.875 % 2023 Notes 400,000 370,000 400,000 425,000 7.625 % Term Loan 801,900 801,900 — — N/A Total $ 3,051,199 $ 3,048,956 $ 2,769,465 $ 2,893,547 |
Schedule of Derivative Liabilities at Fair Value | September 30, 2018 and December 31, 2017 (in thousands): September 30, 2018 December 31, 2017 Consumer Financing Program Contractual Obligations: Fair value $ 112,554 $ 46,496 Notional amount 355,527 163,032 Classified on the condensed consolidated unaudited balance sheets as: Accrued expenses and other current liabilities 58,864 25,473 Other long-term obligations 53,690 21,023 Total Consumer Financing Program Contractual Obligation $ 112,554 $ 46,496 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation | The following table summarizes the change in the fair value of the Level 3 outstanding derivative liability instrument for the nine months ended September 30, 2018 and the twelve months ended December 31, 2017 (in thousands): Nine months ended September 30, 2018 Twelve months ended December 31, 2017 Balance, beginning of period $ 46,496 $ — Additions 78,995 44,913 Settlements (22,805 ) (7,972 ) Losses included in earnings 9,868 9,555 Balance, end of period $ 112,554 $ 46,496 |
Stock-Based Compensation and _2
Stock-Based Compensation and Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Expense | Stock-based compensation expense in connection with all stock-based awards is presented as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Operating expenses $ 102 $ 9 $ 147 $ 49 Selling expenses 235 55 361 165 General and administrative expenses 770 337 1,143 1,073 Total stock-based compensation $ 1,107 $ 401 $ 1,651 $ 1,287 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating Leases of Lessee Disclosure | The Company's operating lease arrangements and related terms consisted of the following (in thousands): Rent Expense For the three months ended, For the nine months ended , September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Lease Term Arrangement Warehouse, office space and other $ 3,731 $ 3,489 $ 10,410 $ 9,374 11 - 15 years Wireless towers and spectrum 1,056 1,169 3,144 3,513 1 - 10 years Total Rent Expense $ 4,787 $ 4,658 $ 13,554 $ 12,887 |
Restructuring and Asset Impai_2
Restructuring and Asset Impairment Charges (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Summary of Restructuring Activity | The following table presents accrued restructuring activity for the nine months ended September 30, 2018 and the twelve months ended December 31, 2017 (in thousands): Contract termination costs Employee severance and termination benefits Total Accrued restructuring balance as of December 31, 2016 $ 649 $ — $ 649 Cash payments (91 ) — (91 ) Accrued restructuring balance as of December 31, 2017 558 — 558 Restructuring charges — 4,683 4,683 Cash payments (68 ) (3,992 ) (4,060 ) Accrued restructuring balance as of September 30, 2018 $ 490 $ 691 $ 1,181 |
Segment Reporting and Busines_2
Segment Reporting and Business Concentrations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | Revenues disaggregated by geographic region were as follows (in thousands): United States Canada Total Revenue from external customers Three months ended September 30, 2018 $ 253,635 $ 18,700 $ 272,335 Three months ended September 30, 2017 211,077 17,581 228,658 Nine months ended September 30, 2018 719,690 54,209 773,899 Nine months ended September 30, 2017 597,842 48,295 646,137 |
Guarantor and Non-Guarantor S_2
Guarantor and Non-Guarantor Supplemental Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Guarantor And Non Guarantor Supplemental Financial Information [Abstract] | |
Supplemental Condensed Consolidating Balance Sheet | Supplemental Condensed Consolidating Balance Sheet September 30, 2018 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets $ — $ 110,625 $ 292,080 $ 89,026 $ (236,208 ) $ 255,523 Property, plant and equipment, net — — 75,346 536 — 75,882 Capitalized contract costs, net — — 1,086,964 76,516 — 1,163,480 Deferred financing costs, net — 2,318 — — — 2,318 Investment in subsidiaries — 1,711,422 — — (1,711,422 ) — Intercompany receivable — — 6,303 — (6,303 ) — Intangible assets, net — — 257,383 21,111 — 278,494 Goodwill — — 809,678 26,612 — 836,290 Long-term notes receivables and other assets — 106 104,566 18,200 (106 ) 122,766 Total Assets $ — $ 1,824,471 $ 2,632,320 $ 232,001 $ (1,954,039 ) $ 2,734,753 Liabilities and Stockholders’ (Deficit) Equity Current liabilities $ — $ 68,412 $ 530,668 $ 175,960 $ (236,208 ) $ 538,832 Intercompany payable — — — 6,303 (6,303 ) — Notes payable and revolving credit facility, net of current portion — 3,038,173 — — — 3,038,173 Capital lease obligations, net of current portion — — 7,283 42 — 7,325 Deferred revenue, net of current portion — — 309,634 18,534 — 328,168 Other long-term obligations — — 95,553 — — 95,553 Accumulated losses of investee, net 1,282,114 (1,282,114 ) — Deferred income tax liability — — 106 8,816 (106 ) 8,816 Total (deficit) equity (1,282,114 ) (1,282,114 ) 1,689,076 22,346 (429,308 ) (1,282,114 ) Total liabilities and stockholders’ (deficit) equity $ — $ 1,824,471 $ 2,632,320 $ 232,001 $ (1,954,039 ) $ 2,734,753 Supplemental Condensed Consolidating Balance Sheet December 31, 2017 (in thousands) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets $ — $ 4,150 $ 284,293 $ 49,935 $ (162,413 ) $ 175,965 Property, plant and equipment, net — — 77,345 736 — 78,081 Subscriber acquisition costs, net — — 1,214,678 93,880 — 1,308,558 Deferred financing costs, net — 3,099 — — — 3,099 Investment in subsidiaries — 2,188,221 — — (2,188,221 ) — Intercompany receivable — — 6,303 — (6,303 ) — Intangible assets, net — — 350,710 26,741 — 377,451 Goodwill — — 809,678 27,292 — 836,970 Long-term notes receivables and other assets — 106 78,173 10,550 (106 ) 88,723 Total Assets $ — $ 2,195,576 $ 2,821,180 $ 209,134 $ (2,357,043 ) $ 2,868,847 Liabilities and Stockholders’ (Deficit) Equity Current liabilities $ — $ 28,805 $ 343,398 $ 128,581 $ (162,413 ) $ 338,371 Intercompany payable — — — 6,303 (6,303 ) — Notes payable and revolving credit facility, net of current portion — 2,820,297 — — — 2,820,297 Capital lease obligations, net of current portion — — 10,791 298 — 11,089 Deferred revenue, net of current portion — — 248,643 15,912 — 264,555 Accumulated Losses of Investee, net 653,526 (653,526 ) — Other long-term obligations — — 79,020 — — 79,020 Deferred income tax liability — — 106 9,041 (106 ) 9,041 Total (deficit) equity (653,526 ) (653,526 ) 2,139,222 48,999 (1,534,695 ) (653,526 ) Total liabilities and stockholders’ (deficit) equity $ — $ 2,195,576 $ 2,821,180 $ 209,134 $ (2,357,043 ) $ 2,868,847 |
Supplemental Condensed Consolidating Statements of Operations and Comprehensive (Loss) Income | Supplemental Condensed Consolidating Statements of Operations and Comprehensive Loss For the Three Months Ended September 30, 2018 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ — $ 260,462 $ 12,512 $ (639 ) $ 272,335 Costs and expenses — — 303,009 14,023 (639 ) 316,393 Loss from operations — — (42,547 ) (1,511 ) — (44,058 ) Loss from subsidiaries (120,226 ) (44,640 ) — — 164,866 — Other expense (income), net — 75,586 2,227 (1,422 ) — 76,391 Loss before income tax expenses (120,226 ) (120,226 ) (44,774 ) (89 ) 164,866 (120,449 ) Income tax expense (benefit) — — 55 (278 ) — (223 ) Net (loss) income (120,226 ) (120,226 ) (44,829 ) 189 164,866 (120,226 ) Other comprehensive loss, net of tax effects: Net (loss) income (120,226 ) (120,226 ) (44,829 ) 189 164,866 (120,226 ) Foreign currency translation adjustment 406 406 — 406 (812 ) 406 Total other comprehensive loss 406 406 — 406 (812 ) 406 Comprehensive (loss) income $ (119,820 ) $ (119,820 ) $ (44,829 ) $ 595 $ 164,054 $ (119,820 ) Supplemental Condensed Consolidating Statements of Operations and Comprehensive Loss For the Three Months Ended September 30, 2017 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ — $ 216,560 $ 12,770 $ (672 ) $ 228,658 Costs and expenses — — 257,988 11,489 (672 ) 268,805 (Loss) income from operations — — (41,428 ) 1,281 — (40,147 ) Loss from subsidiaries (107,920 ) (40,608 ) — — 148,528 — Other expense (income), net — 67,312 2,356 (3,052 ) — 66,616 (Loss) income before income tax expenses (107,920 ) (107,920 ) (43,784 ) 4,333 148,528 (106,763 ) Income tax (benefit) expense — — (34 ) 1,191 — 1,157 Net (loss) income (107,920 ) (107,920 ) (43,750 ) 3,142 148,528 (107,920 ) Other comprehensive loss, net of tax effects: Net (loss) income (107,920 ) (107,920 ) (43,750 ) 3,142 148,528 (107,920 ) Foreign currency translation adjustment — 1,967 — 1,967 (1,967 ) 1,967 Unrealized gain on marketable securities — (413 ) (413 ) — 413 (413 ) Total other comprehensive income — 1,554 (413 ) 1,967 (1,554 ) 1,554 Comprehensive (loss) income $ (107,920 ) $ (106,366 ) $ (44,163 ) $ 5,109 $ 146,974 $ (106,366 ) Supplemental Condensed Consolidating Statements of Operations and Comprehensive Loss For the Nine Months Ended September 30, 2018 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ — $ 738,250 $ 37,590 $ (1,941 ) $ 773,899 Costs and expenses — — 930,065 41,697 (1,941 ) 969,821 Loss from operations — — (191,815 ) (4,107 ) — (195,922 ) Loss from subsidiaries (349,328 ) (155,883 ) — — 505,211 — Other expense (income), net — 193,445 (40,737 ) 2,260 — 154,968 Loss before income tax expenses (349,328 ) (349,328 ) (151,078 ) (6,367 ) 505,211 (350,890 ) Income tax expense (benefit) — — 157 (1,719 ) — (1,562 ) Net loss (349,328 ) (349,328 ) (151,235 ) (4,648 ) 505,211 (349,328 ) Other comprehensive loss, net of tax effects: Net loss (349,328 ) (349,328 ) (151,235 ) (4,648 ) 505,211 (349,328 ) Foreign currency translation adjustment (670 ) (670 ) — (670 ) 1,340 (670 ) Total other comprehensive loss (670 ) (670 ) — (670 ) 1,340 (670 ) Comprehensive loss $ (349,998 ) $ (349,998 ) $ (151,235 ) $ (5,318 ) $ 506,551 $ (349,998 ) Supplemental Condensed Consolidating Statements of Operations and Comprehensive Loss For the Nine Months Ended September 30, 2017 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ — $ 612,075 $ 36,085 $ (2,023 ) $ 646,137 Costs and expenses — — 703,656 31,641 (2,023 ) 733,274 (Loss) income from operations — — (91,581 ) 4,444 — (87,137 ) Loss from subsidiaries (274,793 ) (88,104 ) — — 362,897 — Other expense (income), net — 186,689 4,097 (5,438 ) — 185,348 (Loss) income before income tax expenses (274,793 ) (274,793 ) (95,678 ) 9,882 362,897 (272,485 ) Income tax (benefit) expense — — (303 ) 2,611 — 2,308 Net (loss) income (274,793 ) (274,793 ) (95,375 ) 7,271 362,897 (274,793 ) Other comprehensive loss, net of tax effects: Net (loss) income (274,793 ) (274,793 ) (95,375 ) 7,271 362,897 (274,793 ) Foreign currency translation adjustment — 3,543 — 3,543 (3,543 ) 3,543 Unrealized gain on marketable securities — (671 ) (671 ) — 671 (671 ) Total other comprehensive income — 2,872 (671 ) 3,543 (2,872 ) 2,872 Comprehensive (loss) income $ (274,793 ) $ (271,921 ) $ (96,046 ) $ 10,814 $ 360,025 $ (271,921 ) |
Supplemental Condensed Consolidating Statements of Cash Flows | Supplemental Condensed Consolidating Statements of Cash Flows For the Nine Months Ended September 30, 2018 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net cash used in operating activities $ — $ — $ (130,718 ) $ 695 $ — $ (130,023 ) Cash flows from investing activities: Capital expenditures — — (15,355 ) — — (15,355 ) Proceeds from sale of intangibles — — 53,693 — — 53,693 Proceeds from sale of capital assets — — 185 — — 185 Investment in subsidiary (2,331 ) (104,906 ) — — 107,237 — Acquisition of intangible assets — — (1,068 ) — — (1,068 ) Net cash (used in) provided by investing activities (2,331 ) (104,906 ) 37,455 — 107,237 37,455 Cash flows from financing activities: Proceeds from notes payable — 810,000 — — — 810,000 Repayment on notes payable — (520,166 ) — — — (520,166 ) Borrowings from revolving credit facility — 201,000 — — — 201,000 Repayments on revolving credit facility — (261,000 ) — — — (261,000 ) Proceeds from capital contribution 4,700 4,700 107,275 — (111,975 ) 4,700 Repayments of capital lease obligations — — (9,611 ) (271 ) — (9,882 ) Financing costs — (11,317 ) — — — (11,317 ) Deferred financing costs — (9,302 ) — — — (9,302 ) Return of capital (2,369 ) (2,369 ) (2,369 ) — 4,738 (2,369 ) Net cash provided by (used in) financing activities 2,331 211,546 95,295 (271 ) (107,237 ) 201,664 Effect of exchange rate changes on cash — — — (2 ) — (2 ) Net increase in cash and cash equivalents — 106,640 2,032 422 — 109,094 Cash and cash equivalents: Beginning of period — 3,661 (572 ) 783 — 3,872 End of period $ — $ 110,301 $ 1,460 $ 1,205 $ — $ 112,966 Supplemental Condensed Consolidating Statements of Cash Flows For the Nine Months Ended September 30, 2017 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net cash (used in) provided by operating activities $ — $ — $ (154,360 ) $ 5,092 $ — $ (149,268 ) Cash flows from investing activities: Capital expenditures — — (14,842 ) — — (14,842 ) Investment in subsidiary — (157,400 ) — — 157,400 — Acquisition of intangible assets — — (1,057 ) — — (1,057 ) Proceeds from sale of capital assets — — 275 — — 275 Acquisition of other assets — — (156 ) — — (156 ) Net cash used in investing activities — (157,400 ) (15,780 ) — 157,400 (15,780 ) Cash flows from financing activities: Proceeds from notes payable — 724,750 — — — 724,750 Repayment on notes payable — (450,000 ) — — — (450,000 ) Borrowings from revolving credit facility — 124,000 — — — 124,000 Repayments on revolving credit facility — (124,000 ) — — — (124,000 ) Intercompany receivable — — 3,621 — (3,621 ) — Intercompany payable — — — (3,621 ) 3,621 — Proceeds from capital contributions — — 157,400 — (157,400 ) — Repayments of capital lease obligations — — (6,899 ) (262 ) — (7,161 ) Payments of other long-term obligations — — (2,065 ) — — (2,065 ) Financing costs — (17,771 ) — — — (17,771 ) Deferred financing costs — (10,730 ) — — — (10,730 ) Net cash provided by (used in) financing activities — 246,249 152,057 (3,883 ) (157,400 ) 237,023 Effect of exchange rate changes on cash — — — 72 — 72 Net increase (decrease) in cash and cash equivalents — 88,849 (18,083 ) 1,281 — 72,047 Cash and cash equivalents: Beginning of period — 24,680 18,186 654 — 43,520 End of period $ — $ 113,529 $ 103 $ 1,935 $ — $ 115,567 |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018USD ($)payment | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)paymentunit | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)unit | Jan. 01, 2018USD ($) | Dec. 31, 2016USD ($) | |
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||||||
Long-term debt | $ 3,038,173,000 | $ 3,038,173,000 | $ 2,820,297,000 | ||||
Accounts and notes receivable, net | 22,600,000 | 22,600,000 | 24,300,000 | ||||
Allowance for doubtful accounts | 5,648,000 | 5,648,000 | 5,356,000 | $ 4,138,000 | |||
Provision for doubtful accounts | 5,900,000 | $ 5,000,000 | $ 14,318,000 | $ 14,723,000 | 22,465,000 | ||
Capitalized contract costs, expected period of benefit | 5 years | ||||||
Equity method investments | 4,800,000 | $ 4,800,000 | 3,400,000 | ||||
Available for sale securities, fair value | 117,054,000 | 117,054,000 | 6,575,000 | ||||
Deferred financing costs | 34,591,000 | 34,591,000 | 35,667,000 | ||||
Amortization expenses included in interest expense | 3,944,000 | 5,201,000 | |||||
Sales commission included in accrued expenses and other liabilities | 4,400,000 | 4,400,000 | 3,300,000 | ||||
Other long-term obligations | 24,900,000 | 24,900,000 | $ 18,500,000 | ||||
Advertising expenses incurred | 13,100,000 | 12,600,000 | $ 34,800,000 | 33,700,000 | |||
Uncertain income tax position | 50.00% | ||||||
Number of reporting units | unit | 2 | 2 | |||||
Translation (gain) loss | (1,459,000) | (3,076,000) | $ 2,175,000 | (5,545,000) | |||
Issued and unused letters of credit | 11,300,000 | 11,300,000 | $ 9,500,000 | ||||
Accumulated deficit | 1,991,153,000 | 1,991,153,000 | 1,358,571,000 | $ 1,641,143,000 | |||
Equity securities, unrealized gain | 600,000 | $ 1,400,000 | |||||
2GIG Sale | |||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||||||
Percentage of installed panels | 20.00% | ||||||
Vivint Sky Control Panels | |||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||||||
Percentage of installed panels | 78.00% | ||||||
Interest Expense | |||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||||||
Amortization expenses included in interest expense | 2,600,000 | $ 2,800,000 | $ 7,900,000 | $ 8,700,000 | |||
Minimum | |||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||||||
Estimated useful life of intangible assets | 5 years | ||||||
Maximum | |||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||||||
Estimated useful life of intangible assets | 10 years | ||||||
Notes Payable | |||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||||||
Deferred financing costs | 34,600,000 | $ 34,600,000 | 35,700,000 | ||||
Deferred financing cost, accumulated amortization | $ 52,400,000 | $ 52,400,000 | 45,200,000 | ||||
Vivint Flex Pay | |||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||||||
Number of payment options | payment | 3 | 3 | |||||
Installment loans available to qualified customers, maximum amount provided by third party | $ 4,000 | $ 4,000 | |||||
Vivint Flex Pay | Minimum | |||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||||||
Installment loans available to qualified customers, term | 42 months | ||||||
Vivint Flex Pay | Maximum | |||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||||||
Installment loans available to qualified customers, term | 60 months | ||||||
Subscriber Contracts | |||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||||||
Amortization duration of costs period | 15 years | ||||||
Amortization percentage on subscriber contract costs over estimated useful life | 240.00% | ||||||
Subscriber Contracts | Minimum | |||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||||||
Contract with customer, term | 3 years | ||||||
Subscriber Contracts | Maximum | |||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||||||
Contract with customer, term | 5 years | ||||||
Revolving Credit Facility | |||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||||||
Long-term debt | 0 | $ 0 | 60,000,000 | ||||
Issued and unused letters of credit | 292,300,000 | 292,300,000 | |||||
Line of Credit | Revolving Credit Facility | |||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||||||
Deferred financing costs | 2,300,000 | 2,300,000 | 3,100,000 | ||||
Deferred financing cost, accumulated amortization | 9,400,000 | 9,400,000 | $ 8,600,000 | ||||
Accounting Standards Update 2016-01 | |||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||||||
Accumulated deficit | $ 700,000 | ||||||
Fair Value, Inputs, Level 3 | |||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||||||
Equity method investments | $ 700,000 | $ 700,000 |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policies - Accounts Receivable (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||||
Accounts receivable classified as held for sale | $ 0 | $ 0 | $ 0 | ||
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||||
Beginning balance | 5,356,000 | $ 4,138,000 | 4,138,000 | ||
Provision for doubtful accounts | 5,900,000 | $ 5,000,000 | 14,318,000 | $ 14,723,000 | 22,465,000 |
Write-offs and adjustments | (14,026,000) | (21,247,000) | |||
Balance at end of period | $ 5,648,000 | $ 5,648,000 | $ 5,356,000 |
Basis of Presentation and Sig_6
Basis of Presentation and Significant Accounting Policies - Depreciation and Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Property, Plant and Equipment [Line Items] | ||||
Total depreciation and amortization | $ 130,636 | $ 84,460 | $ 381,767 | $ 241,425 |
Depreciation of property, plant and equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Total depreciation and amortization | 6,397 | 5,183 | 18,772 | 15,225 |
Amortization of capitalized contract costs | ||||
Property, Plant and Equipment [Line Items] | ||||
Total depreciation and amortization | 101,498 | 0 | 294,802 | 0 |
Amortization of subscriber acquisition costs | ||||
Property, Plant and Equipment [Line Items] | ||||
Total depreciation and amortization | 0 | 53,730 | 0 | 149,933 |
Amortization of definite-lived intangibles | ||||
Property, Plant and Equipment [Line Items] | ||||
Total depreciation and amortization | $ 22,741 | $ 25,547 | $ 68,193 | $ 76,267 |
Revenue and Capitalized Contr_3
Revenue and Capitalized Contract Costs - Impact of Adopting ASC 606 (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Revenue recognized | $ 132,400 | |||||
Capitalized contract costs, net | $ 1,163,480 | 1,163,480 | $ 1,020,408 | $ 0 | ||
Subscriber acquisition costs, net | 0 | 0 | 0 | 1,308,558 | ||
Long-term notes receivables and other assets, net | 122,766 | 122,766 | 91,436 | 88,723 | ||
Accrued expenses and other current liabilities | 155,818 | 155,818 | 84,650 | 74,321 | ||
Deferred revenue | 184,226 | 184,226 | 128,205 | 88,337 | ||
Deferred revenue, net of current portion | 328,168 | 328,168 | 211,493 | 264,555 | ||
Accumulated deficit | (1,991,153) | (1,991,153) | (1,641,143) | (1,358,571) | ||
Accumulated other comprehensive loss | (27,289) | (27,289) | (27,301) | |||
Recurring and other revenue | 272,335 | $ 228,658 | 773,899 | $ 646,137 | ||
Operating expenses | 92,703 | 81,108 | 265,784 | 229,776 | ||
Depreciation and amortization | 130,636 | 84,460 | 381,767 | 241,425 | ||
Loss before income taxes | (120,449) | (106,763) | (350,890) | (272,485) | ||
Net loss | (120,226) | (107,920) | (349,328) | (274,793) | ||
Foreign currency translation adjustment | 406 | 1,967 | (670) | 3,543 | ||
Total other comprehensive (loss) income | 406 | 1,554 | (670) | 2,872 | ||
Comprehensive loss | $ (119,820) | (106,366) | (349,998) | (271,921) | ||
Amortization of capitalized contract costs | 294,802 | 0 | ||||
Amortization of subscriber acquisition costs | 0 | 149,933 | ||||
Capitalized contract costs, net | (439,711) | 0 | ||||
Subscriber acquisition costs, net | 0 | (367,300) | ||||
Accrued payroll and commissions, expenses and other current and long-term liabilities | 168,953 | 132,649 | ||||
Deferred revenue | 173,255 | 205,092 | ||||
Net cash provided by (used in) operating activities | $ (130,023) | (149,268) | ||||
Capitalized contract cost, amortization period | 5 years | 5 years | ||||
Calculated under Revenue Guidance in Effect before Topic 606 | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Capitalized contract costs, net | $ 0 | $ 0 | 0 | |||
Subscriber acquisition costs, net | 1,540,097 | 1,540,097 | 1,308,558 | |||
Long-term notes receivables and other assets, net | 88,723 | |||||
Accrued expenses and other current liabilities | 145,680 | 145,680 | 74,321 | |||
Deferred revenue | 126,797 | 126,797 | 88,337 | |||
Deferred revenue, net of current portion | 429,248 | 429,248 | 264,555 | |||
Accumulated deficit | (1,647,493) | (1,647,493) | $ (1,358,571) | |||
Accumulated other comprehensive loss | (27,845) | (27,845) | ||||
Operating expenses | 103,199 | 286,214 | ||||
Depreciation and amortization | 94,509 | 272,319 | ||||
Loss before income taxes | (105,906) | (292,511) | ||||
Net loss | (105,683) | (290,949) | ||||
Foreign currency translation adjustment | (150) | (1,226) | ||||
Total other comprehensive (loss) income | (150) | (1,226) | ||||
Comprehensive loss | (105,833) | (292,175) | ||||
Amortization of capitalized contract costs | 0 | |||||
Amortization of subscriber acquisition costs | 185,354 | |||||
Capitalized contract costs, net | 0 | |||||
Subscriber acquisition costs, net | (419,281) | |||||
Deferred revenue | 203,894 | |||||
Net cash provided by (used in) operating activities | (130,023) | |||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Capitalized contract costs, net | 1,163,480 | 1,163,480 | 1,020,408 | |||
Subscriber acquisition costs, net | (1,540,097) | (1,540,097) | (1,308,558) | |||
Long-term notes receivables and other assets, net | 2,713 | |||||
Accrued expenses and other current liabilities | 10,138 | 10,138 | 10,329 | |||
Deferred revenue | 57,429 | 57,429 | 39,868 | |||
Deferred revenue, net of current portion | (101,080) | (101,080) | (53,062) | |||
Accumulated deficit | (343,660) | (343,660) | $ (282,572) | |||
Accumulated other comprehensive loss | 556 | 556 | ||||
Operating expenses | (10,496) | (20,430) | ||||
Depreciation and amortization | 36,127 | 109,448 | ||||
Loss before income taxes | (14,543) | (58,379) | ||||
Net loss | (14,543) | (58,379) | ||||
Foreign currency translation adjustment | 556 | |||||
Total other comprehensive (loss) income | 556 | 556 | ||||
Comprehensive loss | (13,987) | (57,823) | ||||
Amortization of capitalized contract costs | 294,802 | |||||
Amortization of subscriber acquisition costs | (185,354) | |||||
Capitalized contract costs, net | (439,711) | |||||
Subscriber acquisition costs, net | 419,281 | |||||
Deferred revenue | (30,639) | |||||
Net cash provided by (used in) operating activities | 0 | |||||
Recurring and other revenue | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Recurring and other revenue | 272,335 | 219,111 | 773,899 | 618,752 | ||
Recurring and other revenue | Calculated under Revenue Guidance in Effect before Topic 606 | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Recurring and other revenue | 243,733 | 703,807 | ||||
Recurring and other revenue | Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Recurring and other revenue | 28,602 | 70,092 | ||||
Service and other sales revenue | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Recurring and other revenue | 0 | 6,764 | 0 | 18,513 | ||
Service and other sales revenue | Calculated under Revenue Guidance in Effect before Topic 606 | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Recurring and other revenue | 15,200 | 31,998 | ||||
Service and other sales revenue | Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Recurring and other revenue | (15,200) | (31,998) | ||||
Activation fees | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Recurring and other revenue | 0 | $ 2,783 | 0 | $ 8,872 | ||
Activation fees | Calculated under Revenue Guidance in Effect before Topic 606 | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Recurring and other revenue | 2,314 | 7,455 | ||||
Activation fees | Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Recurring and other revenue | $ (2,314) | $ (7,455) | ||||
Subscriber Contracts | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Amortization duration of costs period | 15 years | |||||
Amortization percentage on subscriber contract costs over estimated useful life | 240.00% | |||||
Minimum | Subscriber Contracts | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Contract with customer, term | 3 years | |||||
Maximum | Subscriber Contracts | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Contract with customer, term | 5 years |
Revenue and Capitalized Contr_4
Revenue and Capitalized Contract Costs - Remaining Performance Obligations (Details) $ in Billions | Sep. 30, 2018USD ($) |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 2.3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 3 years |
Performance obligations expected to be satisfied, expected timing | 62.00% |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) | Dec. 13, 2013USD ($) | May 31, 2013USD ($) | Nov. 16, 2012USD ($)offering | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2017USD ($) | Nov. 30, 2017USD ($) | Aug. 31, 2017USD ($) | Aug. 10, 2017USD ($) | Feb. 28, 2017USD ($) | Aug. 31, 2016USD ($) | May 31, 2016USD ($) | Oct. 31, 2015USD ($) | Mar. 06, 2015USD ($) |
Debt Instrument [Line Items] | |||||||||||||||
Issued and unused letters of credit | $ 11,300,000 | $ 11,300,000 | $ 9,500,000 | ||||||||||||
Outstanding borrowings | $ 3,038,173,000 | $ 3,038,173,000 | 2,820,297,000 | ||||||||||||
Revolving Credit Facility | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Credit facility, aggregate principal amount | $ 200,000,000 | $ 324,300,000 | $ 289,400,000 | ||||||||||||
Debt maturity term | 5 years | ||||||||||||||
Aggregate principal amount of the credit agreement, description | The aggregate commitments previously available to APX thereunder from $200.0 million to $289.4 million | ||||||||||||||
Step down | 0.25% | 0.25% | |||||||||||||
Commitment fee | 0.125% | ||||||||||||||
Issued and unused letters of credit | $ 292,300,000 | $ 292,300,000 | |||||||||||||
Outstanding borrowings | $ 0 | $ 0 | 60,000,000 | ||||||||||||
Revolving Credit Facility | Federal Funds Rate | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Baiss spread on variable interest rate percentage | 0.50% | ||||||||||||||
Revolving Credit Facility | LIBOR | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Baiss spread on variable interest rate percentage | 1.00% | ||||||||||||||
Variable interest rate description | One month, plus 1.00% | ||||||||||||||
6.375% Senior Secured Notes due 2019 | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument interest rate | 6.375% | 6.375% | |||||||||||||
Debt instrument maturity date | Dec. 1, 2019 | ||||||||||||||
8.75% Senior Notes due 2020 | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument interest rate | 8.75% | 8.75% | |||||||||||||
Debt instrument maturity date | Dec. 1, 2020 | ||||||||||||||
Series A Revolving Commitments | Revolving Credit Facility | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Credit facility, aggregate principal amount | $ 267,000,000 | $ 267,000,000 | |||||||||||||
Series A Revolving Commitments | Revolving Credit Facility | LIBOR | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Baiss spread on variable interest rate percentage | 3.00% | ||||||||||||||
Series A Revolving Commitments | Revolving Credit Facility | Base Rate-based Borrowings | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Baiss spread on variable interest rate percentage | 2.00% | ||||||||||||||
Series B Revolving Commitments | Revolving Credit Facility | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Credit facility, aggregate principal amount | 21,200,000 | $ 21,200,000 | |||||||||||||
Credit facility, due date | Mar. 31, 2021 | ||||||||||||||
Series B Revolving Commitments | Revolving Credit Facility | LIBOR | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Baiss spread on variable interest rate percentage | 4.00% | ||||||||||||||
Series B Revolving Commitments | Revolving Credit Facility | Base Rate-based Borrowings | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Baiss spread on variable interest rate percentage | 3.00% | ||||||||||||||
Series C Revolving Commitments | Revolving Credit Facility | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Credit facility, aggregate principal amount | $ 20,800,000 | ||||||||||||||
Series C Revolving Commitments | Revolving Credit Facility | LIBOR | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Baiss spread on variable interest rate percentage | 3.00% | ||||||||||||||
Series C Revolving Commitments | Revolving Credit Facility | Base Rate-based Borrowings | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Baiss spread on variable interest rate percentage | 2.00% | ||||||||||||||
Series D Revolving Commitments | Revolving Credit Facility | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Credit facility, aggregate principal amount | $ 15,400,000 | $ 15,400,000 | |||||||||||||
Senior Notes | 6.375% Senior Secured Notes due 2019 | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Face amount | $ 925,000,000 | ||||||||||||||
Debt instrument interest rate | 6.375% | 6.375% | 6.375% | ||||||||||||
Repurchase amount | $ 269,500,000 | $ 269,500,000 | $ 150,000,000 | $ 300,000,000 | $ 205,500,000 | ||||||||||
Outstanding borrowings | 266,588,000 | ||||||||||||||
Senior Notes | 7.625% Senior Notes Due 2023 | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Face amount | $ 400,000,000 | ||||||||||||||
Debt instrument interest rate | 7.625% | 7.625% | 7.625% | ||||||||||||
Outstanding borrowings | $ 395,868,000 | $ 395,868,000 | 395,238,000 | ||||||||||||
Senior Notes | 8.75% Senior Notes due 2020 | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Face amount | $ 250,000,000 | $ 200,000,000 | $ 380,000,000 | $ 100,000,000 | |||||||||||
Debt instrument interest rate | 8.75% | 8.75% | 8.75% | ||||||||||||
Number of offerings | offering | 2 | ||||||||||||||
Debt instrument, redemption price, percentage | 101.50% | 101.75% | 102.00% | ||||||||||||
Repurchase amount | $ 250,700,000 | $ 250,700,000 | |||||||||||||
Outstanding borrowings | $ 675,712,000 | $ 675,712,000 | 923,256,000 | ||||||||||||
Senior Notes | 2019 Senior Notes and 2022 Private Placement Notes | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Repurchase amount | 235,000,000 | ||||||||||||||
Senior Notes | 8.875% Senior Secured Notes Due 2022 | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Face amount | $ 300,000,000 | ||||||||||||||
Debt instrument interest rate | 8.875% | 8.875% | 8.875% | ||||||||||||
Principal amount outstanding threshold for accelerated maturity (on September 1, 2020) | $ 190,000,000 | $ 190,000,000 | |||||||||||||
Repurchase amount | 29,500,000 | ||||||||||||||
Outstanding borrowings | $ 267,127,000 | $ 267,127,000 | 266,689,000 | ||||||||||||
Senior Notes | 7.875% Senior Secured Notes Due 2022 | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Face amount | $ 500,000,000 | ||||||||||||||
Debt instrument interest rate | 7.875% | 7.875% | 7.875% | ||||||||||||
Outstanding borrowings | $ 907,688,000 | $ 907,688,000 | $ 908,526,000 | ||||||||||||
Senior Notes | August 2022 Notes | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Issuance price, percentage | 108.25% | 104.00% | |||||||||||||
Term Loan | Federal Funds Rate | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Baiss spread on variable interest rate percentage | 0.50% | ||||||||||||||
Term Loan | LIBOR | LIBOR Referenced To US Dollar Deposits | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Baiss spread on variable interest rate percentage | 1.00% | ||||||||||||||
Term Loan | LIBOR | LIBOR Referenced To LIBOR For Dollars In Period Of Borrowing | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Baiss spread on variable interest rate percentage | 5.00% | ||||||||||||||
Term Loan | Base Rate-based Borrowings | LIBOR Referenced To LIBOR For Dollars In Period Of Borrowing | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Baiss spread on variable interest rate percentage | 4.00% | ||||||||||||||
Term Loan | September 2018 issuance | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Credit facility, aggregate principal amount | $ 810,000,000 | $ 810,000,000 | |||||||||||||
Quarterly amortization payments, percent of principal amount outstanding | 0.25% | ||||||||||||||
Outstanding borrowings | $ 791,778,000 | 791,778,000 | |||||||||||||
Letter of Credit | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Outstanding borrowings | $ 11,300,000 | $ 11,300,000 | |||||||||||||
August 2016 Issuance of 7.875% Notes Due 2022 | Senior Notes | August 2022 Notes | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Face amount | $ 100,000,000 | ||||||||||||||
February 2017 Issuance of 7.875% Notes Due 2022 | Senior Notes | August 2022 Notes | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Face amount | $ 300,000,000 |
Long-Term Debt - Other Expense
Long-Term Debt - Other Expense and Loss on Extinguishment and Deferred Financing Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||||
Previously deferred financing costs extinguished | $ 4,207 | $ 4,667 | |||
New financing costs | (9,302) | $ (10,730) | |||
Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Original premium extinguished | 0 | ||||
Previously deferred financing costs extinguished | 4,667 | ||||
New financing costs | 18,372 | ||||
Total other expense and loss on extinguishment | 23,039 | ||||
Previously deferred financing costs rolled over | $ 1,949 | 1,949 | |||
New deferred financing costs | 10,633 | 10,633 | |||
Total deferred financing costs | 12,582 | 12,582 | |||
Senior Notes | 6.375% Senior Secured Notes due 2019 | |||||
Debt Instrument [Line Items] | |||||
Previously deferred financing costs extinguished | 1,876 | 4,667 | |||
Senior Notes | 7.875% Senior Secured Notes Due 2022 | |||||
Debt Instrument [Line Items] | |||||
Previously deferred financing costs extinguished | 0 | $ 0 | |||
September 2018 issuance | Senior Notes | 6.375% Senior Secured Notes due 2019 | |||||
Debt Instrument [Line Items] | |||||
Original premium extinguished | $ (953) | ||||
Previously deferred financing costs extinguished | 4,207 | ||||
New financing costs | 11,317 | ||||
Total other expense and loss on extinguishment | 14,571 | ||||
Previously deferred financing costs rolled over | 0 | 0 | |||
New deferred financing costs | 10,275 | 10,275 | |||
Total deferred financing costs | $ 10,275 | $ 10,275 | |||
August 2017 issuance | Senior Notes | 6.375% Senior Secured Notes due 2019 | |||||
Debt Instrument [Line Items] | |||||
Original premium extinguished | 0 | 0 | |||
Previously deferred financing costs extinguished | 1,408 | 1,408 | |||
New financing costs | 8,881 | 8,881 | |||
Total other expense and loss on extinguishment | 10,289 | 10,289 | |||
Previously deferred financing costs rolled over | 473 | 473 | |||
New deferred financing costs | 4,556 | 4,556 | |||
Total deferred financing costs | 5,029 | 5,029 | |||
February 2017 issuance | Senior Notes | 6.375% Senior Secured Notes due 2019 | |||||
Debt Instrument [Line Items] | |||||
Original premium extinguished | 0 | ||||
Previously deferred financing costs extinguished | 3,259 | ||||
New financing costs | 9,491 | ||||
Total other expense and loss on extinguishment | 12,750 | ||||
Previously deferred financing costs rolled over | 1,476 | 1,476 | |||
New deferred financing costs | 6,077 | 6,077 | |||
Total deferred financing costs | $ 7,553 | $ 7,553 |
Long-Term Debt - Deferred Finan
Long-Term Debt - Deferred Financing Activity (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Deferred Financing Activity [Roll Forward] | |||
Beginning balance | $ 38,766 | $ 43,783 | $ 43,783 |
Additions | 10,275 | 11,044 | |
Refinances | 0 | 0 | |
Early Extinguishment | (4,207) | (4,667) | |
Amortized | (7,925) | (11,394) | |
Ending balance | 36,909 | 38,766 | |
Senior Notes | |||
Deferred Financing Activity [Roll Forward] | |||
Early Extinguishment | (4,667) | ||
Senior Notes | 6.375% Senior Secured Notes due 2019 | |||
Deferred Financing Activity [Roll Forward] | |||
Beginning balance | 2,877 | 11,693 | 11,693 |
Additions | 0 | 0 | |
Refinances | 0 | (1,949) | |
Early Extinguishment | (1,876) | (4,667) | |
Amortized | (1,001) | (2,200) | |
Ending balance | 0 | 2,877 | |
Senior Notes | 8.75% Senior Notes due 2020 | |||
Deferred Financing Activity [Roll Forward] | |||
Beginning balance | 11,209 | 15,053 | 15,053 |
Additions | 0 | 0 | |
Refinances | 0 | 0 | |
Early Extinguishment | (2,331) | 0 | |
Amortized | (2,796) | (3,844) | |
Ending balance | 6,082 | 11,209 | |
Senior Notes | 8.875% Senior Secured Notes Due 2022 | |||
Deferred Financing Activity [Roll Forward] | |||
Beginning balance | 752 | 903 | 903 |
Additions | 0 | 0 | |
Refinances | 0 | 0 | |
Early Extinguishment | 0 | 0 | |
Amortized | (113) | (151) | |
Ending balance | 639 | 752 | |
Senior Notes | 7.875% Senior Secured Notes Due 2022 | |||
Deferred Financing Activity [Roll Forward] | |||
Beginning balance | 16,067 | 11,714 | 11,714 |
Additions | 0 | 6,076 | |
Refinances | 0 | 1,476 | |
Early Extinguishment | 0 | 0 | |
Amortized | (2,451) | (3,199) | |
Ending balance | 13,616 | 16,067 | |
Senior Notes | 7.625% Senior Notes Due 2023 | |||
Deferred Financing Activity [Roll Forward] | |||
Beginning balance | 4,762 | 0 | 0 |
Additions | 0 | 4,569 | |
Refinances | 0 | 473 | |
Early Extinguishment | 0 | 0 | |
Amortized | (630) | (280) | |
Ending balance | 4,132 | 4,762 | |
Term Loan | September 2018 issuance | |||
Deferred Financing Activity [Roll Forward] | |||
Beginning balance | 0 | ||
Additions | 10,275 | ||
Refinances | 0 | ||
Early Extinguishment | 0 | ||
Amortized | (153) | ||
Ending balance | 10,122 | 0 | |
Revolving Credit Facility | Line of Credit | |||
Deferred Financing Activity [Roll Forward] | |||
Beginning balance | 3,099 | $ 4,420 | 4,420 |
Additions | 0 | 399 | |
Refinances | 0 | 0 | |
Early Extinguishment | 0 | 0 | |
Amortized | (781) | (1,720) | |
Ending balance | $ 2,318 | $ 3,099 |
Long-Term Debt - Summary of Deb
Long-Term Debt - Summary of Debt (Detail) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Outstanding Principal | $ 3,051,199,000 | $ 2,829,465,000 |
Unamortized Premium (Discount) | 21,565,000 | 26,499,000 |
Unamortized Deferred Financing Costs | (34,591,000) | (35,667,000) |
Net Carrying Amount | 3,038,173,000 | 2,820,297,000 |
Deferred financing costs, net | 2,318,000 | 3,099,000 |
Senior Notes | 6.375% Senior Secured Notes due 2019 | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 269,465,000 | |
Unamortized Premium (Discount) | 0 | |
Unamortized Deferred Financing Costs | (2,877,000) | |
Net Carrying Amount | 266,588,000 | |
Senior Notes | 8.75% Senior Notes due 2020 | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 679,299,000 | 930,000,000 |
Unamortized Premium (Discount) | 2,495,000 | 4,465,000 |
Unamortized Deferred Financing Costs | (6,082,000) | (11,209,000) |
Net Carrying Amount | 675,712,000 | 923,256,000 |
Senior Notes | 8.875% Senior Secured Notes Due 2022 | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 270,000,000 | 270,000,000 |
Unamortized Premium (Discount) | (2,234,000) | (2,559,000) |
Unamortized Deferred Financing Costs | (639,000) | (752,000) |
Net Carrying Amount | 267,127,000 | 266,689,000 |
Senior Notes | 7.875% Senior Secured Notes Due 2022 | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 900,000,000 | 900,000,000 |
Unamortized Premium (Discount) | 21,304,000 | 24,593,000 |
Unamortized Deferred Financing Costs | (13,616,000) | (16,067,000) |
Net Carrying Amount | 907,688,000 | 908,526,000 |
Senior Notes | 7.625% Senior Notes Due 2023 | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 400,000,000 | 400,000,000 |
Unamortized Premium (Discount) | 0 | 0 |
Unamortized Deferred Financing Costs | (4,132,000) | (4,762,000) |
Net Carrying Amount | 395,868,000 | 395,238,000 |
Term Loan | September 2018 issuance | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 801,900,000 | |
Unamortized Premium (Discount) | 0 | |
Unamortized Deferred Financing Costs | (10,122,000) | |
Net Carrying Amount | 791,778,000 | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Net Carrying Amount | 0 | 60,000,000 |
Deferred financing costs, net | $ 2,300,000 | 3,100,000 |
Revolving Credit Facility | Series D Revolving Credit Facility Due 2019 | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 3,000,000 | |
Unamortized Premium (Discount) | 0 | |
Unamortized Deferred Financing Costs | 0 | |
Net Carrying Amount | 3,000,000 | |
Revolving Credit Facility | Series A, B Revolving Credit Facilities Due 2021 | ||
Debt Instrument [Line Items] | ||
Outstanding Principal | 57,000,000 | |
Unamortized Premium (Discount) | 0 | |
Unamortized Deferred Financing Costs | 0 | |
Net Carrying Amount | $ 57,000,000 |
Retail Installment Contract R_3
Retail Installment Contract Receivables - Installment Receivables (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Deferred interest | $ (41,006) | $ (41,006) | $ (36,049) | ||
Retail Installment Contracts | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
RIC receivables, gross | 181,353 | 181,353 | 131,024 | ||
Deferred interest | (41,006) | (41,006) | (36,048) | ||
RIC receivables, net of deferred interest | 140,347 | 140,347 | 94,976 | ||
Classified on the condensed consolidated unaudited balance sheets as: | |||||
Accounts and notes receivable, net | 29,350 | 29,350 | 16,469 | ||
Long-term notes receivables and other assets, net | 110,997 | 110,997 | 78,507 | ||
RIC receivables, net | 140,347 | 140,347 | $ 94,976 | ||
Interest income | $ (4,100) | $ (2,800) | $ (10,900) | $ (4,000) | |
Minimum | Vivint Flex Pay | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Installment loans available to qualified customers, term | 42 months | ||||
Maximum | Vivint Flex Pay | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Installment loans available to qualified customers, term | 60 months |
Retail Installment Contract R_4
Retail Installment Contract Receivables - Allowance for Credit Losses (Details) - Retail Installment Contracts - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Deferred interest, beginning of period | $ 36,048 | $ 0 |
Write-offs, net of recoveries | (19,105) | (6,055) |
Change in deferred interest on short-term and long-term RIC receivables | 24,063 | 42,103 |
Deferred interest, end of period | $ 41,006 | $ 36,048 |
Balance Sheet Components (Detai
Balance Sheet Components (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Prepaid expenses and other current assets | |||
Prepaid expenses | $ 9,021 | $ 8,000 | |
Deposits | 1,976 | 1,596 | |
Other | 6,478 | 6,554 | |
Total prepaid expenses and other current assets | 17,475 | 16,150 | |
Capitalized contract costs | |||
Capitalized contract costs | 2,310,922 | 0 | |
Accumulated amortization | (1,147,442) | 0 | |
Capitalized contract costs, net | 1,163,480 | $ 1,020,408 | 0 |
Subscriber acquisition costs | |||
Subscriber acquisition costs | 0 | 1,837,388 | |
Accumulated amortization | 0 | (528,830) | |
Subscriber acquisition costs, net | 0 | 0 | 1,308,558 |
Long-term notes receivables and other assets | |||
RIC receivables, gross | 152,003 | 114,556 | |
RIC deferred interest | (41,006) | (36,049) | |
Security deposits | 6,652 | 6,427 | |
Investments | 4,800 | 3,429 | |
Other | 317 | 360 | |
Total long-term notes receivables and other assets, net | 122,766 | 91,436 | 88,723 |
Accrued payroll and commissions | |||
Accrued commissions | 86,398 | 27,485 | |
Accrued payroll | 32,515 | 30,267 | |
Total accrued payroll and commissions | 118,913 | 57,752 | |
Accrued expenses and other current liabilities | |||
Accrued interest payable | 60,496 | 28,737 | |
Current portion of derivative liability | 58,864 | 25,473 | |
Service warranty accrual | 8,938 | 0 | |
Current portion of notes payable | 8,100 | 0 | |
Accrued taxes | 2,854 | 4,585 | |
Spectrum license obligation | 0 | 3,861 | |
Accrued payroll taxes and withholdings | 3,542 | 3,185 | |
Loss contingencies | 3,131 | 2,156 | |
Blackstone monitoring fee, a related party | 4,000 | 933 | |
Other | 5,893 | 5,391 | |
Total accrued expenses and other current liabilities | $ 155,818 | $ 84,650 | $ 74,321 |
Property Plant and Equipment -
Property Plant and Equipment - Components of Property Plant and Equipment (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | $ 152,721 | $ 139,211 |
Accumulated depreciation and amortization | (76,839) | (61,130) |
Property, plant and equipment, net | 75,882 | 78,081 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | $ 45,448 | 42,008 |
Vehicles | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 3 years | |
Vehicles | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 5 years | |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | $ 51,384 | 46,651 |
Computer equipment and software | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 3 years | |
Computer equipment and software | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 5 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | $ 25,950 | 20,783 |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 2 years | |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 15 years | |
Office furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | $ 19,000 | 17,202 |
Estimated Useful Lives | 7 years | |
Build-to-suit lease building | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | $ 8,268 | 8,268 |
Accumulated depreciation and amortization | $ (1,000) | (300) |
Estimated Useful Lives | 10 years 6 months | |
Construction in process | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | $ 2,671 | $ 4,299 |
Property Plant and Equipment _2
Property Plant and Equipment - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||||
Property plant and equipment, gross | $ 152,721 | $ 152,721 | $ 139,211 | ||
Accumulated amortization | 76,839 | 76,839 | 61,130 | ||
Depreciation and amortization expense | 6,400 | $ 5,200 | 18,800 | $ 14,900 | |
Assets Under Capital Lease Obligations | |||||
Property, Plant and Equipment [Line Items] | |||||
Property plant and equipment, gross | 25,500 | 25,500 | 26,200 | ||
Accumulated amortization | $ 20,800 | $ 20,800 | $ 16,600 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Detail) $ in Thousands | Jan. 10, 2018USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($)market | Dec. 31, 2017USD ($) |
Finite-Lived Intangible Assets [Line Items] | |||||||
Goodwill | $ 836,290 | $ 836,290 | $ 836,970 | ||||
Proceeds from the sale of intangible assets | 53,693 | $ 0 | |||||
Amortization expense related to intangible assets | 22,700 | $ 25,500 | $ 68,200 | $ 76,300 | |||
Finite-lived intangible assets, remaining amortization period | 4 years 1 month 15 days | ||||||
Patents | $ 200 | $ 200 | |||||
Spectrum Licenses | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Number of mid-sized metropolitan markets | market | 40 | ||||||
Lease agreements term | 7 years | 7 years | |||||
Intangible assets acquired | $ 31,300 | ||||||
Spectrum Leases | Verizon | Spectrum Licenses | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Proceeds from the sale of intangible assets | $ 55,000 | ||||||
Extinguishment of liability | (27,900) | ||||||
Indefinite-lived intangible assets, written off | 31,300 | ||||||
Regulatory costs | 1,300 | ||||||
Gain on sale | $ 50,400 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, gross | $ 1,006,940 | $ 1,007,780 |
Accumulated amortization | (729,069) | (662,205) |
Finite-lived intangible assets | 277,871 | 345,575 |
Indefinite-lived intangible assets | 623 | 31,876 |
Total intangible assets, gross | 1,007,563 | 1,039,656 |
Total intangible assets, net | 278,494 | 377,451 |
Customer contracts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, gross | 968,203 | 970,147 |
Accumulated amortization | (699,652) | (637,780) |
Finite-lived intangible assets | $ 268,551 | 332,367 |
Estimated useful lives of intangible asset | 10 years | |
2GIG 2.0 technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, gross | $ 17,000 | 17,000 |
Accumulated amortization | (14,788) | (13,274) |
Finite-lived intangible assets | $ 2,212 | 3,726 |
Estimated useful lives of intangible asset | 8 years | |
Other technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, gross | $ 2,917 | 2,917 |
Accumulated amortization | (1,563) | (1,250) |
Finite-lived intangible assets | 1,354 | 1,667 |
Space Monkey technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, gross | 7,100 | 7,100 |
Accumulated amortization | (5,333) | (4,066) |
Finite-lived intangible assets | $ 1,767 | 3,034 |
Estimated useful lives of intangible asset | 6 years | |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, gross | $ 11,720 | 10,616 |
Accumulated amortization | (7,733) | (5,835) |
Finite-lived intangible assets | $ 3,987 | 4,781 |
Estimated useful lives of intangible asset | 5 years | |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful lives of intangible asset | 5 years | |
Minimum | Other technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful lives of intangible asset | 5 years | |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful lives of intangible asset | 10 years | |
Maximum | Other technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful lives of intangible asset | 7 years | |
Spectrum Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 0 | 31,253 |
IP addresses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 564 | 564 |
Domain names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 59 | $ 59 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Future Amortization Expense (Detail) $ in Thousands | Sep. 30, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2018 - Remaining Period | $ 22,791 |
2,019 | 79,218 |
2,020 | 67,980 |
2,021 | 58,765 |
2,022 | 48,844 |
Thereafter | 69 |
Total estimated amortization expense | $ 277,667 |
Financial Instruments - Valuati
Financial Instruments - Valuation Approach Applied to Each Class of Security (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Cash | $ 7,960 | $ 7,960 | $ 3,866 | ||
Adjusted Cost | 115,669 | 115,669 | 7,890 | ||
Unrealized Gains | 1,385 | 1,385 | 0 | ||
Unrealized Losses | 0 | 0 | (1,315) | ||
Fair Value | 117,054 | 117,054 | 6,575 | ||
Cash and Cash Equivalents | 112,966 | 112,966 | 3,872 | ||
Long-Term Notes Receivables and Other Assets, net | 4,088 | 4,088 | 2,703 | ||
Unrealized gain (loss) during period | 600 | $ (500) | 1,400 | $ (300) | |
Accumulated other comprehensive income | 0 | 0 | (300) | ||
Privately Held Company | Convertible Debt Securities | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Cost method investments | 3,000 | 3,000 | |||
Level 1 | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Adjusted Cost | 107,709 | 107,709 | 4,024 | ||
Unrealized Gains | 1,385 | 1,385 | 0 | ||
Unrealized Losses | 0 | 0 | (1,315) | ||
Fair Value | 109,094 | 109,094 | 2,709 | ||
Cash and Cash Equivalents | 105,006 | 105,006 | 6 | ||
Long-Term Notes Receivables and Other Assets, net | 4,088 | 4,088 | 2,703 | ||
Money market funds | Level 1 | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Adjusted Cost | 105,006 | 105,006 | 6 | ||
Unrealized Gains | 0 | 0 | 0 | ||
Unrealized Losses | 0 | 0 | 0 | ||
Fair Value | 105,006 | 105,006 | 6 | ||
Cash and Cash Equivalents | 105,006 | 105,006 | 6 | ||
Long-Term Notes Receivables and Other Assets, net | 0 | 0 | 0 | ||
Corporate securities | Level 1 | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Adjusted Cost | 2,703 | 2,703 | 4,018 | ||
Unrealized Gains | 1,385 | 1,385 | 0 | ||
Unrealized Losses | 0 | 0 | (1,315) | ||
Fair Value | 4,088 | 4,088 | 2,703 | ||
Cash and Cash Equivalents | 0 | 0 | 0 | ||
Long-Term Notes Receivables and Other Assets, net | $ 4,088 | $ 4,088 | $ 2,703 |
Financial Instruments - Debt Fa
Financial Instruments - Debt Fair Value and Carrying Value (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Aug. 31, 2017 | May 31, 2016 | Oct. 31, 2015 | Nov. 16, 2012 |
Debt Instrument [Line Items] | ||||||
Face Value | $ 3,038,173 | $ 2,820,297 | ||||
Outstanding Principal | 3,051,199 | 2,829,465 | ||||
Level 2 | ||||||
Debt Instrument [Line Items] | ||||||
Face Value | 3,051,199 | 2,769,465 | ||||
Estimated Fair Value | $ 3,048,956 | 2,893,547 | ||||
6.375% Senior Secured Notes due 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 6.375% | |||||
8.75% Senior Notes due 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Stated Interest Rate | 8.75% | |||||
Senior Notes | 6.375% Senior Secured Notes due 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Face Value | 266,588 | |||||
Outstanding Principal | 269,465 | |||||
Stated Interest Rate | 6.375% | 6.375% | ||||
Senior Notes | 6.375% Senior Secured Notes due 2019 | Level 2 | ||||||
Debt Instrument [Line Items] | ||||||
Face Value | $ 0 | 269,465 | ||||
Estimated Fair Value | 0 | 273,507 | ||||
Senior Notes | 8.75% Senior Notes due 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Face Value | 675,712 | 923,256 | ||||
Outstanding Principal | $ 679,299 | 930,000 | ||||
Stated Interest Rate | 8.75% | 8.75% | ||||
Senior Notes | 8.75% Senior Notes due 2020 | Level 2 | ||||||
Debt Instrument [Line Items] | ||||||
Face Value | $ 679,299 | 930,000 | ||||
Estimated Fair Value | 680,114 | 952,134 | ||||
Senior Notes | 8.875% Senior Secured Notes Due 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Face Value | 267,127 | 266,689 | ||||
Outstanding Principal | $ 270,000 | 270,000 | ||||
Stated Interest Rate | 8.875% | 8.875% | ||||
Senior Notes | 8.875% Senior Secured Notes Due 2022 | Level 2 | ||||||
Debt Instrument [Line Items] | ||||||
Face Value | $ 270,000 | 270,000 | ||||
Estimated Fair Value | 276,692 | 276,486 | ||||
Senior Notes | 7.875% Senior Secured Notes Due 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Face Value | 907,688 | 908,526 | ||||
Outstanding Principal | $ 900,000 | 900,000 | ||||
Stated Interest Rate | 7.875% | 7.875% | ||||
Senior Notes | 7.875% Senior Secured Notes Due 2022 | Level 2 | ||||||
Debt Instrument [Line Items] | ||||||
Face Value | $ 900,000 | 900,000 | ||||
Estimated Fair Value | 920,250 | 966,420 | ||||
Senior Notes | 7.625% Senior Notes Due 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Face Value | 395,868 | 395,238 | ||||
Outstanding Principal | $ 400,000 | 400,000 | ||||
Stated Interest Rate | 7.625% | 7.625% | ||||
Senior Notes | 7.625% Senior Notes Due 2023 | Level 2 | ||||||
Debt Instrument [Line Items] | ||||||
Face Value | $ 400,000 | 400,000 | ||||
Estimated Fair Value | 370,000 | 425,000 | ||||
Term Loan | 7.625% Senior Notes Due 2023 | Level 2 | ||||||
Debt Instrument [Line Items] | ||||||
Face Value | 801,900 | 0 | ||||
Estimated Fair Value | $ 801,900 | $ 0 |
Financial Instruments - Derivat
Financial Instruments - Derivative Fair Value (Details) - Level 2 - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||
Fair value | $ 112,554 | $ 46,496 |
Notional amount | 355,527 | 163,032 |
Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value | 58,864 | 25,473 |
Other long-term obligations | ||
Derivatives, Fair Value [Line Items] | ||
Fair value | $ 53,690 | $ 21,023 |
Financial Instruments - Level 3
Financial Instruments - Level 3 (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Balance, beginning of period | $ 46,496 | $ 0 |
Additions | 78,995 | 44,913 |
Settlements | (22,805) | (7,972) |
Losses included in earnings | 9,868 | 9,555 |
Balance, end of period | $ 112,554 | $ 46,496 |
Income Taxes (Detail)
Income Taxes (Detail) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 0.45% | (0.85%) |
Stock-Based Compensation and _3
Stock-Based Compensation and Equity - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation | $ 1,107 | $ 401 | $ 1,651 | $ 1,287 | |
Incentive Units | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected volatility | 55.00% | ||||
Expected exercise term | 3 years 11 months 16 days | ||||
Risk-free rate | 0.62% | ||||
Incentive Units | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected volatility | 125.00% | ||||
Expected exercise term | 6 years | ||||
Risk-free rate | 2.61% | ||||
Incentive Units Time Based Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation awards, description | The Incentive Units are subject to time-based and performance-based vesting conditions, with one-third subject to ratable time-based vesting over a five year period and two-thirds subject to the achievement of certain investment return thresholds by The Blackstone Group, L.P. and its affiliates | ||||
Vesting period | 5 years | ||||
Stock compensation award, method of measurement | Monte Carlo simulation valuation approach | ||||
Incentive Units Time Based Awards | Tranche One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock compensation award, vesting percentage | 66.67% | ||||
Incentive Units Time Based Awards | Senior Management and Board Member | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Incentive units issued as share-based compensation awards | 85,362,836 | ||||
Incentive Units Time Based Awards | Chief Executive Officer and President | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Incentive units issued as share-based compensation awards, outstanding | 42,169,456 | 42,169,456 | |||
Incentive Units Performance Based Awards | Tranche One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock compensation award, vesting percentage | 33.33% | ||||
Stock Appreciation Rights (SARs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock compensation award, method of measurement | Black-Scholes option valuation model | ||||
Shares reserved for issuance | 53,621,891 | 53,621,891 | |||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Incentive units issued as share-based compensation awards | 360,000 | ||||
Vesting period | 3 years | ||||
Vivint | Stock Appreciation Rights (SARs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Incentive units issued as share-based compensation awards, outstanding | 39,151,490 | 39,151,490 | |||
Share-based compensation awards, description | The SARs are subject to time-based and performance-based vesting conditions, with one-third subject to ratable time-based vesting over a five year period and two-thirds subject to the achievement of certain investment return thresholds by 313. | ||||
Expected dividends | 0.00% | ||||
Vivint | Stock Appreciation Rights (SARs) | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected volatility | 55.00% | ||||
Expected exercise term | 6 years | ||||
Risk-free rate | 0.61% | ||||
Vivint | Stock Appreciation Rights (SARs) | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected volatility | 125.00% | ||||
Expected exercise term | 6 years 5 months 20 days | ||||
Risk-free rate | 2.61% | ||||
Vivint | Stock Appreciation Rights Time Based Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 5 years | ||||
Vivint | Stock Appreciation Rights Time Based Awards | Tranche One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock compensation award, vesting percentage | 66.67% | ||||
Vivint | Stock Appreciation Rights Performance Based Awards | Tranche One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock compensation award, vesting percentage | 33.33% | ||||
313 Acquisition LLC | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation | $ 2,200 |
Stock-Based Compensation and _4
Stock-Based Compensation and Equity - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 1,107 | $ 401 | $ 1,651 | $ 1,287 |
Operating expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | 102 | 9 | 147 | 49 |
Selling expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | 235 | 55 | 361 | 165 |
General and administrative expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 770 | $ 337 | $ 1,143 | $ 1,073 |
Commitments and Contingencies_2
Commitments and Contingencies (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Commitments And Contingencies [Line Items] | |||||
Loss contingency accrual | $ 3,100 | $ 3,100 | $ 2,200 | ||
Rent Expense | 4,787 | $ 4,658 | 13,554 | $ 12,887 | |
Capital lease obligation | 15,800 | 15,800 | 21,700 | ||
Property plant and equipment, gross | 152,721 | 152,721 | 139,211 | ||
Accumulated amortization | 76,839 | $ 76,839 | 61,130 | ||
Vehicles | |||||
Commitments And Contingencies [Line Items] | |||||
Lease agreements term | 36 months | ||||
Average remaining life for fleet | 11 months | ||||
Property plant and equipment, gross | 45,448 | $ 45,448 | 42,008 | ||
Build-to-suit lease building | |||||
Commitments And Contingencies [Line Items] | |||||
Property plant and equipment, gross | 8,268 | 8,268 | 8,268 | ||
Accumulated amortization | 1,000 | 1,000 | $ 300 | ||
Warehouse, office space and other | |||||
Commitments And Contingencies [Line Items] | |||||
Rent Expense | $ 3,731 | 3,489 | $ 10,410 | 9,374 | |
Warehouse, office space and other | Minimum | |||||
Commitments And Contingencies [Line Items] | |||||
Lease Term | 11 years | 11 years | |||
Warehouse, office space and other | Maximum | |||||
Commitments And Contingencies [Line Items] | |||||
Lease Term | 15 years | 15 years | |||
Wireless towers and spectrum | |||||
Commitments And Contingencies [Line Items] | |||||
Rent Expense | $ 1,056 | $ 1,169 | $ 3,144 | $ 3,513 | |
Wireless towers and spectrum | Minimum | |||||
Commitments And Contingencies [Line Items] | |||||
Lease Term | 1 year | 1 year | |||
Wireless towers and spectrum | Maximum | |||||
Commitments And Contingencies [Line Items] | |||||
Lease Term | 10 years | 10 years |
Related Party Transactions (Det
Related Party Transactions (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Jan. 01, 2018 | Feb. 28, 2017 | |
Related Party Transaction [Line Items] | ||||||||
Amounts due from employees | $ 300,000 | $ 300,000 | $ 300,000 | $ 300,000 | ||||
Prepaid expenses and other current assets | 17,475,000 | 17,475,000 | 17,475,000 | 16,150,000 | ||||
Additional expenses incurred for other related-party transactions | 300,000 | $ 400,000 | 1,500,000 | $ 1,200,000 | ||||
Accrued expenses and other current liabilities | 155,818,000 | 155,818,000 | 155,818,000 | 74,321,000 | $ 84,650,000 | |||
Additions | 11,317,000 | 17,771,000 | ||||||
Deferred financing costs | 34,591,000 | 34,591,000 | 34,591,000 | 35,667,000 | ||||
Outstanding borrowings | 3,038,173,000 | 3,038,173,000 | 3,038,173,000 | 2,820,297,000 | ||||
Proceeds from capital contribution | 4,700,000 | 0 | ||||||
Vivint | ||||||||
Related Party Transaction [Line Items] | ||||||||
Accrued expenses and other current liabilities | 700,000 | 700,000 | 700,000 | 1,400,000 | ||||
Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Expenses related to agreement | 1,100,000 | 1,200,000 | 3,200,000 | 3,600,000 | ||||
Accrued expenses and other current liabilities | 4,000,000 | 4,000,000 | 4,000,000 | |||||
Affiliated Entity | Minimum | ||||||||
Related Party Transaction [Line Items] | ||||||||
Annual monitoring base fee, minimum | 2,700,000 | |||||||
Personal Use of Corporate Jet | ||||||||
Related Party Transaction [Line Items] | ||||||||
Prepaid expenses and other current assets | 300,000 | 300,000 | 300,000 | 500,000 | ||||
7.875% Senior Secured Notes Due 2022 | Senior Notes | ||||||||
Related Party Transaction [Line Items] | ||||||||
Deferred financing costs | 13,616,000 | 13,616,000 | 13,616,000 | 16,067,000 | ||||
Outstanding borrowings | 907,688,000 | 907,688,000 | 907,688,000 | 908,526,000 | ||||
Blackstone Advisory Partners L.P. | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Deferred financing costs | $ 1,500,000 | |||||||
Blackstone Advisory Partners L.P. | Term Loan | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Outstanding borrowings | 59,500,000 | 59,500,000 | $ 59,500,000 | |||||
Blackstone Management Partners L.L.C. | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Payment of annual monitoring fee description | Company agreed to pay an annual monitoring fee equal to the greater of (i) a minimum base fee of $2.7 million subject to adjustments if the Company engages in a business combination or disposition that is deemed significant and (ii) the amount of the monitoring fee paid in respect of the immediately preceding fiscal year, without regard to any post-fiscal year "true-up" adjustments as determined by the agreement. | |||||||
Blackstone Management Partners L.L.C. | Blackstone Management Partners LLC Support and Services Agreement | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Expenses related to agreement | 0 | 0 | $ 0 | 0 | ||||
Maximum advisory fee obligation | 1,500,000 | 1,500,000 | 1,500,000 | |||||
Solar | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Sublease and other administrative expenses | $ 6,100,000 | $ 700,000 | 10,800,000 | $ 1,800,000 | ||||
Other expenses | $ 100,000 | $ 200,000 | ||||||
Vivint Smart Home, Inc. | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Proceeds from capital contribution | $ 4,700,000 |
Employee Benefit Plan (Detail)
Employee Benefit Plan (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Postemployment Benefits [Abstract] | ||||
Employer matching contribution, percent of employees' gross pay | 1.00% | |||
Employer matching contribution, amount for every employees' dollar contributed | $ 0.50 | |||
Employer matching contribution, percent of employees' gross pay for 50% matching for every dollar contributed | 5.00% | |||
Maximum annual contributions per employee, percent | 3.50% | |||
Award vesting service period | 2 years | |||
Matching contributions to the plan | $ 1,400,000 | $ 0 | $ 4,400,000 | $ 0 |
Restructuring and Asset Impai_3
Restructuring and Asset Impairment Charges (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Restructuring Reserve [Roll Forward] | |||
Accrued restructuring, beginning balance | $ 558 | $ 649 | |
Restructuring charges | 4,683 | ||
Cash payments | (4,060) | (91) | |
Accrued restructuring, ending balance | $ 1,181 | 1,181 | 558 |
Contract termination costs | |||
Restructuring Reserve [Roll Forward] | |||
Accrued restructuring, beginning balance | 558 | 649 | |
Restructuring charges | 0 | ||
Cash payments | (68) | (91) | |
Accrued restructuring, ending balance | 490 | 490 | 558 |
Employee severance and termination benefits | |||
Restructuring Reserve [Roll Forward] | |||
Accrued restructuring, beginning balance | 0 | 0 | |
Restructuring charges | 500 | 4,683 | |
Cash payments | (3,992) | 0 | |
Accrued restructuring, ending balance | $ 691 | $ 691 | $ 0 |
Segment Reporting and Busines_3
Segment Reporting and Business Concentrations (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)regionsegment | Sep. 30, 2017USD ($)segment | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Number of operating segments | segment | 1 | 1 | ||
Number of geographic regions | region | 2 | |||
Revenue from external customers | $ 272,335 | $ 228,658 | $ 773,899 | $ 646,137 |
United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue from external customers | 253,635 | 211,077 | 719,690 | 597,842 |
Canada | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue from external customers | $ 18,700 | $ 17,581 | $ 54,209 | $ 48,295 |
Guarantor and Non-Guarantor S_3
Guarantor and Non-Guarantor Supplemental Financial Information - Balance Sheet (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
ASSETS | |||
Current assets | $ 255,523 | $ 175,965 | |
Property, plant and equipment, net | 75,882 | 78,081 | |
Capitalized contract costs, net | 1,163,480 | $ 1,020,408 | 0 |
Subscriber acquisition costs, net | 0 | 0 | 1,308,558 |
Deferred financing costs, net | 2,318 | 3,099 | |
Investment in subsidiaries | 0 | 0 | |
Intercompany receivable | 0 | 0 | |
Intangible assets, net | 278,494 | 377,451 | |
Goodwill | 836,290 | 836,970 | |
Long-term notes receivables and other assets | 122,766 | 91,436 | 88,723 |
Total assets | 2,734,753 | 2,868,847 | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||
Current liabilities | 538,832 | 338,371 | |
Intercompany payable | 0 | 0 | |
Notes payable and revolving credit facility, net of current portion | 3,038,173 | 2,820,297 | |
Capital lease obligations, net of current portion | 7,325 | 11,089 | |
Deferred revenue, net of current portion | 328,168 | $ 211,493 | 264,555 |
Other long-term obligations | 95,553 | 79,020 | |
Accumulated losses of investee, net | 0 | 0 | |
Deferred income tax liability | 8,816 | 9,041 | |
Total stockholders’ deficit | (1,282,114) | (653,526) | |
Total liabilities and stockholders’ deficit | 2,734,753 | 2,868,847 | |
Eliminations | |||
ASSETS | |||
Current assets | (236,208) | (162,413) | |
Property, plant and equipment, net | 0 | 0 | |
Capitalized contract costs, net | 0 | ||
Subscriber acquisition costs, net | 0 | ||
Deferred financing costs, net | 0 | 0 | |
Investment in subsidiaries | (1,711,422) | (2,188,221) | |
Intercompany receivable | (6,303) | (6,303) | |
Intangible assets, net | 0 | 0 | |
Goodwill | 0 | 0 | |
Long-term notes receivables and other assets | (106) | (106) | |
Total assets | (1,954,039) | (2,357,043) | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||
Current liabilities | (236,208) | (162,413) | |
Intercompany payable | (6,303) | (6,303) | |
Notes payable and revolving credit facility, net of current portion | 0 | 0 | |
Capital lease obligations, net of current portion | 0 | 0 | |
Deferred revenue, net of current portion | 0 | 0 | |
Other long-term obligations | 0 | 0 | |
Accumulated losses of investee, net | (1,282,114) | (653,526) | |
Deferred income tax liability | (106) | (106) | |
Total stockholders’ deficit | (429,308) | (1,534,695) | |
Total liabilities and stockholders’ deficit | (1,954,039) | (2,357,043) | |
Parent | Reportable Legal Entities | |||
ASSETS | |||
Current assets | 0 | 0 | |
Property, plant and equipment, net | 0 | 0 | |
Capitalized contract costs, net | 0 | ||
Subscriber acquisition costs, net | 0 | ||
Deferred financing costs, net | 0 | 0 | |
Investment in subsidiaries | 0 | 0 | |
Intercompany receivable | 0 | 0 | |
Intangible assets, net | 0 | 0 | |
Goodwill | 0 | 0 | |
Long-term notes receivables and other assets | 0 | 0 | |
Total assets | 0 | 0 | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||
Current liabilities | 0 | 0 | |
Intercompany payable | 0 | 0 | |
Notes payable and revolving credit facility, net of current portion | 0 | 0 | |
Capital lease obligations, net of current portion | 0 | 0 | |
Deferred revenue, net of current portion | 0 | 0 | |
Other long-term obligations | 0 | 0 | |
Accumulated losses of investee, net | 1,282,114 | 653,526 | |
Deferred income tax liability | 0 | 0 | |
Total stockholders’ deficit | (1,282,114) | (653,526) | |
Total liabilities and stockholders’ deficit | 0 | 0 | |
APX Group, Inc. | Reportable Legal Entities | |||
ASSETS | |||
Current assets | 110,625 | 4,150 | |
Property, plant and equipment, net | 0 | 0 | |
Capitalized contract costs, net | 0 | ||
Subscriber acquisition costs, net | 0 | ||
Deferred financing costs, net | 2,318 | 3,099 | |
Investment in subsidiaries | 1,711,422 | 2,188,221 | |
Intercompany receivable | 0 | 0 | |
Intangible assets, net | 0 | 0 | |
Goodwill | 0 | 0 | |
Long-term notes receivables and other assets | 106 | 106 | |
Total assets | 1,824,471 | 2,195,576 | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||
Current liabilities | 68,412 | 28,805 | |
Intercompany payable | 0 | 0 | |
Notes payable and revolving credit facility, net of current portion | 3,038,173 | 2,820,297 | |
Capital lease obligations, net of current portion | 0 | 0 | |
Deferred revenue, net of current portion | 0 | 0 | |
Other long-term obligations | 0 | 0 | |
Accumulated losses of investee, net | |||
Deferred income tax liability | 0 | 0 | |
Total stockholders’ deficit | (1,282,114) | (653,526) | |
Total liabilities and stockholders’ deficit | 1,824,471 | 2,195,576 | |
Guarantor Subsidiaries | Reportable Legal Entities | |||
ASSETS | |||
Current assets | 292,080 | 284,293 | |
Property, plant and equipment, net | 75,346 | 77,345 | |
Capitalized contract costs, net | 1,086,964 | ||
Subscriber acquisition costs, net | 1,214,678 | ||
Deferred financing costs, net | 0 | 0 | |
Investment in subsidiaries | 0 | 0 | |
Intercompany receivable | 6,303 | 6,303 | |
Intangible assets, net | 257,383 | 350,710 | |
Goodwill | 809,678 | 809,678 | |
Long-term notes receivables and other assets | 104,566 | 78,173 | |
Total assets | 2,632,320 | 2,821,180 | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||
Current liabilities | 530,668 | 343,398 | |
Intercompany payable | 0 | 0 | |
Notes payable and revolving credit facility, net of current portion | 0 | 0 | |
Capital lease obligations, net of current portion | 7,283 | 10,791 | |
Deferred revenue, net of current portion | 309,634 | 248,643 | |
Other long-term obligations | 95,553 | 79,020 | |
Accumulated losses of investee, net | |||
Deferred income tax liability | 106 | 106 | |
Total stockholders’ deficit | 1,689,076 | 2,139,222 | |
Total liabilities and stockholders’ deficit | 2,632,320 | 2,821,180 | |
Non-Guarantor Subsidiaries | Reportable Legal Entities | |||
ASSETS | |||
Current assets | 89,026 | 49,935 | |
Property, plant and equipment, net | 536 | 736 | |
Capitalized contract costs, net | 76,516 | ||
Subscriber acquisition costs, net | 93,880 | ||
Deferred financing costs, net | 0 | 0 | |
Investment in subsidiaries | 0 | 0 | |
Intercompany receivable | 0 | 0 | |
Intangible assets, net | 21,111 | 26,741 | |
Goodwill | 26,612 | 27,292 | |
Long-term notes receivables and other assets | 18,200 | 10,550 | |
Total assets | 232,001 | 209,134 | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||
Current liabilities | 175,960 | 128,581 | |
Intercompany payable | 6,303 | 6,303 | |
Notes payable and revolving credit facility, net of current portion | 0 | 0 | |
Capital lease obligations, net of current portion | 42 | 298 | |
Deferred revenue, net of current portion | 18,534 | 15,912 | |
Other long-term obligations | 0 | 0 | |
Accumulated losses of investee, net | |||
Deferred income tax liability | 8,816 | 9,041 | |
Total stockholders’ deficit | 22,346 | 48,999 | |
Total liabilities and stockholders’ deficit | $ 232,001 | $ 209,134 |
Guarantor and Non-Guarantor S_4
Guarantor and Non-Guarantor Supplemental Financial Information - Statements of Operations and Comprehensive (Loss) Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Condensed Income Statements, Captions [Line Items] | ||||
Revenues | $ 272,335 | $ 228,658 | $ 773,899 | $ 646,137 |
Costs and expenses | 316,393 | 268,805 | 969,821 | 733,274 |
Loss from operations | (44,058) | (40,147) | (195,922) | (87,137) |
Loss from subsidiaries | 0 | 0 | 0 | 0 |
Other expense (income), net | 76,391 | 66,616 | 154,968 | 185,348 |
Loss before income taxes | (120,449) | (106,763) | (350,890) | (272,485) |
Income tax (benefit) expense | (223) | 1,157 | (1,562) | 2,308 |
Net loss | (120,226) | (107,920) | (349,328) | (274,793) |
Other comprehensive (loss) income, net of tax effects: | ||||
Net loss | (120,226) | (107,920) | (349,328) | (274,793) |
Foreign currency translation adjustment | 406 | 1,967 | (670) | 3,543 |
Unrealized gain on marketable securities | 0 | (413) | 0 | (671) |
Total other comprehensive income (loss) | 406 | 1,554 | (670) | 2,872 |
Comprehensive loss | (119,820) | (106,366) | (349,998) | (271,921) |
Eliminations | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Revenues | (639) | (672) | (1,941) | (2,023) |
Costs and expenses | (639) | (672) | (1,941) | (2,023) |
Loss from operations | 0 | 0 | 0 | 0 |
Loss from subsidiaries | 164,866 | 148,528 | 505,211 | 362,897 |
Other expense (income), net | 0 | 0 | 0 | 0 |
Loss before income taxes | 164,866 | 148,528 | 505,211 | 362,897 |
Income tax (benefit) expense | 0 | 0 | 0 | 0 |
Net loss | 164,866 | 148,528 | 505,211 | 362,897 |
Other comprehensive (loss) income, net of tax effects: | ||||
Net loss | 164,866 | 148,528 | 505,211 | 362,897 |
Foreign currency translation adjustment | (812) | (1,967) | 1,340 | (3,543) |
Unrealized gain on marketable securities | 413 | 671 | ||
Total other comprehensive income (loss) | (812) | (1,554) | 1,340 | (2,872) |
Comprehensive loss | 164,054 | 146,974 | 506,551 | 360,025 |
Parent | Reportable Legal Entities | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Costs and expenses | 0 | 0 | 0 | 0 |
Loss from operations | 0 | 0 | 0 | 0 |
Loss from subsidiaries | (120,226) | (107,920) | (349,328) | (274,793) |
Other expense (income), net | 0 | 0 | 0 | 0 |
Loss before income taxes | (120,226) | (107,920) | (349,328) | (274,793) |
Income tax (benefit) expense | 0 | 0 | 0 | 0 |
Net loss | (120,226) | (107,920) | (349,328) | (274,793) |
Other comprehensive (loss) income, net of tax effects: | ||||
Net loss | (120,226) | (107,920) | (349,328) | (274,793) |
Foreign currency translation adjustment | 406 | 0 | (670) | 0 |
Unrealized gain on marketable securities | 0 | 0 | ||
Total other comprehensive income (loss) | 406 | 0 | (670) | 0 |
Comprehensive loss | (119,820) | (107,920) | (349,998) | (274,793) |
APX Group, Inc. | Reportable Legal Entities | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Costs and expenses | 0 | 0 | 0 | 0 |
Loss from operations | 0 | 0 | 0 | 0 |
Loss from subsidiaries | (44,640) | (40,608) | (155,883) | (88,104) |
Other expense (income), net | 75,586 | 67,312 | 193,445 | 186,689 |
Loss before income taxes | (120,226) | (107,920) | (349,328) | (274,793) |
Income tax (benefit) expense | 0 | 0 | 0 | 0 |
Net loss | (120,226) | (107,920) | (349,328) | (274,793) |
Other comprehensive (loss) income, net of tax effects: | ||||
Net loss | (120,226) | (107,920) | (349,328) | (274,793) |
Foreign currency translation adjustment | 406 | 1,967 | (670) | 3,543 |
Unrealized gain on marketable securities | (413) | (671) | ||
Total other comprehensive income (loss) | 406 | 1,554 | (670) | 2,872 |
Comprehensive loss | (119,820) | (106,366) | (349,998) | (271,921) |
Guarantor Subsidiaries | Reportable Legal Entities | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Revenues | 260,462 | 216,560 | 738,250 | 612,075 |
Costs and expenses | 303,009 | 257,988 | 930,065 | 703,656 |
Loss from operations | (42,547) | (41,428) | (191,815) | (91,581) |
Loss from subsidiaries | 0 | 0 | 0 | 0 |
Other expense (income), net | 2,227 | 2,356 | (40,737) | 4,097 |
Loss before income taxes | (44,774) | (43,784) | (151,078) | (95,678) |
Income tax (benefit) expense | 55 | (34) | 157 | (303) |
Net loss | (44,829) | (43,750) | (151,235) | (95,375) |
Other comprehensive (loss) income, net of tax effects: | ||||
Net loss | (44,829) | (43,750) | (151,235) | (95,375) |
Foreign currency translation adjustment | 0 | 0 | 0 | 0 |
Unrealized gain on marketable securities | (413) | (671) | ||
Total other comprehensive income (loss) | 0 | (413) | 0 | (671) |
Comprehensive loss | (44,829) | (44,163) | (151,235) | (96,046) |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Revenues | 12,512 | 12,770 | 37,590 | 36,085 |
Costs and expenses | 14,023 | 11,489 | 41,697 | 31,641 |
Loss from operations | (1,511) | 1,281 | (4,107) | 4,444 |
Loss from subsidiaries | 0 | 0 | 0 | 0 |
Other expense (income), net | (1,422) | (3,052) | 2,260 | (5,438) |
Loss before income taxes | (89) | 4,333 | (6,367) | 9,882 |
Income tax (benefit) expense | (278) | 1,191 | (1,719) | 2,611 |
Net loss | 189 | 3,142 | (4,648) | 7,271 |
Other comprehensive (loss) income, net of tax effects: | ||||
Net loss | 189 | 3,142 | (4,648) | 7,271 |
Foreign currency translation adjustment | 406 | 1,967 | (670) | 3,543 |
Unrealized gain on marketable securities | 0 | 0 | ||
Total other comprehensive income (loss) | 406 | 1,967 | (670) | 3,543 |
Comprehensive loss | $ 595 | $ 5,109 | $ (5,318) | $ 10,814 |
Guarantor and Non-Guarantor S_5
Guarantor and Non-Guarantor Supplemental Financial Information - Cash Flows (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net cash provided by (used in) operating activities | $ (130,023) | $ (149,268) |
Cash flows from investing activities: | ||
Capital expenditures | (15,355) | (14,842) |
Proceeds from the sale of intangible assets | 53,693 | 0 |
Investment in subsidiary | 0 | 0 |
Proceeds from the sale of capital assets | 185 | 275 |
Acquisition of intangible assets | (1,068) | (1,057) |
Acquisition of other assets | 0 | (156) |
Net cash provided by (used in) investing activities | 37,455 | (15,780) |
Cash flows from financing activities: | ||
Proceeds from notes payable | 810,000 | 724,750 |
Repayment of notes payable | (520,166) | (450,000) |
Borrowings from revolving credit facility | 201,000 | 124,000 |
Repayments on revolving credit facility | (261,000) | (124,000) |
Proceeds from capital contribution | 4,700 | 0 |
Intercompany receivable | 0 | |
Intercompany payable | 0 | |
Repayments of capital lease obligations | (9,882) | (7,161) |
Payments of other long-term obligations | 0 | (2,065) |
Financing costs | (11,317) | (17,771) |
Deferred financing costs | (9,302) | (10,730) |
Return of capital | (2,369) | 0 |
Net cash provided by financing activities | 201,664 | 237,023 |
Effect of exchange rate changes on cash | (2) | 72 |
Net increase (decrease) in cash and cash equivalents | 109,094 | 72,047 |
Cash and cash equivalents: | ||
Beginning of period | 3,872 | 43,520 |
End of period | 112,966 | 115,567 |
Eliminations | ||
Cash flows from operating activities: | ||
Net cash provided by (used in) operating activities | 0 | 0 |
Cash flows from investing activities: | ||
Capital expenditures | 0 | 0 |
Proceeds from the sale of intangible assets | 0 | |
Investment in subsidiary | 107,237 | 157,400 |
Proceeds from the sale of capital assets | 0 | 0 |
Acquisition of intangible assets | 0 | 0 |
Acquisition of other assets | 0 | |
Net cash provided by (used in) investing activities | 107,237 | 157,400 |
Cash flows from financing activities: | ||
Proceeds from notes payable | 0 | 0 |
Repayment of notes payable | 0 | 0 |
Borrowings from revolving credit facility | 0 | 0 |
Repayments on revolving credit facility | 0 | 0 |
Proceeds from capital contribution | (111,975) | (157,400) |
Intercompany receivable | (3,621) | |
Intercompany payable | 3,621 | |
Repayments of capital lease obligations | 0 | 0 |
Payments of other long-term obligations | 0 | |
Financing costs | 0 | 0 |
Deferred financing costs | 0 | 0 |
Return of capital | 4,738 | |
Net cash provided by financing activities | (107,237) | (157,400) |
Effect of exchange rate changes on cash | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents: | ||
Beginning of period | 0 | 0 |
End of period | 0 | 0 |
Parent | Reportable Legal Entities | ||
Cash flows from operating activities: | ||
Net cash provided by (used in) operating activities | 0 | 0 |
Cash flows from investing activities: | ||
Capital expenditures | 0 | 0 |
Proceeds from the sale of intangible assets | 0 | |
Investment in subsidiary | (2,331) | 0 |
Proceeds from the sale of capital assets | 0 | 0 |
Acquisition of intangible assets | 0 | 0 |
Acquisition of other assets | 0 | |
Net cash provided by (used in) investing activities | (2,331) | 0 |
Cash flows from financing activities: | ||
Proceeds from notes payable | 0 | 0 |
Repayment of notes payable | 0 | 0 |
Borrowings from revolving credit facility | 0 | 0 |
Repayments on revolving credit facility | 0 | 0 |
Proceeds from capital contribution | 4,700 | 0 |
Intercompany receivable | 0 | |
Intercompany payable | 0 | |
Repayments of capital lease obligations | 0 | 0 |
Payments of other long-term obligations | 0 | |
Financing costs | 0 | 0 |
Deferred financing costs | 0 | 0 |
Return of capital | (2,369) | |
Net cash provided by financing activities | 2,331 | 0 |
Effect of exchange rate changes on cash | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents: | ||
Beginning of period | 0 | 0 |
End of period | 0 | 0 |
APX Group, Inc. | Reportable Legal Entities | ||
Cash flows from operating activities: | ||
Net cash provided by (used in) operating activities | 0 | 0 |
Cash flows from investing activities: | ||
Capital expenditures | 0 | 0 |
Proceeds from the sale of intangible assets | 0 | |
Investment in subsidiary | (104,906) | (157,400) |
Proceeds from the sale of capital assets | 0 | 0 |
Acquisition of intangible assets | 0 | 0 |
Acquisition of other assets | 0 | |
Net cash provided by (used in) investing activities | (104,906) | (157,400) |
Cash flows from financing activities: | ||
Proceeds from notes payable | 810,000 | 724,750 |
Repayment of notes payable | (520,166) | (450,000) |
Borrowings from revolving credit facility | 201,000 | 124,000 |
Repayments on revolving credit facility | (261,000) | (124,000) |
Proceeds from capital contribution | 4,700 | 0 |
Intercompany receivable | 0 | |
Intercompany payable | 0 | |
Repayments of capital lease obligations | 0 | 0 |
Payments of other long-term obligations | 0 | |
Financing costs | (11,317) | (17,771) |
Deferred financing costs | (9,302) | (10,730) |
Return of capital | (2,369) | |
Net cash provided by financing activities | 211,546 | 246,249 |
Effect of exchange rate changes on cash | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 106,640 | 88,849 |
Cash and cash equivalents: | ||
Beginning of period | 3,661 | 24,680 |
End of period | 110,301 | 113,529 |
Guarantor Subsidiaries | Reportable Legal Entities | ||
Cash flows from operating activities: | ||
Net cash provided by (used in) operating activities | (130,718) | (154,360) |
Cash flows from investing activities: | ||
Capital expenditures | (15,355) | (14,842) |
Proceeds from the sale of intangible assets | 53,693 | |
Investment in subsidiary | 0 | 0 |
Proceeds from the sale of capital assets | 185 | 275 |
Acquisition of intangible assets | (1,068) | (1,057) |
Acquisition of other assets | (156) | |
Net cash provided by (used in) investing activities | 37,455 | (15,780) |
Cash flows from financing activities: | ||
Proceeds from notes payable | 0 | 0 |
Repayment of notes payable | 0 | 0 |
Borrowings from revolving credit facility | 0 | 0 |
Repayments on revolving credit facility | 0 | 0 |
Proceeds from capital contribution | 107,275 | 157,400 |
Intercompany receivable | 3,621 | |
Intercompany payable | 0 | |
Repayments of capital lease obligations | (9,611) | (6,899) |
Payments of other long-term obligations | (2,065) | |
Financing costs | 0 | 0 |
Deferred financing costs | 0 | 0 |
Return of capital | (2,369) | |
Net cash provided by financing activities | 95,295 | 152,057 |
Effect of exchange rate changes on cash | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 2,032 | (18,083) |
Cash and cash equivalents: | ||
Beginning of period | (572) | 18,186 |
End of period | 1,460 | 103 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Cash flows from operating activities: | ||
Net cash provided by (used in) operating activities | 695 | 5,092 |
Cash flows from investing activities: | ||
Capital expenditures | 0 | 0 |
Proceeds from the sale of intangible assets | 0 | |
Investment in subsidiary | 0 | 0 |
Proceeds from the sale of capital assets | 0 | 0 |
Acquisition of intangible assets | 0 | 0 |
Acquisition of other assets | 0 | |
Net cash provided by (used in) investing activities | 0 | 0 |
Cash flows from financing activities: | ||
Proceeds from notes payable | 0 | 0 |
Repayment of notes payable | 0 | 0 |
Borrowings from revolving credit facility | 0 | 0 |
Repayments on revolving credit facility | 0 | 0 |
Proceeds from capital contribution | 0 | 0 |
Intercompany receivable | 0 | |
Intercompany payable | (3,621) | |
Repayments of capital lease obligations | (271) | (262) |
Payments of other long-term obligations | 0 | |
Financing costs | 0 | 0 |
Deferred financing costs | 0 | 0 |
Return of capital | 0 | |
Net cash provided by financing activities | (271) | (3,883) |
Effect of exchange rate changes on cash | (2) | 72 |
Net increase (decrease) in cash and cash equivalents | 422 | 1,281 |
Cash and cash equivalents: | ||
Beginning of period | 783 | 654 |
End of period | $ 1,205 | $ 1,935 |