Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 08, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ck0001584423 | |
Entity Registrant Name | APX Group Holdings, Inc. | |
Entity Central Index Key | 0001584423 | |
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 | Mar. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 3,691 | $ 12,773 |
Accounts and notes receivable, net | 55,348 | 48,724 |
Inventories | 94,275 | 50,552 |
Prepaid expenses and other current assets | 15,128 | 11,449 |
Total current assets | 168,442 | 123,498 |
Property, plant and equipment, net | 64,614 | 73,401 |
Capitalized contract costs, net | 1,092,865 | 1,115,775 |
Deferred financing costs, net | 1,797 | 2,058 |
Intangible assets, net | 235,583 | 255,085 |
Goodwill | 835,404 | 834,855 |
Operating lease right-of-use assets | 72,891 | 0 |
Long-term notes receivables and other assets, net | 121,796 | 119,819 |
Total assets | 2,593,392 | 2,524,491 |
Current Liabilities: | ||
Accounts payable | 115,242 | 66,646 |
Accrued payroll and commissions | 37,281 | 65,479 |
Accrued expenses and other current liabilities | 158,997 | 136,715 |
Deferred revenue | 194,326 | 186,953 |
Current portion of operating lease liabilities | 11,749 | 0 |
Current portion of finance lease liabilities | 7,114 | 7,743 |
Total current liabilities | 524,709 | 463,536 |
Notes payable, net | 2,956,702 | 2,961,947 |
Notes payable, net - related party | 79,288 | 75,148 |
Revolving credit facility | 40,000 | 0 |
Finance lease liabilities, net of current portion | 3,952 | 5,571 |
Deferred revenue, net of current portion | 326,631 | 323,585 |
Operating lease liabilities | 71,964 | 0 |
Other long-term obligations | 73,390 | 90,209 |
Deferred income tax liabilities | 1,120 | 1,096 |
Total liabilities | 4,077,756 | 3,921,092 |
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 | 737,072 | 736,333 |
Accumulated deficit | (2,193,169) | (2,104,097) |
Accumulated other comprehensive loss | (28,267) | (28,837) |
Total stockholders’ deficit | (1,484,364) | (1,396,601) |
Total liabilities and stockholders’ deficit | $ 2,593,392 | $ 2,524,491 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
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 | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues: | ||
Revenues: | $ 276,249 | $ 246,597 |
Costs and expenses: | ||
Operating expenses (exclusive of depreciation and amortization shown separately below) | 83,076 | 83,760 |
Selling expenses (exclusive of amortization of deferred commissions of $44,012 and $38,303, respectively, which are included in depreciation and amortization shown separately below) | 43,591 | 59,243 |
General and administrative expenses | 46,339 | 50,967 |
Depreciation and amortization | 131,221 | 124,258 |
Total costs and expenses | 304,227 | 318,228 |
Loss from operations | (27,978) | (71,631) |
Other expenses (income): | ||
Interest expense | 63,748 | 58,790 |
Interest income | (23) | (31) |
Other income, net | (2,246) | (45,240) |
Loss before income taxes | (89,457) | (85,150) |
Income tax benefit | (301) | (433) |
Net loss | (89,156) | (84,717) |
Recurring and other revenue | ||
Revenues: | ||
Revenues: | $ 276,249 | $ 246,597 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations(unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Amortization of deferred commissions | $ 44,012 | $ 38,303 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (89,156) | $ (84,717) |
Other comprehensive income (loss), net of tax effects: | ||
Foreign currency translation adjustment | 570 | (659) |
Total other comprehensive income (loss) | 570 | (659) |
Comprehensive loss | $ (88,586) | $ (85,376) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Equity (Deficit) Statement - USD ($) $ in Thousands | Total | Common Stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive loss |
Stockholders' equity, beginning balance at Dec. 31, 2017 | $ (653,526) | $ 0 | $ 732,346 | $ (1,358,571) | $ (27,301) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Loss | (84,717) | ||||
Foreign currency translation adjustment | (659) | ||||
Stock-based compensation | 205 | 205 | |||
Return of capital to Vivint Smart Home, Inc. | (966) | (966) | |||
Stockholders' equity, ending balance at Mar. 31, 2018 | (1,022,235) | 0 | 731,585 | (1,726,540) | (27,280) |
Stockholders' equity, beginning balance at Dec. 31, 2018 | (1,396,601) | 0 | 736,333 | (2,104,097) | (28,837) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Loss | (89,156) | ||||
Foreign currency translation adjustment | 570 | ||||
Stock-based compensation | 857 | 857 | |||
Return of capital to Vivint Smart Home, Inc. | (118) | (118) | |||
Stockholders' equity, ending balance at Mar. 31, 2019 | $ (1,484,364) | $ 0 | $ 737,072 | $ (2,193,169) | $ (28,267) |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (89,156) | $ (84,717) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of capitalized contract costs | 105,031 | 95,363 |
Amortization of customer relationships | 18,632 | 21,084 |
Depreciation and amortization of property, plant and equipment and other intangible assets | 7,558 | 7,811 |
Amortization of deferred financing costs and bond premiums and discounts | 1,180 | 1,343 |
Gain on fair value changes of equity securities | (2,212) | (332) |
Loss (gain) on sale or disposal of assets | 232 | (50,459) |
Stock-based compensation | 857 | 204 |
Provision for doubtful accounts | 5,918 | 3,968 |
Changes in operating assets and liabilities: | ||
Accounts and notes receivable, net | (10,424) | (6,124) |
Inventories | (43,668) | 5,914 |
Prepaid expenses and other current assets | (3,678) | (1,010) |
Capitalized contract costs, net | (80,614) | (84,986) |
Long-term notes receivables, other assets, net and right-of-use assets | 2,756 | (6,135) |
Accounts payable | 42,864 | (25,551) |
Accrued payroll and commissions, accrued expenses, other current and long-term liabilities, and current and long-term operating lease liabilities | (8,113) | 30,252 |
Deferred revenue | 9,820 | 33,793 |
Net cash used in operating activities | (43,017) | (59,582) |
Cash flows from investing activities: | ||
Capital expenditures | (1,391) | (6,407) |
Proceeds from the sale of intangible assets | 0 | 53,693 |
(Payments) proceeds from the sale of capital assets | (51) | 149 |
Acquisition of intangible assets | (369) | (849) |
Net cash (used in) provided by investing activities | (1,811) | 46,586 |
Cash flows from financing activities: | ||
Repayment of notes payable | (2,025) | 0 |
Borrowings from revolving credit facility | 40,000 | 57,000 |
Repayments on revolving credit facility | 0 | (40,000) |
Repayments of capital lease obligations | (3,418) | |
Repayments of finance lease obligations | (2,136) | |
Return of capital | (118) | (966) |
Net cash provided by financing activities | 35,721 | 12,616 |
Effect of exchange rate changes on cash | 25 | (19) |
Net decrease in cash and cash equivalents | (9,082) | (399) |
Cash and cash equivalents: | ||
Beginning of period | 12,773 | 3,872 |
End of period | 3,691 | 3,473 |
Supplemental non-cash investing and financing activities: | ||
Finance lease additions | 93 | 3,524 |
Intangible assets acquisitions included within accounts payable | 374 | 403 |
Capital expenditures included within accounts payable and accrued expenses and other current liabilities | 2,213 | 572 |
Proceeds from capital contribution | $ 0 | $ 0 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
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, 2018 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 months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 . 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/A for the fiscal year ended December 31, 2018 , as filed with the Securities and Exchange Commission (“SEC”) on March 8, 2019, 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 The Vivint Flex Pay plan (“Vivint Flex Pay”) 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 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. For a certain third-party provider, the Company pays a monthly fee 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 with this third-party provider, 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 by the Company to the third-party financing provider. Subsequent changes to the fair value of the derivative liability are realized through other income, net in the Condensed Consolidated Statement of Operations. (See Note 8 ). For a separate third-party financing provider , the Company receives net proceeds from installment loans (net of fees and expected losses) for which the Company has no further obligation to the third-party. The Company records these net proceeds to deferred revenue. Retail Installment Contract Receivables For subscribers that enter into a RIC to finance the purchase of Products and related installation, the Company records a receivable for the amount financed. The RIC receivables are recorded at their present value, net of the imputed interest discount. 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, it records an adjustment to the imputed interest discount and reduces 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 subscribers 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 $20.0 million and $16.5 million at March 31, 2019 and December 31, 2018 , respectively net of the allowance for doubtful accounts of $5.8 million and $5.6 million at March 31, 2019 and December 31, 2018 , 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. 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 $4.0 million for the three months ended March 31, 2019 and 2018 , respectively. The changes in the Company’s allowance for accounts receivable were as follows for the periods ended (in thousands): Three Months Ended March 31, 2019 Twelve Months Ended December 31, 2018 Beginning balance $ 5,594 $ 5,356 Provision for doubtful accounts 5,918 19,405 Write-offs and adjustments (5,704 ) (19,167 ) Balance at end of period $ 5,808 $ 5,594 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 of 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, which is generally three to five years . 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 subscriber contracts. These include commissions, other compensation and related costs incurred 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 subscriber 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 subscriber 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. Property, Plant and Equipment and Long-lived Assets 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 finance 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 months ended March 31, 2019 and 2018 , 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 March 31, 2019 2018 Amortization of capitalized contract costs $ 105,028 $ 95,363 Amortization of definite-lived intangibles 20,272 22,720 Depreciation of property, plant and equipment 5,921 6,175 Total depreciation and amortization $ 131,221 $ 124,258 Leases Effective January 1, 2019 the Company accounts for leases under Topic 842 (see Recently Adopted Accounting Standards below). Under Topic 842, the Company determines if an arrangement is a lease at inception. Lease right-of-use (“ROU”) assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, the Company uses the implicit rate when available. When implicit rates are not available, the Company uses an incremental borrowing rate based on the information available at commencement date. The lease ROU asset also includes any lease payments made and is reduced by lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company does not record lease ROU assets and liabilities for leases with terms of 12 months or less. Leases are classified as either operating or finance at lease inception. Operating lease assets and liabilities and finance lease liabilities are stated separately on the condensed consolidated balance sheets. Finance lease assets are included in property, plant and equipment, net on the condensed consolidated balance sheets. The Company has lease agreements with lease and non-lease components. For facility type leases, the Company separates the lease and non-lease components. Generally, the Company accounts for the lease and non-lease components as a single lease component for all other class of leases. Prior to the adoption of Topic 842, the Company's leases were classified as either operating or capital leases. Capital lease liabilities were stated separately on the condensed consolidated balance sheets and capital lease assets were included in property, plant and equipment, net on the condensed consolidated balance sheets. Operating leases were not recognized in the balance sheet. Capital lease balances are presented on the same lines as finance lease balances for comparative prior periods in the unaudited condensed consolidated financial statements. See Recently Adopted Accounting Standards below and note 12 "Leases" for additional information related to the impact of adopting Topic 842. Long-term Investments The Company’s long-term investments are composed of equity securities in both privately held and public companies. As of March 31, 2019 and December 31, 2018 , the Company's equity investments totaled $6.1 million and $3.9 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 March 31, 2019 and December 31, 2018 , 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 March 31, 2019 and December 31, 2018 , 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 March 31, 2019 and December 31, 2018 were $1.8 million and $2.1 million , net of accumulated amortization of $9.9 million and $9.6 million , respectively. Deferred financing costs included in the accompanying unaudited condensed consolidated balance sheets within notes payable, net at March 31, 2019 and December 31, 2018 were $30.1 million and $32.4 million , net of accumulated amortization of $56.8 million and $54.6 million , respectively. Amortization expense on deferred financing costs recognized and included in interest expense in the accompanying unaudited condensed consolidated statements of operations, totaled $2.5 million and $2.7 million for the three months ended March 31, 2019 and 2018 , 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”). The Company also has a residual sales compensation plan (the “Residual Plan”) under which the Company's sales personnel (each, a “Plan Participant”) receive compensation based on the performance of the underlying contracts they create. 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 $3.1 million and $4.9 million at March 31, 2019 and December 31, 2018 , respectively, and the amount included in other long-term obligations was $16.8 million and $17.6 million at March 31, 2019 and December 31, 2018 , respectively. Stock-Based Compensation The Company measures compensation cost 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 $12.7 million and $13.7 million for the three months ended March 31, 2019 and 2018 , 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. Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. The Company records the effect of a tax rate or law change on the Company’s deferred tax assets and liabilities in the period of enactment. Future tax rate or law changes could have a material effect on the Company’s results of operations, financial condition, or cash flows. 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 March 31, 2019 , approximately 82% of the Company’s installed panels were SkyControl panels and 17% were 2GIG Go!Control panels and 1% were other 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 three months ended March 31, 2019 and 2018 . 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, 2018 and March 31, 2019 consisted of two reporting units. As of March 31, 2019 , 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 March 31, 2019 2018 Translation (gain) loss $ (1,701 ) $ 2,075 Letters of Credit As of March 31, 2019 and December 31, 2018 , the Company had $13.9 million and $13.8 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 disposal 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 15 ). 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. Recently Adopted Accounting Standards In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” to increase transpar |
Revenue and Capitalized Contrac
Revenue and Capitalized Contract Costs | 3 Months Ended |
Mar. 31, 2019 | |
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. 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. During the three months ended March 31, 2019 and 2018 , the Company recognized revenues of $86.4 million and $59.8 million , respectively, that were included in the deferred revenue balance as of December 31, 2018 and 2017 , respectively. Transaction Price Allocated to the Remaining Performance Obligations As of March 31, 2019 , approximately $2.2 billion of revenue is expected to be recognized from remaining performance obligations for subscription contracts. The Company expects to recognize approximately 63% of the revenue related to these remaining performance obligations over the next 24 months, with the remaining balance recognized over an additional 36 months. Timing of Revenue Recognition 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, 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 defers and amortizes these costs for new or modified subscriber contracts on a straight-line basis over the expected period of benefit of five years . |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt The Company’s debt at March 31, 2019 and December 31, 2018 consisted of the following (in thousands): March 31, 2019 Outstanding Principal Unamortized Premium (Discount) Unamortized Deferred Financing Costs (1) Net Carrying Amount Senior Secured Revolving Credit Facilities $ 40,000 $ — $ — $ 40,000 8.75% Senior Notes due 2020 679,299 1,958 (4,678 ) 676,579 8.875% Senior Secured Notes Due 2022 270,000 (2,006 ) (564 ) 267,430 7.875% Senior Secured Notes Due 2022 900,000 19,028 (11,983 ) 907,045 7.625% Senior Notes Due 2023 400,000 — (3,712 ) 396,288 Senior Secured Term Loan - noncurrent 797,850 — (9,202 ) 788,648 Total Long-Term Debt 3,087,149 18,980 (30,139 ) 3,075,990 Senior Secured Term Loan - current 8,100 — — 8,100 Total Debt $ 3,095,249 $ 18,980 $ (30,139 ) $ 3,084,090 December 31, 2018 Outstanding Principal Unamortized Premium (Discount) Unamortized Deferred Financing Costs (1) Net Carrying Amount 8.75% Senior Notes due 2020 $ 679,299 $ 2,230 $ (5,380 ) $ 676,149 8.875% Senior Secured Notes due 2022 270,000 (2,122 ) (602 ) 267,276 7.875% Senior Secured Notes due 2022 900,000 20,178 (12,799 ) 907,379 7.625% Senior Notes Due 2023 400,000 — (3,922 ) 396,078 Senior Secured Term Loan - noncurrent 799,875 — (9,662 ) 790,213 Total Long-Term Debt 3,049,174 20,286 (32,365 ) 3,037,095 Senior Secured Term Loan - current 8,100 — — 8,100 Total Debt $ 3,057,274 $ 20,286 $ (32,365 ) $ 3,045,195 (1) Unamortized deferred financing costs related to the revolving credit facilities included in deferred financing costs, net on the condensed consolidated balance sheets at March 31, 2019 and December 31, 2018 were $1.8 million and $2.1 million , respectively. Notes Payable 2020 Notes As of March 31, 2019 , APX had $679.3 million outstanding aggregate principal amount of 8.75% senior notes due 2020 (the “2020 notes”) with a maturity date of December 1, 2020. 2022 Private Placement Notes As of March 31, 2019 , APX had $270.0 million outstanding aggregate principal amount of 8.875% senior secured notes due 2022 (the “2022 private placement notes”). 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 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. 2022 Notes As of March 31, 2019 , APX had $900.0 million outstanding aggregate principal amount of 7.875% senior secured notes due 2022 (the “2022 notes”). 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 2022 private placement notes, the revolving credit facilities and the Term Loan, in all cases, subject to certain exceptions and permitted liens. 2023 Notes As of March 31, 2019 , APX had $400.0 million outstanding aggregate principal amount of the 7.625% senior notes due 2023 (the “2023 notes” and, together with the 2020 notes, the 2022 notes and the 2022 private placement notes, the “Notes”) with a maturity date of September 1, 2023. 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, or the note purchase 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. Other expense and loss on extinguishment Deferred financing costs Deferred financing costs are amortized to interest expense over the life of the issued debt. The following table presents deferred financing activity for the three months ended March 31, 2019 and year ended December 31, 2018 (in thousands): Unamortized Deferred Financing Costs Balance December 31, 2018 Additions Early Extinguishment Amortized Balance March 31, 2019 Revolving Credit Facility $ 2,058 $ — $ — $ (261 ) $ 1,797 2020 Notes 5,380 — — (702 ) 4,678 2022 Private Placement Notes 602 — — (38 ) 564 2022 Notes 12,799 — — (816 ) 11,983 2023 Notes 3,922 — — (210 ) 3,712 Term Loan 9,662 — (460 ) 9,202 Total Deferred Financing Costs $ 34,423 $ — $ — $ (2,487 ) $ 31,936 Unamortized Deferred Financing Costs Balance December 31, 2017 Additions Early Extinguishment Amortized Balance December 31, 2018 Revolving Credit Facility $ 3,099 $ — $ — $ (1,041 ) $ 2,058 2019 Notes 2,877 — (1,877 ) (1,000 ) — 2020 Notes 11,209 — (2,330 ) (3,499 ) 5,380 2022 Private Placement Notes 752 — — (150 ) 602 2022 Notes 16,067 — — (3,268 ) 12,799 2023 Notes 4,762 — — (840 ) 3,922 Term Loan — 10,275 — (613 ) 9,662 Total Deferred Financing Costs $ 38,766 $ 10,275 $ (4,207 ) $ (10,411 ) $ 34,423 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 is and, when in effect, the Series D Revolving Commitments of approximately $15.4 million was 2.0% per annum and (b) under the Series B Revolving Commitments of approximately $21.2 million was 3.0% and (2)(a) the applicable margin for LIBOR rate-based borrowings (a) under the Series A Revolving Commitments is, and, when in effect, the 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. 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 Series D Revolving Commitments of $15.4 million expired effective April 1, 2019 and the principal amount outstanding under the revolving credit facility will be due and payable in full with respect to the extended commitments under the Series A Revolving Credit Facility and Series B Revolving Credit Facility on March 31, 2021 . As of March 31, 2019 there was $40.0 million outstanding borrowings under the revolving credit facility. As of December 31, 2018 , there were no outstanding borrowings under the revolving credit facility. As of March 31, 2019 the Company had $249.7 million of availability under the revolving credit facility (including the Series D Revolving Commitments scheduled to terminate effective April 1, 2019 and after giving effect to $13.9 million of letters of credit outstanding and $40.0 million of borrowings). Guarantees All of the obligations under the credit agreement governing the revolving credit facility, the credit agreement governing the Term Loan and the debt agreements governing the Notes are guaranteed by APX Group Holdings, Inc. and each of APX Group, Inc.'s existing and future material wholly-owned U.S. restricted subsidiaries. However, such subsidiaries shall only be required to guarantee the obligations under the debt agreements governing the Notes for so long as such entities guarantee the obligations under the revolving credit facility, the credit agreement governing the Term Loan or the Company's other indebtedness. |
Retail Installment Contract Rec
Retail Installment Contract Receivables | 3 Months Ended |
Mar. 31, 2019 | |
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 RIC receivables (in thousands): March 31, 2019 December 31, 2018 RIC receivables, gross $ 173,254 $ 175,250 Deferred interest (29,612 ) (34,163 ) RIC receivables, net of deferred interest $ 143,642 $ 141,087 Classified on the condensed consolidated unaudited balance sheets as: Accounts and notes receivable, net $ 35,370 $ 32,185 Long-term notes receivables and other assets, net 108,272 108,902 RIC receivables, net $ 143,642 $ 141,087 Activity in the deferred interest for the RIC receivables was as follows (in thousands): Three months ended March 31, 2019 Twelve months ended December 31, 2018 Deferred interest, beginning of period $ 34,163 $ 36,048 Write-offs, net of recoveries (6,923 ) (26,360 ) Change in deferred interest on short-term and long-term RIC receivables 2,372 24,475 Deferred interest, end of period $ 29,612 $ 34,163 The amount of RIC imputed interest income recognized in recurring and other revenue was $3.5 million and $3.3 million during the three months ended March 31, 2019 and 2018 , respectively. |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2019 | |
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): March 31, 2019 December 31, 2018 Prepaid expenses and other current assets Prepaid expenses $ 12,984 $ 7,183 Deposits 1,353 904 Other 791 3,362 Total prepaid expenses and other current assets $ 15,128 $ 11,449 Capitalized contract costs Capitalized contract costs $ 2,445,784 $ 2,361,795 Accumulated amortization (1,352,919 ) (1,246,020 ) Capitalized contract costs, net $ 1,092,865 $ 1,115,775 Long-term notes receivables and other assets RIC receivables, gross $ 137,884 $ 143,065 RIC deferred interest (29,612 ) (34,164 ) Security deposits 7,126 6,586 Investments 6,099 3,865 Other 299 467 Total long-term notes receivables and other assets, net $ 121,796 $ 119,819 Accrued payroll and commissions Accrued commissions $ 11,432 $ 28,726 Accrued payroll 25,849 36,753 Total accrued payroll and commissions $ 37,281 $ 65,479 Accrued expenses and other current liabilities Accrued interest payable $ 55,157 $ 28,885 Current portion of derivative liability 70,137 67,710 Service warranty accrual 8,825 8,813 Current portion of notes payable 8,100 8,100 Loss contingencies 2,131 3,131 Other 14,647 20,076 Total accrued expenses and other current liabilities $ 158,997 $ 136,715 |
Property Plant and Equipment
Property Plant and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property Plant and Equipment | Property Plant and Equipment Property, plant and equipment consisted of the following (in thousands): March 31, 2019 December 31, 2018 Estimated Useful Lives Vehicles $ 44,594 $ 45,050 3 - 5 years Computer equipment and software 55,459 53,891 3 - 5 years Leasehold improvements 27,609 26,401 2 - 15 years Office furniture, fixtures and equipment 19,918 19,532 7 years Build-to-suit lease building — 8,247 10.5 years Construction in process 4,205 2,975 Property, plant and equipment, gross 151,785 156,096 Accumulated depreciation and amortization (87,171 ) (82,695 ) Property, plant and equipment, net $ 64,614 $ 73,401 Property, plant and equipment, net includes approximately $22.2 million and $26.2 million of assets under finance or capital lease obligations at March 31, 2019 and December 31, 2018 , respectively, net of accumulated amortization of $23.2 million and $22.2 million , respectively. Depreciation and amortization expense on all property, plant and equipment was $5.9 million and $6.2 million for the three months ended March 31, 2019 and 2018 , respectively. Amortization expense relates to assets under finance or capital leases and is included in depreciation and amortization expense. As a result of implementing ASU 2016-02, effective January 1, 2019 the Company's build-to-suit leasing arrangement was considered a sale-leaseback and is classified as an operating lease. This resulted in a reduction to property, plant and equipment, net of $6.1 million and a reduction of $6.6 million related the financing lease obligation within accrued expenses and other current liabilities and other long-term obligations. See Note 12 "Leases" for additional information related to the impact of adopting ASU 2016-02. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill As of March 31, 2019 and December 31, 2018 , the Company had a goodwill balance of $835.4 million and $834.9 million , respectively. The change in the carrying amount of goodwill during the three months ended March 31, 2019 was the result of foreign currency translation adjustments. Intangible assets, net The following table presents intangible asset balances (in thousands): March 31, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Definite-lived intangible assets: Customer contracts $ 965,670 $ (737,443 ) $ 228,227 $ 964,100 $ (717,648 ) $ 246,452 10 years 2GIG 2.0 technology 17,000 (15,603 ) 1,397 17,000 (15,292 ) 1,708 8 years Other technology 2,917 (1,771 ) 1,146 2,917 (1,667 ) 1,250 5 - 7 years Space Monkey technology 7,100 (6,019 ) 1,081 7,100 (5,756 ) 1,344 6 years Patents 12,245 (9,136 ) 3,109 12,123 (8,415 ) 3,708 5 years Total definite-lived intangible assets: $ 1,004,932 $ (769,972 ) $ 234,960 $ 1,003,240 $ (748,778 ) $ 254,462 Indefinite-lived intangible assets: IP addresses 564 — 564 564 — 564 Domain names 59 — 59 59 — 59 Total Indefinite-lived intangible assets 623 — 623 623 — 623 Total intangible assets, net $ 1,005,555 $ (769,972 ) $ 235,583 $ 1,003,863 $ (748,778 ) $ 255,085 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 for the three months ended March 31, 2018 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 $1.2 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 $20.3 million and $22.7 million for the three months ended March 31, 2019 and 2018 , respectively. As of March 31, 2019 , the remaining weighted-average amortization period for definite-lived intangible assets was 4.0 years . Estimated future amortization expense of intangible assets, excluding approximately $0.3 million in patents currently in process, is as follows as of March 31, 2019 (in thousands): 2019 - Remaining Period $ 59,216 2020 67,990 2021 58,709 2022 48,759 2023 28 Thereafter — Total estimated amortization expense $ 234,702 |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and December 31, 2018 , the Company held an immaterial amount of money market funds. As of March 31, 2019 and December 31, 2018 , the company held $5.4 million and $3.2 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 March 31, 2019 and December 31, 2018 (in thousands): March 31, 2019 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Long-Term Notes Receivables and Other Assets, net Cash $ 3,599 $ — $ — $ 3,599 $ 3,599 $ — Level 1: Money market funds 92 — — 92 92 — Corporate securities 3,181 2,212 — 5,393 — 5,393 Subtotal 3,273 2,212 — 5,485 92 5,393 Total $ 6,872 $ 2,212 $ — $ 9,084 $ 3,691 $ 5,393 December 31, 2018 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Long-Term Notes Receivables and Other Assets, net Cash $ 6,681 $ — $ — $ 6,681 $ 6,681 $ — Level 1: Money market funds 6,092 — — 6,092 6,092 — Corporate securities 3,485 — (304 ) 3,181 — 3,181 Subtotal 9,577 — (304 ) 9,273 6,092 3,181 Total $ 16,258 $ — $ (304 ) $ 15,954 $ 12,773 $ 3,181 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 March 31, 2019 and 2018 , the Company recorded an unrealized gain s of $2.2 million and $0.3 million , respectively, associated with the change in fair value of the investee's stock. 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): March 31, 2019 December 31, 2018 Stated Interest Rate Issuance Face Value Estimated Fair Value Face Value Estimated Fair Value 2020 Notes 679,299 669,110 679,299 643,568 8.75 % 2022 Private Placement Notes 270,000 271,323 270,000 257,073 8.875 % 2022 Notes 900,000 904,410 900,000 855,000 7.875 % 2023 Notes 400,000 342,120 400,000 326,000 7.625 % Term Loan 805,950 805,950 807,975 807,975 N/A Total $ 3,055,249 $ 2,992,913 $ 3,057,274 $ 2,889,616 The fair values of the 2020 notes, the 2022 private placement notes, the 2022 notes, the 2023 notes, all of which are fixed-rate debt 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 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 March 31, 2019 and December 31, 2018 (in thousands): March 31, 2019 December 31, 2018 Consumer Financing Program Contractual Obligations: Fair value $ 120,671 $ 117,620 Notional amount 385,955 368,708 Classified on the condensed consolidated unaudited balance sheets as: Accrued expenses and other current liabilities 70,137 67,710 Other long-term obligations 50,534 49,910 Total Consumer Financing Program Contractual Obligation $ 120,671 $ 117,620 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 three months ended March 31, 2019 and the twelve months ended December 31, 2018 (in thousands): Three months ended March 31, 2019 Twelve months ended December 31, 2018 Balance, beginning of period $ 117,620 $ 46,496 Additions 16,480 93,095 Settlements (14,856 ) (34,587 ) Losses included in earnings 1,427 12,616 Balance, end of period $ 120,671 $ 117,620 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
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 benefit rate for the three months ended March 31, 2019 and 2018 was approximately 0.34% and 0.51% , respectively. Income tax expense for the three months ended March 31, 2019 was affected by year to date projected loss in Canada and estimated minimum state taxes in the US. Both the 2019 and 2018 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. 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 domestic valuation allowance against the deferred tax assets that remain after offset by domestic deferred tax liabilities, and the company currently anticipates recording a valuation allowance against net foreign deferred tax assets by the end of the current year. |
Stock-Based Compensation and Eq
Stock-Based Compensation and Equity | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 , 84,132,816 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, 36,576,342 SARs were outstanding as of March 31, 2019 . 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 March 2019 and June 2018, the Company’s subsidiary, Vivint Group, awarded 236,111 and 360,000 Restricted Stock Units (“RSUs”), respectively, 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 March 31, 2019 2018 Operating expenses $ 43 $ 18 Selling expenses 87 45 General and administrative expenses 727 141 Total stock-based compensation $ 857 $ 204 The increase in total stock-based compensation for the three months ended March 31, 2019 was primarily due to the Modification in June 2018. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
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 $2.1 million and $3.1 million as of March 31, 2019 and December 31, 2018 , 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 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. Total rent expense for all operating leases for the three months ended March 31, 2018 was $4.3 million . Capital Leases The Company also enters into certain capital leases with expiration dates through July 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 10 months , as of March 31, 2019 . As of December 31, 2018 , the capital lease obligation balance was $13.3 million . See Note 12 "Leases" for additional information related to the impact of adopting Topic 842. |
Leases (Notes)
Leases (Notes) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company has operating leases for corporate offices, warehouse facilities, research and development and other operating facilities, an aircraft, and other operating assets. The Company has finance leases for vehicles, office equipment and other warehouse equipment. The leases have remaining terms of 1 year to 9 years , some of which include options to extend the leases for up to 10 years , and some of which include options to terminate the leases within 1 year . The components of lease expense were as follows (in thousands): Three Months Ended March 31, 2019 Operating lease cost $ 4,298 Finance lease cost: Amortization of right-of-use assets $ 1,376 Interest on lease liabilities 154 Total finance lease cost $ 1,530 Supplemental cash flow information related to leases was as follows (in thousands): Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ (4,375 ) Operating cash flows from finance leases (154 ) Financing cash flows from finance leases (2,136 ) Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 584 Finance leases 230 Supplemental balance sheet information related to leases was as follows (in thousands, except lease term and discount rate): March 31, 2019 Operating Leases Operating lease right-of-use assets $ 72,891 Current operating lease liabilities $ 11,749 Operating lease liabilities 71,964 Total operating lease liabilities $ 83,713 Finance Leases Property, plant and equipment, gross $ 45,440 Accumulated depreciation (23,205 ) Property, plant and equipment, net $ 22,235 Current finance lease liabilities $ 7,114 Finance lease liabilities 3,952 Total finance lease liabilities $ 11,066 Weighted Average Remaining Lease Term Operating leases 7 years Finance leases 1.5 years Weighted Average Discount Rate Operating leases 7 % Finance leases 4 % Maturities of lease liabilities were as follows (in thousands): Operating Leases Finance Leases Year Ending December 31, 2019 (excluding the three months ended March 31, 2019) $ 13,163 $ 5,827 2020 16,345 5,167 2021 15,649 384 2022 14,514 38 2023 14,553 — Thereafter 32,404 — Total lease payments 106,628 11,416 Less imputed interest (22,915 ) (350 ) Total $ 83,713 $ 11,066 As of March 31, 2019 , the Company has an additional facility operating lease that has not yet commenced of $0.6 million . The operating lease will commence in fiscal year 2019 with a lease term of 5 years . |
Leases | Leases The Company has operating leases for corporate offices, warehouse facilities, research and development and other operating facilities, an aircraft, and other operating assets. The Company has finance leases for vehicles, office equipment and other warehouse equipment. The leases have remaining terms of 1 year to 9 years , some of which include options to extend the leases for up to 10 years , and some of which include options to terminate the leases within 1 year . The components of lease expense were as follows (in thousands): Three Months Ended March 31, 2019 Operating lease cost $ 4,298 Finance lease cost: Amortization of right-of-use assets $ 1,376 Interest on lease liabilities 154 Total finance lease cost $ 1,530 Supplemental cash flow information related to leases was as follows (in thousands): Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ (4,375 ) Operating cash flows from finance leases (154 ) Financing cash flows from finance leases (2,136 ) Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 584 Finance leases 230 Supplemental balance sheet information related to leases was as follows (in thousands, except lease term and discount rate): March 31, 2019 Operating Leases Operating lease right-of-use assets $ 72,891 Current operating lease liabilities $ 11,749 Operating lease liabilities 71,964 Total operating lease liabilities $ 83,713 Finance Leases Property, plant and equipment, gross $ 45,440 Accumulated depreciation (23,205 ) Property, plant and equipment, net $ 22,235 Current finance lease liabilities $ 7,114 Finance lease liabilities 3,952 Total finance lease liabilities $ 11,066 Weighted Average Remaining Lease Term Operating leases 7 years Finance leases 1.5 years Weighted Average Discount Rate Operating leases 7 % Finance leases 4 % Maturities of lease liabilities were as follows (in thousands): Operating Leases Finance Leases Year Ending December 31, 2019 (excluding the three months ended March 31, 2019) $ 13,163 $ 5,827 2020 16,345 5,167 2021 15,649 384 2022 14,514 38 2023 14,553 — Thereafter 32,404 — Total lease payments 106,628 11,416 Less imputed interest (22,915 ) (350 ) Total $ 83,713 $ 11,066 As of March 31, 2019 , the Company has an additional facility operating lease that has not yet commenced of $0.6 million . The operating lease will commence in fiscal year 2019 with a lease term of 5 years . |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Transactions with Vivint Solar The Company has negotiated and entered into a number of agreements with its sister company, Vivint Solar, Inc. (“Solar”). Some of those agreements related to Solar’s use of certain of the Company’s information technology and infrastructure services; however, Solar stopped using such services in July 2017. In August 2017, the Company entered into a sales dealer agreement with Solar, pursuant to which each company 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 term of two years and replaces substantially all of the activities being undertaken under the parties’ former marketing and customer relations agreement. The Company and Solar also agreed to extend the term of the non-solicitation provisions under an existing non-competition agreement to match the term of the sales dealer agreement. During the three months ended March 31, 2019 and 2018 , the Company charged $2.4 million and $1.0 million , 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 immaterial at March 31, 2019 and December 31, 2018 , respectively, and is included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets. Other Related-party Transactions Prepaid expenses and other current assets at March 31, 2019 and December 31, 2018 included a receivable for $0.2 million and $1.8 million , respectively, from certain members of management in regards to their personal use of the corporate jet. The Company incurred additional expenses of $0.4 million and $0.6 million during the three months ended March 31, 2019 and 2018 , 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 March 31, 2019 and December 31, 2018 , included a net payable associated with these related-party transactions of $0.1 million and $0.2 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 $1.0 million and $1.2 million during the three months ended March 31, 2019 and 2018 , respectively. Accrued expenses and other current liabilities at March 31, 2019 and December 31, 2018 , included a liability to BMP in regards to the monitoring fee for $1.0 million and $4.8 million , respectively. 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 months ended March 31, 2019 and 2018 the Company incurred no costs associated with such services. An affiliate of Blackstone participated as one of the arrangers in the Term Loan in September 2018 and received approximately $0.9 million of total fees associated with this issuance. In September 2018, GSO Capital Partners, an affiliate of Blackstone, participated as a lender in the Term Loan. As of March 31, 2019 and December 31, 2018 , GSO Capital Partners held $79.3 million and $75.1 million , respectively, 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 | 3 Months Ended |
Mar. 31, 2019 | |
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. Since January 2018, participants in the 401(k) plans have been eligible for the Company's matching program. Under this 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 months ended March 31, 2019 and 2018 totaled $1.9 million and $1.6 million , respectively. |
Restructuring and Asset Impairm
Restructuring and Asset Impairment Charges | 3 Months Ended |
Mar. 31, 2019 | |
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. The following table presents accrued restructuring activity for the three months ended March 31, 2019 and the twelve months ended December 31, 2018 (in thousands): Contract termination costs Employee severance and termination benefits Total Accrued restructuring balance as of December 31, 2017 $ 558 $ — $ 558 Restructuring expenses — 4,683 4,683 Cash payments (91 ) (4,341 ) (4,432 ) Accrued restructuring balance as of December 31, 2018 467 342 809 Cash payments (23 ) (257 ) (280 ) Accrued restructuring balance as of March 31, 2019 $ 444 $ 85 $ 529 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 | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting and Business Concentrations | Segment Reporting and Business Concentrations For the three months ended March 31, 2019 and 2018 , 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 March 31, 2019 $ 258,436 $ 17,813 $ 276,249 Three months ended March 31, 2018 228,542 18,055 246,597 |
Guarantor and Non-Guarantor Sup
Guarantor and Non-Guarantor Supplemental Financial Information | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and December 31, 2018 and for the three months ended March 31, 2019 and 2018 . 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 March 31, 2019 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets $ — $ 2,919 $ 335,398 $ 119,909 $ (289,784 ) $ 168,442 Property, plant and equipment, net — — 64,188 426 — 64,614 Capitalized contract costs, net — — 1,027,364 65,501 — 1,092,865 Deferred financing costs, net — 1,797 — — — 1,797 Investment in subsidiaries — 1,650,064 — — (1,650,064 ) — Intercompany receivable — — 6,303 — (6,303 ) — Intangible assets, net — — 218,194 17,389 — 235,583 Goodwill — — 809,678 25,726 — 835,404 Operating lease right-of-use assets — — 72,661 230 — 72,891 Long-term notes receivables and other assets — 106 104,486 17,310 (106 ) 121,796 Total Assets $ — $ 1,654,886 $ 2,638,272 $ 246,491 $ (1,946,257 ) $ 2,593,392 Liabilities and Stockholders’ (Deficit) Equity Current liabilities $ — $ 63,260 $ 558,398 $ 192,835 $ (289,784 ) $ 524,709 Intercompany payable — — — 6,303 (6,303 ) — Notes payable and revolving credit facility, net of current portion — 3,075,990 — — — 3,075,990 Finance lease obligations, net of current portion — — 3,952 — — 3,952 Deferred revenue, net of current portion — — 309,896 16,735 — 326,631 Operating lease liabilities — — 71,878 86 — 71,964 Other long-term obligations — — 73,043 347 — 73,390 Accumulated losses of investee, net 1,484,364 (1,484,364 ) — Deferred income tax liability — — 106 1,120 (106 ) 1,120 Total (deficit) equity (1,484,364 ) (1,484,364 ) 1,620,999 29,065 (165,700 ) (1,484,364 ) Total liabilities and stockholders’ (deficit) equity $ — $ 1,654,886 $ 2,638,272 $ 246,491 $ (1,946,257 ) $ 2,593,392 Supplemental Condensed Consolidating Balance Sheet December 31, 2018 (in thousands) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets $ — $ 12,951 $ 269,770 $ 103,451 $ (262,674 ) $ 123,498 Property, plant and equipment, net — — 72,937 464 — 73,401 Capitalized contract costs, net — — 1,047,532 68,243 — 1,115,775 Deferred financing costs, net — 2,058 — — — 2,058 Investment in subsidiaries — 1,662,367 — — (1,662,367 ) — Intercompany receivable — — 6,303 — (6,303 ) — Intangible assets, net — — 236,677 18,408 — 255,085 Goodwill — — 809,678 25,177 — 834,855 Long-term notes receivables and other assets — 106 102,695 17,124 (106 ) 119,819 Total Assets $ — $ 1,677,482 $ 2,545,592 $ 232,867 $ (1,931,450 ) $ 2,524,491 Liabilities and Stockholders’ (Deficit) Equity Current liabilities $ — $ 36,988 $ 507,063 $ 182,159 $ (262,674 ) $ 463,536 Intercompany payable — — — 6,303 (6,303 ) — Notes payable and revolving credit facility, net of current portion — 3,037,095 — — — 3,037,095 Capital lease obligations, net of current portion — — 5,570 1 — 5,571 Deferred revenue, net of current portion — — 306,653 16,932 — 323,585 Accumulated Losses of Investee, net 1,396,601 (1,396,601 ) — Other long-term obligations — — 90,209 — — 90,209 Deferred income tax liability — — 106 1,096 (106 ) 1,096 Total (deficit) equity (1,396,601 ) (1,396,601 ) 1,635,991 26,376 (265,766 ) (1,396,601 ) Total liabilities and stockholders’ (deficit) equity $ — $ 1,677,482 $ 2,545,592 $ 232,867 $ (1,931,450 ) $ 2,524,491 Supplemental Condensed Consolidating Statements of Operations and Comprehensive Loss For the Three Months Ended March 31, 2019 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ — $ 263,539 $ 12,912 $ (202 ) $ 276,249 Costs and expenses — — 291,509 12,920 (202 ) 304,227 Loss from operations — — (27,970 ) (8 ) — (27,978 ) Loss from subsidiaries (89,156 ) (25,981 ) — — 115,137 — Other expense (income), net — 63,175 (52 ) (1,644 ) — 61,479 (Loss) income before income tax expenses (89,156 ) (89,156 ) (27,918 ) 1,636 115,137 (89,457 ) Income tax expense (benefit) — — 182 (483 ) — (301 ) Net (loss) income (89,156 ) (89,156 ) (28,100 ) 2,119 115,137 (89,156 ) Other comprehensive loss, net of tax effects: Net (loss) income (89,156 ) (89,156 ) (28,100 ) 2,119 115,137 (89,156 ) Foreign currency translation adjustment 570 570 — 570 (1,140 ) 570 Total other comprehensive income 570 570 — 570 (1,140 ) 570 Comprehensive (loss) income $ (88,586 ) $ (88,586 ) $ (28,100 ) $ 2,689 $ 113,997 $ (88,586 ) Supplemental Condensed Consolidating Statements of Operations and Comprehensive Loss For the Three Months Ended March 31, 2018 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ — $ 233,788 $ 13,465 $ (656 ) $ 246,597 Costs and expenses — — 305,221 13,663 (656 ) 318,228 (Loss) income from operations — — (71,433 ) (198 ) — (71,631 ) Loss from subsidiaries (84,717 ) (26,320 ) — — 111,037 — Other expense (income), net — 58,397 (46,970 ) 2,092 — 13,519 Loss before income tax expenses (84,717 ) (84,717 ) (24,463 ) (2,290 ) 111,037 (85,150 ) Income tax expense (benefit) — — 172 (605 ) — (433 ) Net loss (84,717 ) (84,717 ) (24,635 ) (1,685 ) 111,037 (84,717 ) Other comprehensive loss, net of tax effects: Net loss (84,717 ) (84,717 ) (24,635 ) (1,685 ) 111,037 (84,717 ) Foreign currency translation adjustment (659 ) (659 ) — (659 ) 1,318 (659 ) Total other comprehensive loss (659 ) (659 ) — (659 ) 1,318 (659 ) Comprehensive loss $ (85,376 ) $ (85,376 ) $ (24,635 ) $ (2,344 ) $ 112,355 $ (85,376 ) Supplemental Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2019 (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 $ — $ — $ (43,058 ) $ 41 $ — $ (43,017 ) Cash flows from investing activities: Capital expenditures — — (1,391 ) — — (1,391 ) Proceeds from sale of capital assets — — (51 ) — — (51 ) Investment in subsidiary (118 ) (46,487 ) — — 46,605 — Acquisition of intangible assets — — (369 ) — — (369 ) Net cash used in investing activities (118 ) (46,487 ) (1,811 ) — 46,605 (1,811 ) Cash flows from financing activities: Repayment on notes payable — (2,025 ) — — — (2,025 ) Borrowings from revolving credit facility — 40,000 — — — 40,000 Proceeds from capital contribution — — 46,369 — (46,369 ) — Repayments of finance lease obligations — — (2,064 ) (72 ) — (2,136 ) Return of capital 118 118 (118 ) — (236 ) (118 ) Net cash provided by (used in) financing activities 118 38,093 44,187 (72 ) (46,605 ) 35,721 Effect of exchange rate changes on cash — — — 25 — 25 Net decrease in cash and cash equivalents — (8,394 ) (682 ) (6 ) — (9,082 ) Cash and cash equivalents: Beginning of period — 11,130 682 961 — 12,773 End of period $ — $ 2,736 $ — $ 955 $ — $ 3,691 Supplemental Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2018 (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 $ — $ — $ (59,159 ) $ (423 ) $ — $ (59,582 ) Cash flows from investing activities: Capital expenditures — — (6,407 ) — — (6,407 ) Investment in subsidiary 966 (16,450 ) — — 15,484 — Acquisition of intangible assets — — (849 ) — — (849 ) Proceeds from sale of intangibles — — 53,693 — — 53,693 Proceeds from sale of capital assets — — 149 — — 149 Net cash provided by (used in) investing activities 966 (16,450 ) 46,586 — 15,484 46,586 Cash flows from financing activities: Borrowings from revolving credit facility — 57,000 — — — 57,000 Repayments on revolving credit facility — (40,000 ) — — — (40,000 ) Proceeds from capital contributions — — 17,416 — (17,416 ) — Repayments of capital lease obligations — — (3,305 ) (113 ) — (3,418 ) Return of capital (966 ) (966 ) (966 ) — 1,932 (966 ) Net cash (used in) provided by financing activities (966 ) 16,034 13,145 (113 ) (15,484 ) 12,616 Effect of exchange rate changes on cash — — — (19 ) — (19 ) Net (decrease) increase in cash and cash equivalents — (416 ) 572 (555 ) — (399 ) Cash and cash equivalents: Beginning of period — 3,661 (572 ) 783 — 3,872 End of period $ — $ 3,245 $ — $ 228 $ — $ 3,473 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 26, 2019, the Company announced that APX priced $225.0 million aggregate principal amount of 8.75% Senior Secured Notes due 2024 (“2024 notes”) in a private placement. APX intends to use the net proceeds from the 2024 notes offering to redeem $225.0 million aggregate principal amount of its 2020 notes, and to pay the related accrued interest and to pay all fees and expenses related thereto and any remaining proceeds for general corporate purposes. The partial redemption of the 2020 Notes is conditioned on the consummation of the Notes offering. The offering is expected to close on May 10, 2019, subject to customary closing conditions. The indenture governing the 2024 notes is expected to contain covenants similar to the 2022 notes. An affiliate of Blackstone acted as one of the initial purchasers in connection with this offering. No assurances may be given that these transactions will be completed on the timeline, in the amount, or on the terms presently contemplated by the Company or at all. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
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 The Vivint Flex Pay plan (“Vivint Flex Pay”) 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 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. For a certain third-party provider, the Company pays a monthly fee 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 with this third-party provider, 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 by the Company to the third-party financing provider. Subsequent changes to the fair value of the derivative liability are realized through other income, net in the Condensed Consolidated Statement of Operations. (See Note 8 ). For a separate third-party financing provider , the Company receives net proceeds from installment loans (net of fees and expected losses) for which the Company has no further obligation to the third-party. The Company records these net proceeds to deferred revenue. |
Retail Installment Contract Receivables | Retail Installment Contract Receivables For subscribers that enter into a RIC to finance the purchase of Products and related installation, the Company records a receivable for the amount financed. The RIC receivables are recorded at their present value, net of the imputed interest discount. 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, it records an adjustment to the imputed interest discount and reduces 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 subscribers 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 $20.0 million and $16.5 million at March 31, 2019 and December 31, 2018 , respectively net of the allowance for doubtful accounts of $5.8 million and $5.6 million at March 31, 2019 and December 31, 2018 , 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. 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 $4.0 million for the three months ended March 31, 2019 and 2018 , 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 of 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, which is generally three to five years . |
Capitalized Contract 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 subscriber contracts. These include commissions, other compensation and related costs incurred 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 subscriber 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 subscriber 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. |
Property, Plant and Equipment and Long-lived Assets | Property, Plant and Equipment and Long-lived Assets 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 finance 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. |
Leases | Leases Effective January 1, 2019 the Company accounts for leases under Topic 842 (see Recently Adopted Accounting Standards below). Under Topic 842, the Company determines if an arrangement is a lease at inception. Lease right-of-use (“ROU”) assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, the Company uses the implicit rate when available. When implicit rates are not available, the Company uses an incremental borrowing rate based on the information available at commencement date. The lease ROU asset also includes any lease payments made and is reduced by lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company does not record lease ROU assets and liabilities for leases with terms of 12 months or less. Leases are classified as either operating or finance at lease inception. Operating lease assets and liabilities and finance lease liabilities are stated separately on the condensed consolidated balance sheets. Finance lease assets are included in property, plant and equipment, net on the condensed consolidated balance sheets. The Company has lease agreements with lease and non-lease components. For facility type leases, the Company separates the lease and non-lease components. Generally, the Company accounts for the lease and non-lease components as a single lease component for all other class of leases. |
Long-term Investments | Long-term Investments The Company’s long-term investments are composed of equity securities in both privately held and public companies. As of March 31, 2019 and December 31, 2018 , the Company's equity investments totaled $6.1 million and $3.9 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 March 31, 2019 and December 31, 2018 , 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 March 31, 2019 and December 31, 2018 , 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”). The Company also has a residual sales compensation plan (the “Residual Plan”) under which the Company's sales personnel (each, a “Plan Participant”) receive compensation based on the performance of the underlying contracts they create. 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 cost 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. Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. The Company records the effect of a tax rate or law change on the Company’s deferred tax assets and liabilities in the period of enactment. Future tax rate or law changes could have a material effect on the Company’s results of operations, financial condition, or cash flows. |
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 March 31, 2019 , approximately 82% of the Company’s installed panels were SkyControl panels and 17% were 2GIG Go!Control panels and 1% were other 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 three months ended March 31, 2019 and 2018 . 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, 2018 and March 31, 2019 consisted of two reporting units. As of March 31, 2019 , 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. 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. |
Letters of Credit | Letters of Credit As of March 31, 2019 and December 31, 2018 , the Company had $13.9 million and $13.8 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 disposal 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 15 ). |
Recent 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. Recently Adopted Accounting Standards In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” 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. The Company adopted ASU 2016-02 as of January 1, 2019, utilizing the modified retrospective approach and using certain practical expedients. The adoption of the standard resulted in recording ROU assets of $75.5 million and lease liabilities of $85.9 million as of January 1, 2019. The ROU assets are lower than the lease liabilities as existing deferred rent and lease incentive liabilities were recorded against the ROU assets at adoption in accordance with the standard. The standard did not materially affect the Company's condensed consolidated statements of operations or its condensed consolidated statements of cash flows. The standard also resulted in a reassessment that a sale would have occurred at January 1, 2019 for the Company's build-to-suit building. As a result, the Company classifies the leasing arrangement as an operating lease. The recognition of the sale-leaseback transaction resulted in an immaterial amount recorded to opening equity. See Note 6 for additional information on the sale-leaseback transaction. See Note 12 "Leases" for additional information related to the impact of adopting this standard. |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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): Three Months Ended March 31, 2019 Twelve Months Ended December 31, 2018 Beginning balance $ 5,594 $ 5,356 Provision for doubtful accounts 5,918 19,405 Write-offs and adjustments (5,704 ) (19,167 ) Balance at end of period $ 5,808 $ 5,594 The following table summarizes the RIC receivables (in thousands): March 31, 2019 December 31, 2018 RIC receivables, gross $ 173,254 $ 175,250 Deferred interest (29,612 ) (34,163 ) RIC receivables, net of deferred interest $ 143,642 $ 141,087 Classified on the condensed consolidated unaudited balance sheets as: Accounts and notes receivable, net $ 35,370 $ 32,185 Long-term notes receivables and other assets, net 108,272 108,902 RIC receivables, net $ 143,642 $ 141,087 |
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 March 31, 2019 2018 Amortization of capitalized contract costs $ 105,028 $ 95,363 Amortization of definite-lived intangibles 20,272 22,720 Depreciation of property, plant and equipment 5,921 6,175 Total depreciation and amortization $ 131,221 $ 124,258 |
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 March 31, 2019 2018 Translation (gain) loss $ (1,701 ) $ 2,075 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Debt | The Company’s debt at March 31, 2019 and December 31, 2018 consisted of the following (in thousands): March 31, 2019 Outstanding Principal Unamortized Premium (Discount) Unamortized Deferred Financing Costs (1) Net Carrying Amount Senior Secured Revolving Credit Facilities $ 40,000 $ — $ — $ 40,000 8.75% Senior Notes due 2020 679,299 1,958 (4,678 ) 676,579 8.875% Senior Secured Notes Due 2022 270,000 (2,006 ) (564 ) 267,430 7.875% Senior Secured Notes Due 2022 900,000 19,028 (11,983 ) 907,045 7.625% Senior Notes Due 2023 400,000 — (3,712 ) 396,288 Senior Secured Term Loan - noncurrent 797,850 — (9,202 ) 788,648 Total Long-Term Debt 3,087,149 18,980 (30,139 ) 3,075,990 Senior Secured Term Loan - current 8,100 — — 8,100 Total Debt $ 3,095,249 $ 18,980 $ (30,139 ) $ 3,084,090 December 31, 2018 Outstanding Principal Unamortized Premium (Discount) Unamortized Deferred Financing Costs (1) Net Carrying Amount 8.75% Senior Notes due 2020 $ 679,299 $ 2,230 $ (5,380 ) $ 676,149 8.875% Senior Secured Notes due 2022 270,000 (2,122 ) (602 ) 267,276 7.875% Senior Secured Notes due 2022 900,000 20,178 (12,799 ) 907,379 7.625% Senior Notes Due 2023 400,000 — (3,922 ) 396,078 Senior Secured Term Loan - noncurrent 799,875 — (9,662 ) 790,213 Total Long-Term Debt 3,049,174 20,286 (32,365 ) 3,037,095 Senior Secured Term Loan - current 8,100 — — 8,100 Total Debt $ 3,057,274 $ 20,286 $ (32,365 ) $ 3,045,195 (1) Unamortized deferred financing costs related to the revolving credit facilities included in deferred financing costs, net on the condensed consolidated balance sheets at March 31, 2019 and December 31, 2018 were $1.8 million and $2.1 million , respectively. |
Schedule of Deferred Financing Activity | The following table presents deferred financing activity for the three months ended March 31, 2019 and year ended December 31, 2018 (in thousands): Unamortized Deferred Financing Costs Balance December 31, 2018 Additions Early Extinguishment Amortized Balance March 31, 2019 Revolving Credit Facility $ 2,058 $ — $ — $ (261 ) $ 1,797 2020 Notes 5,380 — — (702 ) 4,678 2022 Private Placement Notes 602 — — (38 ) 564 2022 Notes 12,799 — — (816 ) 11,983 2023 Notes 3,922 — — (210 ) 3,712 Term Loan 9,662 — (460 ) 9,202 Total Deferred Financing Costs $ 34,423 $ — $ — $ (2,487 ) $ 31,936 Unamortized Deferred Financing Costs Balance December 31, 2017 Additions Early Extinguishment Amortized Balance December 31, 2018 Revolving Credit Facility $ 3,099 $ — $ — $ (1,041 ) $ 2,058 2019 Notes 2,877 — (1,877 ) (1,000 ) — 2020 Notes 11,209 — (2,330 ) (3,499 ) 5,380 2022 Private Placement Notes 752 — — (150 ) 602 2022 Notes 16,067 — — (3,268 ) 12,799 2023 Notes 4,762 — — (840 ) 3,922 Term Loan — 10,275 — (613 ) 9,662 Total Deferred Financing Costs $ 38,766 $ 10,275 $ (4,207 ) $ (10,411 ) $ 34,423 |
Retail Installment Contract R_2
Retail Installment Contract Receivables (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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): Three Months Ended March 31, 2019 Twelve Months Ended December 31, 2018 Beginning balance $ 5,594 $ 5,356 Provision for doubtful accounts 5,918 19,405 Write-offs and adjustments (5,704 ) (19,167 ) Balance at end of period $ 5,808 $ 5,594 The following table summarizes the RIC receivables (in thousands): March 31, 2019 December 31, 2018 RIC receivables, gross $ 173,254 $ 175,250 Deferred interest (29,612 ) (34,163 ) RIC receivables, net of deferred interest $ 143,642 $ 141,087 Classified on the condensed consolidated unaudited balance sheets as: Accounts and notes receivable, net $ 35,370 $ 32,185 Long-term notes receivables and other assets, net 108,272 108,902 RIC receivables, net $ 143,642 $ 141,087 |
Allowance for Credit Losses on Financing Receivables | Activity in the deferred interest for the RIC receivables was as follows (in thousands): Three months ended March 31, 2019 Twelve months ended December 31, 2018 Deferred interest, beginning of period $ 34,163 $ 36,048 Write-offs, net of recoveries (6,923 ) (26,360 ) Change in deferred interest on short-term and long-term RIC receivables 2,372 24,475 Deferred interest, end of period $ 29,612 $ 34,163 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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): March 31, 2019 December 31, 2018 Prepaid expenses and other current assets Prepaid expenses $ 12,984 $ 7,183 Deposits 1,353 904 Other 791 3,362 Total prepaid expenses and other current assets $ 15,128 $ 11,449 Capitalized contract costs Capitalized contract costs $ 2,445,784 $ 2,361,795 Accumulated amortization (1,352,919 ) (1,246,020 ) Capitalized contract costs, net $ 1,092,865 $ 1,115,775 Long-term notes receivables and other assets RIC receivables, gross $ 137,884 $ 143,065 RIC deferred interest (29,612 ) (34,164 ) Security deposits 7,126 6,586 Investments 6,099 3,865 Other 299 467 Total long-term notes receivables and other assets, net $ 121,796 $ 119,819 Accrued payroll and commissions Accrued commissions $ 11,432 $ 28,726 Accrued payroll 25,849 36,753 Total accrued payroll and commissions $ 37,281 $ 65,479 Accrued expenses and other current liabilities Accrued interest payable $ 55,157 $ 28,885 Current portion of derivative liability 70,137 67,710 Service warranty accrual 8,825 8,813 Current portion of notes payable 8,100 8,100 Loss contingencies 2,131 3,131 Other 14,647 20,076 Total accrued expenses and other current liabilities $ 158,997 $ 136,715 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Components of Property Plant and Equipment | Property, plant and equipment consisted of the following (in thousands): March 31, 2019 December 31, 2018 Estimated Useful Lives Vehicles $ 44,594 $ 45,050 3 - 5 years Computer equipment and software 55,459 53,891 3 - 5 years Leasehold improvements 27,609 26,401 2 - 15 years Office furniture, fixtures and equipment 19,918 19,532 7 years Build-to-suit lease building — 8,247 10.5 years Construction in process 4,205 2,975 Property, plant and equipment, gross 151,785 156,096 Accumulated depreciation and amortization (87,171 ) (82,695 ) Property, plant and equipment, net $ 64,614 $ 73,401 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Indefinite-Lived Intangible Assets | The following table presents intangible asset balances (in thousands): March 31, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Definite-lived intangible assets: Customer contracts $ 965,670 $ (737,443 ) $ 228,227 $ 964,100 $ (717,648 ) $ 246,452 10 years 2GIG 2.0 technology 17,000 (15,603 ) 1,397 17,000 (15,292 ) 1,708 8 years Other technology 2,917 (1,771 ) 1,146 2,917 (1,667 ) 1,250 5 - 7 years Space Monkey technology 7,100 (6,019 ) 1,081 7,100 (5,756 ) 1,344 6 years Patents 12,245 (9,136 ) 3,109 12,123 (8,415 ) 3,708 5 years Total definite-lived intangible assets: $ 1,004,932 $ (769,972 ) $ 234,960 $ 1,003,240 $ (748,778 ) $ 254,462 Indefinite-lived intangible assets: IP addresses 564 — 564 564 — 564 Domain names 59 — 59 59 — 59 Total Indefinite-lived intangible assets 623 — 623 623 — 623 Total intangible assets, net $ 1,005,555 $ (769,972 ) $ 235,583 $ 1,003,863 $ (748,778 ) $ 255,085 |
Schedule of Definite-Lived Intangible Assets | The following table presents intangible asset balances (in thousands): March 31, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Definite-lived intangible assets: Customer contracts $ 965,670 $ (737,443 ) $ 228,227 $ 964,100 $ (717,648 ) $ 246,452 10 years 2GIG 2.0 technology 17,000 (15,603 ) 1,397 17,000 (15,292 ) 1,708 8 years Other technology 2,917 (1,771 ) 1,146 2,917 (1,667 ) 1,250 5 - 7 years Space Monkey technology 7,100 (6,019 ) 1,081 7,100 (5,756 ) 1,344 6 years Patents 12,245 (9,136 ) 3,109 12,123 (8,415 ) 3,708 5 years Total definite-lived intangible assets: $ 1,004,932 $ (769,972 ) $ 234,960 $ 1,003,240 $ (748,778 ) $ 254,462 Indefinite-lived intangible assets: IP addresses 564 — 564 564 — 564 Domain names 59 — 59 59 — 59 Total Indefinite-lived intangible assets 623 — 623 623 — 623 Total intangible assets, net $ 1,005,555 $ (769,972 ) $ 235,583 $ 1,003,863 $ (748,778 ) $ 255,085 |
Schedule of Estimated Future Amortization Expense of Intangible Assets Excluding Patents Currently in Process | Estimated future amortization expense of intangible assets, excluding approximately $0.3 million in patents currently in process, is as follows as of March 31, 2019 (in thousands): 2019 - Remaining Period $ 59,216 2020 67,990 2021 58,709 2022 48,759 2023 28 Thereafter — Total estimated amortization expense $ 234,702 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and December 31, 2018 (in thousands): March 31, 2019 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Long-Term Notes Receivables and Other Assets, net Cash $ 3,599 $ — $ — $ 3,599 $ 3,599 $ — Level 1: Money market funds 92 — — 92 92 — Corporate securities 3,181 2,212 — 5,393 — 5,393 Subtotal 3,273 2,212 — 5,485 92 5,393 Total $ 6,872 $ 2,212 $ — $ 9,084 $ 3,691 $ 5,393 December 31, 2018 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Long-Term Notes Receivables and Other Assets, net Cash $ 6,681 $ — $ — $ 6,681 $ 6,681 $ — Level 1: Money market funds 6,092 — — 6,092 6,092 — Corporate securities 3,485 — (304 ) 3,181 — 3,181 Subtotal 9,577 — (304 ) 9,273 6,092 3,181 Total $ 16,258 $ — $ (304 ) $ 15,954 $ 12,773 $ 3,181 |
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): March 31, 2019 December 31, 2018 Stated Interest Rate Issuance Face Value Estimated Fair Value Face Value Estimated Fair Value 2020 Notes 679,299 669,110 679,299 643,568 8.75 % 2022 Private Placement Notes 270,000 271,323 270,000 257,073 8.875 % 2022 Notes 900,000 904,410 900,000 855,000 7.875 % 2023 Notes 400,000 342,120 400,000 326,000 7.625 % Term Loan 805,950 805,950 807,975 807,975 N/A Total $ 3,055,249 $ 2,992,913 $ 3,057,274 $ 2,889,616 |
Schedule of Derivative Liabilities at Fair Value | he following table summarizes the fair value and the notional amount of the Company’s outstanding derivative instrument as of March 31, 2019 and December 31, 2018 (in thousands): March 31, 2019 December 31, 2018 Consumer Financing Program Contractual Obligations: Fair value $ 120,671 $ 117,620 Notional amount 385,955 368,708 Classified on the condensed consolidated unaudited balance sheets as: Accrued expenses and other current liabilities 70,137 67,710 Other long-term obligations 50,534 49,910 Total Consumer Financing Program Contractual Obligation $ 120,671 $ 117,620 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation | he following table summarizes the change in the fair value of the Level 3 outstanding derivative liability instrument for the three months ended March 31, 2019 and the twelve months ended December 31, 2018 (in thousands): Three months ended March 31, 2019 Twelve months ended December 31, 2018 Balance, beginning of period $ 117,620 $ 46,496 Additions 16,480 93,095 Settlements (14,856 ) (34,587 ) Losses included in earnings 1,427 12,616 Balance, end of period $ 120,671 $ 117,620 |
Stock-Based Compensation and _2
Stock-Based Compensation and Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 2018 Operating expenses $ 43 $ 18 Selling expenses 87 45 General and administrative expenses 727 141 Total stock-based compensation $ 857 $ 204 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Lease Expense | The components of lease expense were as follows (in thousands): Three Months Ended March 31, 2019 Operating lease cost $ 4,298 Finance lease cost: Amortization of right-of-use assets $ 1,376 Interest on lease liabilities 154 Total finance lease cost $ 1,530 Supplemental cash flow information related to leases was as follows (in thousands): Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ (4,375 ) Operating cash flows from finance leases (154 ) Financing cash flows from finance leases (2,136 ) Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 584 Finance leases 230 |
Schedule Of Supplemental Balance Sheet Information Related To Leases | Supplemental balance sheet information related to leases was as follows (in thousands, except lease term and discount rate): March 31, 2019 Operating Leases Operating lease right-of-use assets $ 72,891 Current operating lease liabilities $ 11,749 Operating lease liabilities 71,964 Total operating lease liabilities $ 83,713 Finance Leases Property, plant and equipment, gross $ 45,440 Accumulated depreciation (23,205 ) Property, plant and equipment, net $ 22,235 Current finance lease liabilities $ 7,114 Finance lease liabilities 3,952 Total finance lease liabilities $ 11,066 Weighted Average Remaining Lease Term Operating leases 7 years Finance leases 1.5 years Weighted Average Discount Rate Operating leases 7 % Finance leases 4 % |
Schedule Of Maturities Of Financing Leases Liabilities | Maturities of lease liabilities were as follows (in thousands): Operating Leases Finance Leases Year Ending December 31, 2019 (excluding the three months ended March 31, 2019) $ 13,163 $ 5,827 2020 16,345 5,167 2021 15,649 384 2022 14,514 38 2023 14,553 — Thereafter 32,404 — Total lease payments 106,628 11,416 Less imputed interest (22,915 ) (350 ) Total $ 83,713 $ 11,066 |
Schedule Of Maturities Of Operating Leases Liabilities | Maturities of lease liabilities were as follows (in thousands): Operating Leases Finance Leases Year Ending December 31, 2019 (excluding the three months ended March 31, 2019) $ 13,163 $ 5,827 2020 16,345 5,167 2021 15,649 384 2022 14,514 38 2023 14,553 — Thereafter 32,404 — Total lease payments 106,628 11,416 Less imputed interest (22,915 ) (350 ) Total $ 83,713 $ 11,066 |
Restructuring and Asset Impai_2
Restructuring and Asset Impairment Charges (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Summary of Restructuring Activity | The following table presents accrued restructuring activity for the three months ended March 31, 2019 and the twelve months ended December 31, 2018 (in thousands): Contract termination costs Employee severance and termination benefits Total Accrued restructuring balance as of December 31, 2017 $ 558 $ — $ 558 Restructuring expenses — 4,683 4,683 Cash payments (91 ) (4,341 ) (4,432 ) Accrued restructuring balance as of December 31, 2018 467 342 809 Cash payments (23 ) (257 ) (280 ) Accrued restructuring balance as of March 31, 2019 $ 444 $ 85 $ 529 |
Segment Reporting and Busines_2
Segment Reporting and Business Concentrations (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 $ 258,436 $ 17,813 $ 276,249 Three months ended March 31, 2018 228,542 18,055 246,597 |
Guarantor and Non-Guarantor S_2
Guarantor and Non-Guarantor Supplemental Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Guarantor And Non Guarantor Supplemental Financial Information [Abstract] | |
Supplemental Condensed Consolidating Balance Sheet | Supplemental Condensed Consolidating Balance Sheet March 31, 2019 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets $ — $ 2,919 $ 335,398 $ 119,909 $ (289,784 ) $ 168,442 Property, plant and equipment, net — — 64,188 426 — 64,614 Capitalized contract costs, net — — 1,027,364 65,501 — 1,092,865 Deferred financing costs, net — 1,797 — — — 1,797 Investment in subsidiaries — 1,650,064 — — (1,650,064 ) — Intercompany receivable — — 6,303 — (6,303 ) — Intangible assets, net — — 218,194 17,389 — 235,583 Goodwill — — 809,678 25,726 — 835,404 Operating lease right-of-use assets — — 72,661 230 — 72,891 Long-term notes receivables and other assets — 106 104,486 17,310 (106 ) 121,796 Total Assets $ — $ 1,654,886 $ 2,638,272 $ 246,491 $ (1,946,257 ) $ 2,593,392 Liabilities and Stockholders’ (Deficit) Equity Current liabilities $ — $ 63,260 $ 558,398 $ 192,835 $ (289,784 ) $ 524,709 Intercompany payable — — — 6,303 (6,303 ) — Notes payable and revolving credit facility, net of current portion — 3,075,990 — — — 3,075,990 Finance lease obligations, net of current portion — — 3,952 — — 3,952 Deferred revenue, net of current portion — — 309,896 16,735 — 326,631 Operating lease liabilities — — 71,878 86 — 71,964 Other long-term obligations — — 73,043 347 — 73,390 Accumulated losses of investee, net 1,484,364 (1,484,364 ) — Deferred income tax liability — — 106 1,120 (106 ) 1,120 Total (deficit) equity (1,484,364 ) (1,484,364 ) 1,620,999 29,065 (165,700 ) (1,484,364 ) Total liabilities and stockholders’ (deficit) equity $ — $ 1,654,886 $ 2,638,272 $ 246,491 $ (1,946,257 ) $ 2,593,392 Supplemental Condensed Consolidating Balance Sheet December 31, 2018 (in thousands) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Assets Current assets $ — $ 12,951 $ 269,770 $ 103,451 $ (262,674 ) $ 123,498 Property, plant and equipment, net — — 72,937 464 — 73,401 Capitalized contract costs, net — — 1,047,532 68,243 — 1,115,775 Deferred financing costs, net — 2,058 — — — 2,058 Investment in subsidiaries — 1,662,367 — — (1,662,367 ) — Intercompany receivable — — 6,303 — (6,303 ) — Intangible assets, net — — 236,677 18,408 — 255,085 Goodwill — — 809,678 25,177 — 834,855 Long-term notes receivables and other assets — 106 102,695 17,124 (106 ) 119,819 Total Assets $ — $ 1,677,482 $ 2,545,592 $ 232,867 $ (1,931,450 ) $ 2,524,491 Liabilities and Stockholders’ (Deficit) Equity Current liabilities $ — $ 36,988 $ 507,063 $ 182,159 $ (262,674 ) $ 463,536 Intercompany payable — — — 6,303 (6,303 ) — Notes payable and revolving credit facility, net of current portion — 3,037,095 — — — 3,037,095 Capital lease obligations, net of current portion — — 5,570 1 — 5,571 Deferred revenue, net of current portion — — 306,653 16,932 — 323,585 Accumulated Losses of Investee, net 1,396,601 (1,396,601 ) — Other long-term obligations — — 90,209 — — 90,209 Deferred income tax liability — — 106 1,096 (106 ) 1,096 Total (deficit) equity (1,396,601 ) (1,396,601 ) 1,635,991 26,376 (265,766 ) (1,396,601 ) Total liabilities and stockholders’ (deficit) equity $ — $ 1,677,482 $ 2,545,592 $ 232,867 $ (1,931,450 ) $ 2,524,491 |
Supplemental Condensed Consolidating Statements of Operations and Comprehensive (Loss) Income | Supplemental Condensed Consolidating Statements of Operations and Comprehensive Loss For the Three Months Ended March 31, 2019 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ — $ 263,539 $ 12,912 $ (202 ) $ 276,249 Costs and expenses — — 291,509 12,920 (202 ) 304,227 Loss from operations — — (27,970 ) (8 ) — (27,978 ) Loss from subsidiaries (89,156 ) (25,981 ) — — 115,137 — Other expense (income), net — 63,175 (52 ) (1,644 ) — 61,479 (Loss) income before income tax expenses (89,156 ) (89,156 ) (27,918 ) 1,636 115,137 (89,457 ) Income tax expense (benefit) — — 182 (483 ) — (301 ) Net (loss) income (89,156 ) (89,156 ) (28,100 ) 2,119 115,137 (89,156 ) Other comprehensive loss, net of tax effects: Net (loss) income (89,156 ) (89,156 ) (28,100 ) 2,119 115,137 (89,156 ) Foreign currency translation adjustment 570 570 — 570 (1,140 ) 570 Total other comprehensive income 570 570 — 570 (1,140 ) 570 Comprehensive (loss) income $ (88,586 ) $ (88,586 ) $ (28,100 ) $ 2,689 $ 113,997 $ (88,586 ) Supplemental Condensed Consolidating Statements of Operations and Comprehensive Loss For the Three Months Ended March 31, 2018 (in thousands) (unaudited) Parent APX Group, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ — $ 233,788 $ 13,465 $ (656 ) $ 246,597 Costs and expenses — — 305,221 13,663 (656 ) 318,228 (Loss) income from operations — — (71,433 ) (198 ) — (71,631 ) Loss from subsidiaries (84,717 ) (26,320 ) — — 111,037 — Other expense (income), net — 58,397 (46,970 ) 2,092 — 13,519 Loss before income tax expenses (84,717 ) (84,717 ) (24,463 ) (2,290 ) 111,037 (85,150 ) Income tax expense (benefit) — — 172 (605 ) — (433 ) Net loss (84,717 ) (84,717 ) (24,635 ) (1,685 ) 111,037 (84,717 ) Other comprehensive loss, net of tax effects: Net loss (84,717 ) (84,717 ) (24,635 ) (1,685 ) 111,037 (84,717 ) Foreign currency translation adjustment (659 ) (659 ) — (659 ) 1,318 (659 ) Total other comprehensive loss (659 ) (659 ) — (659 ) 1,318 (659 ) Comprehensive loss $ (85,376 ) $ (85,376 ) $ (24,635 ) $ (2,344 ) $ 112,355 $ (85,376 ) |
Supplemental Condensed Consolidating Statements of Cash Flows | Supplemental Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2019 (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 $ — $ — $ (43,058 ) $ 41 $ — $ (43,017 ) Cash flows from investing activities: Capital expenditures — — (1,391 ) — — (1,391 ) Proceeds from sale of capital assets — — (51 ) — — (51 ) Investment in subsidiary (118 ) (46,487 ) — — 46,605 — Acquisition of intangible assets — — (369 ) — — (369 ) Net cash used in investing activities (118 ) (46,487 ) (1,811 ) — 46,605 (1,811 ) Cash flows from financing activities: Repayment on notes payable — (2,025 ) — — — (2,025 ) Borrowings from revolving credit facility — 40,000 — — — 40,000 Proceeds from capital contribution — — 46,369 — (46,369 ) — Repayments of finance lease obligations — — (2,064 ) (72 ) — (2,136 ) Return of capital 118 118 (118 ) — (236 ) (118 ) Net cash provided by (used in) financing activities 118 38,093 44,187 (72 ) (46,605 ) 35,721 Effect of exchange rate changes on cash — — — 25 — 25 Net decrease in cash and cash equivalents — (8,394 ) (682 ) (6 ) — (9,082 ) Cash and cash equivalents: Beginning of period — 11,130 682 961 — 12,773 End of period $ — $ 2,736 $ — $ 955 $ — $ 3,691 Supplemental Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2018 (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 $ — $ — $ (59,159 ) $ (423 ) $ — $ (59,582 ) Cash flows from investing activities: Capital expenditures — — (6,407 ) — — (6,407 ) Investment in subsidiary 966 (16,450 ) — — 15,484 — Acquisition of intangible assets — — (849 ) — — (849 ) Proceeds from sale of intangibles — — 53,693 — — 53,693 Proceeds from sale of capital assets — — 149 — — 149 Net cash provided by (used in) investing activities 966 (16,450 ) 46,586 — 15,484 46,586 Cash flows from financing activities: Borrowings from revolving credit facility — 57,000 — — — 57,000 Repayments on revolving credit facility — (40,000 ) — — — (40,000 ) Proceeds from capital contributions — — 17,416 — (17,416 ) — Repayments of capital lease obligations — — (3,305 ) (113 ) — (3,418 ) Return of capital (966 ) (966 ) (966 ) — 1,932 (966 ) Net cash (used in) provided by financing activities (966 ) 16,034 13,145 (113 ) (15,484 ) 12,616 Effect of exchange rate changes on cash — — — (19 ) — (19 ) Net (decrease) increase in cash and cash equivalents — (416 ) 572 (555 ) — (399 ) Cash and cash equivalents: Beginning of period — 3,661 (572 ) 783 — 3,872 End of period $ — $ 3,245 $ — $ 228 $ — $ 3,473 |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019USD ($)paymentunit | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($)unit | Dec. 31, 2017USD ($) | |
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||
Accounts and notes receivable, net | $ 20,000,000 | $ 16,500,000 | ||
Allowance for doubtful accounts | 5,808,000 | 5,594,000 | $ 5,356,000 | |
Accounts receivable classified as held for sale | 0 | |||
Provision for doubtful accounts | $ 5,918,000 | $ 3,968,000 | 19,405,000 | |
Capitalized contract costs, expected period of benefit | 5 years | |||
Equity method investments | $ 6,100,000 | 3,900,000 | ||
Amortization expenses included in interest expense | 1,180,000 | 1,343,000 | ||
Sales commission included in accrued expenses and other liabilities | 3,100,000 | 4,900,000 | ||
Other long-term obligations | 16,800,000 | $ 17,600,000 | ||
Advertising expenses incurred | $ 12,700,000 | 13,700,000 | ||
Uncertain income tax position, percentage | 50.00% | |||
Number of reporting units | unit | 2 | 2 | ||
Translation (gain) loss | $ (1,701,000) | 2,075,000 | ||
Issued and unused letters of credit | $ 13,900,000 | $ 13,800,000 | ||
Vivint Sky Control Panels | ||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||
Percentage of installed panels | 82.00% | |||
2GIG Sale | ||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||
Percentage of installed panels | 17.00% | |||
Other Panels | ||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||
Percentage of installed panels | 1.00% | |||
Interest Expense | ||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||
Amortization expenses included in interest expense | $ 2,500,000 | $ 2,700,000 | ||
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 | $ 30,100,000 | 32,400,000 | ||
Deferred financing cost, accumulated amortization | $ 56,800,000 | 54,600,000 | ||
Vivint Flex Pay | ||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||
Number of payment options | payment | 3 | |||
Installment loans available to qualified customers, maximum amount provided by third party | $ 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 | 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] | ||||
Issued and unused letters of credit | $ 249,700,000 | |||
Line of Credit | Revolving Credit Facility | ||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||
Deferred financing costs | 1,800,000 | 2,100,000 | ||
Deferred financing cost, accumulated amortization | 9,900,000 | 9,600,000 | ||
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 ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Beginning balance | $ 5,594 | $ 5,356 | $ 5,356 |
Provision for doubtful accounts | 5,918 | $ 3,968 | 19,405 |
Write-offs and adjustments | (5,704) | (19,167) | |
Balance at end of period | $ 5,808 | $ 5,594 |
Basis of Presentation and Sig_6
Basis of Presentation and Significant Accounting Policies - Depreciation and Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Total depreciation and amortization | $ 131,221 | $ 124,258 |
Depreciation of property, plant and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciation and amortization | 5,921 | 6,175 |
Amortization of capitalized contract costs | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciation and amortization | 105,028 | 95,363 |
Amortization of definite-lived intangibles | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciation and amortization | $ 20,272 | $ 22,720 |
Basis of Presentation and Sig_7
Basis of Presentation and Significant Accounting Policies - Recently Adopted Accounting Standards (Details) - ASU 2016-02 adoption $ in Millions | Jan. 01, 2019USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Right-of-use lease asset | $ 75.5 |
Operating and finance lease liability | $ 85.9 |
Revenue and Capitalized Contr_2
Revenue and Capitalized Contract Costs - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue recognized | $ 86.4 | $ 59.8 |
Revenue expected to be recognized from remaining performance obligations for subscription contracts | $ 2,200 | |
Capitalized contract cost, amortization period | 5 years | |
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_3
Revenue and Capitalized Contract Costs - Remaining Performance Obligations (Details) | Mar. 31, 2019 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied, percentage | 63.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, expected period of satisfaction | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, expected period of satisfaction | 3 years |
Long-Term Debt - Summary of Deb
Long-Term Debt - Summary of Debt (Detail) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Outstanding Principal, noncurrent debt | $ 3,087,149,000 | $ 3,049,174,000 |
Outstanding Principal, total debt | 3,095,249,000 | 3,057,274,000 |
Unamortized Premium (Discount) | 18,980,000 | 20,286,000 |
Unamortized Debt Issuance Expense | (30,139,000) | (32,365,000) |
Net Carrying Amount, noncurrent | 3,075,990,000 | 3,037,095,000 |
Net Carrying Amount | 3,084,090,000 | 3,045,195,000 |
Senior Notes | Senior Secured Revolving Credit Facilities | ||
Debt Instrument [Line Items] | ||
Outstanding Principal, noncurrent debt | 40,000,000 | |
Unamortized Premium (Discount) | 0 | |
Unamortized Debt Issuance Expense | 0 | |
Net Carrying Amount, noncurrent | $ 40,000,000 | |
Senior Notes | 8.75% Senior Notes due 2020 | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate, percentage | 8.875% | |
Outstanding Principal, noncurrent debt | $ 679,299,000 | 679,299,000 |
Unamortized Premium (Discount) | 1,958,000 | 2,230,000 |
Unamortized Debt Issuance Expense | (4,678,000) | (5,380,000) |
Net Carrying Amount, noncurrent | $ 676,579,000 | 676,149,000 |
Senior Notes | 8.875% Senior Secured Notes Due 2022 | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate, percentage | 8.875% | |
Outstanding Principal, noncurrent debt | $ 270,000,000 | 270,000,000 |
Unamortized Premium (Discount) | (2,006,000) | (2,122,000) |
Unamortized Debt Issuance Expense | (564,000) | (602,000) |
Net Carrying Amount, noncurrent | $ 267,430,000 | 267,276,000 |
Senior Notes | 7.875% Senior Secured Notes Due 2022 | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate, percentage | 7.875% | |
Outstanding Principal, noncurrent debt | $ 900,000,000 | 900,000,000 |
Unamortized Premium (Discount) | 19,028,000 | 20,178,000 |
Unamortized Debt Issuance Expense | (11,983,000) | (12,799,000) |
Net Carrying Amount, noncurrent | $ 907,045,000 | 907,379,000 |
Senior Notes | 7.625% Senior Notes Due 2023 | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate, percentage | 7.625% | |
Outstanding Principal, noncurrent debt | $ 400,000,000 | 400,000,000 |
Unamortized Premium (Discount) | 0 | 0 |
Unamortized Debt Issuance Expense | (3,712,000) | (3,922,000) |
Net Carrying Amount, noncurrent | 396,288,000 | 396,078,000 |
Term Loan | Term Loan | ||
Debt Instrument [Line Items] | ||
Outstanding Principal, noncurrent debt | 797,850,000 | 799,875,000 |
Outstanding Principal, current maturities | 8,100,000 | 8,100,000 |
Unamortized Premium (Discount) | 0 | 0 |
Unamortized Debt Issuance Expense | (9,202,000) | (9,662,000) |
Net Carrying Amount, noncurrent | 788,648,000 | 790,213,000 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Net Carrying Amount | 40,000,000 | 0 |
Deferred financing costs, net | $ 1,800,000 | $ 2,100,000 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - USD ($) | Nov. 16, 2012 | Sep. 30, 2018 | Mar. 31, 2019 | Apr. 01, 2019 | Dec. 31, 2018 | Aug. 10, 2017 | Mar. 06, 2015 |
Debt Instrument [Line Items] | |||||||
Outstanding borrowings | $ 3,084,090,000 | $ 3,045,195,000 | |||||
Issued and unused letters of credit | $ 13,900,000 | 13,800,000 | |||||
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 | ||||||
Step down, percentage | 0.25% | ||||||
Commitment fee, percentage | 0.125% | ||||||
Outstanding borrowings | $ 40,000,000 | $ 0 | |||||
Issued and unused letters of credit | $ 249,700,000 | ||||||
Revolving Credit Facility | Federal Funds Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable interest rate percentage | 0.50% | ||||||
Revolving Credit Facility | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable interest rate percentage | 1.00% | ||||||
Series A Revolving Commitments | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility, aggregate principal amount | $ 267,000,000 | ||||||
Series A Revolving Commitments | Revolving Credit Facility | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable interest rate percentage | 3.00% | ||||||
Series A Revolving Commitments | Revolving Credit Facility | Base Rate-based Borrowings | |||||||
Debt Instrument [Line Items] | |||||||
Basis 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 | ||||||
Series B Revolving Commitments | Revolving Credit Facility | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable interest rate percentage | 4.00% | ||||||
Series B Revolving Commitments | Revolving Credit Facility | Base Rate-based Borrowings | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable interest rate percentage | 3.00% | ||||||
Senior Notes | 2020 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 679,299,000 | ||||||
Debt instrument interest rate, percentage | 8.75% | ||||||
Repurchase amount | $ 250,700,000 | ||||||
Senior Notes | 8.875% Senior Secured Notes Due 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 270,000,000 | ||||||
Debt instrument interest rate, percentage | 8.875% | ||||||
Principal amount outstanding threshold for accelerated maturity (on September 1, 2020) | $ 190,000,000 | ||||||
Senior Notes | 7.875% Senior Secured Notes Due 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 900,000,000 | ||||||
Debt instrument interest rate, percentage | 7.875% | ||||||
Senior Notes | 7.625% Senior Notes Due 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 400,000,000 | ||||||
Debt instrument interest rate, percentage | 7.625% | ||||||
Senior Notes | 6.375% Senior Secured Notes due 2019 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument interest rate, percentage | 6.375% | ||||||
Repurchase amount | $ 269,500,000 | ||||||
Term Loan | Federal Funds Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable interest rate percentage | 0.50% | ||||||
Term Loan | LIBOR | LIBOR Referenced To US Dollar Deposits | |||||||
Debt Instrument [Line Items] | |||||||
Basis 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] | |||||||
Basis 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] | |||||||
Basis spread on variable interest rate percentage | 4.00% | ||||||
Term Loan | Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility, aggregate principal amount | $ 810,000,000 | ||||||
Quarterly amortization payments, percent of principal amount outstanding | 0.25% | ||||||
Letter of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding borrowings | $ 13,900,000 | ||||||
Subsequent Event | Series D Revolving Commitments | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility, aggregate principal amount | $ 15,400,000 |
Long-Term Debt - Deferred Finan
Long-Term Debt - Deferred Financing Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Deferred Financing Activity [Roll Forward] | ||
Beginning balance | $ 34,423 | $ 38,766 |
Additions | 0 | 10,275 |
Early Extinguishment | 0 | (4,207) |
Amortized | (2,487) | (10,411) |
Ending balance | 31,936 | 34,423 |
Senior Notes | 2019 Notes | ||
Deferred Financing Activity [Roll Forward] | ||
Beginning balance | 0 | 2,877 |
Additions | 0 | |
Early Extinguishment | (1,877) | |
Amortized | (1,000) | |
Ending balance | 0 | |
Senior Notes | 2020 Notes | ||
Deferred Financing Activity [Roll Forward] | ||
Beginning balance | 5,380 | 11,209 |
Additions | 0 | 0 |
Early Extinguishment | 0 | (2,330) |
Amortized | (702) | (3,499) |
Ending balance | 4,678 | 5,380 |
Senior Notes | 2022 Private Placement Notes | ||
Deferred Financing Activity [Roll Forward] | ||
Beginning balance | 602 | 752 |
Additions | 0 | 0 |
Early Extinguishment | 0 | 0 |
Amortized | (38) | (150) |
Ending balance | 564 | 602 |
Senior Notes | 2022 Notes | ||
Deferred Financing Activity [Roll Forward] | ||
Beginning balance | 12,799 | 16,067 |
Additions | 0 | 0 |
Early Extinguishment | 0 | 0 |
Amortized | (816) | (3,268) |
Ending balance | 11,983 | 12,799 |
Senior Notes | 2023 Notes | ||
Deferred Financing Activity [Roll Forward] | ||
Beginning balance | 3,922 | 4,762 |
Additions | 0 | 0 |
Early Extinguishment | 0 | 0 |
Amortized | (210) | (840) |
Ending balance | 3,712 | 3,922 |
Term Loan | Term Loan | ||
Deferred Financing Activity [Roll Forward] | ||
Beginning balance | 9,662 | 0 |
Additions | 10,275 | |
Early Extinguishment | 0 | 0 |
Amortized | (460) | (613) |
Ending balance | 9,202 | 9,662 |
Revolving Credit Facility | Line of Credit | ||
Deferred Financing Activity [Roll Forward] | ||
Beginning balance | 2,058 | 3,099 |
Additions | 0 | 0 |
Early Extinguishment | 0 | 0 |
Amortized | (261) | (1,041) |
Ending balance | $ 1,797 | $ 2,058 |
Retail Installment Contract R_3
Retail Installment Contract Receivables - Installment Receivables (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Deferred interest | $ (29,612) | $ (34,164) | |
Retail Installment Contracts | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
RIC receivables, gross | 173,254 | 175,250 | |
Deferred interest | (29,612) | (34,163) | |
RIC receivables, net of deferred interest | 143,642 | 141,087 | |
Classified on the condensed consolidated unaudited balance sheets as: | |||
Accounts and notes receivable, net | 35,370 | 32,185 | |
Long-term notes receivables and other assets, net | 108,272 | 108,902 | |
RIC receivables, net | 143,642 | $ 141,087 | |
Interest income | $ (3,500) | $ (3,300) | |
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) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Deferred revenue | $ 9,820 | $ 33,793 | |
Retail Installment Contracts | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Deferred interest, beginning of period | 34,163 | $ 36,048 | $ 36,048 |
Write-offs, net of recoveries | (6,923) | (26,360) | |
Deferred revenue | 2,372 | 24,475 | |
Deferred interest, end of period | $ 29,612 | $ 34,163 |
Balance Sheet Components (Detai
Balance Sheet Components (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Prepaid expenses and other current assets | ||
Prepaid expenses | $ 12,984 | $ 7,183 |
Deposits | 1,353 | 904 |
Other | 791 | 3,362 |
Total prepaid expenses and other current assets | 15,128 | 11,449 |
Capitalized contract costs | ||
Capitalized contract costs | 2,445,784 | 2,361,795 |
Accumulated amortization | (1,352,919) | (1,246,020) |
Capitalized contract costs, net | 1,092,865 | 1,115,775 |
Long-term notes receivables and other assets | ||
RIC receivables, gross | 137,884 | 143,065 |
RIC deferred interest | (29,612) | (34,164) |
Security deposits | 7,126 | 6,586 |
Investments | 6,099 | 3,865 |
Other | 299 | 467 |
Total long-term notes receivables and other assets, net | 121,796 | 119,819 |
Accrued payroll and commissions | ||
Accrued commissions | 11,432 | 28,726 |
Accrued payroll | 25,849 | 36,753 |
Total accrued payroll and commissions | 37,281 | 65,479 |
Accrued expenses and other current liabilities | ||
Accrued interest payable | 55,157 | 28,885 |
Current portion of derivative liability | 70,137 | 67,710 |
Service warranty accrual | 8,825 | 8,813 |
Current portion of notes payable | 8,100 | 8,100 |
Loss contingencies | 2,131 | 3,131 |
Other | 14,647 | 20,076 |
Total accrued expenses and other current liabilities | $ 158,997 | $ 136,715 |
Property Plant and Equipment -
Property Plant and Equipment - Components of Property Plant and Equipment (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | $ 151,785 | $ 156,096 |
Accumulated depreciation and amortization | (87,171) | (82,695) |
Property, plant and equipment, net | 64,614 | 73,401 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | $ 44,594 | 45,050 |
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 | $ 55,459 | 53,891 |
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 | $ 27,609 | 26,401 |
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 | $ 19,918 | 19,532 |
Estimated Useful Lives | 7 years | |
Build-to-suit lease building | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | $ 0 | 8,247 |
Estimated Useful Lives | 10 years 6 months | |
Construction in process | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, gross | $ 4,205 | $ 2,975 |
Property Plant and Equipment _2
Property Plant and Equipment - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||||
Property plant and equipment, gross | $ 151,785 | $ 156,096 | ||
Accumulated depreciation | 87,171 | 82,695 | ||
Depreciation and amortization expense | 5,900 | $ 6,200 | ||
Reduction in property, plant and equipment | (64,614) | (73,401) | ||
Reduction in finance lease obligations | (11,066) | |||
Assets Under Finance Lease Obligations | ||||
Property, Plant and Equipment [Line Items] | ||||
Property plant and equipment, gross | 22,200 | 26,200 | ||
Accumulated depreciation | $ 23,200 | $ 22,200 | ||
ASU 2016-02 adoption | ||||
Property, Plant and Equipment [Line Items] | ||||
Reduction in property, plant and equipment | $ 6,100 | |||
Accrued expenses and other current liabilities | ASU 2016-02 adoption | ||||
Property, Plant and Equipment [Line Items] | ||||
Reduction in finance lease obligations | $ 6,600 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2016USD ($)market | Dec. 31, 2018USD ($) | |
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill | $ 835,404 | $ 834,855 | ||
Proceeds from the sale of intangible assets | 0 | $ 53,693 | ||
Amortization expense related to intangible assets | $ 20,300 | 22,700 | ||
Finite-lived intangible assets, remaining amortization period | 4 years | |||
Patents | $ 300 | |||
Spectrum Licenses | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Number of mid-sized metropolitan markets | market | 40 | |||
Lease agreements term | 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 | 1,200 | |||
Gain on sale | $ 50,400 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, gross carrying amount | $ 1,004,932 | $ 1,003,240 |
Accumulated Amortization | (769,972) | (748,778) |
Definite-lived intangible assets, net carrying amount | 234,960 | 254,462 |
Indefinite-lived intangible assets: | 623 | 623 |
Total intangible assets, gross carrying amount | 1,005,555 | 1,003,863 |
Total intangible assets, net carrying amount | 235,583 | 255,085 |
Customer contracts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, gross carrying amount | 965,670 | 964,100 |
Accumulated Amortization | (737,443) | (717,648) |
Definite-lived intangible assets, net carrying amount | $ 228,227 | 246,452 |
Estimated Useful Lives | 10 years | |
2GIG 2.0 technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, gross carrying amount | $ 17,000 | 17,000 |
Accumulated Amortization | (15,603) | (15,292) |
Definite-lived intangible assets, net carrying amount | $ 1,397 | 1,708 |
Estimated Useful Lives | 8 years | |
Other technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, gross carrying amount | $ 2,917 | 2,917 |
Accumulated Amortization | (1,771) | (1,667) |
Definite-lived intangible assets, net carrying amount | 1,146 | 1,250 |
Space Monkey technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, gross carrying amount | 7,100 | 7,100 |
Accumulated Amortization | (6,019) | (5,756) |
Definite-lived intangible assets, net carrying amount | $ 1,081 | 1,344 |
Estimated Useful Lives | 6 years | |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite-lived intangible assets, gross carrying amount | $ 12,245 | 12,123 |
Accumulated Amortization | (9,136) | (8,415) |
Definite-lived intangible assets, net carrying amount | $ 3,109 | 3,708 |
Estimated Useful Lives | 5 years | |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Lives | 5 years | |
Minimum | Other technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Lives | 5 years | |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Lives | 10 years | |
Maximum | Other technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Lives | 7 years | |
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 | Mar. 31, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2019 - Remaining Period | $ 59,216 |
2020 | 67,990 |
2021 | 58,709 |
2022 | 48,759 |
2023 | 28 |
Thereafter | 0 |
Total estimated amortization expense | $ 234,702 |
Financial Instruments - Valuati
Financial Instruments - Valuation Approach Applied to Each Class of Security (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash | $ 3,599 | $ 6,681 | |
Adjusted Cost | 6,872 | 16,258 | |
Unrealized Gains | 2,212 | 0 | |
Unrealized Losses | 0 | (304) | |
Fair Value | 9,084 | 15,954 | |
Cash and Cash Equivalents | 3,691 | 12,773 | |
Long-Term Notes Receivables and Other Assets, net | 5,393 | 3,181 | |
Unrealized gain (loss) during period | 2,200 | $ 300 | |
Privately Held Company | Convertible Debt Securities | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cost method investments | 3,000 | ||
Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Adjusted Cost | 3,273 | 9,577 | |
Unrealized Gains | 2,212 | 0 | |
Unrealized Losses | 0 | (304) | |
Fair Value | 5,485 | 9,273 | |
Cash and Cash Equivalents | 92 | 6,092 | |
Long-Term Notes Receivables and Other Assets, net | 5,393 | 3,181 | |
Money market funds | Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Adjusted Cost | 92 | 6,092 | |
Unrealized Gains | 0 | 0 | |
Unrealized Losses | 0 | 0 | |
Fair Value | 92 | 6,092 | |
Cash and Cash Equivalents | 92 | 6,092 | |
Long-Term Notes Receivables and Other Assets, net | 0 | 0 | |
Corporate securities | Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Adjusted Cost | 3,181 | 3,485 | |
Unrealized Gains | 2,212 | 0 | |
Unrealized Losses | 0 | (304) | |
Fair Value | 5,393 | 3,181 | |
Cash and Cash Equivalents | 0 | 0 | |
Long-Term Notes Receivables and Other Assets, net | $ 5,393 | $ 3,181 |
Financial Instruments - Debt Fa
Financial Instruments - Debt Fair Value and Carrying Value (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Face Value | $ 3,084,090 | $ 3,045,195 |
Level 2 | ||
Debt Instrument [Line Items] | ||
Face Value | 3,055,249 | 3,057,274 |
Estimated Fair Value | $ 2,992,913 | 2,889,616 |
Senior Notes | 2020 Notes | ||
Debt Instrument [Line Items] | ||
Stated Interest Rate | 8.75% | |
Senior Notes | 2020 Notes | Level 2 | ||
Debt Instrument [Line Items] | ||
Face Value | $ 679,299 | 679,299 |
Estimated Fair Value | $ 669,110 | 643,568 |
Senior Notes | 2022 Private Placement Notes | ||
Debt Instrument [Line Items] | ||
Stated Interest Rate | 8.875% | |
Senior Notes | 2022 Private Placement Notes | Level 2 | ||
Debt Instrument [Line Items] | ||
Face Value | $ 270,000 | 270,000 |
Estimated Fair Value | $ 271,323 | 257,073 |
Senior Notes | 2022 Notes | ||
Debt Instrument [Line Items] | ||
Stated Interest Rate | 7.875% | |
Senior Notes | 2022 Notes | Level 2 | ||
Debt Instrument [Line Items] | ||
Face Value | $ 900,000 | 900,000 |
Estimated Fair Value | $ 904,410 | 855,000 |
Senior Notes | 2023 Notes | ||
Debt Instrument [Line Items] | ||
Stated Interest Rate | 7.625% | |
Senior Notes | 2023 Notes | Level 2 | ||
Debt Instrument [Line Items] | ||
Face Value | $ 400,000 | 400,000 |
Estimated Fair Value | 342,120 | 326,000 |
Term Loan | Level 2 | ||
Debt Instrument [Line Items] | ||
Face Value | 805,950 | 807,975 |
Estimated Fair Value | $ 805,950 | $ 807,975 |
Financial Instruments - Derivat
Financial Instruments - Derivative Fair Value (Details) - Level 2 - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Fair value | $ 120,671 | $ 117,620 |
Notional amount | 385,955 | 368,708 |
Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value | 70,137 | 67,710 |
Other long-term obligations | ||
Derivatives, Fair Value [Line Items] | ||
Fair value | $ 50,534 | $ 49,910 |
Financial Instruments - Level 3
Financial Instruments - Level 3 (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Balance, beginning of period | $ 117,620 | $ 46,496 |
Additions | 16,480 | 93,095 |
Settlements | (14,856) | (34,587) |
Losses included in earnings | 1,427 | 12,616 |
Balance, end of period | $ 120,671 | $ 117,620 |
Income Taxes (Detail)
Income Taxes (Detail) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate, percentage | 0.34% | 0.51% |
Stock-Based Compensation and _3
Stock-Based Compensation and Equity - Additional Information (Detail) - shares | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2019 | |
Incentive Units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility, percentage | 55.00% | ||
Expected exercise term | 3 years 11 months 16 days | ||
Risk-free rate, percentage | 0.62% | ||
Incentive Units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility, percentage | 125.00% | ||
Expected exercise term | 6 years | ||
Risk-free rate, percentage | 2.61% | ||
Incentive Units Time Based Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 5 years | ||
Incentive Units Time Based Awards | Tranche One | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, 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 (in shares) | 84,132,816 | ||
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 (in shares) | 42,169,456 | 42,169,456 | |
Incentive Units Performance Based Awards | Tranche One | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 33.33% | ||
Stock Appreciation Rights (SARs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
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 (in shares) | 236,111 | 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 (in shares) | 36,576,342 | 36,576,342 | |
Expected dividends, percentage | 0.00% | ||
Vivint | Stock Appreciation Rights (SARs) | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility, percentage | 55.00% | ||
Expected exercise term | 6 years | ||
Risk-free rate, percentage | 0.61% | ||
Vivint | Stock Appreciation Rights (SARs) | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility, percentage | 125.00% | ||
Expected exercise term | 6 years 5 months 20 days | ||
Risk-free rate, percentage | 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] | |||
Award vesting rights, percentage | 66.67% | ||
Vivint | Stock Appreciation Rights Performance Based Awards | Tranche One | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 33.33% |
Stock-Based Compensation and _4
Stock-Based Compensation and Equity - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | $ 857 | $ 204 |
Operating expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 43 | 18 |
Selling expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 87 | 45 |
General and administrative expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | $ 727 | $ 141 |
Commitments and Contingencies (
Commitments and Contingencies (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Commitments And Contingencies [Line Items] | |||
Loss contingency accrual | $ 2.1 | $ 3.1 | |
Operating leases, rent expense | $ 4.3 | ||
Capital lease obligation | $ 13.3 | ||
Vehicles | |||
Commitments And Contingencies [Line Items] | |||
Lease agreements term | 36 months | ||
Average remaining life for fleet | 10 months |
Leases - Components of Lease E
Leases - Components of Lease Expense (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Operating and finance leases, renewal term | 10 years |
Operating and finance leases, options to terminate lease, term | 1 year |
Operating lease cost | $ 4,298 |
Finance lease cost: | |
Amortization of right-of-use assets | 1,376 |
Interest on lease liabilities | 154 |
Total finance lease cost | $ 1,530 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating and finance leases, remaining lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating and finance leases, remaining lease term | 9 years |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ (4,375) |
Operating cash flows from finance leases | (154) |
Financing cash flows from finance leases | (2,136) |
Right-of-use assets obtained in exchange for lease obligations: | |
Operating leases | 584 |
Finance leases | $ 230 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Assets and Liabilities, Lessee [Abstract] | ||
Operating lease right-of-use assets | $ 72,891 | $ 0 |
Current operating lease liabilities | 11,749 | 0 |
Operating lease liabilities | 71,964 | 0 |
Total | 83,713 | |
Property, plant and equipment, gross | 45,440 | |
Accumulated depreciation | (23,205) | |
Property, plant and equipment, net | 22,235 | |
Current finance lease liabilities | 7,114 | 7,743 |
Finance lease liabilities | 3,952 | $ 5,571 |
Total | $ 11,066 | |
Operating leases, weighted average remaining lease term | 7 years | |
Finance leases, weighted average remaining lease term | 1 year 6 months | |
Operating leases, weighted average discount rate, percentage | 7.00% | |
Finance leases, weighted average discount rate, percentage | 4.00% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
Lessor, Operating Lease, Lease Not yet Commenced, Assumption and Judgment, Value of Underlying Asset, Description | $ 600 |
Operating Leases | |
2019 (excluding the three months ended March 31, 2019) | 13,163 |
2020 | 16,345 |
2021 | 15,649 |
2022 | 14,514 |
2023 | 14,553 |
Thereafter | 32,404 |
Total lease payments | 106,628 |
Less imputed interest | (22,915) |
Total | 83,713 |
Finance Leases | |
2019 (excluding the three months ended March 31, 2019) | 5,827 |
2020 | 5,167 |
2021 | 384 |
2022 | 38 |
2023 | 0 |
Thereafter | 0 |
Total lease payments | 11,416 |
Less imputed interest | (350) |
Total | $ 11,066 |
Operating lease not yet commenced, term of contract (in years) | 5 years |
Related Party Transactions (Det
Related Party Transactions (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Sep. 30, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | ||||
Prepaid expenses and other current assets | $ 15,128,000 | $ 11,449,000 | ||
Additional expenses incurred for other related-party transactions | 400,000 | $ 600,000 | ||
Accrued expenses and other current liabilities | 158,997,000 | 136,715,000 | ||
Blackstone monitoring fee, a related party | 1,000,000 | 4,800,000 | ||
Outstanding borrowings | 3,084,090,000 | 3,045,195,000 | ||
Proceeds from capital contribution | 0 | 0 | ||
Vivint | ||||
Related Party Transaction [Line Items] | ||||
Accrued expenses and other current liabilities | 100,000 | 200,000 | ||
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 | 200,000 | 1,800,000 | ||
Solar | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Sublease and other administrative expenses | 2,400,000 | 1,000,000 | ||
Blackstone Management Partners L.L.C. | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred for services | 1,000,000 | 1,200,000 | ||
Blackstone Management Partners L.L.C. | Blackstone Management Partners LLC Support and Services Agreement | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Maximum advisory fee obligation | 1,500,000 | |||
Expenses related to agreement | 0 | $ 0 | ||
Blackstone Advisory Partners L.P. | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Deferred financing costs | $ 900,000 | |||
Blackstone Advisory Partners L.P. | Term Loan | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Outstanding borrowings | $ 79,300,000 | $ 75,100,000 | ||
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 | |
Mar. 31, 2019 | Mar. 31, 2018 | |
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 | $ 1,900,000 | $ 1,600,000 |
Restructuring and Asset Impai_3
Restructuring and Asset Impairment Charges (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Restructuring Reserve [Roll Forward] | ||
Accrued restructuring, beginning balance | $ 809 | $ 558 |
Restructuring expenses | 4,683 | |
Cash payments | (280) | (4,432) |
Accrued restructuring, ending balance | 529 | 809 |
Contract termination costs | ||
Restructuring Reserve [Roll Forward] | ||
Accrued restructuring, beginning balance | 467 | 558 |
Restructuring expenses | 0 | |
Cash payments | (23) | (91) |
Accrued restructuring, ending balance | 444 | 467 |
Employee severance and termination benefits | ||
Restructuring Reserve [Roll Forward] | ||
Accrued restructuring, beginning balance | 342 | 0 |
Restructuring expenses | 4,683 | |
Cash payments | (257) | (4,341) |
Accrued restructuring, ending balance | $ 85 | $ 342 |
Segment Reporting and Busines_3
Segment Reporting and Business Concentrations (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)regionsegment | Mar. 31, 2018USD ($)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 | $ 276,249 | $ 246,597 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue from external customers | 258,436 | 228,542 |
Canada | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue from external customers | $ 17,813 | $ 18,055 |
Guarantor and Non-Guarantor S_3
Guarantor and Non-Guarantor Supplemental Financial Information - Balance Sheet (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||||
Current assets | $ 168,442 | $ 123,498 | ||
Property, plant and equipment, net | 64,614 | 73,401 | ||
Capitalized contract costs, net | 1,092,865 | 1,115,775 | ||
Subscriber acquisition costs, net | 1,115,775 | |||
Deferred financing costs, net | 1,797 | 2,058 | ||
Investment in subsidiaries | 0 | 0 | ||
Intercompany receivable | 0 | 0 | ||
Intangible assets, net | 235,583 | 255,085 | ||
Goodwill | 835,404 | 834,855 | ||
Operating lease right-of-use assets | 72,891 | 0 | ||
Long-term notes receivables and other assets | 121,796 | 119,819 | ||
Total assets | 2,593,392 | 2,524,491 | ||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||
Current liabilities | 524,709 | 463,536 | ||
Intercompany payable | 0 | 0 | ||
Notes payable and revolving credit facility, net of current portion | 3,075,990 | 3,037,095 | ||
Finance lease liabilities | 3,952 | 5,571 | ||
Deferred revenue, net of current portion | 326,631 | 323,585 | ||
Operating lease liabilities | 71,964 | 0 | ||
Other long-term obligations | 73,390 | 90,209 | ||
Accumulated losses of investee, net | 0 | 0 | ||
Deferred income tax liability | 1,120 | 1,096 | ||
Total stockholders’ deficit | (1,484,364) | (1,396,601) | $ (1,022,235) | $ (653,526) |
Total liabilities and stockholders’ deficit | 2,593,392 | 2,524,491 | ||
Eliminations | ||||
ASSETS | ||||
Current assets | (289,784) | (262,674) | ||
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 | (1,650,064) | (1,662,367) | ||
Intercompany receivable | (6,303) | (6,303) | ||
Intangible assets, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Operating lease right-of-use assets | 0 | |||
Long-term notes receivables and other assets | (106) | (106) | ||
Total assets | (1,946,257) | (1,931,450) | ||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||
Current liabilities | (289,784) | (262,674) | ||
Intercompany payable | (6,303) | (6,303) | ||
Notes payable and revolving credit facility, net of current portion | 0 | 0 | ||
Finance lease liabilities | 0 | 0 | ||
Deferred revenue, net of current portion | 0 | 0 | ||
Operating lease liabilities | 0 | |||
Other long-term obligations | 0 | 0 | ||
Accumulated losses of investee, net | (1,484,364) | (1,396,601) | ||
Deferred income tax liability | (106) | (106) | ||
Total stockholders’ deficit | (165,700) | (265,766) | ||
Total liabilities and stockholders’ deficit | (1,946,257) | (1,931,450) | ||
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 | ||
Operating lease right-of-use assets | 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 | ||
Finance lease liabilities | 0 | 0 | ||
Deferred revenue, net of current portion | 0 | 0 | ||
Operating lease liabilities | 0 | |||
Other long-term obligations | 0 | 0 | ||
Accumulated losses of investee, net | 1,484,364 | 1,396,601 | ||
Deferred income tax liability | 0 | 0 | ||
Total stockholders’ deficit | (1,484,364) | (1,396,601) | ||
Total liabilities and stockholders’ deficit | 0 | 0 | ||
Guarantor Subsidiaries | Reportable Legal Entities | ||||
ASSETS | ||||
Current assets | 335,398 | 269,770 | ||
Property, plant and equipment, net | 64,188 | 72,937 | ||
Capitalized contract costs, net | 1,027,364 | |||
Subscriber acquisition costs, net | 1,047,532 | |||
Deferred financing costs, net | 0 | 0 | ||
Investment in subsidiaries | 0 | 0 | ||
Intercompany receivable | 6,303 | 6,303 | ||
Intangible assets, net | 218,194 | 236,677 | ||
Goodwill | 809,678 | 809,678 | ||
Operating lease right-of-use assets | 72,661 | |||
Long-term notes receivables and other assets | 104,486 | 102,695 | ||
Total assets | 2,638,272 | 2,545,592 | ||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||
Current liabilities | 558,398 | 507,063 | ||
Intercompany payable | 0 | 0 | ||
Notes payable and revolving credit facility, net of current portion | 0 | 0 | ||
Finance lease liabilities | 3,952 | 5,570 | ||
Deferred revenue, net of current portion | 309,896 | 306,653 | ||
Operating lease liabilities | 71,878 | |||
Other long-term obligations | 73,043 | 90,209 | ||
Accumulated losses of investee, net | ||||
Deferred income tax liability | 106 | 106 | ||
Total stockholders’ deficit | 1,620,999 | 1,635,991 | ||
Total liabilities and stockholders’ deficit | 2,638,272 | 2,545,592 | ||
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
ASSETS | ||||
Current assets | 119,909 | 103,451 | ||
Property, plant and equipment, net | 426 | 464 | ||
Capitalized contract costs, net | 65,501 | |||
Subscriber acquisition costs, net | 68,243 | |||
Deferred financing costs, net | 0 | 0 | ||
Investment in subsidiaries | 0 | 0 | ||
Intercompany receivable | 0 | 0 | ||
Intangible assets, net | 17,389 | 18,408 | ||
Goodwill | 25,726 | 25,177 | ||
Operating lease right-of-use assets | 230 | |||
Long-term notes receivables and other assets | 17,310 | 17,124 | ||
Total assets | 246,491 | 232,867 | ||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||
Current liabilities | 192,835 | 182,159 | ||
Intercompany payable | 6,303 | 6,303 | ||
Notes payable and revolving credit facility, net of current portion | 0 | 0 | ||
Finance lease liabilities | 0 | 1 | ||
Deferred revenue, net of current portion | 16,735 | 16,932 | ||
Operating lease liabilities | 86 | |||
Other long-term obligations | 347 | 0 | ||
Accumulated losses of investee, net | ||||
Deferred income tax liability | 1,120 | 1,096 | ||
Total stockholders’ deficit | 29,065 | 26,376 | ||
Total liabilities and stockholders’ deficit | 246,491 | 232,867 | ||
APX Group, Inc. | Reportable Legal Entities | ||||
ASSETS | ||||
Current assets | 2,919 | 12,951 | ||
Property, plant and equipment, net | 0 | 0 | ||
Capitalized contract costs, net | 0 | |||
Subscriber acquisition costs, net | 0 | |||
Deferred financing costs, net | 1,797 | 2,058 | ||
Investment in subsidiaries | 1,650,064 | 1,662,367 | ||
Intercompany receivable | 0 | 0 | ||
Intangible assets, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Operating lease right-of-use assets | 0 | |||
Long-term notes receivables and other assets | 106 | 106 | ||
Total assets | 1,654,886 | 1,677,482 | ||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||
Current liabilities | 63,260 | 36,988 | ||
Intercompany payable | 0 | 0 | ||
Notes payable and revolving credit facility, net of current portion | 3,075,990 | 3,037,095 | ||
Finance lease liabilities | 0 | 0 | ||
Deferred revenue, net of current portion | 0 | 0 | ||
Operating lease liabilities | 0 | |||
Other long-term obligations | 0 | 0 | ||
Accumulated losses of investee, net | ||||
Deferred income tax liability | 0 | 0 | ||
Total stockholders’ deficit | (1,484,364) | (1,396,601) | ||
Total liabilities and stockholders’ deficit | $ 1,654,886 | $ 1,677,482 |
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 | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Income Statements, Captions [Line Items] | ||
Revenues | $ 276,249 | $ 246,597 |
Costs and expenses | 304,227 | 318,228 |
Loss from operations | (27,978) | (71,631) |
Loss from subsidiaries | 0 | 0 |
Other expense (income), net | 61,479 | 13,519 |
Loss before income taxes | (89,457) | (85,150) |
Income tax benefit | (301) | (433) |
Net loss | (89,156) | (84,717) |
Other comprehensive (loss) income, net of tax effects: | ||
Net loss | (89,156) | (84,717) |
Foreign currency translation adjustment | 570 | (659) |
Total other comprehensive income (loss) | 570 | (659) |
Comprehensive loss | (88,586) | (85,376) |
Eliminations | ||
Condensed Income Statements, Captions [Line Items] | ||
Revenues | (202) | (656) |
Costs and expenses | (202) | (656) |
Loss from operations | 0 | 0 |
Loss from subsidiaries | 115,137 | 111,037 |
Other expense (income), net | 0 | 0 |
Loss before income taxes | 115,137 | 111,037 |
Income tax benefit | 0 | 0 |
Net loss | 115,137 | 111,037 |
Other comprehensive (loss) income, net of tax effects: | ||
Net loss | 115,137 | 111,037 |
Foreign currency translation adjustment | (1,140) | 1,318 |
Total other comprehensive income (loss) | (1,140) | 1,318 |
Comprehensive loss | 113,997 | 112,355 |
Parent | Reportable Legal Entities | ||
Condensed Income Statements, Captions [Line Items] | ||
Revenues | 0 | 0 |
Costs and expenses | 0 | 0 |
Loss from operations | 0 | 0 |
Loss from subsidiaries | (89,156) | (84,717) |
Other expense (income), net | 0 | 0 |
Loss before income taxes | (89,156) | (84,717) |
Income tax benefit | 0 | 0 |
Net loss | (89,156) | (84,717) |
Other comprehensive (loss) income, net of tax effects: | ||
Net loss | (89,156) | (84,717) |
Foreign currency translation adjustment | 570 | (659) |
Total other comprehensive income (loss) | 570 | (659) |
Comprehensive loss | (88,586) | (85,376) |
Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Income Statements, Captions [Line Items] | ||
Revenues | 263,539 | 233,788 |
Costs and expenses | 291,509 | 305,221 |
Loss from operations | (27,970) | (71,433) |
Loss from subsidiaries | 0 | 0 |
Other expense (income), net | (52) | (46,970) |
Loss before income taxes | (27,918) | (24,463) |
Income tax benefit | 182 | 172 |
Net loss | (28,100) | (24,635) |
Other comprehensive (loss) income, net of tax effects: | ||
Net loss | (28,100) | (24,635) |
Foreign currency translation adjustment | 0 | 0 |
Total other comprehensive income (loss) | 0 | 0 |
Comprehensive loss | (28,100) | (24,635) |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Income Statements, Captions [Line Items] | ||
Revenues | 12,912 | 13,465 |
Costs and expenses | 12,920 | 13,663 |
Loss from operations | (8) | (198) |
Loss from subsidiaries | 0 | 0 |
Other expense (income), net | (1,644) | 2,092 |
Loss before income taxes | 1,636 | (2,290) |
Income tax benefit | (483) | (605) |
Net loss | 2,119 | (1,685) |
Other comprehensive (loss) income, net of tax effects: | ||
Net loss | 2,119 | (1,685) |
Foreign currency translation adjustment | 570 | (659) |
Total other comprehensive income (loss) | 570 | (659) |
Comprehensive loss | 2,689 | (2,344) |
APX Group, Inc. | Reportable Legal Entities | ||
Condensed Income Statements, Captions [Line Items] | ||
Revenues | 0 | 0 |
Costs and expenses | 0 | 0 |
Loss from operations | 0 | 0 |
Loss from subsidiaries | (25,981) | (26,320) |
Other expense (income), net | 63,175 | 58,397 |
Loss before income taxes | (89,156) | (84,717) |
Income tax benefit | 0 | 0 |
Net loss | (89,156) | (84,717) |
Other comprehensive (loss) income, net of tax effects: | ||
Net loss | (89,156) | (84,717) |
Foreign currency translation adjustment | 570 | (659) |
Total other comprehensive income (loss) | 570 | (659) |
Comprehensive loss | $ (88,586) | $ (85,376) |
Guarantor and Non-Guarantor S_5
Guarantor and Non-Guarantor Supplemental Financial Information - Cash Flows (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net cash (used in) provided by operating activities | $ (43,017) | $ (59,582) |
Cash flows from investing activities: | ||
Capital expenditures | (1,391) | (6,407) |
Proceeds from sale of capital assets | (51) | 149 |
Investment in subsidiary | 0 | |
Acquisition of intangible assets | (369) | (849) |
Investment in subsidiary | 0 | |
Proceeds from the sale of intangible assets | 0 | 53,693 |
Net cash (used in) provided by investing activities | (1,811) | 46,586 |
Cash flows from financing activities: | ||
Repayment of notes payable | (2,025) | 0 |
Borrowings from revolving credit facility | 40,000 | 57,000 |
Repayments on revolving credit facility | 0 | (40,000) |
Proceeds from capital contribution | 0 | 0 |
Repayments of capital lease obligations | (3,418) | |
Repayments of finance lease obligations | (2,136) | |
Return of capital | (118) | (966) |
Net cash provided by financing activities | 35,721 | 12,616 |
Effect of exchange rate changes on cash | 25 | (19) |
Net decrease in cash and cash equivalents | (9,082) | (399) |
Cash and cash equivalents: | ||
Beginning of period | 12,773 | 3,872 |
End of period | 3,691 | 3,473 |
Eliminations | ||
Cash flows from operating activities: | ||
Net cash (used in) provided by operating activities | 0 | 0 |
Cash flows from investing activities: | ||
Capital expenditures | 0 | 0 |
Proceeds from sale of capital assets | 0 | 0 |
Investment in subsidiary | 46,605 | |
Acquisition of intangible assets | 0 | 0 |
Investment in subsidiary | 15,484 | |
Proceeds from the sale of intangible assets | 0 | |
Net cash (used in) provided by investing activities | 46,605 | 15,484 |
Cash flows from financing activities: | ||
Repayment of notes payable | 0 | |
Borrowings from revolving credit facility | 0 | 0 |
Repayments on revolving credit facility | 0 | |
Proceeds from capital contribution | (46,369) | (17,416) |
Repayments of capital lease obligations | 0 | |
Repayments of finance lease obligations | 0 | |
Return of capital | (236) | 1,932 |
Net cash provided by financing activities | (46,605) | (15,484) |
Effect of exchange rate changes on cash | 0 | 0 |
Net 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 (used in) provided by operating activities | 0 | 0 |
Cash flows from investing activities: | ||
Capital expenditures | 0 | 0 |
Proceeds from sale of capital assets | 0 | 0 |
Investment in subsidiary | (118) | |
Acquisition of intangible assets | 0 | 0 |
Investment in subsidiary | 966 | |
Proceeds from the sale of intangible assets | 0 | |
Net cash (used in) provided by investing activities | (118) | 966 |
Cash flows from financing activities: | ||
Repayment of notes payable | 0 | |
Borrowings from revolving credit facility | 0 | 0 |
Repayments on revolving credit facility | 0 | |
Proceeds from capital contribution | 0 | 0 |
Repayments of capital lease obligations | 0 | |
Repayments of finance lease obligations | 0 | |
Return of capital | 118 | (966) |
Net cash provided by financing activities | 118 | (966) |
Effect of exchange rate changes on cash | 0 | 0 |
Net decrease in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents: | ||
Beginning of period | 0 | 0 |
End of period | 0 | 0 |
Guarantor Subsidiaries | Reportable Legal Entities | ||
Cash flows from operating activities: | ||
Net cash (used in) provided by operating activities | (43,058) | (59,159) |
Cash flows from investing activities: | ||
Capital expenditures | (1,391) | (6,407) |
Proceeds from sale of capital assets | (51) | 149 |
Investment in subsidiary | 0 | |
Acquisition of intangible assets | (369) | (849) |
Investment in subsidiary | 0 | |
Proceeds from the sale of intangible assets | 53,693 | |
Net cash (used in) provided by investing activities | (1,811) | 46,586 |
Cash flows from financing activities: | ||
Repayment of notes payable | 0 | |
Borrowings from revolving credit facility | 0 | 0 |
Repayments on revolving credit facility | 0 | |
Proceeds from capital contribution | 46,369 | 17,416 |
Repayments of capital lease obligations | (3,305) | |
Repayments of finance lease obligations | (2,064) | |
Return of capital | (118) | (966) |
Net cash provided by financing activities | 44,187 | 13,145 |
Effect of exchange rate changes on cash | 0 | 0 |
Net decrease in cash and cash equivalents | (682) | 572 |
Cash and cash equivalents: | ||
Beginning of period | 682 | (572) |
End of period | 0 | 0 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Cash flows from operating activities: | ||
Net cash (used in) provided by operating activities | 41 | (423) |
Cash flows from investing activities: | ||
Capital expenditures | 0 | 0 |
Proceeds from sale of capital assets | 0 | 0 |
Investment in subsidiary | 0 | |
Acquisition of intangible assets | 0 | 0 |
Investment in subsidiary | 0 | |
Proceeds from the sale of intangible assets | 0 | |
Net cash (used in) provided by investing activities | 0 | 0 |
Cash flows from financing activities: | ||
Repayment of notes payable | 0 | |
Borrowings from revolving credit facility | 0 | 0 |
Repayments on revolving credit facility | 0 | |
Proceeds from capital contribution | 0 | 0 |
Repayments of capital lease obligations | (113) | |
Repayments of finance lease obligations | (72) | |
Return of capital | 0 | 0 |
Net cash provided by financing activities | (72) | (113) |
Effect of exchange rate changes on cash | 25 | (19) |
Net decrease in cash and cash equivalents | (6) | (555) |
Cash and cash equivalents: | ||
Beginning of period | 961 | 783 |
End of period | 955 | 228 |
APX Group, Inc. | Reportable Legal Entities | ||
Cash flows from operating activities: | ||
Net cash (used in) provided by operating activities | 0 | 0 |
Cash flows from investing activities: | ||
Capital expenditures | 0 | 0 |
Proceeds from sale of capital assets | 0 | 0 |
Investment in subsidiary | (46,487) | |
Acquisition of intangible assets | 0 | 0 |
Investment in subsidiary | (16,450) | |
Proceeds from the sale of intangible assets | 0 | |
Net cash (used in) provided by investing activities | (46,487) | (16,450) |
Cash flows from financing activities: | ||
Repayment of notes payable | (2,025) | |
Borrowings from revolving credit facility | 40,000 | 57,000 |
Repayments on revolving credit facility | (40,000) | |
Proceeds from capital contribution | 0 | 0 |
Repayments of capital lease obligations | 0 | |
Repayments of finance lease obligations | 0 | |
Return of capital | 118 | (966) |
Net cash provided by financing activities | 38,093 | 16,034 |
Effect of exchange rate changes on cash | 0 | 0 |
Net decrease in cash and cash equivalents | (8,394) | (416) |
Cash and cash equivalents: | ||
Beginning of period | 11,130 | 3,661 |
End of period | $ 2,736 | $ 3,245 |
Subsequent Events (Details)
Subsequent Events (Details) - Senior Notes - USD ($) | Apr. 26, 2019 | Mar. 31, 2019 |
Senior Notes Due 2024 | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Face amount | $ 225,000,000 | |
Debt instrument interest rate, percentage | 8.75% | |
2020 Notes | ||
Subsequent Event [Line Items] | ||
Face amount | $ 679,299,000 | |
Debt instrument interest rate, percentage | 8.75% | |
2020 Notes | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Repayments of long-term debt | $ 225,000,000 |
Uncategorized Items - ck0001584
Label | Element | Value |
Accounting Standards Update 2016-01 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (680,000) |
Accounting Standards Update 2016-01 [Member] | AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 680,000 |
Accounting Standards Update 2016-02 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 84,000 |
Accounting Standards Update 2016-02 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 84,000 |
Accounting Standards Update 2014-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (282,572,000) |
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (282,572,000) |