Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2024 | Oct. 17, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-38352 | |
Entity Registrant Name | ADT Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-4116383 | |
Entity Address, Address Line One | 1501 Yamato Road | |
Entity Address, City or Town | Boca Raton | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33431 | |
City Area Code | 561 | |
Local Phone Number | 988-3600 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | ADT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001703056 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 852,268,869 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 54,744,525 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 95,338 | $ 14,621 |
Restricted cash and restricted cash equivalents | 109,411 | 115,329 |
Accounts receivable, net of allowance for credit losses of $63,995 and $46,850, respectively | 396,913 | 370,201 |
Inventories, net | 203,007 | 201,394 |
Prepaid expenses and other current assets | 194,902 | 242,192 |
Current assets of discontinued operations | 3,322 | 60,957 |
Total current assets | 1,002,893 | 1,004,694 |
Property and equipment, net | 259,554 | 253,658 |
Subscriber system assets, net | 3,003,196 | 3,005,936 |
Intangible assets, net | 4,898,878 | 4,877,493 |
Goodwill | 4,903,899 | 4,903,899 |
Deferred subscriber acquisition costs, net | 1,288,840 | 1,175,904 |
Other assets | 726,732 | 699,231 |
Noncurrent assets of discontinued operations | 569 | 43,279 |
Total assets | 16,084,561 | 15,964,094 |
Current liabilities: | ||
Current maturities of long-term debt | 196,563 | 312,061 |
Accounts payable | 226,614 | 277,201 |
Deferred revenue | 249,920 | 255,221 |
Accrued expenses and other current liabilities | 533,959 | 556,114 |
Current liabilities of discontinued operations | 38,301 | 79,611 |
Total current liabilities | 1,245,357 | 1,480,208 |
Long-term debt | 7,524,523 | 7,513,456 |
Deferred subscriber acquisition revenue | 2,058,273 | 1,914,954 |
Deferred tax liabilities | 1,116,665 | 1,027,189 |
Other liabilities | 230,231 | 219,069 |
Noncurrent liabilities of discontinued operations | 12,227 | 20,572 |
Total liabilities | 12,187,276 | 12,175,448 |
Commitments and contingencies (See Note 11) | ||
Stockholders' equity: | ||
Preferred stock—authorized 1,000,000 shares of $0.01 par value; zero issued and outstanding as of September 30, 2024 and December 31, 2023 | 0 | 0 |
Additional paid-in capital | 7,358,241 | 7,413,305 |
Accumulated deficit | (3,458,579) | (3,617,718) |
Accumulated other comprehensive income (loss) | (11,497) | (16,162) |
Total stockholders' equity | 3,897,285 | 3,788,646 |
Total liabilities and stockholders' equity | 16,084,561 | 15,964,094 |
Common Stock | ||
Stockholders' equity: | ||
Common stock | 8,573 | 8,674 |
Class B Common Stock | ||
Stockholders' equity: | ||
Common stock | $ 547 | $ 547 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2024 | Dec. 31, 2023 |
Accounts receivable, allowance for credit loss | $ 63,995 | $ 46,850 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common Stock | ||
Common stock, shares authorized (in shares) | 3,999,000,000 | 3,999,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 857,250,221 | 867,432,337 |
Common stock, shares outstanding (in shares) | 857,250,221 | 867,432,337 |
Class B Common Stock | ||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 54,744,525 | 54,744,525 |
Common stock, shares outstanding (in shares) | 54,744,525 | 54,744,525 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | |
Total revenue | $ 1,243,836 | $ 1,179,873 | $ 3,638,067 | $ 3,480,426 |
Total cost of revenue | 222,106 | 187,396 | 612,645 | 566,730 |
Selling, general, and administrative expenses | 358,520 | 346,444 | 1,105,523 | 1,000,861 |
Depreciation and intangible asset amortization | 335,270 | 329,653 | 1,002,131 | 1,008,773 |
Merger, restructuring, integration, and other | 1,590 | 9,817 | 15,094 | 32,441 |
Operating income (loss) | 326,350 | 306,563 | 902,674 | 871,621 |
Interest expense, net | (161,830) | (146,850) | (358,980) | (401,261) |
Other income (expense) | 17,735 | 661 | 44,907 | (10) |
Income (loss) from continuing operations before income taxes and equity in net earnings (losses) of equity method investee | 182,255 | 160,374 | 588,601 | 470,350 |
Income tax benefit (expense) | (50,235) | (34,427) | (166,505) | (119,987) |
Income (loss) from continuing operations before equity in net earnings (losses) of equity method investee | 132,020 | 125,947 | 422,096 | 350,363 |
Equity in net earnings (losses) of equity method investee | 0 | (2,688) | 0 | (7,103) |
Income (loss) from continuing operations | 132,020 | 123,259 | 422,096 | 343,260 |
Income (loss) from discontinued operations, net of tax | (4,869) | (209,496) | (111,000) | (456,123) |
Net income (loss) | $ 127,151 | $ (86,237) | $ 311,096 | $ (112,863) |
Common Stock | ||||
Income (loss) from continuing operations per share - basic (in dollars per share) | $ 0.15 | $ 0.13 | $ 0.46 | $ 0.38 |
Income (loss) from continuing operations per share - diluted (in dollars per share) | 0.14 | 0.13 | 0.44 | 0.36 |
Net income (loss) per share - basic (in dollars per share) | 0.14 | (0.09) | 0.34 | (0.12) |
Net income (loss) per share - diluted (in dollars per share) | $ 0.13 | $ (0.09) | $ 0.32 | $ (0.12) |
Weighted-average shares outstanding - basic (in shares) | 850,462 | 857,423 | 851,539 | 856,446 |
Weighted-average shares outstanding - diluted (in shares) | 912,861 | 917,774 | 913,296 | 918,701 |
Class B Common Stock | ||||
Income (loss) from continuing operations per share - basic (in dollars per share) | $ 0.15 | $ 0.13 | $ 0.46 | $ 0.38 |
Income (loss) from continuing operations per share - diluted (in dollars per share) | 0.14 | 0.13 | 0.44 | 0.36 |
Net income (loss) per share - basic (in dollars per share) | 0.14 | (0.09) | 0.34 | (0.12) |
Net income (loss) per share - diluted (in dollars per share) | $ 0.13 | $ (0.09) | $ 0.32 | $ (0.12) |
Weighted-average shares outstanding - basic (in shares) | 54,745 | 54,745 | 54,745 | 54,745 |
Weighted-average shares outstanding - diluted (in shares) | 54,745 | 54,745 | 54,745 | 54,745 |
Monitoring and related services | ||||
Total revenue | $ 1,077,550 | $ 1,053,456 | $ 3,208,267 | $ 3,125,344 |
Total cost of revenue | 154,744 | 148,533 | 460,649 | 452,809 |
Security installation, product, and other | ||||
Total revenue | 166,286 | 126,417 | 429,800 | 355,082 |
Total cost of revenue | $ 67,362 | $ 38,863 | $ 151,996 | $ 113,921 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 127,151 | $ (86,237) | $ 311,096 | $ (112,863) |
Other comprehensive income (loss), net of tax: | ||||
Cash flow hedges | 1,472 | 22,763 | 4,593 | 30,484 |
Other | (42) | (17) | 72 | (43) |
Total other comprehensive income (loss), net of tax | 1,430 | 22,746 | 4,665 | 30,441 |
Comprehensive income (loss) | $ 128,581 | $ (63,491) | $ 315,761 | $ (82,422) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common Stock | Class B Common Stock | Common Stock Common Stock | Common Stock Class B Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Beginning balance (in shares) at Dec. 31, 2022 | 862,098,000 | 54,745,000 | ||||||
Beginning balance at Dec. 31, 2022 | $ 3,393,148 | $ 8,621 | $ 547 | $ 7,380,759 | $ (3,949,579) | $ (47,200) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | (112,863) | (112,863) | ||||||
Other comprehensive income (loss), net of tax | 30,441 | 30,441 | ||||||
Dividends | (96,751) | (96,751) | ||||||
Share-based compensation expense | 43,068 | 43,068 | ||||||
Transactions related to employee share-based compensation plans and other (in shares) | 4,696,000 | |||||||
Transactions related to employee share-based compensation plans and other | (18,378) | $ 47 | (16,663) | (1,762) | ||||
Ending balance (in shares) at Sep. 30, 2023 | 866,794,000 | 54,745,000 | ||||||
Ending balance at Sep. 30, 2023 | 3,238,665 | $ 8,668 | $ 547 | 7,407,164 | (4,160,955) | (16,759) | ||
Beginning balance (in shares) at Jun. 30, 2023 | 866,409,000 | 54,745,000 | ||||||
Beginning balance at Jun. 30, 2023 | 3,318,012 | $ 8,664 | $ 547 | 7,390,269 | (4,041,963) | (39,505) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | (86,237) | (86,237) | ||||||
Other comprehensive income (loss), net of tax | 22,746 | 22,746 | ||||||
Dividends | (32,321) | (32,321) | ||||||
Share-based compensation expense | 15,580 | 15,580 | ||||||
Transactions related to employee share-based compensation plans and other (in shares) | 385,000 | |||||||
Transactions related to employee share-based compensation plans and other | 885 | $ 4 | 1,315 | (434) | ||||
Ending balance (in shares) at Sep. 30, 2023 | 866,794,000 | 54,745,000 | ||||||
Ending balance at Sep. 30, 2023 | 3,238,665 | $ 8,668 | $ 547 | 7,407,164 | (4,160,955) | (16,759) | ||
Beginning balance (in shares) at Dec. 31, 2023 | 867,432,337 | 54,744,525 | 867,432,000 | 54,745,000 | ||||
Beginning balance at Dec. 31, 2023 | 3,788,646 | $ 8,674 | $ 547 | 7,413,305 | (3,617,718) | (16,162) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 311,096 | 311,096 | ||||||
Other comprehensive income (loss), net of tax | 4,665 | 4,665 | ||||||
Dividends | (150,375) | (150,375) | ||||||
Share-based compensation expense | 39,329 | 39,329 | ||||||
Repurchases of common stock (including excise tax) (in shares) | (15,000,000) | |||||||
Repurchases of common stock (including excise tax) | (94,119) | $ (150) | (93,969) | |||||
Transactions related to employee share-based compensation plans and other (in shares) | 4,818,000 | |||||||
Transactions related to employee share-based compensation plans and other | (1,957) | $ 49 | (424) | (1,582) | ||||
Ending balance (in shares) at Sep. 30, 2024 | 857,250,221 | 54,744,525 | 857,250,000 | 54,745,000 | ||||
Ending balance at Sep. 30, 2024 | 3,897,285 | $ 8,573 | $ 547 | 7,358,241 | (3,458,579) | (11,497) | ||
Beginning balance (in shares) at Jun. 30, 2024 | 857,053,000 | 54,745,000 | ||||||
Beginning balance at Jun. 30, 2024 | 3,808,210 | $ 8,571 | $ 547 | 7,347,061 | (3,535,042) | (12,927) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 127,151 | 127,151 | ||||||
Other comprehensive income (loss), net of tax | 1,430 | 1,430 | ||||||
Dividends | (50,157) | (50,157) | ||||||
Share-based compensation expense | 9,942 | 9,942 | ||||||
Transactions related to employee share-based compensation plans and other (in shares) | 197,000 | |||||||
Transactions related to employee share-based compensation plans and other | 709 | $ 2 | 1,238 | (531) | ||||
Ending balance (in shares) at Sep. 30, 2024 | 857,250,221 | 54,744,525 | 857,250,000 | 54,745,000 | ||||
Ending balance at Sep. 30, 2024 | $ 3,897,285 | $ 8,573 | $ 547 | $ 7,358,241 | $ (3,458,579) | $ (11,497) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2024 | Sep. 30, 2023 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 311,096 | $ (112,863) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and intangible asset amortization | 1,004,003 | 1,058,794 |
Amortization of deferred subscriber acquisition costs | 165,454 | 145,688 |
Amortization of deferred subscriber acquisition revenue | (257,538) | (227,651) |
Share-based compensation expense | 39,329 | 43,068 |
Deferred income taxes | 87,652 | 6,804 |
Provision for losses on receivables and inventory | 146,204 | 104,469 |
Goodwill, intangible, and other asset impairments | 21,296 | 521,663 |
Unrealized (gain) loss on interest rate swap contracts | 61,128 | (38,477) |
Other non-cash items, net | 53,934 | 102,843 |
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: | ||
Deferred subscriber acquisition costs | (271,029) | (295,440) |
Deferred subscriber acquisition revenue | 196,355 | 221,747 |
Other, net | (132,661) | (284,951) |
Net cash provided by (used in) operating activities | 1,425,223 | 1,245,694 |
Cash flows from investing activities: | ||
Dealer generated customer accounts and bulk account purchases | (473,560) | (385,462) |
Subscriber system asset expenditures | (406,521) | (480,947) |
Purchases of property and equipment | (130,114) | (130,520) |
Proceeds (payments) from sale of business, net of cash sold | (21,000) | 0 |
Proceeds (payments) from interest rate swaps | (6,675) | 0 |
Other investing, net | 3,506 | 8,848 |
Net cash provided by (used in) investing activities | (1,034,364) | (988,081) |
Cash flows from financing activities: | ||
Proceeds from long-term borrowings | 970,521 | 650,000 |
Proceeds from receivables facility | 189,861 | 212,188 |
Proceeds (payments) from interest rate swaps | 72,249 | 59,184 |
Repurchases of common stock | (93,356) | 0 |
Repayment of long-term borrowings, including call premiums | (1,087,658) | (888,716) |
Repayment of receivables facility | (202,747) | (144,620) |
Dividends on common stock | (132,214) | (96,400) |
Payments on finance leases | (23,069) | (32,268) |
Other financing, net | (9,647) | (34,497) |
Net cash provided by (used in) financing activities | (316,060) | (275,129) |
Cash and cash equivalents and restricted cash and restricted cash equivalents: | ||
Net increase (decrease) | 74,799 | (17,516) |
Beginning balance | 129,950 | 373,580 |
Ending balance | $ 204,749 | $ 356,064 |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2024 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business and Organization ADT Inc., together with its wholly-owned subsidiaries (collectively, “ADT” or the “Company”), provides security, interactive, and smart home solutions to consumer and small business customers in the United States (“U.S.”). Prior to March 11, 2024, the Company was majority-owned by Prime Security Services TopCo (ML), L.P., which is majority-owned by Prime Security Services TopCo Parent, L.P. (“Ultimate Parent”). Ultimate Parent is majority-owned by Apollo Investment Fund VIII, L.P. and its related funds that are directly or indirectly managed by affiliates of Apollo Global Management, Inc. (together with its subsidiaries and affiliates, “Apollo” or the “Sponsor”). Following a registered secondary offering of the Company’s common stock (“Common Stock”) by certain Apollo affiliates (and the Company’s concurrent repurchase from the underwriters of 15 million shares of Common Stock that were the subject of the offering), including the exercise of the underwriters’ overallotment option which closed on March 19, 2024, Apollo beneficially owns less than 50% of the Company’s outstanding common stock, which includes Common Stock and Class B common stock (“Class B Common Stock”) combined, and less than 50% of the Company’s outstanding Common Stock, and the Company ceased to be a “controlled company” under the New York Stock Exchange (the “NYSE”) rules. Basis of Presentation The condensed consolidated financial statements included herein: • have been prepared in U.S. dollars in accordance with generally accepted accounting principles in the United States of America (“GAAP”); • are comprised of the consolidated results of ADT Inc. and its wholly-owned subsidiaries for which all intercompany transactions have been eliminated; • are unaudited, but in the opinion of management, include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company’s financial position, results of operations, and cash flows for the interim periods presented; and • should not be taken as indicative of results that may be expected for future interim periods or the full year. The Condensed Consolidated Balance Sheet as of December 31, 2023 included herein was derived from the audited consolidated financial statements as of that date. Certain information and footnote disclosures required in the annual consolidated financial statements have been omitted as appropriate. For a more comprehensive understanding of the Company and its interim results, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report”). In addition, the results of companies acquired, if applicable, are included from the effective dates of acquisition. Prior to the sale of its shares in SNTNL LLC (“Canopy”) during the fourth quarter of 2023, the Company used the equity method of accounting to account for its investment in Canopy as it had the ability to exercise significant influence but did not control. Certain prior period amounts have been reclassified to conform with the current period presentation. Discontinued Operations In January 2024, the Company’s board of directors (the “Board of Directors” or the “Board”) approved a plan to fully exit the residential solar business (the “Solar Business”) (the “ADT Solar Exit”). The ADT Solar Exit represents a strategic shift that had a major effect on the Company’s financial results. As of June 30, 2024, substantially all operations of the Solar Business had ceased, and beginning in the second quarter of 2024, the results of operations and financial position of the Solar Business are classified as discontinued operations in the Company’s Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets, respectively, for all periods presented. In addition, in August 2023, ADT entered into an agreement to divest its commercial business (the “Commercial Business”), which was completed in October 2023 (the “Commercial Divestiture”). As a result, the Commercial Business is presented as a discontinued operation in the Company’s Condensed Consolidated Statements of Operations for all periods presented. The cash flows and comprehensive income (loss) of discontinued operations have not been segregated and are included in the Condensed Consolidated Statements of Cash Flows and Condensed Consolidated Statements of Comprehensive Income (Loss), respectively, for all periods presented. Refer to Note 3 “Divestitures” for additional information on discontinued operations. Unless otherwise noted, amounts and disclosures throughout these Notes to Condensed Consolidated Financial Statements relate to the Company’s continuing operations. Use of Estimates The preparation of these condensed consolidated financial statements in accordance with GAAP requires the Company to select accounting policies and make estimates that affect amounts reported in the condensed consolidated financial statements and the accompanying notes. The Company’s estimates are based on the relevant information available at the end of each period. Actual results could differ materially from these estimates under different assumptions or market conditions. Segment Update Beginning in the second quarter of 2024, and as a result of the ADT Solar Exit, the Company currently reports its results in a single operating and reportable segment, which reflects the business operations of the Company’s former Consumer and Small Business (“CSB”) segment, based on the manner in which the Company’s Chief Executive Officer, who is the chief operating decision maker (the “CODM”), evaluates performance and makes decisions about how to allocate resources. Prior to the third quarter of 2023, the Commercial Business was reflected in the Commercial reportable segment, and prior to the second quarter of 2024, the Solar Business was reflected in the Solar reportable segment. Accounting Pronouncements Recently Adopted Accounting Pronouncements Supplier Finance Program Obligations - Accounting Standards Update (“ASU”) 2022-04, Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, requires that a reporting entity who is a buyer in a supplier finance program disclose qualitative and quantitative information about its supplier finance programs, including a roll-forward of the obligations. The Company adopted the roll-forward requirement effective January 1, 2024. The Company does not currently have any material supplier finance programs, and the guidance will be applied prospectively to any future arrangements. Fair Value of Equity Investments - ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, states that an entity should not consider the impact of contractual sale restrictions when measuring an equity security’s fair value and introduces new disclosure requirements related to such equity securities. The Company adopted this guidance effective January 1, 2024. This guidance did not impact the Company. Recently Issued Accounting Pronouncements Disclosure Improvements - ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative , represents changes to clarify or improve disclosure and presentation requirements of a variety of topics. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company is monitoring the potential impact of this guidance on its financial statements and disclosures. Segment Reporting - ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , improves reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. In addition, the guidance, among other requirements, enhances interim disclosures, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, and provides new segment disclosure requirements for entities with a single reportable segment. The amendments in this guidance are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. This guidance should be applied retrospectively to all periods presented. The Company is currently evaluating the impact of this guidance on its disclosures. Income Taxes - ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , focuses on improvements to income tax disclosures, primarily related to the rate reconciliation and income tax paid information. In addition, the update includes certain other amendments to improve the effectiveness of income tax disclosures. The guidance is effective for annual periods beginning after December 15, 2024, and should be applied prospectively, with retrospective application also a permitted option. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its disclosures. Significant Accounting Policies Unless otherwise noted, the Company’s accounting policies, including those discussed herein, do not materially differ from those disclosed in the 2023 Annual Report. Cash and Cash Equivalents and Restricted Cash and Restricted Cash Equivalents The following table reconciles the amounts below reported in the Condensed Consolidated Balance Sheets to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows: (in thousands) September 30, 2024 December 31, 2023 Cash and cash equivalents $ 95,338 $ 14,621 Restricted cash and restricted cash equivalents (1) 109,411 115,329 Ending balance $ 204,749 $ 129,950 ________________ (1) Primarily includes funds received from State Farm Fire & Casualty Company (“State Farm”), net of payments and inclusive of interest earned, in connection with the State Farm Development Agreement (as defined and discussed in Note 13 “Related Party Transactions”). The remaining amount of restricted cash relates to the Company’s uncommitted receivables securitization financing agreement (the “ 2020 Receivables Facility”). Refer to Note 5 “Debt.” Inventories, net Inventories, net includes finished goods and work-in-progress. Work-in-progress is not material. Subscriber System Assets, net and Deferred Subscriber Acquisition Costs, net Subscriber system assets represent capitalized equipment and installation costs incurred in connection with transactions in which the Company retains ownership of the security system, and which the Company may retrieve upon termination of the contract with the customer. Deferred subscriber acquisition costs represent selling expenses (primarily commissions) that are incremental to acquiring customers. Subscriber system assets and any related deferred subscriber acquisition costs are accounted for on a pooled basis based on the month and year of customer acquisition. The Company depreciates and amortizes these pooled costs using an accelerated method over the estimated life of the customer relationship, which is 15 years. (in thousands) September 30, 2024 December 31, 2023 Gross carrying amount $ 6,777,008 $ 6,404,479 Accumulated depreciation (3,773,812) (3,398,543) Subscriber system assets, net $ 3,003,196 $ 3,005,936 Depreciation of subscriber system assets and amortization of deferred subscriber acquisition costs are reflected in depreciation and intangible asset amortization and selling, general, and administrative expenses (“SG&A”), respectively, as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2024 2023 2024 2023 Depreciation of subscriber system assets $ 139,704 $ 135,414 $ 417,313 $ 407,739 Amortization of deferred subscriber acquisition costs $ 56,119 $ 47,945 $ 165,454 $ 138,145 Accrued Expenses and Other Current Liabilities (in thousands) September 30, 2024 December 31, 2023 Accrued interest $ 57,648 $ 111,197 Payroll-related accruals 110,521 110,941 Opportunity Fund (see Note 13 “Related Party Transactions”) 87,168 93,950 Accrued dividends 50,051 32,207 Other accrued liabilities 228,571 207,819 Accrued expenses and other current liabilities $ 533,959 $ 556,114 Fair Value of Financial Instruments The Company’s financial instruments primarily consist of cash and cash equivalents, restricted cash and restricted cash equivalents, accounts receivable, retail installment contract receivables, accounts payable, debt, and derivative financial instruments. Due to their short-term and/or liquid nature, the fair values of cash, restricted cash, accounts receivable, and accounts payable approximate their respective carrying amounts. Cash Equivalents - Included in cash and cash equivalents and restricted cash and restricted cash equivalents, as applicable from time to time, are investments in money market mutual funds. These investments are generally classified as Level 1 fair value measurements, which represent unadjusted quoted prices in active markets for identical assets or liabilities. As of September 30, 2024 and December 31, 2023, investments in money market mutual funds were $98 million and $55 million, respectively. Long-Term Debt Instruments - The fair values of the Company’s long-term debt instruments are determined using broker-quoted market prices, which represent quoted prices for similar assets or liabilities as well as other observable market data, and are classified as Level 2 fair value measurements. The carrying amounts of debt outstanding, if any, under the Company’s first lien revolving credit facility (the “First Lien Revolving Credit Facility”) and the 2020 Receivables Facility approximate their fair values as interest rates on these borrowings approximate current market rates. September 30, 2024 December 31, 2023 (in thousands) Carrying Fair Carrying Fair Long-term debt instruments subject to fair value disclosures (1) $ 7,647,462 $ 7,701,348 $ 7,756,049 $ 7,731,408 ________________ (1) Excludes finance leases and certain vehicle loans reported as discontinued operations. Derivative Financial Instruments - Derivative financial instruments are reported at fair value as either assets or liabilities that are primarily calculated using discounted cash flow models utilizing observable inputs, such as quoted forward interest rates, and incorporate credit risk adjustments to reflect the risk of default by the counterparty or the Company. The resulting fair values are classified as Level 2 fair value measurements. Refer to Note 6 “Derivative Financial Instruments” for the fair values of the Company’s derivative financial instruments. Retail Installment Contract Receivables - The fair values of the Company’s retail installment contract receivables are determined using a discounted cash flow model and are classified as Level 3 fair value measurements. September 30, 2024 December 31, 2023 (in thousands) Carrying Fair Carrying Fair Retail installment contract receivables, net $ 676,922 $ 500,920 $ 673,635 $ 487,685 |
REVENUE AND RECEIVABLES
REVENUE AND RECEIVABLES | 9 Months Ended |
Sep. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE AND RECEIVABLES | REVENUE AND RECEIVABLES Revenue The Company allocates the transaction price to each performance obligation based on the relative standalone selling price, which is determined using observable internal and external pricing, profitability, and operational metrics. In addition to the details provided below, the Company’s disaggregated revenue includes monitoring and related services and security installation, product, and other revenue, which are presented on the face of the Condensed Consolidated Statements of Operations. Company-Owned - In transactions in which the Company provides monitoring and related services but retains ownership of the security system (referred to as Company-owned transactions), the Company’s performance obligations primarily include (i) monitoring and related services, which are recognized when these services are provided to the customer, and (ii) a material right associated with the one-time non-refundable fees in connection with the initiation of a monitoring contract which the customer will not be required to pay again upon a renewal of the contract (referred to as deferred subscriber acquisition revenue). Deferred subscriber acquisition revenue is amortized on a pooled basis over the estimated life of the customer relationship using an accelerated method consistent with the treatment of subscriber system assets and deferred subscriber acquisition costs and is reflected in security installation, product, and other revenue. Three Months Ended September 30, Nine Months Ended September 30, ( in thousands ) 2024 2023 2024 2023 Amortization of deferred subscriber acquisition revenue $ 87,980 $ 77,471 $ 257,538 $ 220,779 Customer-Owned - In transactions involving security systems sold outright to the customer (referred to as outright sales), the Company’s performance obligations generally include the sale and installation of the system, which is primarily recognized at a point in time based upon the nature of the transaction and contractual terms, and any monitoring and related services, which are recognized when these services are provided to the customer. Allowance for Credit Losses The Company evaluates its allowance for credit losses on accounts receivable in pools based on customer type. For each customer pool, the allowance for credit losses is estimated based on the delinquency status of the underlying receivables and the related historical loss experience, as adjusted for current and expected future conditions, if applicable. The allowance for credit losses is not material for the individual pools of customers. Nine Months Ended September 30, (in thousands) 2024 2023 Beginning balance $ 46,850 $ 27,815 Provision for credit losses 106,697 81,368 Write-offs, net of recoveries (1) (89,552) (70,543) Ending balance $ 63,995 $ 38,640 ________________ (1) Recoveries were not material for the periods presented. As such, the Company presented write-offs, net of recoveries. Retail Installment Contract Receivables, Net For security system transactions occurring under both Company-owned and customer-owned equipment models, the Company’s retail installment contract option allows qualifying residential customers to pay the fees due at installation over a 24-, 36-, or 60-month interest-free period, and there is no significant financing component. Upon origination of a retail installment contract, the Company utilizes external credit scores to assess customer credit quality and determine eligibility. Subsequent to origination, the Company monitors the delinquency status of retail installment contract receivables as the key credit quality indicator. The balance of unbilled retail installment contract receivables is comprised of: (in thousands) September 30, 2024 December 31, 2023 Retail installment contract receivables, gross $ 685,883 $ 674,827 Allowance for credit losses (8,961) (1,192) Retail installment contract receivables, net $ 676,922 $ 673,635 Balance Sheet Classification: Accounts receivable, net $ 258,453 $ 238,961 Other assets 418,469 434,674 Retail installment contract receivables, net $ 676,922 $ 673,635 The allowance for credit losses relates to retail installment contract receivables from outright sales transactions. As of September 30, 2024, the current and delinquent billed retail installment contract receivables, net were not material. As of September 30, 2024 and December 31, 2023, retail installment contract receivables, net, used as collateral for borrowings under the 2020 Receivables Facility were $599 million and $610 million, respectively. Refer to Note 5 “Debt” for further discussion regarding the 2020 Receivables Facility. Contract Assets Contract assets represent the Company’s right to consideration in exchange for goods or services transferred to the customer. The contract asset is reclassified to accounts receivable when the Company’s right to the consideration becomes unconditional, which generally occurs over the course of a 24-, 36-, or 60-month period as additional services are performed and billed. There is no significant financing component. During the nine months ended September 30, 2024 and 2023, contract assets recognized were not material. The balance of contract assets for residential transactions is comprised of: (in thousands) September 30, 2024 December 31, 2023 Contract assets, gross $ 42,147 $ 39,627 Allowance for credit losses (5,272) (9,025) Contract assets, net $ 36,875 $ 30,602 Balance Sheet Classification: Prepaid expenses and other current assets $ 17,482 $ 15,365 Other assets 19,393 15,237 Contract assets, net $ 36,875 $ 30,602 |
DIVESTITURES
DIVESTITURES | 9 Months Ended |
Sep. 30, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DIVESTITURES | DIVESTITURES The Company may decide to divest or exit a portion of its business for various reasons, including efforts to focus on its other businesses. The Company presents discontinued operations for components of the business that are either disposed of through sale (or qualify as held for sale), abandonment, or spin-off if these actions also represent a strategic shift that has or will have a major effect on the Company’s financial results. Refer to Note 10 “Net Income (Loss) per Share” for basic and diluted earnings per share information for discontinued operations. ADT Solar Exit As discussed in Note 1 “Description of Business and Summary of Significant Accounting Policies,” as a result of the ADT Solar Exit, the Solar Business is now presented as a discontinued operation in the Company’s Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets for the periods presented as substantially all operations have ceased. During the three months ended September 30, 2024, aggregate exit charges incurred were not material. During the nine months ended September 30, 2024, the Company incurred aggregate exit charges of $88 million, which have been recognized within income (loss) from discontinued operations, net of tax related to (i) $34 million, associated with the write-down and disposition of inventory and asset impairments, (ii) $29 million, associated with the disposition of the existing installation pipeline, (iii) $13 million, associated with employee separation costs, and (iv) $11 million, associated with contract termination and other charges. During the nine months ended September 30, 2024, the Company paid approximately $21 million associated with the ADT Solar Exit primarily related to employee separation and other restructuring costs. The following reconciliations represent the major classes of line items of the Solar Business presented within discontinued operations in the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations and certain information in the Condensed Consolidated Statements of Cash Flows for the periods presented. Balance Sheet Information (in thousands) September 30, 2024 December 31, 2023 Assets Accounts receivable, net $ 309 $ 20,270 Inventories, net — 28,714 Prepaid expenses and other current assets 3,013 11,973 Total current assets of discontinued operations 3,322 60,957 Property and equipment, net 473 29,512 Other assets 96 13,767 Total assets of discontinued operations $ 3,891 $ 104,236 Liabilities Current maturities of long-term debt $ 138 $ 8,551 Accounts payable 3,397 16,682 Deferred revenue 165 9,177 Accrued expenses and other current liabilities 34,601 45,201 Total current liabilities of discontinued operations 38,301 79,611 Long-term debt 365 9,893 Other liabilities 11,862 10,679 Total liabilities of discontinued operations $ 50,528 $ 100,183 Statements of Operations Information Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2024 2023 2024 2023 Revenue $ 65 $ 57,611 $ 21,360 $ 279,978 Cost of revenue 1,091 49,424 62,450 212,666 Selling, general, and administrative expenses 5,477 49,157 57,245 158,228 Depreciation and intangible asset amortization 55 3,434 1,872 12,330 Merger, restructuring, integration, and other (1,558) 6,480 36,592 9,898 Goodwill impairment — 88,367 — 511,176 Other (income) and expense items 5 337 1,478 1,121 Income (loss) from discontinued operations before income taxes (5,005) (139,588) (138,277) (625,441) Income tax benefit (expense) 475 (4,336) 35,851 132,427 Income (loss) from discontinued operations, net of tax $ (4,530) $ (143,924) $ (102,426) $ (493,014) Cash Flow Information Nine Months Ended September 30, (in thousands) 2024 2023 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and intangible asset amortization $ 1,872 $ 12,330 Goodwill, intangible, and other asset impairments $ 13,770 $ 515,730 Cash flows from investing activities: Purchases of property and equipment $ (80) $ (3,233) Commercial Divestiture As discussed in Note 1 “Description of Business and Summary of Significant Accounting Policies,” on October 2, 2023, the Company completed the Commercial Divestiture. At the time of closing, the total purchase price was approximately $1,613 million, and the Company received net proceeds of approximately $1,585 million, subject to certain customary post-closing adjustments as set forth in the purchase agreement. In July 2024, the Company paid the purchaser of the Commercial Business $21 million related to the settlement of post-closing adjustments. In connection with the Commercial Divestiture, the Company entered into a Transition Services Agreement (the “Commercial TSA”). During the three and nine months ended September 30, 2024, the Company recognized $14 million and $36 million, respectively, of income from the Commercial TSA, which is reflected in other income (expense). The following reconciliations represent the major classes of line items of the Commercial Business presented within discontinued operations in the Condensed Consolidated Statements of Operations and certain information in the Condensed Consolidated Statements of Cash Flows for any period presented prior to the Commercial Divestiture. Statements of Operations Information During the nine months ended September 30, 2024, activity, net of tax, relating to the Commercial Divestiture was approximately $9 million primarily related to the settlement of post-closing adjustments. (in thousands) Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023 Revenue $ 351,400 $ 1,033,962 Cost of revenue 233,204 688,305 Selling, general, and administrative expenses 72,601 213,113 Depreciation and intangible asset amortization (3,186) 37,691 Other (income) and expense items 8,814 19,222 Income (loss) from discontinued operations before income taxes 39,967 75,631 Income tax benefit (expense) (105,539) (38,740) Income (loss) from discontinued operations, net of tax $ (65,572) $ 36,891 Cash Flow Information (in thousands) Nine Months Ended September 30, 2023 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and intangible asset amortization $ 37,691 Share-based compensation expense $ 11,699 Cash flows from investing activities: Subscriber system asset expenditures $ (8,902) Purchases of property and equipment $ (4,399) |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill There were no changes in the carrying amounts of goodwill since December 31, 2023. All accumulated goodwill impairment losses were associated with the Solar reporting unit, which is now presented as a discontinued operation. Other Intangible Assets September 30, 2024 December 31, 2023 (in thousands) Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Definite-lived intangible assets: Contracts and related customer relationships $ 6,046,100 $ (3,328,512) $ 2,717,588 $ 5,571,456 $ (2,937,245) $ 2,634,211 Dealer relationships 1,518,020 (677,548) 840,472 1,518,020 (618,154) 899,866 Other 209,773 (201,955) 7,818 209,773 (199,357) 10,416 Total definite-lived intangible assets 7,773,893 (4,208,015) 3,565,878 7,299,249 (3,754,756) 3,544,493 Indefinite-lived intangible assets: Trade name 1,333,000 — 1,333,000 1,333,000 — 1,333,000 Intangible assets $ 9,106,893 $ (4,208,015) $ 4,898,878 $ 8,632,249 $ (3,754,756) $ 4,877,493 The change in the net carrying amount of contracts and related customer relationships during the period was as follows: (in thousands) Balance as of December 31, 2023 $ 2,634,211 Customer contract additions, net of dealer charge-backs (1) 474,744 Amortization (391,367) Balance as of September 30, 2024 $ 2,717,588 ________________ (1) The weighted-average amortization period for customer contract additions was approximately 15 years. Payments for customer contract additions under the Company’s authorized dealer program and from other third parties are reflected as dealer generated customer accounts and bulk account purchases on the Condensed Consolidated Statements of Cash Flows. During the third quarter of 2024, the Company purchased customer accounts from a third party for an aggregate contractual purchase price of approximately $98 million, subject to reduction based on customer retention. The Company paid initial cash at closing of approximately $81 million, which is included in dealer generated customer accounts and bulk account purchases on the Condensed Consolidated Statements of Cash Flows. Definite-Lived Intangible Asset Amortization Expense Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2024 2023 2024 2023 Definite-lived intangible asset amortization expense $ 151,817 $ 143,243 $ 453,359 $ 466,886 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2024 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The Company’s debt is comprised of the following (in thousands) : Description Issued Maturity Interest Rate (1) Interest Payable September 30, 2024 December 31, 2023 First Lien Term Loan B due 2030 10/13/2023 10/13/2030 Term SOFR +2.25% Quarterly $ 1,984,090 $ 1,375,000 First Lien Revolving Credit Facility 3/16/2018 6/23/2026 Term SOFR +2.75% Quarterly — — Term Loan A Facility 3/14/2023 3/14/2028 Term SOFR +2.25% Quarterly — 625,625 First Lien Notes due 2024 4/4/2019 4/15/2024 5.250% 2/15 and 8/15 — 99,999 First Lien Notes due 2026 4/4/2019 4/15/2026 5.750% 3/15 and 9/15 1,350,000 1,350,000 First Lien Notes due 2027 8/20/2020 8/31/2027 3.375% 6/15 and 12/15 1,000,000 1,000,000 First Lien Notes due 2029 7/29/2021 8/1/2029 4.125% 2/1 and 8/1 1,000,000 1,000,000 ADT Notes due 2032 5/2/2016 7/15/2032 4.875% 1/15 and 7/15 728,016 728,016 ADT Notes due 2042 7/5/2012 7/15/2042 4.875% 1/15 and 7/15 21,896 21,896 Second Lien Notes due 2028 1/28/2020 1/15/2028 6.250% 1/15 and 7/15 1,300,000 1,300,000 2020 Receivables Facility (2) 3/5/2020 8/20/2029 Various Monthly 423,118 436,004 Total debt principal, excluding finance leases 7,807,120 7,936,540 Plus: Finance lease liabilities (3) 73,624 69,468 Less: Unamortized debt discount, net (12,325) (15,005) Less: Unamortized deferred financing costs (29,397) (39,620) Less: Unamortized purchase accounting fair value adjustment and other (117,936) (125,866) Total debt 7,721,086 7,825,517 Less: Current maturities of long-term debt, net of unamortized debt discount (196,563) (312,061) Long-term debt $ 7,524,523 $ 7,513,456 _________________ (1) Interest rate as of September 30, 2024. Interest on the 2020 Receivables Facility is primarily based on the Secured Overnight Financing Rate (“SOFR”) + 0.95 (2) Maturity date for the 2020 Receivables Facility represents the final maturity date of current loans borrowed under the facility. (3) Refer to Note 12 “Leases” for additional information regarding the Company’s finance leases. As of September 30, 2024, the Company was in compliance with all financial covenant and other maintenance tests for all of its debt obligations. Significant changes in the Company’s debt during the nine months ended September 30, 2024 were as follows: First Lien Credit Agreement The Company’s first lien credit agreement, dated as of July 1, 2015 (together with subsequent amendments and restatements, the “First Lien Credit Agreement”), contains a term loan (the “First Lien Term Loan B due 2030”) and the First Lien Revolving Credit Facility. During the nine months ended September 30, 2024, the Company borrowed $325 million and repaid $325 million under the First Lien Revolving Credit Facility; and as of September 30, 2024, the available borrowing capacity was $575 million. During the nine months ended September 30, 2023, there were no borrowings or repayments under the First Lien Revolving Credit Facility. Significant amendments to the First Lien Credit Agreement since December 31, 2023 are as follows: • April 2024 - The Company amended and restated the First Lien Credit Agreement, which reduced the interest rate on the First Lien Term Loan B due 2030 from Term SOFR + 2.50 2.25 • May 2024 - The Company amended and restated the First Lien Credit Agreement, which included the exchange of $143 million principal amount of loans under the Company’s Term Loan A Facility for its First Lien Term Loan B due 2030. In addition, later that month, the Company further amended and restated the First Lien Credit Agreement, pursuant to which the Company incurred an additional $474 million of outstanding principal under the First Lien Term Loan B due 2030 with the proceeds used to pay off the remaining outstanding balance of the Company’s Term Loan A Facility. • Subsequent event - In October 2024, the Company amended and restated the First Lien Credit Agreement to extend the maturity date of the First Lien Revolving Credit Facility to October 2029 (as extended, the “Extended First Lien Revolving Credit Facility”), subject to a springing maturity of 91 days prior to the maturity date of certain long-term indebtedness, and obtain an additional $225 million of Extended First Lien Revolving Credit Facility commitments. After giving effect to the amendment, the aggregate amount of commitments under the Extended First Lien Revolving Credit Facility is $800 million. Borrowings under the Extended First Lien Revolving Credit Facility bear interest at a rate equal to either (a) Term SOFR with a floor of zero or (b) a base rate (“Base Rate”) determined by reference to the highest of (i) the federal funds rate plus 0.50% per annum, (ii) the rate of interest per annum last quoted by The Wall Street Journal as the “Prime Rate” in the United States and (iii) the one-month adjusted term SOFR plus 1.00% per annum, in each case, plus an applicable margin of 2.00% per annum for Term SOFR loans and 1.00% per annum for Base Rate loans, subject to two step-downs based on certain specified net first lien leverage ratios. In addition, the amendment reduced the commitment fee in respect of the Extended First Lien Revolving Credit Facility to 0.30% per annum in respect of the unutilized commitments thereunder, subject to two step-downs based on certain specified net first lien leverage ratios. Proceeds and repayments of long-term borrowings include the impact of $646 million from the amendments described above. In addition, debt issuance costs, loss on extinguishment of debt, and financing and consent fees were not material as a result of these amendments. Other than as described above, the loans under the amended and restated First Lien Credit Agreement continue to have the same terms as provided under the existing First Lien Credit Agreement, and the parties to the amended and restated First Lien Credit Agreement continue to have the same obligations set forth in the existing First Lien Credit Agreement. Term Loan A Facility Redemption Significant activity since December 31, 2023 is as follows: • May 2024 - The Company exchanged $143 million of loans under its Term Loan A Facility for its First Lien Term Loan B due 2030, as discussed above. In addition, later that month, the Company redeemed the remaining outstanding principal balance of $474 million of its Term Loan A Facility, excluding accrued and unpaid interest, using proceeds under the First Lien Term Loan B due 2030, as discussed above. As a result, the Term Loan A Facility has been terminated. First Lien Notes due 2024 Redemption Significant activity since December 31, 2023 is as follows: • April 2024 - The Company redeemed the remaining outstanding principal balance of $100 million of the First Lien Notes due 2024, excluding accrued and unpaid interest, using proceeds from the Company’s First Lien Revolving Credit Facility. 2020 Receivables Facility Under the 2020 Receivables Facility, the Company obtains financing by selling or contributing certain retail installment contract receivables to the Company’s wholly-owned consolidated bankruptcy-remote special purpose entity (the “SPE”), which then grants a security interest in those retail installment contract receivables as collateral for cash borrowings. Significant activity since December 31, 2023 is as follows: • March 2024 - The Company amended the agreement governing the 2020 Receivables Facility, pursuant to which the uncommitted revolving period was extended from March 2024 to April 2024. • April 2024 - The Company further amended the agreement governing the 2020 Receivables Facility, pursuant to which, among other things, the borrowing capacity was increased from $500 million to $550 million and the uncommitted revolving period was extended from April 2024 to April 2025. In addition, proceeds and repayments of long-term borrowings include the impact of $32 million from the amendments described above. As of September 30, 2024, the Company had an uncommitted available borrowing capacity under the 2020 Receivables Facility of approximately $127 million. Variable Interest Entity The SPE meets the definition of a variable interest entity for which the Company is the primary beneficiary as it has the power to direct the SPE’s activities and the obligation to absorb losses or the right to receive benefits of the SPE. As such, the Company consolidates the SPE’s assets, liabilities, and financial results of operations. The SPE’s assets and liabilities primarily consist of a portion of the Company’s unbilled retail installment contract receivables, net, as discussed in Note 2 “Revenue and Receivables,” and borrowings under the 2020 Receivables Facility, as presented above. The 2020 Receivables Facility did not have a material impact to the Condensed Consolidated Statements of Operations during the periods presented. Solar Receivables Facility On August 2, 2023, Compass Solar Group, LLC (“Compass”) and ADT Solar Finance LLC (“ADT Solar Finance”), each an indirect wholly-owned subsidiary of ADT Inc. entered into a Receivables Financing Agreement with Mizuho Bank, Ltd. (the “Solar Receivables Financing Agreement”) to finance receivables generated by the installation of residential solar systems. Prior to its expiration in August 2024, the Solar Receivables Financing Agreement, among other things, provided for an uncommitted revolving loan facility in the aggregate principal amount of up to $300 million which loans were to be secured by substantially all the assets of ADT Solar Finance (the “Solar Receivables Facility”). The Company did not borrow any amounts under the Solar Receivable Facility prior to its expiration. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS The Company's derivative financial instruments primarily consist of interest rate swap contracts, which were entered into with the objective of managing exposure to variability in interest rates on the Company's debt. As of July 2023, SOFR is the applicable benchmark for all of the Company's interest rate swap contracts. All interest rate swap contracts are reported in the Condensed Consolidated Balance Sheets at fair value. For interest rate swap contracts that are: • Not designated as cash flow hedges: Unrealized gains and losses are recognized in interest expense, net, and other income (expense) depending on the nature of the underlying that the swaps are economically hedging. • Designated as cash flow hedges: Unrealized gains and losses are recognized as a component of accumulated other comprehensive income (loss) (“AOCI”) and are reclassified into interest expense, net, in the same period in which the related interest on debt affects earnings. For interest rate swap contracts that have been de-designated as cash flow hedges and for which forecasted cash flows are: • Probable or reasonably possible of occurring: Unrealized gains and losses previously recognized as a component of AOCI are reclassified into interest expense, net, in the same period in which the related interest on variable-rate debt affects earnings through the original maturity date of the related interest rate swap contracts. • Probable of not occurring: Unrealized gains and losses previously recognized as a component of AOCI are immediately reclassified into interest expense, net. The cash flows associated with interest rate swap contracts that were entered into with the intention of offsetting the economic overhedged position of a portion of the Company’s existing interest rate swaps are reflected as cash flows from investing activities. The cash flows associated with interest rate swap contracts that included an other-than-insignificant financing element at inception are reflected as cash flows from financing activities. Interest Rate Swaps As of September 30, 2024 and December 31, 2023, the Company’s interest rate swaps consisted of the following (in thousands) : Execution Maturity Designation Notional Amount October 2019 September 2026 Not designated $ 2,800,000 March 2023 March 2028 Not designated 100,000 April 2023 March 2028 Not designated 200,000 December 2023 (1) September 2026 Not designated 700,000 Total notional amount $ 3,800,000 _________________ (1) Interest rate swaps entered into to offset the excess notional interest rate swaps as a result of the partial redemption of the First Lien Term Loan B due 2026. The changes in fair value associated with these swaps and the over-hedged swaps are reflected in other income (expense). Classification and Fair Value of Interest Rate Swaps (in thousands) September 30, 2024 December 31, 2023 Prepaid expenses and other current assets $ 51,776 $ 74,974 Other assets $ 43,683 $ 76,493 Accrued expenses and other current liabilities $ 699 $ 5,312 Other liabilities $ 2,135 $ 1,325 Unrealized Gain (Loss) on Interest Rate Swaps Three Months Ended September 30, Nine Months Ended September 30, Statement of Operations Classification (in thousands) 2024 2023 2024 2023 Interest expense, net $ (58,051) $ 16,380 $ (46,429) $ 38,477 Other income (expense) $ (4,821) $ — $ (14,699) $ — Cash Flow Hedges Reclassifications out of AOCI Three Months Ended September 30, Nine Months Ended September 30, ( in thousands ) 2024 2023 2024 2023 Interest expense, net $ 1,943 $ 30,008 $ 6,057 $ 40,186 Income tax (benefit) expense $ (471) $ (7,245) $ (1,464) $ (9,702) As of September 30, 2024 and December 31, 2023, AOCI, net of tax, related to previously designated cash flow hedges was $9 million and $13 million, respectively. As of September 30, 2024, AOCI associated with previously designated cash flow hedges that is estimated to be reclassified to interest expense, net, within the next twelve months is not material. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Unrecognized Tax Benefits The Company’s unrecognized tax benefits relate to tax years that remain subject to audit by the taxing authorities in the U.S. federal, state and local, and foreign jurisdictions. During the nine months ended September 30, 2024, the Company did not have a material change to its unrecognized tax benefits from those disclosed in the 2023 Annual Report. Based on the current status of its income tax audits, the Company expects approximately $29 million of its unrecognized tax benefits will be resolved in the next twelve months. Effective Tax Rate The effective tax rate can vary from period to period due to permanent tax adjustments, discrete items such as the settlement of income tax audits and changes in tax laws, as well as recurring factors such as changes in the overall state tax rate. The discussion below is based on the continuing operations of the Company. The Company’s income tax expense for the three months ended September 30, 2024 was $50 million, resulting in an effective tax rate for the period of 27.6%. The effective tax rate primarily represents the federal statutory rate of 21.0%, a state tax rate, net of federal benefits, of 6.2%, and an unfavorable impact from unrecognized tax benefits of 4.0%, partially offset by a favorable impact from a prior year tax return adjustment of 4.0%. The Company’s income tax expense for the three months ended September 30, 2023 was $34 million, resulting in an effective tax rate for the period of 21.5%. The effective tax rate primarily represents the federal statutory tax rate of 21.0%, and a state tax rate, net of federal benefits, of 5.1%, partially offset by favorable impacts from dispositions of 3.1%, and prior year tax return adjustments of 1.2%. The Company’s income tax expense for the nine months ended September 30, 2024 was $167 million, resulting in an effective tax rate for the period of 28.3%. The effective tax rate primarily represents the federal statutory rate of 21.0%, a state tax rate, net of federal benefits, of 5.8%, unfavorable impacts from dispositions of 1.6%, and unrecognized tax benefits of 0.8%, partially offset by a favorable impact from a prior year tax return adjustment of 1.2%. The Company’s income tax expense for the nine months ended September 30, 2023 was $120 million, resulting in an effective tax rate for the period of 25.5%. The effective tax rate primarily represents the federal statutory tax rate of 21.0%, a state tax rate, net of federal benefits, of 5.8%, and an unfavorable impact from permanent non-deductible items of 1.2%, partially offset by a favorable impact from dispositions of 1.0%. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2024 | |
Equity [Abstract] | |
EQUITY | EQUITY Common Stock and Class B Common Stock The Company has two classes of common stock, including Common Stock and Class B Common Stock. During the nine months ended September 30, 2024, shares issued resulted from the vesting of restricted stock units (“RSUs”) and stock option exercises related to share-based compensation awards. Share Repurchase Plan On January 24, 2024, the Company's Board of Directors announced a share repurchase plan (the “Share Repurchase Plan”), pursuant to which the Company is authorized to repurchase, through January 29, 2025, up to a maximum aggregate amount of $350 million of shares of the Company's Common Stock under this Share Repurchase Plan. The Company may effect these repurchases pursuant to one or more open market or private transactions, including pursuant to a plan that qualifies for the affirmative defense provided by Rule 10b5‐1 under the Exchange Act, or pursuant to one or more accelerated share repurchase agreements. The Company is not obligated to repurchase any of its shares of Common Stock, and the timing and amount of any repurchases will depend on legal requirements, market conditions, stock price, the availability of the safe harbor provided by Rule 10b-18 under the Exchange Act, alternative uses of capital, and other factors. During the first quarter of 2024, the Company repurchased and retired 15 million shares of its Common Stock under the Share Repurchase Plan and paid approximately $93 million (or approximately $6.22 per share). Refer to Note 13 “Related Party Transactions” for further information. There were no other share repurchases during the nine months ended September 30, 2024. As of September 30, 2024, the Company had approximately $257 million remaining under the Share Repurchase Plan. Subsequent event - In October 2024, the Company repurchased 5 million shares of Common Stock at a price per share of $6.40 for an aggregate purchase price of $32 million. As a result, the Company has approximately $225 million remaining under the Share Repurchase Plan. Dividends (in thousands, except per share data) Common Stock Class B Common Stock Declaration Date Record Date Payment Date Per Share Aggregate Per Share Aggregate Nine Months Ended September 30, 2024 1/24/2024 3/14/2024 4/4/2024 $ 0.055 $ 47,059 $ 0.055 $ 3,011 4/25/2024 6/13/2024 7/9/2024 0.055 47,137 0.055 3,011 8/1/2024 9/13/2024 10/4/2024 0.055 47,146 0.055 3,011 Total $ 0.165 $ 141,342 $ 0.165 $ 9,033 Nine Months Ended September 30, 2023 2/28/2023 3/16/2023 4/4/2023 $ 0.035 $ 30,342 $ 0.035 $ 1,916 5/2/2023 6/15/2023 7/6/2023 0.035 30,256 0.035 1,916 8/8/2023 9/15/2023 10/4/2023 0.035 30,405 0.035 1,916 Total $ 0.105 $ 91,003 $ 0.105 $ 5,748 Subsequent Event - On October 24, 2024, the Company announced a dividend of $0.055 per share to holders of Common Stock and Class B Common Stock of record on December 12, 2024, which will be paid on January 9, 2025. Accumulated Other Comprehensive Income (Loss) During the three and nine months ended September 30, 2024, there were no material reclassifications out of AOCI. Refer to Note 6 “Derivative Financial Instruments” for AOCI reclassifications associated with previously designated cash flow hedges. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION RSUs During the first quarter of 2024, the Company completed its annual long-term incentive plan equity award to employees and granted approximately 3.9 million RSUs under its 2018 Omnibus Incentive Plan, as amended (the “2018 Plan”), with a grant date fair value of $6.51 equal to the closing price per share of the Company’s Common Stock on the date of grant. These RSUs are service-based awards with a three-year graded vesting period from the date of grant. Options During the first quarter of 2024, the Company granted approximately 6.8 million options under the 2018 Plan. These options are service-based awards with a three-year graded vesting period from the date of grant and have an exercise price of $6.51, which is equal to the closing price per share of the Company’s common stock on the date of grant, and a contractual term of ten years from the grant date. The weighted-average grant date fair value for the options granted was $2.56. The Company used a binomial lattice model to determine the grant date fair value for options granted and included the following assumptions: Expected exercise term (years) 7 Expected volatility (1) 49.9% Expected dividend yield (2) 3.4% Risk-free interest rate (3) 4.0% _________________ (1) Estimated using historical and implied stock price volatility of the Company. (2) Calculated by taking the annual dividend run-rate and dividing by the stock price at date of grant. (3) Based on the U.S. Treasury yield curve. Other During the second quarter of 2024, the Company modified certain share-based compensation awards and recorded additional share-based compensation expense of $11 million associated with the modifications. |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2024 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE | NET INCOME (LOSS) PER SHARE The Company applies the two-class method for computing and presenting net income (loss) per share for each class of common stock, which allocates current period net income (loss) to each class of common stock and participating securities based on dividends declared and participation rights in the remaining undistributed earnings or losses. Basic net income (loss) per share is computed by dividing the net income (loss) allocated to each class of common stock by the related weighted-average number of shares outstanding during the period. Diluted net income (loss) per share gives effect to all securities representing potential common shares that were dilutive and outstanding during the period for each class of common stock and excludes potentially dilutive securities whose effect would have been anti-dilutive. Common Stock Potential shares of Common Stock include (i) incremental shares related to the vesting or exercise of share-based compensation awards, warrants, and other options to purchase additional shares of the Company’s Common Stock calculated using the treasury stock method and (ii) incremental shares of Common Stock issuable upon the conversion of Class B Common Stock. Additionally, the basic and diluted earnings per share computations for Common Stock excludes approximately 7 million and 9 million unvested shares for the current and prior periods, respectively, as their vesting is contingent upon achievement of certain performance requirements. Three Months Ended September 30, Nine Months Ended September 30, in thousands, except per share amounts 2024 2023 2024 2023 Allocation of income (loss) from continuing operations - basic $ 124,078 $ 115,874 $ 396,740 $ 322,680 Dilutive effect 3,327 2,255 10,068 6,697 Allocation of income (loss) from continuing operations - diluted $ 127,405 $ 118,129 $ 406,808 $ 329,377 Allocation of income (loss) from discontinued operations, net of tax - basic $ (4,576) $ (196,923) $ (104,340) $ (428,719) Dilutive effect — — — — Allocation of income (loss) from discontinued operations, net of tax - diluted $ (4,576) $ (196,923) $ (104,340) $ (428,719) Weighted-average shares outstanding - basic 850,462 857,423 851,539 856,446 Dilutive effect (1) 62,399 60,351 61,757 62,255 Weighted-average shares outstanding - diluted 912,861 917,774 913,296 918,701 Income (loss) from continuing operations per share - basic $ 0.15 $ 0.13 $ 0.46 $ 0.38 Income (loss) from continuing operations per share - diluted $ 0.14 $ 0.13 $ 0.44 $ 0.36 Income (loss) per share from discontinued operations, net of tax - basic $ (0.01) $ (0.23) $ (0.12) $ (0.50) Income (loss) per share from discontinued operations, net of tax - diluted $ (0.01) $ (0.21) $ (0.11) $ (0.47) _________________ (1) During the three and nine months ended September 30, 2024, 21 million and 20 million shares of Common Stock, respectively, that would be dilutive were excluded from the diluted earnings per share calculations because their effects would have been anti-dilutive. During the three and nine months ended September 30, 2023, 22 million and 18 million shares of Common Stock, respectively, that would be dilutive were excluded from the diluted earnings per share calculations because their effects would have been anti-dilutive. Class B Common Stock Three Months Ended September 30, Nine Months Ended September 30, in thousands, except per share amounts 2024 2023 2024 2023 Allocation of net income (loss) from continuing operations - basic $ 7,942 $ 7,385 $ 25,356 $ 20,580 Dilutive effect (316) (339) (1,035) (949) Allocation of net income (loss) from continuing operations - diluted $ 7,626 $ 7,046 $ 24,321 $ 19,631 Allocation of income (loss) from discontinued operations, net of tax - basic $ (293) $ (12,573) $ (6,660) $ (27,404) Dilutive effect — — — — Allocation of income (loss) from discontinued operations, net of tax - diluted $ (293) $ (12,573) $ (6,660) $ (27,404) Weighted-average shares outstanding - basic 54,745 54,745 54,745 54,745 Dilutive effect (1) — — — — Weighted-average shares outstanding - diluted 54,745 54,745 54,745 54,745 Net income (loss) from continuing operations per share - basic $ 0.15 $ 0.13 $ 0.46 $ 0.38 Net income (loss) from continuing operations per share - diluted $ 0.14 $ 0.13 $ 0.44 $ 0.36 Income (loss) per share from discontinued operations, net of tax - basic $ (0.01) $ (0.23) $ (0.12) $ (0.50) Income (loss) per share from discontinued operations, net of tax - diluted $ (0.01) $ (0.21) $ (0.11) $ (0.47) ________________ (1) There were no potential shares of Class B Common Stock during the periods presented. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Contractual Obligations There have been no significant changes to the Company’s contractual obligations as compared to December 31, 2023, except as discussed below: Google Commercial Agreement In July 2020, the Company and Google entered into a Master Supply, Distribution, and Marketing Agreement (the “Google Commercial Agreement”), as subsequently amended, pursuant to which Google has agreed to supply the Company with certain Google devices as well as certain Google video and analytics services (“Google Devices and Services”), for sale to the Company’s customers. The Google Commercial Agreement also specifies that each party shall contribute $150 million toward joint marketing, customer acquisition, training of the Company’s employees, and product technology updates related to the Google Devices and Services. In August 2022, the Company and Google executed an amendment to the Google Commercial Agreement, pursuant to which Google has agreed to commit an additional $150 million to fund growth, data and insights, product innovation and technology advancements, customer acquisition, and marketing, as mutually agreed by the Company and Google, (together with the initial amounts, the “Google Success Funds”). During the three and nine months ended September 30, 2024, $7 million and $22 million, respectively, of the Google Success Funds were reimbursed to the Company primarily for certain joint marketing and customer acquisition expenses incurred by the Company, substantially all of which was recorded as a reduction to advertising expenses. During the three and nine months ended September 30, 2023, the Company was reimbursed $28 million and $40 million, respectively. Google Cloud Agreement Addendum In December 2023, the Company and Google entered into an addendum to the Company’s existing agreement with Google for using Google cloud services (the “Google Cloud Agreement Addendum”), pursuant to which Google has agreed to provide certain credits, discounts, and other incentives for use of the Google Cloud Platform to the Company, and the Company has committed to purchasing $200 million of Google Cloud Platform services over seven years (through December 2030), with $35 million in the first two years, $65 million in the next two years after that, and $100 million in the last three years of the commitment. The Company may elect to cancel the commitment in return for a cancellation fee of 30% of the total remaining commitment amount and loss of any discounts, remaining credits, or other incentives provided under the Google Cloud Agreement Addendum. During the three and nine months ended September 30, 2024, the Company made purchases toward this commitment of $9 million and $19 million, respectively. Other Commitments During the fourth quarter of 2023, the Company entered into an agreement with one of its vendors to purchase at least $190 million of security system equipment and components through March 2025. During the second quarter of 2024, the Company increased its commitment by approximately $130 million. This commitment is also satisfied through purchases made by the Company’s dealer network. During the three and nine months ended September 30, 2024, purchases toward this commitment were approximately $44 million and $144 million, respectively. Guarantees In the normal course of business, the Company is liable for contract completion and product performance. As of September 30, 2024 and December 31, 2023, the Company’s guarantees primarily relate to standby letters of credit related to its insurance programs and totaled $74 million and $78 million, respectively. The Company does not believe such obligations will materially affect its financial position, results of operations, or cash flows. Legal Proceedings The Company is subject to various claims and lawsuits in the ordinary course of business, which include among other things commercial general liability claims, automobile liability claims, contractual disputes, worker’s compensation claims, labor law and employment claims, claims that the Company infringed on the intellectual property of others, and consumer and employment class actions. The Company is also subject to regulatory and governmental examinations, information requests and subpoenas, inquiries, investigations, and threatened legal actions and proceedings. In connection with such formal and informal inquiries, the Company receives numerous requests, subpoenas, and orders for documents, testimony, and information in connection with various aspects of its activities. There have been no material changes to these matters from those disclosed in the 2023 Annual Report. The Company records accruals for losses that are probable and reasonably estimable. These accruals are based on a variety of factors such as judgment, probability of loss, opinions of internal and external legal counsel, and actuarially determined estimates of claims incurred but not yet reported based upon historical claims experience. Legal costs in connection with claims and lawsuits in the ordinary course of business are expensed as incurred. Additionally, the Company records insurance recovery receivables or other indemnifications from third-parties when recovery has been determined to be probable. The Company has not accrued for any losses for which the likelihood of loss cannot be assessed, is less than probable, or the range of possible loss cannot be estimated. As of September 30, 2024 and December 31, 2023, the Company’s accrual for ongoing claims and lawsuits within the scope of an insurance program, including amounts related to the Solar Business, totaled $102 million and $110 million, respectively. The Company’s accrual related to ongoing claims and lawsuits not within the scope of an insurance program is not material. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2024 | |
Leases [Abstract] | |
LEASES | LEASES Company as Lessee As part of normal operations, the Company leases real estate, vehicles, and equipment primarily through its main operating entity, ADT LLC. Right-of-Use Assets and Lease Liabilities (in thousands) September 30, 2024 December 31, 2023 Presentation and Classification: Operating Current Prepaid expenses and other current assets $ 67 $ 68 Operating Non-current Other assets 82,983 85,649 Finance Non-current Property and equipment, net (1) 67,832 65,368 Total right-of-use assets $ 150,882 $ 151,085 Operating Current Accrued expenses and other current liabilities $ 19,147 $ 13,035 Finance Current Current maturities of long-term debt 26,533 25,741 Operating Non-current Other liabilities 77,066 80,189 Finance Non-current Long-term debt 47,091 43,727 Total lease liabilities $ 169,837 $ 162,692 _________________ (1) Finance lease right-of-use assets are recorded net of accumulated depreciation, which was approximately $61 million and $50 million as of September 30, 2024 and December 31, 2023, respectively. Lease Cost Three Months Ended September 30, Nine Months Ended September 30, ( in thousands ) 2024 2023 2024 2023 Operating lease cost $ 7,365 $ 8,832 $ 20,943 $ 24,822 Finance lease cost: Amortization of right-of-use assets 6,095 4,355 16,203 10,144 Interest on lease liabilities 1,109 709 3,514 1,494 Variable lease costs 8,701 7,692 24,428 27,512 Total lease cost $ 23,270 $ 21,588 $ 65,088 $ 63,972 Right-of-Use Assets Obtained in Exchange for Lease Obligations (1) Nine Months Ended September 30, ( in thousands ) 2024 2023 Operating leases $ 14,200 $ 28,786 Finance leases $ 33,283 $ 62,203 _________________ (1) Includes both continuing and discontinued operations. Company as Lessor The Company is a lessor in certain Company-owned transactions as the Company has identified a lease component associated with the right-of-use of the security system and a non-lease component associated with the monitoring and related services. For transactions in which (i) the timing and pattern of transfer is the same for the lease and non-lease components and (ii) the lease component would be classified as an operating lease if accounted for separately, the Company applies the practical expedient to aggregate the lease and non-lease components and accounts for the combined transaction based upon its predominant characteristic, which is the non-lease component. The Company accounts for the combined component as a single performance obligation under the applicable revenue guidance and recognizes the underlying assets within subscriber system assets, net. |
LEASES | LEASES Company as Lessee As part of normal operations, the Company leases real estate, vehicles, and equipment primarily through its main operating entity, ADT LLC. Right-of-Use Assets and Lease Liabilities (in thousands) September 30, 2024 December 31, 2023 Presentation and Classification: Operating Current Prepaid expenses and other current assets $ 67 $ 68 Operating Non-current Other assets 82,983 85,649 Finance Non-current Property and equipment, net (1) 67,832 65,368 Total right-of-use assets $ 150,882 $ 151,085 Operating Current Accrued expenses and other current liabilities $ 19,147 $ 13,035 Finance Current Current maturities of long-term debt 26,533 25,741 Operating Non-current Other liabilities 77,066 80,189 Finance Non-current Long-term debt 47,091 43,727 Total lease liabilities $ 169,837 $ 162,692 _________________ (1) Finance lease right-of-use assets are recorded net of accumulated depreciation, which was approximately $61 million and $50 million as of September 30, 2024 and December 31, 2023, respectively. Lease Cost Three Months Ended September 30, Nine Months Ended September 30, ( in thousands ) 2024 2023 2024 2023 Operating lease cost $ 7,365 $ 8,832 $ 20,943 $ 24,822 Finance lease cost: Amortization of right-of-use assets 6,095 4,355 16,203 10,144 Interest on lease liabilities 1,109 709 3,514 1,494 Variable lease costs 8,701 7,692 24,428 27,512 Total lease cost $ 23,270 $ 21,588 $ 65,088 $ 63,972 Right-of-Use Assets Obtained in Exchange for Lease Obligations (1) Nine Months Ended September 30, ( in thousands ) 2024 2023 Operating leases $ 14,200 $ 28,786 Finance leases $ 33,283 $ 62,203 _________________ (1) Includes both continuing and discontinued operations. Company as Lessor The Company is a lessor in certain Company-owned transactions as the Company has identified a lease component associated with the right-of-use of the security system and a non-lease component associated with the monitoring and related services. For transactions in which (i) the timing and pattern of transfer is the same for the lease and non-lease components and (ii) the lease component would be classified as an operating lease if accounted for separately, the Company applies the practical expedient to aggregate the lease and non-lease components and accounts for the combined transaction based upon its predominant characteristic, which is the non-lease component. The Company accounts for the combined component as a single performance obligation under the applicable revenue guidance and recognizes the underlying assets within subscriber system assets, net. |
LEASES | LEASES Company as Lessee As part of normal operations, the Company leases real estate, vehicles, and equipment primarily through its main operating entity, ADT LLC. Right-of-Use Assets and Lease Liabilities (in thousands) September 30, 2024 December 31, 2023 Presentation and Classification: Operating Current Prepaid expenses and other current assets $ 67 $ 68 Operating Non-current Other assets 82,983 85,649 Finance Non-current Property and equipment, net (1) 67,832 65,368 Total right-of-use assets $ 150,882 $ 151,085 Operating Current Accrued expenses and other current liabilities $ 19,147 $ 13,035 Finance Current Current maturities of long-term debt 26,533 25,741 Operating Non-current Other liabilities 77,066 80,189 Finance Non-current Long-term debt 47,091 43,727 Total lease liabilities $ 169,837 $ 162,692 _________________ (1) Finance lease right-of-use assets are recorded net of accumulated depreciation, which was approximately $61 million and $50 million as of September 30, 2024 and December 31, 2023, respectively. Lease Cost Three Months Ended September 30, Nine Months Ended September 30, ( in thousands ) 2024 2023 2024 2023 Operating lease cost $ 7,365 $ 8,832 $ 20,943 $ 24,822 Finance lease cost: Amortization of right-of-use assets 6,095 4,355 16,203 10,144 Interest on lease liabilities 1,109 709 3,514 1,494 Variable lease costs 8,701 7,692 24,428 27,512 Total lease cost $ 23,270 $ 21,588 $ 65,088 $ 63,972 Right-of-Use Assets Obtained in Exchange for Lease Obligations (1) Nine Months Ended September 30, ( in thousands ) 2024 2023 Operating leases $ 14,200 $ 28,786 Finance leases $ 33,283 $ 62,203 _________________ (1) Includes both continuing and discontinued operations. Company as Lessor The Company is a lessor in certain Company-owned transactions as the Company has identified a lease component associated with the right-of-use of the security system and a non-lease component associated with the monitoring and related services. For transactions in which (i) the timing and pattern of transfer is the same for the lease and non-lease components and (ii) the lease component would be classified as an operating lease if accounted for separately, the Company applies the practical expedient to aggregate the lease and non-lease components and accounts for the combined transaction based upon its predominant characteristic, which is the non-lease component. The Company accounts for the combined component as a single performance obligation under the applicable revenue guidance and recognizes the underlying assets within subscriber system assets, net. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2024 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS The Company’s related party transactions primarily relate to products and services received from, or monitoring and related services provided to, other entities affiliated with Apollo, and, from time to time, management, consulting, and transaction advisory services provided by Apollo to the Company, as well as transactions between the Company and State Farm. There were no notable related party transactions during the periods presented other than as described below. Apollo Offering and Share Repurchase On March 6, 2024, the Company and certain entities managed by affiliates of Apollo Global Management, Inc. (the “Selling Stockholders”) entered into an underwriting agreement (the “Underwriting Agreement”) with Morgan Stanley & Co. LLC and Barclays Capital Inc., as representatives of the underwriters named therein, including Apollo Global Securities, LLC, an affiliate of Apollo (collectively, the “Underwriters”), in connection with the offer and sale by the Selling Stockholders (the “Offering”) of 65 million shares of the Company’s Common Stock, and, at the option of the Underwriters, up to an additional 9.75 million shares of Common Stock (the “Underwriters’ Option”). As part of the Offering, the Company purchased 15 million shares of Common Stock under its Share Repurchase Plan from the Underwriters (the “Share Repurchase”). The Company paid approximately $93 million (or approximately $6.22 per share) for the Share Repurchase, which was the same per share price paid by the Underwriters to the Selling Stockholders. The repurchase is reflected as a reduction to additional paid-in-capital and as a financing cash outflow. The Offering and the Share Repurchase closed on March 11, 2024. On March 15, 2024, the Underwriters exercised the Underwriters’ Option in full, which subsequently closed on March 19, 2024. The Company did not pay any underwriting fees in connection with the Share Repurchase, including on behalf of the Selling Stockholders or otherwise. All the shares in the Offering were sold by the Selling Stockholders. The Company did not receive any of the proceeds from the sale of shares by the Selling Stockholders in the Offering. Other During the nine months ended September 30, 2024, other fees incurred to Apollo were not material. During the nine months ended September 30, 2023, the Company incurred fees to Apollo of $1 million related to Apollo’s performance of placement agent services related to the initial funding of the Term Loan A Facility. State Farm State Farm owns more than 10% of the Company’s issued and outstanding common stock, and as a result, is a related party. In October 2022, the Company, ADT LLC (an indirect wholly owned subsidiary of the Company), and State Farm entered into a development agreement (the “State Farm Development Agreement”) in connection with State Farm’s strategic investment in ADT. Pursuant to the State Farm Development Agreement, State Farm committed up to $300 million to fund certain initiatives as agreed to between the Company and State Farm related to the partnership (the “Opportunity Fund”), of which the Company has received $100 million. Amounts held by the Company in the Opportunity Fund are restricted until the Company uses the funds, as agreed upon with State Farm, in accordance with the State Farm Development Agreement. As of September 30, 2024 and December 31, 2023, the balance in the portion of the Opportunity Fund held by the Company was $87 million and $94 million, respectively. During the nine months ended September 30, 2024 and 2023, the Company made payments from the Opportunity Fund of $10 million and $6 million, respectively. Interest earned on the Opportunity Fund was not material. Sunlight Financial LLC ADT Solar used Sunlight Financial LLC (“Sunlight”), an entity previously affiliated with Apollo, to access certain loan products for ADT Solar customers. As of December 2023, Sunlight was no longer affiliated with Apollo, and as a result, was no longer a related party. During the three and nine months ended September 30, 2023, total loans funded by Sunlight were $9 million and $71 million, respectively, and the Company incurred financing fees of $2 million and $11 million, respectively. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | |
Pay vs Performance Disclosure | ||||
Net income (loss) | $ 127,151 | $ (86,237) | $ 311,096 | $ (112,863) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation The condensed consolidated financial statements included herein: • have been prepared in U.S. dollars in accordance with generally accepted accounting principles in the United States of America (“GAAP”); • are comprised of the consolidated results of ADT Inc. and its wholly-owned subsidiaries for which all intercompany transactions have been eliminated; • are unaudited, but in the opinion of management, include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company’s financial position, results of operations, and cash flows for the interim periods presented; and • should not be taken as indicative of results that may be expected for future interim periods or the full year. The Condensed Consolidated Balance Sheet as of December 31, 2023 included herein was derived from the audited consolidated financial statements as of that date. Certain information and footnote disclosures required in the annual consolidated financial statements have been omitted as appropriate. For a more comprehensive understanding of the Company and its interim results, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report”). In addition, the results of companies acquired, if applicable, are included from the effective dates of acquisition. Prior to the sale of its shares in SNTNL LLC (“Canopy”) during the fourth quarter of 2023, the Company used the equity method of accounting to account for its investment in Canopy as it had the ability to exercise significant influence but did not control. Certain prior period amounts have been reclassified to conform with the current period presentation. Significant Accounting Policies Unless otherwise noted, the Company’s accounting policies, including those discussed herein, do not materially differ from those disclosed in the 2023 Annual Report. |
Discontinued Operations | Discontinued Operations In January 2024, the Company’s board of directors (the “Board of Directors” or the “Board”) approved a plan to fully exit the residential solar business (the “Solar Business”) (the “ADT Solar Exit”). The ADT Solar Exit represents a strategic shift that had a major effect on the Company’s financial results. As of June 30, 2024, substantially all operations of the Solar Business had ceased, and beginning in the second quarter of 2024, the results of operations and financial position of the Solar Business are classified as discontinued operations in the Company’s Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets, respectively, for all periods presented. In addition, in August 2023, ADT entered into an agreement to divest its commercial business (the “Commercial Business”), which was completed in October 2023 (the “Commercial Divestiture”). As a result, the Commercial Business is presented as a discontinued operation in the Company’s Condensed Consolidated Statements of Operations for all periods presented. The cash flows and comprehensive income (loss) of discontinued operations have not been segregated and are included in the Condensed Consolidated Statements of Cash Flows and Condensed Consolidated Statements of Comprehensive Income (Loss), respectively, for all periods presented. Refer to Note 3 “Divestitures” for additional information on discontinued operations. Unless otherwise noted, amounts and disclosures throughout these Notes to Condensed Consolidated Financial Statements relate to the Company’s continuing operations. |
Use of Estimates | Use of Estimates The preparation of these condensed consolidated financial statements in accordance with GAAP requires the Company to select accounting policies and make estimates that affect amounts reported in the condensed consolidated financial statements and the accompanying notes. The Company’s estimates are based on the relevant information available at the end of each period. Actual results could differ materially from these estimates under different assumptions or market conditions. |
Segment Update | Segment Update Beginning in the second quarter of 2024, and as a result of the ADT Solar Exit, the Company currently reports its results in a single operating and reportable segment, which reflects the business operations of the Company’s former Consumer and Small Business (“CSB”) segment, based on the manner in which the Company’s Chief Executive Officer, who is the chief operating decision maker (the “CODM”), evaluates performance and makes decisions about how to allocate resources. Prior to the third quarter of 2023, the Commercial Business was reflected in the Commercial reportable segment, and prior to the second quarter of 2024, the Solar Business was reflected in the Solar reportable segment. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Supplier Finance Program Obligations - Accounting Standards Update (“ASU”) 2022-04, Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, requires that a reporting entity who is a buyer in a supplier finance program disclose qualitative and quantitative information about its supplier finance programs, including a roll-forward of the obligations. The Company adopted the roll-forward requirement effective January 1, 2024. The Company does not currently have any material supplier finance programs, and the guidance will be applied prospectively to any future arrangements. Fair Value of Equity Investments - ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, states that an entity should not consider the impact of contractual sale restrictions when measuring an equity security’s fair value and introduces new disclosure requirements related to such equity securities. The Company adopted this guidance effective January 1, 2024. This guidance did not impact the Company. Recently Issued Accounting Pronouncements Disclosure Improvements - ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative , represents changes to clarify or improve disclosure and presentation requirements of a variety of topics. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company is monitoring the potential impact of this guidance on its financial statements and disclosures. Segment Reporting - ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , improves reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. In addition, the guidance, among other requirements, enhances interim disclosures, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, and provides new segment disclosure requirements for entities with a single reportable segment. The amendments in this guidance are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. This guidance should be applied retrospectively to all periods presented. The Company is currently evaluating the impact of this guidance on its disclosures. Income Taxes - ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , focuses on improvements to income tax disclosures, primarily related to the rate reconciliation and income tax paid information. In addition, the update includes certain other amendments to improve the effectiveness of income tax disclosures. The guidance is effective for annual periods beginning after December 15, 2024, and should be applied prospectively, with retrospective application also a permitted option. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its disclosures. |
Inventories, net | Inventories, net Inventories, net includes finished goods and work-in-progress. Work-in-progress is not material. |
Subscriber System Assets, net and Deferred Subscriber Acquisition Costs, net | Subscriber System Assets, net and Deferred Subscriber Acquisition Costs, net Subscriber system assets represent capitalized equipment and installation costs incurred in connection with transactions in which the Company retains ownership of the security system, and which the Company may retrieve upon termination of the contract with the customer. Deferred subscriber acquisition costs represent selling expenses (primarily commissions) that are incremental to acquiring customers. Subscriber system assets and any related deferred subscriber acquisition costs are accounted for on a pooled basis based on the month and year of customer acquisition. The Company depreciates and amortizes these pooled costs using an accelerated method over the estimated life of the customer relationship, which is 15 years. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments primarily consist of cash and cash equivalents, restricted cash and restricted cash equivalents, accounts receivable, retail installment contract receivables, accounts payable, debt, and derivative financial instruments. Due to their short-term and/or liquid nature, the fair values of cash, restricted cash, accounts receivable, and accounts payable approximate their respective carrying amounts. Cash Equivalents - Included in cash and cash equivalents and restricted cash and restricted cash equivalents, as applicable from time to time, are investments in money market mutual funds. These investments are generally classified as Level 1 fair value measurements, which represent unadjusted quoted prices in active markets for identical assets or liabilities. |
Long-Term Debt Instruments | Long-Term Debt Instruments - The fair values of the Company’s long-term debt instruments are determined using broker-quoted market prices, which represent quoted prices for similar assets or liabilities as well as other observable market data, and are classified as Level 2 fair value measurements. The carrying amounts of debt outstanding, if any, under the Company’s first lien revolving credit facility (the “First Lien Revolving Credit Facility”) and the 2020 Receivables Facility approximate their fair values as interest rates on these borrowings approximate current market rates. |
Derivative Financial Instruments | Derivative Financial Instruments - Derivative financial instruments are reported at fair value as either assets or liabilities that are primarily calculated using discounted cash flow models utilizing observable inputs, such as quoted forward interest rates, and incorporate credit risk adjustments to reflect the risk of default by the counterparty or the Company. The resulting fair values are classified as Level 2 fair value measurements. Refer to Note 6 “Derivative Financial Instruments” for the fair values of the Company’s derivative financial instruments. The Company's derivative financial instruments primarily consist of interest rate swap contracts, which were entered into with the objective of managing exposure to variability in interest rates on the Company's debt. As of July 2023, SOFR is the applicable benchmark for all of the Company's interest rate swap contracts. All interest rate swap contracts are reported in the Condensed Consolidated Balance Sheets at fair value. For interest rate swap contracts that are: • Not designated as cash flow hedges: Unrealized gains and losses are recognized in interest expense, net, and other income (expense) depending on the nature of the underlying that the swaps are economically hedging. • Designated as cash flow hedges: Unrealized gains and losses are recognized as a component of accumulated other comprehensive income (loss) (“AOCI”) and are reclassified into interest expense, net, in the same period in which the related interest on debt affects earnings. For interest rate swap contracts that have been de-designated as cash flow hedges and for which forecasted cash flows are: • Probable or reasonably possible of occurring: Unrealized gains and losses previously recognized as a component of AOCI are reclassified into interest expense, net, in the same period in which the related interest on variable-rate debt affects earnings through the original maturity date of the related interest rate swap contracts. • Probable of not occurring: Unrealized gains and losses previously recognized as a component of AOCI are immediately reclassified into interest expense, net. The cash flows associated with interest rate swap contracts that were entered into with the intention of offsetting the economic overhedged position of a portion of the Company’s existing interest rate swaps are reflected as cash flows from investing activities. The cash flows associated with interest rate swap contracts that included an other-than-insignificant financing element at inception are reflected as cash flows from financing activities. |
Retail Installment Contract Receivables | Retail Installment Contract Receivables - The fair values of the Company’s retail installment contract receivables are determined using a discounted cash flow model and are classified as Level 3 fair value measurements. Retail Installment Contract Receivables, Net For security system transactions occurring under both Company-owned and customer-owned equipment models, the Company’s retail installment contract option allows qualifying residential customers to pay the fees due at installation over a 24-, 36-, or 60-month interest-free period, and there is no significant financing component. Upon origination of a retail installment contract, the Company utilizes external credit scores to assess customer credit quality and determine eligibility. Subsequent to origination, the Company monitors the delinquency status of retail installment contract receivables as the key credit quality indicator. |
Revenue | Revenue The Company allocates the transaction price to each performance obligation based on the relative standalone selling price, which is determined using observable internal and external pricing, profitability, and operational metrics. In addition to the details provided below, the Company’s disaggregated revenue includes monitoring and related services and security installation, product, and other revenue, which are presented on the face of the Condensed Consolidated Statements of Operations. Company-Owned - In transactions in which the Company provides monitoring and related services but retains ownership of the security system (referred to as Company-owned transactions), the Company’s performance obligations primarily include (i) monitoring and related services, which are recognized when these services are provided to the customer, and (ii) a material right associated with the one-time non-refundable fees in connection with the initiation of a monitoring contract which the customer will not be required to pay again upon a renewal of the contract (referred to as deferred subscriber acquisition revenue). Deferred subscriber acquisition revenue is amortized on a pooled basis over the estimated life of the customer relationship using an accelerated method consistent with the treatment of subscriber system assets and deferred subscriber acquisition costs and is reflected in security installation, product, and other revenue. Customer-Owned - In transactions involving security systems sold outright to the customer (referred to as outright sales), the Company’s performance obligations generally include the sale and installation of the system, which is primarily recognized at a point in time based upon the nature of the transaction and contractual terms, and any monitoring and related services, which are recognized when these services are provided to the customer. |
Allowance for Credit Losses | Allowance for Credit Losses The Company evaluates its allowance for credit losses on accounts receivable in pools based on customer type. For each customer pool, the allowance for credit losses is estimated based on the delinquency status of the underlying receivables and the related historical loss experience, as adjusted for current and expected future conditions, if applicable. The allowance for credit losses is not material for the individual pools of customers. |
Contract Assets | Contract Assets Contract assets represent the Company’s right to consideration in exchange for goods or services transferred to the customer. The contract asset is reclassified to accounts receivable when the Company’s right to the consideration becomes unconditional, which generally occurs over the course of a 24-, 36-, or 60-month period as additional services are performed and billed. There is no significant financing component. |
Net Income (Loss) Per Share | The Company applies the two-class method for computing and presenting net income (loss) per share for each class of common stock, which allocates current period net income (loss) to each class of common stock and participating securities based on dividends declared and participation rights in the remaining undistributed earnings or losses. Basic net income (loss) per share is computed by dividing the net income (loss) allocated to each class of common stock by the related weighted-average number of shares outstanding during the period. Diluted net income (loss) per share gives effect to all securities representing potential common shares that were dilutive and outstanding during the period for each class of common stock and excludes potentially dilutive securities whose effect would have been anti-dilutive. |
Legal Proceedings | Legal Proceedings The Company is subject to various claims and lawsuits in the ordinary course of business, which include among other things commercial general liability claims, automobile liability claims, contractual disputes, worker’s compensation claims, labor law and employment claims, claims that the Company infringed on the intellectual property of others, and consumer and employment class actions. The Company is also subject to regulatory and governmental examinations, information requests and subpoenas, inquiries, investigations, and threatened legal actions and proceedings. In connection with such formal and informal inquiries, the Company receives numerous requests, subpoenas, and orders for documents, testimony, and information in connection with various aspects of its activities. There have been no material changes to these matters from those disclosed in the 2023 Annual Report. The Company records accruals for losses that are probable and reasonably estimable. These accruals are based on a variety of factors such as judgment, probability of loss, opinions of internal and external legal counsel, and actuarially determined estimates of claims incurred but not yet reported based upon historical claims experience. Legal costs in connection with claims and lawsuits in the ordinary course of business are expensed as incurred. Additionally, the Company records insurance recovery receivables or other indemnifications from third-parties when recovery has been determined to be probable. The Company has not accrued for any losses for which the likelihood of loss cannot be assessed, is less than probable, or the range of possible loss cannot be estimated. |
Company as Lessee | Company as Lessee As part of normal operations, the Company leases real estate, vehicles, and equipment primarily through its main operating entity, ADT LLC. |
Company as Lessor | Company as Lessor The Company is a lessor in certain Company-owned transactions as the Company has identified a lease component associated with the right-of-use of the security system and a non-lease component associated with the monitoring and related services. For transactions in which (i) the timing and pattern of transfer is the same for the lease and non-lease components and (ii) the lease component would be classified as an operating lease if accounted for separately, the Company applies the practical expedient to aggregate the lease and non-lease components and accounts for the combined transaction based upon its predominant characteristic, which is the non-lease component. The Company accounts for the combined component as a single performance obligation under the applicable revenue guidance and recognizes the underlying assets within subscriber system assets, net. |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2024 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table reconciles the amounts below reported in the Condensed Consolidated Balance Sheets to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows: (in thousands) September 30, 2024 December 31, 2023 Cash and cash equivalents $ 95,338 $ 14,621 Restricted cash and restricted cash equivalents (1) 109,411 115,329 Ending balance $ 204,749 $ 129,950 ________________ (1) Primarily includes funds received from State Farm Fire & Casualty Company (“State Farm”), net of payments and inclusive of interest earned, in connection with the State Farm Development Agreement (as defined and discussed in Note 13 “Related Party Transactions”). The remaining amount of restricted cash relates to the Company’s uncommitted receivables securitization financing agreement (the “ 2020 Receivables Facility”). Refer to Note 5 “Debt.” |
Schedule of Subscriber System Assets | (in thousands) September 30, 2024 December 31, 2023 Gross carrying amount $ 6,777,008 $ 6,404,479 Accumulated depreciation (3,773,812) (3,398,543) Subscriber system assets, net $ 3,003,196 $ 3,005,936 |
Schedule of Subscriber System Asset and Deferred Subscriber Acquisition Costs of Depreciation and Amortization | Depreciation of subscriber system assets and amortization of deferred subscriber acquisition costs are reflected in depreciation and intangible asset amortization and selling, general, and administrative expenses (“SG&A”), respectively, as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2024 2023 2024 2023 Depreciation of subscriber system assets $ 139,704 $ 135,414 $ 417,313 $ 407,739 Amortization of deferred subscriber acquisition costs $ 56,119 $ 47,945 $ 165,454 $ 138,145 |
Schedule of Accrued Expenses and Other Current Liabilities | (in thousands) September 30, 2024 December 31, 2023 Accrued interest $ 57,648 $ 111,197 Payroll-related accruals 110,521 110,941 Opportunity Fund (see Note 13 “Related Party Transactions”) 87,168 93,950 Accrued dividends 50,051 32,207 Other accrued liabilities 228,571 207,819 Accrued expenses and other current liabilities $ 533,959 $ 556,114 |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments and Securities | September 30, 2024 December 31, 2023 (in thousands) Carrying Fair Carrying Fair Long-term debt instruments subject to fair value disclosures (1) $ 7,647,462 $ 7,701,348 $ 7,756,049 $ 7,731,408 ________________ (1) Excludes finance leases and certain vehicle loans reported as discontinued operations. |
Schedule of Carrying Values and Fair Values of Retail Installment Contract Receivables | September 30, 2024 December 31, 2023 (in thousands) Carrying Fair Carrying Fair Retail installment contract receivables, net $ 676,922 $ 500,920 $ 673,635 $ 487,685 |
REVENUE AND RECEIVABLES (Tables
REVENUE AND RECEIVABLES (Tables) | 9 Months Ended |
Sep. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Amortization of Deferred Subscriber Acquisition Revenue | Three Months Ended September 30, Nine Months Ended September 30, ( in thousands ) 2024 2023 2024 2023 Amortization of deferred subscriber acquisition revenue $ 87,980 $ 77,471 $ 257,538 $ 220,779 |
Allowance for Credit Loss Rollforward | Nine Months Ended September 30, (in thousands) 2024 2023 Beginning balance $ 46,850 $ 27,815 Provision for credit losses 106,697 81,368 Write-offs, net of recoveries (1) (89,552) (70,543) Ending balance $ 63,995 $ 38,640 ________________ (1) Recoveries were not material for the periods presented. As such, the Company presented write-offs, net of recoveries. |
Schedule of Unbilled Retail Installment Contract Receivables, Net | The balance of unbilled retail installment contract receivables is comprised of: (in thousands) September 30, 2024 December 31, 2023 Retail installment contract receivables, gross $ 685,883 $ 674,827 Allowance for credit losses (8,961) (1,192) Retail installment contract receivables, net $ 676,922 $ 673,635 Balance Sheet Classification: Accounts receivable, net $ 258,453 $ 238,961 Other assets 418,469 434,674 Retail installment contract receivables, net $ 676,922 $ 673,635 |
Summary of Contracts Assets | The balance of contract assets for residential transactions is comprised of: (in thousands) September 30, 2024 December 31, 2023 Contract assets, gross $ 42,147 $ 39,627 Allowance for credit losses (5,272) (9,025) Contract assets, net $ 36,875 $ 30,602 Balance Sheet Classification: Prepaid expenses and other current assets $ 17,482 $ 15,365 Other assets 19,393 15,237 Contract assets, net $ 36,875 $ 30,602 |
DIVESTITURES (Tables)
DIVESTITURES (Tables) | 9 Months Ended |
Sep. 30, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Disposal Groups, Including Discontinued Operations | Balance Sheet Information (in thousands) September 30, 2024 December 31, 2023 Assets Accounts receivable, net $ 309 $ 20,270 Inventories, net — 28,714 Prepaid expenses and other current assets 3,013 11,973 Total current assets of discontinued operations 3,322 60,957 Property and equipment, net 473 29,512 Other assets 96 13,767 Total assets of discontinued operations $ 3,891 $ 104,236 Liabilities Current maturities of long-term debt $ 138 $ 8,551 Accounts payable 3,397 16,682 Deferred revenue 165 9,177 Accrued expenses and other current liabilities 34,601 45,201 Total current liabilities of discontinued operations 38,301 79,611 Long-term debt 365 9,893 Other liabilities 11,862 10,679 Total liabilities of discontinued operations $ 50,528 $ 100,183 Statements of Operations Information Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2024 2023 2024 2023 Revenue $ 65 $ 57,611 $ 21,360 $ 279,978 Cost of revenue 1,091 49,424 62,450 212,666 Selling, general, and administrative expenses 5,477 49,157 57,245 158,228 Depreciation and intangible asset amortization 55 3,434 1,872 12,330 Merger, restructuring, integration, and other (1,558) 6,480 36,592 9,898 Goodwill impairment — 88,367 — 511,176 Other (income) and expense items 5 337 1,478 1,121 Income (loss) from discontinued operations before income taxes (5,005) (139,588) (138,277) (625,441) Income tax benefit (expense) 475 (4,336) 35,851 132,427 Income (loss) from discontinued operations, net of tax $ (4,530) $ (143,924) $ (102,426) $ (493,014) Cash Flow Information Nine Months Ended September 30, (in thousands) 2024 2023 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and intangible asset amortization $ 1,872 $ 12,330 Goodwill, intangible, and other asset impairments $ 13,770 $ 515,730 Cash flows from investing activities: Purchases of property and equipment $ (80) $ (3,233) (in thousands) Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023 Revenue $ 351,400 $ 1,033,962 Cost of revenue 233,204 688,305 Selling, general, and administrative expenses 72,601 213,113 Depreciation and intangible asset amortization (3,186) 37,691 Other (income) and expense items 8,814 19,222 Income (loss) from discontinued operations before income taxes 39,967 75,631 Income tax benefit (expense) (105,539) (38,740) Income (loss) from discontinued operations, net of tax $ (65,572) $ 36,891 (in thousands) Nine Months Ended September 30, 2023 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and intangible asset amortization $ 37,691 Share-based compensation expense $ 11,699 Cash flows from investing activities: Subscriber system asset expenditures $ (8,902) Purchases of property and equipment $ (4,399) |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Indefinite-Lived Intangible Assets | September 30, 2024 December 31, 2023 (in thousands) Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Definite-lived intangible assets: Contracts and related customer relationships $ 6,046,100 $ (3,328,512) $ 2,717,588 $ 5,571,456 $ (2,937,245) $ 2,634,211 Dealer relationships 1,518,020 (677,548) 840,472 1,518,020 (618,154) 899,866 Other 209,773 (201,955) 7,818 209,773 (199,357) 10,416 Total definite-lived intangible assets 7,773,893 (4,208,015) 3,565,878 7,299,249 (3,754,756) 3,544,493 Indefinite-lived intangible assets: Trade name 1,333,000 — 1,333,000 1,333,000 — 1,333,000 Intangible assets $ 9,106,893 $ (4,208,015) $ 4,898,878 $ 8,632,249 $ (3,754,756) $ 4,877,493 |
Schedule of Finite-Lived Intangible Assets | September 30, 2024 December 31, 2023 (in thousands) Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Definite-lived intangible assets: Contracts and related customer relationships $ 6,046,100 $ (3,328,512) $ 2,717,588 $ 5,571,456 $ (2,937,245) $ 2,634,211 Dealer relationships 1,518,020 (677,548) 840,472 1,518,020 (618,154) 899,866 Other 209,773 (201,955) 7,818 209,773 (199,357) 10,416 Total definite-lived intangible assets 7,773,893 (4,208,015) 3,565,878 7,299,249 (3,754,756) 3,544,493 Indefinite-lived intangible assets: Trade name 1,333,000 — 1,333,000 1,333,000 — 1,333,000 Intangible assets $ 9,106,893 $ (4,208,015) $ 4,898,878 $ 8,632,249 $ (3,754,756) $ 4,877,493 The change in the net carrying amount of contracts and related customer relationships during the period was as follows: (in thousands) Balance as of December 31, 2023 $ 2,634,211 Customer contract additions, net of dealer charge-backs (1) 474,744 Amortization (391,367) Balance as of September 30, 2024 $ 2,717,588 ________________ (1) The weighted-average amortization period for customer contract additions was approximately 15 years. |
Schedule of Finite-Lived Intangible Assets, Amortization Expense | Definite-Lived Intangible Asset Amortization Expense Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2024 2023 2024 2023 Definite-lived intangible asset amortization expense $ 151,817 $ 143,243 $ 453,359 $ 466,886 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The Company’s debt is comprised of the following (in thousands) : Description Issued Maturity Interest Rate (1) Interest Payable September 30, 2024 December 31, 2023 First Lien Term Loan B due 2030 10/13/2023 10/13/2030 Term SOFR +2.25% Quarterly $ 1,984,090 $ 1,375,000 First Lien Revolving Credit Facility 3/16/2018 6/23/2026 Term SOFR +2.75% Quarterly — — Term Loan A Facility 3/14/2023 3/14/2028 Term SOFR +2.25% Quarterly — 625,625 First Lien Notes due 2024 4/4/2019 4/15/2024 5.250% 2/15 and 8/15 — 99,999 First Lien Notes due 2026 4/4/2019 4/15/2026 5.750% 3/15 and 9/15 1,350,000 1,350,000 First Lien Notes due 2027 8/20/2020 8/31/2027 3.375% 6/15 and 12/15 1,000,000 1,000,000 First Lien Notes due 2029 7/29/2021 8/1/2029 4.125% 2/1 and 8/1 1,000,000 1,000,000 ADT Notes due 2032 5/2/2016 7/15/2032 4.875% 1/15 and 7/15 728,016 728,016 ADT Notes due 2042 7/5/2012 7/15/2042 4.875% 1/15 and 7/15 21,896 21,896 Second Lien Notes due 2028 1/28/2020 1/15/2028 6.250% 1/15 and 7/15 1,300,000 1,300,000 2020 Receivables Facility (2) 3/5/2020 8/20/2029 Various Monthly 423,118 436,004 Total debt principal, excluding finance leases 7,807,120 7,936,540 Plus: Finance lease liabilities (3) 73,624 69,468 Less: Unamortized debt discount, net (12,325) (15,005) Less: Unamortized deferred financing costs (29,397) (39,620) Less: Unamortized purchase accounting fair value adjustment and other (117,936) (125,866) Total debt 7,721,086 7,825,517 Less: Current maturities of long-term debt, net of unamortized debt discount (196,563) (312,061) Long-term debt $ 7,524,523 $ 7,513,456 _________________ (1) Interest rate as of September 30, 2024. Interest on the 2020 Receivables Facility is primarily based on the Secured Overnight Financing Rate (“SOFR”) + 0.95 (2) Maturity date for the 2020 Receivables Facility represents the final maturity date of current loans borrowed under the facility. (3) Refer to Note 12 “Leases” for additional information regarding the Company’s finance leases. |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | As of September 30, 2024 and December 31, 2023, the Company’s interest rate swaps consisted of the following (in thousands) : Execution Maturity Designation Notional Amount October 2019 September 2026 Not designated $ 2,800,000 March 2023 March 2028 Not designated 100,000 April 2023 March 2028 Not designated 200,000 December 2023 (1) September 2026 Not designated 700,000 Total notional amount $ 3,800,000 _________________ (1) Interest rate swaps entered into to offset the excess notional interest rate swaps as a result of the partial redemption of the First Lien Term Loan B due 2026. The changes in fair value associated with these swaps and the over-hedged swaps are reflected in other income (expense). |
Schedule of Derivative Liabilities at Fair Value | (in thousands) September 30, 2024 December 31, 2023 Prepaid expenses and other current assets $ 51,776 $ 74,974 Other assets $ 43,683 $ 76,493 Accrued expenses and other current liabilities $ 699 $ 5,312 Other liabilities $ 2,135 $ 1,325 |
Schedule of Unrealized Gain (Loss) on Interest Rate Swaps | Three Months Ended September 30, Nine Months Ended September 30, Statement of Operations Classification (in thousands) 2024 2023 2024 2023 Interest expense, net $ (58,051) $ 16,380 $ (46,429) $ 38,477 Other income (expense) $ (4,821) $ — $ (14,699) $ — |
Reclassification out of Accumulated Other Comprehensive Income | Three Months Ended September 30, Nine Months Ended September 30, ( in thousands ) 2024 2023 2024 2023 Interest expense, net $ 1,943 $ 30,008 $ 6,057 $ 40,186 Income tax (benefit) expense $ (471) $ (7,245) $ (1,464) $ (9,702) |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2024 | |
Equity [Abstract] | |
Schedule of Dividends Declared | (in thousands, except per share data) Common Stock Class B Common Stock Declaration Date Record Date Payment Date Per Share Aggregate Per Share Aggregate Nine Months Ended September 30, 2024 1/24/2024 3/14/2024 4/4/2024 $ 0.055 $ 47,059 $ 0.055 $ 3,011 4/25/2024 6/13/2024 7/9/2024 0.055 47,137 0.055 3,011 8/1/2024 9/13/2024 10/4/2024 0.055 47,146 0.055 3,011 Total $ 0.165 $ 141,342 $ 0.165 $ 9,033 Nine Months Ended September 30, 2023 2/28/2023 3/16/2023 4/4/2023 $ 0.035 $ 30,342 $ 0.035 $ 1,916 5/2/2023 6/15/2023 7/6/2023 0.035 30,256 0.035 1,916 8/8/2023 9/15/2023 10/4/2023 0.035 30,405 0.035 1,916 Total $ 0.105 $ 91,003 $ 0.105 $ 5,748 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The Company used a binomial lattice model to determine the grant date fair value for options granted and included the following assumptions: Expected exercise term (years) 7 Expected volatility (1) 49.9% Expected dividend yield (2) 3.4% Risk-free interest rate (3) 4.0% _________________ (1) Estimated using historical and implied stock price volatility of the Company. (2) Calculated by taking the annual dividend run-rate and dividing by the stock price at date of grant. (3) Based on the U.S. Treasury yield curve. |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Three Months Ended September 30, Nine Months Ended September 30, in thousands, except per share amounts 2024 2023 2024 2023 Allocation of income (loss) from continuing operations - basic $ 124,078 $ 115,874 $ 396,740 $ 322,680 Dilutive effect 3,327 2,255 10,068 6,697 Allocation of income (loss) from continuing operations - diluted $ 127,405 $ 118,129 $ 406,808 $ 329,377 Allocation of income (loss) from discontinued operations, net of tax - basic $ (4,576) $ (196,923) $ (104,340) $ (428,719) Dilutive effect — — — — Allocation of income (loss) from discontinued operations, net of tax - diluted $ (4,576) $ (196,923) $ (104,340) $ (428,719) Weighted-average shares outstanding - basic 850,462 857,423 851,539 856,446 Dilutive effect (1) 62,399 60,351 61,757 62,255 Weighted-average shares outstanding - diluted 912,861 917,774 913,296 918,701 Income (loss) from continuing operations per share - basic $ 0.15 $ 0.13 $ 0.46 $ 0.38 Income (loss) from continuing operations per share - diluted $ 0.14 $ 0.13 $ 0.44 $ 0.36 Income (loss) per share from discontinued operations, net of tax - basic $ (0.01) $ (0.23) $ (0.12) $ (0.50) Income (loss) per share from discontinued operations, net of tax - diluted $ (0.01) $ (0.21) $ (0.11) $ (0.47) _________________ (1) During the three and nine months ended September 30, 2024, 21 million and 20 million shares of Common Stock, respectively, that would be dilutive were excluded from the diluted earnings per share calculations because their effects would have been anti-dilutive. During the three and nine months ended September 30, 2023, 22 million and 18 million shares of Common Stock, respectively, that would be dilutive were excluded from the diluted earnings per share calculations because their effects would have been anti-dilutive. Three Months Ended September 30, Nine Months Ended September 30, in thousands, except per share amounts 2024 2023 2024 2023 Allocation of net income (loss) from continuing operations - basic $ 7,942 $ 7,385 $ 25,356 $ 20,580 Dilutive effect (316) (339) (1,035) (949) Allocation of net income (loss) from continuing operations - diluted $ 7,626 $ 7,046 $ 24,321 $ 19,631 Allocation of income (loss) from discontinued operations, net of tax - basic $ (293) $ (12,573) $ (6,660) $ (27,404) Dilutive effect — — — — Allocation of income (loss) from discontinued operations, net of tax - diluted $ (293) $ (12,573) $ (6,660) $ (27,404) Weighted-average shares outstanding - basic 54,745 54,745 54,745 54,745 Dilutive effect (1) — — — — Weighted-average shares outstanding - diluted 54,745 54,745 54,745 54,745 Net income (loss) from continuing operations per share - basic $ 0.15 $ 0.13 $ 0.46 $ 0.38 Net income (loss) from continuing operations per share - diluted $ 0.14 $ 0.13 $ 0.44 $ 0.36 Income (loss) per share from discontinued operations, net of tax - basic $ (0.01) $ (0.23) $ (0.12) $ (0.50) Income (loss) per share from discontinued operations, net of tax - diluted $ (0.01) $ (0.21) $ (0.11) $ (0.47) ________________ (1) There were no potential shares of Class B Common Stock during the periods presented. |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2024 | |
Leases [Abstract] | |
Schedule of Consolidated Balance Sheet Information Related to Leases | (in thousands) September 30, 2024 December 31, 2023 Presentation and Classification: Operating Current Prepaid expenses and other current assets $ 67 $ 68 Operating Non-current Other assets 82,983 85,649 Finance Non-current Property and equipment, net (1) 67,832 65,368 Total right-of-use assets $ 150,882 $ 151,085 Operating Current Accrued expenses and other current liabilities $ 19,147 $ 13,035 Finance Current Current maturities of long-term debt 26,533 25,741 Operating Non-current Other liabilities 77,066 80,189 Finance Non-current Long-term debt 47,091 43,727 Total lease liabilities $ 169,837 $ 162,692 _________________ (1) Finance lease right-of-use assets are recorded net of accumulated depreciation, which was approximately $61 million and $50 million as of September 30, 2024 and December 31, 2023, respectively. |
Schedule of Lease Cost | Three Months Ended September 30, Nine Months Ended September 30, ( in thousands ) 2024 2023 2024 2023 Operating lease cost $ 7,365 $ 8,832 $ 20,943 $ 24,822 Finance lease cost: Amortization of right-of-use assets 6,095 4,355 16,203 10,144 Interest on lease liabilities 1,109 709 3,514 1,494 Variable lease costs 8,701 7,692 24,428 27,512 Total lease cost $ 23,270 $ 21,588 $ 65,088 $ 63,972 |
Supplementary Cash Flow Information | Nine Months Ended September 30, ( in thousands ) 2024 2023 Operating leases $ 14,200 $ 28,786 Finance leases $ 33,283 $ 62,203 _________________ (1) Includes both continuing and discontinued operations. |
DESCRIPTION OF BUSINESS AND S_4
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Mar. 06, 2024 | Mar. 31, 2024 | Sep. 30, 2024 | Mar. 19, 2024 | Dec. 31, 2023 | |
Accounting Policies [Line Items] | |||||
Revenue from contract with customer, term of customer relationship | 15 years | ||||
Money market funds | $ 98 | $ 55 | |||
Apollo | |||||
Accounting Policies [Line Items] | |||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 50% | ||||
Apollo | Related Party | |||||
Accounting Policies [Line Items] | |||||
Treasury stock, shares, acquired (in shares) | 15 | 15 |
DESCRIPTION OF BUSINESS AND S_5
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Sep. 30, 2024 | Dec. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 95,338 | $ 14,621 | ||
Restricted cash and restricted cash equivalents | 109,411 | 115,329 | ||
Ending balance | $ 204,749 | $ 129,950 | $ 356,064 | $ 373,580 |
DESCRIPTION OF BUSINESS AND S_6
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Subscriber System Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2024 | Dec. 31, 2023 |
Accounting Policies [Abstract] | ||
Gross carrying amount | $ 6,777,008 | $ 6,404,479 |
Accumulated depreciation | (3,773,812) | (3,398,543) |
Subscriber system assets, net | $ 3,003,196 | $ 3,005,936 |
DESCRIPTION OF BUSINESS AND S_7
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Subscriber System Asset and Deferred Subscriber Acquisition Costs of Depreciation and Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | |
Accounting Policies [Abstract] | ||||
Depreciation of subscriber system assets | $ 139,704 | $ 135,414 | $ 417,313 | $ 407,739 |
Amortization of deferred subscriber acquisition costs | $ 56,119 | $ 47,945 | $ 165,454 | $ 138,145 |
DESCRIPTION OF BUSINESS AND S_8
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2024 | Dec. 31, 2023 |
Accounting Policies [Abstract] | ||
Accrued interest | $ 57,648 | $ 111,197 |
Payroll-related accruals | 110,521 | 110,941 |
Opportunity fund | 87,168 | 93,950 |
Accrued dividends | 50,051 | 32,207 |
Other accrued liabilities | 228,571 | 207,819 |
Accrued expenses and other current liabilities | $ 533,959 | $ 556,114 |
DESCRIPTION OF BUSINESS AND S_9
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Carrying Values and Estimated Fair Values of Debt Instruments and Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2024 | Dec. 31, 2023 |
Carrying Amount | ||
Accounting Policies [Line Items] | ||
Long-term debt instruments subject to fair value disclosures | $ 7,647,462 | $ 7,756,049 |
Fair Value | ||
Accounting Policies [Line Items] | ||
Long-term debt instruments subject to fair value disclosures | $ 7,701,348 | $ 7,731,408 |
DESCRIPTION OF BUSINESS AND _10
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Carrying Values and Fair Values of Retail Installment Contract Receivables (Details) - Retail Installment Contract - USD ($) $ in Thousands | Sep. 30, 2024 | Dec. 31, 2023 |
Accounting Policies [Line Items] | ||
Retail installment contract receivables, net | $ 676,922 | $ 673,635 |
Retail installment contract receivable, fair value | $ 500,920 | $ 487,685 |
REVENUE AND RECEIVABLES - Amort
REVENUE AND RECEIVABLES - Amortization of Deferred Subscriber Acquisition Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | ||||
Amortization of deferred subscriber acquisition revenue | $ 87,980 | $ 77,471 | $ 257,538 | $ 220,779 |
REVENUE AND RECEIVABLES - Allow
REVENUE AND RECEIVABLES - Allowance for Credit Loss Rollforward (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2024 | Sep. 30, 2023 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 46,850 | $ 27,815 |
Provision for credit losses | 106,697 | 81,368 |
Write-offs, net of recoveries | (89,552) | (70,543) |
Ending balance | $ 63,995 | $ 38,640 |
REVENUE AND RECEIVABLES - Sched
REVENUE AND RECEIVABLES - Schedule of Unbilled Retail Installment Contract Receivables, Net (Details) - Retail Installment Contract - USD ($) $ in Thousands | Sep. 30, 2024 | Dec. 31, 2023 |
Capitalized Contract Cost [Line Items] | ||
Retail installment contract receivables, gross | $ 685,883 | $ 674,827 |
Allowance for credit losses | (8,961) | (1,192) |
Retail installment contract receivables, net | 676,922 | 673,635 |
Accounts receivable, net | ||
Capitalized Contract Cost [Line Items] | ||
Retail installment contract receivables, net | 258,453 | 238,961 |
Other assets | ||
Capitalized Contract Cost [Line Items] | ||
Retail installment contract receivables, net | $ 418,469 | $ 434,674 |
REVENUE AND RECEIVABLES - Narra
REVENUE AND RECEIVABLES - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2024 | Dec. 31, 2023 |
Variable Interest Entity, Primary Beneficiary | ||
Capitalized Contract Cost [Line Items] | ||
Transfers accounted for as secured borrowings, assets, carrying amount | $ 599 | $ 610 |
REVENUE AND RECEIVABLES - Summa
REVENUE AND RECEIVABLES - Summary of Contracts Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2024 | Dec. 31, 2023 |
Capitalized Contract Cost [Line Items] | ||
Contract assets, gross | $ 42,147 | $ 39,627 |
Allowance for credit losses | (5,272) | (9,025) |
Contract assets, net | 36,875 | 30,602 |
Prepaid expenses and other current assets | ||
Capitalized Contract Cost [Line Items] | ||
Contract assets, net | 17,482 | 15,365 |
Other assets | ||
Capitalized Contract Cost [Line Items] | ||
Contract assets, net | $ 19,393 | $ 15,237 |
DIVESTITURES - Narrative (Detai
DIVESTITURES - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Oct. 02, 2023 | Jul. 31, 2024 | Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Income (loss) from discontinued operations, net of tax | $ (4,869) | $ (209,496) | $ (111,000) | $ (456,123) | ||
Other income (expense) | 17,735 | $ 661 | 44,907 | $ (10) | ||
ADT Solar Exit | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Income (loss) from discontinued operations, net of tax | 0 | (88,000) | ||||
Payments for employee severance costs | 21,000 | |||||
Commercial Divestiture | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Noncash or part noncash divestiture, amount of consideration received | $ 1,613,000 | |||||
Proceeds from disposition of business | $ 1,585,000 | |||||
Disposal group, including discontinued operation, post-closing adjustment expense | $ 21,000 | |||||
Other income (expense) | $ 14,000 | 36,000 | ||||
Increase (decrease) in divestiture of businesses | 9,000 | |||||
Write-down and Disposition of Inventory and Asset Impairments | ADT Solar Exit | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Income (loss) from discontinued operations, net of tax | (34,000) | |||||
Disposition of Existing Installation Pipeline | ADT Solar Exit | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Income (loss) from discontinued operations, net of tax | (29,000) | |||||
Employee Separation Costs | ADT Solar Exit | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Income (loss) from discontinued operations, net of tax | (13,000) | |||||
Contract Termination and Other Charges | ADT Solar Exit | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Income (loss) from discontinued operations, net of tax | $ (11,000) |
DIVESTITURES - Schedule of Disp
DIVESTITURES - Schedule of Disposal Groups, Including Discontinued Operations, Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2024 | Dec. 31, 2023 |
Assets | ||
Total current assets of discontinued operations | $ 3,322 | $ 60,957 |
Liabilities | ||
Total current liabilities of discontinued operations | 38,301 | 79,611 |
Discontinued Operations, Disposed of by Sale | ADT Solar Exit | ||
Assets | ||
Accounts receivable, net | 309 | 20,270 |
Inventories, net | 0 | 28,714 |
Prepaid expenses and other current assets | 3,013 | 11,973 |
Total current assets of discontinued operations | 3,322 | 60,957 |
Property and equipment, net | 473 | 29,512 |
Other assets | 96 | 13,767 |
Total assets of discontinued operations | 3,891 | 104,236 |
Liabilities | ||
Current maturities of long-term debt | 138 | 8,551 |
Accounts payable | 3,397 | 16,682 |
Deferred revenue | 165 | 9,177 |
Accrued expenses and other current liabilities | 34,601 | 45,201 |
Total current liabilities of discontinued operations | 38,301 | 79,611 |
Long-term debt | 365 | 9,893 |
Other liabilities | 11,862 | 10,679 |
Total liabilities of discontinued operations | $ 50,528 | $ 100,183 |
DIVESTITURES - Schedule of Di_2
DIVESTITURES - Schedule of Disposal Groups, Including Discontinued Operations, Statements of Operation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Income (loss) from discontinued operations, net of tax | $ (4,869) | $ (209,496) | $ (111,000) | $ (456,123) |
ADT Solar Exit | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Income (loss) from discontinued operations, net of tax | 0 | (88,000) | ||
Discontinued Operations, Disposed of by Sale | ADT Solar Exit | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue | 65 | 57,611 | 21,360 | 279,978 |
Cost of revenue | 1,091 | 49,424 | 62,450 | 212,666 |
Selling, general, and administrative expenses | 5,477 | 49,157 | 57,245 | 158,228 |
Depreciation and intangible asset amortization | 55 | 3,434 | 1,872 | 12,330 |
Merger, restructuring, integration, and other | (1,558) | 6,480 | 36,592 | 9,898 |
Goodwill impairment | 0 | 88,367 | 0 | 511,176 |
Other (income) and expense items | 5 | 337 | 1,478 | 1,121 |
Income (loss) from discontinued operations before income taxes | (5,005) | (139,588) | (138,277) | (625,441) |
Income tax benefit (expense) | 475 | (4,336) | 35,851 | 132,427 |
Income (loss) from discontinued operations, net of tax | $ (4,530) | (143,924) | $ (102,426) | (493,014) |
Discontinued Operations, Disposed of by Sale | Commercial Divestiture | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue | 351,400 | 1,033,962 | ||
Cost of revenue | 233,204 | 688,305 | ||
Selling, general, and administrative expenses | 72,601 | 213,113 | ||
Depreciation and intangible asset amortization | (3,186) | 37,691 | ||
Other (income) and expense items | 8,814 | 19,222 | ||
Income (loss) from discontinued operations before income taxes | 39,967 | 75,631 | ||
Income tax benefit (expense) | (105,539) | (38,740) | ||
Income (loss) from discontinued operations, net of tax | $ (65,572) | $ 36,891 |
DIVESTITURES - Schedule of Di_3
DIVESTITURES - Schedule of Disposal Groups, Including Discontinued Operations, Cash Flow (Details) - Discontinued Operations, Disposed of by Sale - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2024 | Sep. 30, 2023 | |
ADT Solar Exit | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Depreciation and intangible asset amortization | $ 1,872 | $ 12,330 |
Goodwill, intangible, and other asset impairments | 13,770 | 515,730 |
Purchases of property and equipment | $ (80) | (3,233) |
Commercial Divestiture | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Depreciation and intangible asset amortization | 37,691 | |
Share-based compensation expense | 11,699 | |
Subscriber system asset expenditures | (8,902) | |
Purchases of property and equipment | $ (4,399) |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Gross Carrying Amounts and Accumulated Amortization of Other Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2024 | Dec. 31, 2023 |
Definite-lived intangible assets: | ||
Gross Carrying Amount | $ 7,773,893 | $ 7,299,249 |
Accumulated Amortization | (4,208,015) | (3,754,756) |
Net Carrying Amount | 3,565,878 | 3,544,493 |
Indefinite-lived intangible assets: | ||
Intangible assets, gross (excluding goodwill), total | 9,106,893 | 8,632,249 |
Total intangible assets, net carrying amount | 4,898,878 | 4,877,493 |
Trade name | ||
Indefinite-lived intangible assets: | ||
Trade name | 1,333,000 | 1,333,000 |
Contracts and related customer relationships | ||
Definite-lived intangible assets: | ||
Gross Carrying Amount | 6,046,100 | 5,571,456 |
Accumulated Amortization | (3,328,512) | (2,937,245) |
Net Carrying Amount | 2,717,588 | 2,634,211 |
Dealer relationships | ||
Definite-lived intangible assets: | ||
Gross Carrying Amount | 1,518,020 | 1,518,020 |
Accumulated Amortization | (677,548) | (618,154) |
Net Carrying Amount | 840,472 | 899,866 |
Other | ||
Definite-lived intangible assets: | ||
Gross Carrying Amount | 209,773 | 209,773 |
Accumulated Amortization | (201,955) | (199,357) |
Net Carrying Amount | $ 7,818 | $ 10,416 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in Net Carrying Amount of Contracts and Related Customer Relationships (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | |
Finite-lived Intangible Assets [Roll Forward] | ||||
Balance as of beginning of period | $ 3,544,493 | |||
Amortization | $ (151,817) | $ (143,243) | (453,359) | $ (466,886) |
Balance as of end of period | 3,565,878 | 3,565,878 | ||
Contracts and related customer relationships | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
Balance as of beginning of period | 2,634,211 | |||
Amortization | (391,367) | |||
Balance as of end of period | $ 2,717,588 | $ 2,717,588 | ||
Acquired finite-lived intangible assets, weighted average useful life | 15 years | |||
Customer Contracts | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
Customer contract additions, net of dealer charge-backs | $ 474,744 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2024 | Sep. 30, 2024 | Sep. 30, 2023 | |
Finite-Lived Intangible Assets [Line Items] | |||
Payments to acquire intangible assets | $ 473,560 | $ 385,462 | |
Contracts and related customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Payments to acquire intangible assets | $ 98,000 | ||
Customer Contracts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Payments to acquire intangible assets | $ 81,000 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Finite-lived Intangible Assets Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Definite-lived intangible asset amortization expense | $ 151,817 | $ 143,243 | $ 453,359 | $ 466,886 |
DEBT - Schedule of Long-term De
DEBT - Schedule of Long-term Debt Instruments (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Apr. 30, 2024 | Mar. 31, 2024 | Sep. 30, 2024 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | ||||
Total debt principal, excluding finance leases | $ 7,807,120 | $ 7,936,540 | ||
Plus: Finance lease liabilities | 73,624 | 69,468 | ||
Less: Unamortized debt discount, net | (12,325) | (15,005) | ||
Less: Unamortized deferred financing costs | (29,397) | (39,620) | ||
Less: Unamortized purchase accounting fair value adjustment and other | (117,936) | (125,866) | ||
Total debt | 7,721,086 | 7,825,517 | ||
Less: Current maturities of long-term debt, net of unamortized debt discount | (196,563) | (312,061) | ||
Long-term debt | $ 7,524,523 | 7,513,456 | ||
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration] | SOFR | SOFR | SOFR | |
First Lien Term Loan B due 2030 | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 1,984,090 | 1,375,000 | ||
First Lien Term Loan B due 2030 | Secured Debt | SOFR | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 2.25% | |||
First Lien Revolving Credit Facility | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 0 | 0 | ||
First Lien Revolving Credit Facility | Secured Debt | SOFR | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 2.75% | |||
Term Loan A Facility | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 0 | 625,625 | ||
Term Loan A Facility | Secured Debt | SOFR | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 2.25% | |||
First Lien Notes due 2024 | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 5.25% | |||
Long-term debt, gross | $ 0 | 99,999 | ||
First Lien Notes due 2026 | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 5.75% | |||
Long-term debt, gross | $ 1,350,000 | 1,350,000 | ||
First Lien Notes due 2027 | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.375% | |||
Long-term debt, gross | $ 1,000,000 | 1,000,000 | ||
First Lien Notes due 2029 | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.125% | |||
Long-term debt, gross | $ 1,000,000 | 1,000,000 | ||
ADT Notes due 2032 | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.875% | |||
Long-term debt, gross | $ 728,016 | 728,016 | ||
ADT Notes due 2042 | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.875% | |||
Long-term debt, gross | $ 21,896 | 21,896 | ||
Second Lien Notes due 2028 | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 6.25% | |||
Long-term debt, gross | $ 1,300,000 | 1,300,000 | ||
2020 Receivables Facility | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 423,118 | $ 436,004 | ||
2020 Receivables Facility | Secured Debt | SOFR | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 0.95% | |||
2020 Receivables Facility | Secured Debt | COF | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 0.85% |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | |||||
Oct. 31, 2024 | May 31, 2024 | Apr. 30, 2024 | Mar. 31, 2024 | Oct. 31, 2024 | Sep. 30, 2024 | Apr. 30, 2025 | Sep. 30, 2023 | Aug. 02, 2023 | |
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration] | SOFR | SOFR | SOFR | ||||||
First Lien Revolving Credit Facility | Subsequent Event | Base Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 1% | ||||||||
First Lien Revolving Credit Facility | Line of Credit | Subsequent Event | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, increase (decrease), net | $ 225 | ||||||||
Maximum borrowing capacity | $ 800 | $ 800 | |||||||
Line of credit facility, expiration period | 91 days | ||||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.30% | ||||||||
First Lien Revolving Credit Facility | Line of Credit | Subsequent Event | Federal Funds Effective Swap Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 0.50% | ||||||||
First Lien Revolving Credit Facility | Line of Credit | Subsequent Event | Base Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 1% | ||||||||
First Lien Revolving Credit Facility | Line of Credit | Subsequent Event | SOFR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 2% | ||||||||
First Lien Term Loan B due 2030 | Secured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 2.25% | 2.50% | |||||||
Exchanged debt, principal amount | $ 143 | ||||||||
Line of credit facility, increase (decrease), net | 474 | ||||||||
First Lien Term Loan B due 2030 | Secured Debt | Subsequent Event | |||||||||
Debt Instrument [Line Items] | |||||||||
Proceeds from (repayments of) lines of credit | $ 646 | ||||||||
Term Loan A Facility | Secured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Extinguishment of debt, amount | $ 474 | ||||||||
ADT Notes Due 2024 | Secured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Extinguishment of debt, amount | $ 100 | ||||||||
2020 Receivables Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, remaining borrowing capacity | $ 127 | ||||||||
Receivables facility maximum limit | 500 | ||||||||
Proceeds from (repayments of) secured debt | $ 32 | ||||||||
2020 Receivables Facility | Subsequent Event | |||||||||
Debt Instrument [Line Items] | |||||||||
Receivables facility maximum limit | $ 550 | ||||||||
Revolving Credit Facility | First Lien Revolving Credit Facility | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Proceeds from lines of credit | 325 | ||||||||
Repayments of lines of credit | 325 | ||||||||
Line of credit facility, remaining borrowing capacity | $ 575 | ||||||||
Aggregate principal amount | $ 0 | ||||||||
Revolving Credit Facility | Solar Receivables Financing Agreement | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 300 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Schedule of Derivative Instruments (Details) $ in Thousands | Sep. 30, 2024 USD ($) |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Derivative, notional amount | $ 3,800,000 |
October 2019 - Not Designated | Not Designated as Hedging Instrument | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Derivative, notional amount | 2,800,000 |
March 2023 - Not Designated | Not Designated as Hedging Instrument | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Derivative, notional amount | 100,000 |
April 2023 - Not Designated | Not Designated as Hedging Instrument | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Derivative, notional amount | 200,000 |
December 2023 - Not Designated | Not Designated as Hedging Instrument | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Derivative, notional amount | $ 700,000 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Schedule of Derivative Liabilities at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2024 | Dec. 31, 2023 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Prepaid expenses and other current assets | $ 194,902 | $ 242,192 |
Other assets | 726,732 | 699,231 |
Accrued expenses and other current liabilities | 533,959 | 556,114 |
Other liabilities | 230,231 | 219,069 |
Interest Rate Swap | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Prepaid expenses and other current assets | 51,776 | 74,974 |
Other assets | 43,683 | 76,493 |
Other liabilities | 2,135 | 1,325 |
Interest Rate Swap | Not Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Accrued expenses and other current liabilities | $ 699 | $ 5,312 |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS - Schedule of Unrealized Gain (Loss) on Interest Rate Swaps (Details) - Interest Rate Swap - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | |
Interest expense, net | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Interest expense, net | $ (58,051) | $ 16,380 | $ (46,429) | $ 38,477 |
Other income (expense) | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Interest expense, net | $ (4,821) | $ 0 | $ (14,699) | $ 0 |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS - Reclassification out of Accumulated Other Comprehensive Income (Details) - Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | |
Interest expense, net | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Reclassification from accumulated other comprehensive income, current period, before tax | $ 1,943 | $ 30,008 | $ 6,057 | $ 40,186 |
Income tax (benefit) expense | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Reclassification from accumulated other comprehensive income, current period, before tax | $ (471) | $ (7,245) | $ (1,464) | $ (9,702) |
DERIVATIVE FINANCIAL INSTRUME_7
DERIVATIVE FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2024 | Dec. 31, 2023 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Accumulated other comprehensive income (loss) | $ (11,497) | $ (16,162) |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Accumulated other comprehensive income (loss) | $ 9,000 | $ (13,000) |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | ||||
Decrease in unrecognized tax benefits is reasonably possible | $ 29,000 | $ 29,000 | ||
Income tax expense (benefit) | $ 50,235 | $ 34,427 | $ 166,505 | $ 119,987 |
Effective tax rate | 27.60% | 21.50% | 28.30% | 25.50% |
Federal statutory income tax rate, percent | 21% | 21% | 21% | 21% |
State and local income taxes, percent | 6.20% | 5.10% | 5.80% | 5.80% |
Change in unrecognized tax benefit, percent | 4% | 0.80% | ||
Prior year return adjustments, percent | 4% | 1.20% | 1.20% | |
Impact of prior year income taxes, percent | 3.10% | (1.60%) | 1% | |
Non-deductible goodwill on dispositions, percent | 1.20% |
EQUITY - Narrative (Details)
EQUITY - Narrative (Details) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
Oct. 24, 2024 $ / shares | Mar. 06, 2024 USD ($) $ / shares shares | Oct. 31, 2024 USD ($) $ / shares shares | Sep. 30, 2024 USD ($) $ / shares | Jun. 30, 2024 $ / shares | Mar. 31, 2024 USD ($) $ / shares shares | Sep. 30, 2023 $ / shares | Jun. 30, 2023 $ / shares | Mar. 31, 2023 $ / shares | Sep. 30, 2024 USD ($) class $ / shares | Sep. 30, 2023 $ / shares | Jan. 24, 2024 USD ($) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Number of class of common stock | class | 2 | |||||||||||
Stock repurchase program, authorized amount | $ 350 | |||||||||||
Cash dividends declared per common share (in dollars per share) | $ / shares | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.035 | $ 0.035 | $ 0.035 | $ 0.165 | $ 0.105 | ||||
Subsequent Event | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Cash dividends declared per common share (in dollars per share) | $ / shares | $ 0.055 | |||||||||||
Apollo | Related Party | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Treasury stock, shares, acquired (in shares) | shares | 15 | 15 | ||||||||||
Treasury stock, value, acquired, cost method | $ 93 | $ 93 | ||||||||||
Shares acquired, average cost per share (in dollars per share) | $ / shares | $ 6.22 | $ 6.22 | ||||||||||
Stock repurchase program, remaining authorized repurchase amount | $ 257 | $ 257 | ||||||||||
Apollo | Related Party | Subsequent Event | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||
Treasury stock, shares, acquired (in shares) | shares | 5 | |||||||||||
Treasury stock, value, acquired, cost method | $ 32 | |||||||||||
Shares acquired, average cost per share (in dollars per share) | $ / shares | $ 6.40 | |||||||||||
Stock repurchase program, remaining authorized repurchase amount | $ 225 |
EQUITY - Schedule of Dividends
EQUITY - Schedule of Dividends Declared (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2024 | Jun. 30, 2024 | Mar. 31, 2024 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Cash dividends declared per common share (in dollars per share) | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.035 | $ 0.035 | $ 0.035 | $ 0.165 | $ 0.105 |
Dividends, common stock | $ 47,146 | $ 47,137 | $ 47,059 | $ 30,405 | $ 30,256 | $ 30,342 | $ 141,342 | $ 91,003 |
Class B Common Stock | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Cash dividends declared per common share (in dollars per share) | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.035 | $ 0.035 | $ 0.035 | $ 0.165 | $ 0.105 |
Dividends, common stock | $ 3,011 | $ 3,011 | $ 3,011 | $ 1,916 | $ 1,916 | $ 1,916 | $ 9,033 | $ 5,748 |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2024 | Mar. 31, 2024 | Sep. 30, 2024 | Sep. 30, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 39,329 | $ 43,068 | ||
Share-based Compensation, 2018 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, options, grants in period, gross (in shares) | 6.8 | |||
Share-based compensation arrangements by share-based payment award, options, grants in period, weighted average exercise price (in dollars per share) | $ 6.51 | |||
Share-based compensation arrangement by share-based payment award, options, exercisable, weighted average remaining contractual term | 10 years | |||
Share-based compensation arrangement by Share-based payment award, options, grants in period, weighted average grant date fair value (in dollars per share) | $ 2.56 | |||
Restricted Stock Units (RSUs) | Share-based Compensation, 2018 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
RSUs granted in period (in shares) | 3.9 | |||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period, weighted average grant date fair value (in dollars per share) | $ 6.51 | |||
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years | |||
Options | Share-based Compensation, 2018 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years | |||
Modified Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 11,000 |
SHARE-BASED COMPENSATION - Sche
SHARE-BASED COMPENSATION - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) - Options - Share-based Compensation, 2018 Plan | 9 Months Ended |
Sep. 30, 2024 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected exercise term (years) | 7 years |
Expected volatility | 49.90% |
Expected dividend yield | 3.40% |
Risk-free interest rate | 4% |
NET INCOME (LOSS) PER SHARE - N
NET INCOME (LOSS) PER SHARE - Narrative (Details) - shares shares in Millions | 9 Months Ended | |
Sep. 30, 2024 | Sep. 30, 2023 | |
Earnings Per Share [Abstract] | ||
Incremental common shares attributable to dilutive effect of share-based payment arrangements (in shares) | 7 | 9 |
NET INCOME (LOSS) PER SHARE - S
NET INCOME (LOSS) PER SHARE - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 21,000 | 22,000 | 20,000 | 18,000 |
Common Stock | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Allocation of income (loss) from continuing operations - basic | $ 124,078 | $ 115,874 | $ 396,740 | $ 322,680 |
Dilutive effect | 3,327 | 2,255 | 10,068 | 6,697 |
Allocation of income (loss) from continuing operations - diluted | 127,405 | 118,129 | 406,808 | 329,377 |
Allocation of income (loss) from discontinued operations, net of tax - basic | (4,576) | (196,923) | (104,340) | (428,719) |
Dilutive effect | 0 | 0 | 0 | 0 |
Allocation of income (loss) from discontinued operations, net of tax - diluted | $ (4,576) | $ (196,923) | $ (104,340) | $ (428,719) |
Weighted-average shares outstanding - basic (in shares) | 850,462 | 857,423 | 851,539 | 856,446 |
Dilutive effect (including conversion of Class B Common Stock) (in shares) | 62,399 | 60,351 | 61,757 | 62,255 |
Weighted average number of shares - diluted common stock and Class B common stock (in shares) | 912,861 | 917,774 | 913,296 | 918,701 |
Income (loss) from continuing operations per share - basic (in dollars per share) | $ 0.15 | $ 0.13 | $ 0.46 | $ 0.38 |
Income (loss) from continuing operations per share - diluted (in dollars per share) | 0.14 | 0.13 | 0.44 | 0.36 |
Income (loss) per share from discontinued operations, net of tax - basic (in dollars per share) | (0.01) | (0.23) | (0.12) | (0.50) |
Income (loss) per share from discontinued operations, net of tax - diluted (in dollars per share) | $ (0.01) | $ (0.21) | $ (0.11) | $ (0.47) |
Class B Common Stock | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Allocation of income (loss) from continuing operations - basic | $ 7,942 | $ 7,385 | $ 25,356 | $ 20,580 |
Dilutive effect | (316) | (339) | (1,035) | (949) |
Allocation of income (loss) from continuing operations - diluted | 7,626 | 7,046 | 24,321 | 19,631 |
Allocation of income (loss) from discontinued operations, net of tax - basic | (293) | (12,573) | (6,660) | (27,404) |
Dilutive effect | 0 | 0 | 0 | 0 |
Allocation of income (loss) from discontinued operations, net of tax - diluted | $ (293) | $ (12,573) | $ (6,660) | $ (27,404) |
Weighted-average shares outstanding - basic (in shares) | 54,745 | 54,745 | 54,745 | 54,745 |
Dilutive effect (including conversion of Class B Common Stock) (in shares) | 0 | 0 | 0 | 0 |
Weighted average number of shares - diluted common stock and Class B common stock (in shares) | 54,745 | 54,745 | 54,745 | 54,745 |
Income (loss) from continuing operations per share - basic (in dollars per share) | $ 0.15 | $ 0.13 | $ 0.46 | $ 0.38 |
Income (loss) from continuing operations per share - diluted (in dollars per share) | 0.14 | 0.13 | 0.44 | 0.36 |
Income (loss) per share from discontinued operations, net of tax - basic (in dollars per share) | (0.01) | (0.23) | (0.12) | (0.50) |
Income (loss) per share from discontinued operations, net of tax - diluted (in dollars per share) | $ (0.01) | $ (0.21) | $ (0.11) | $ (0.47) |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Aug. 31, 2022 USD ($) | Jul. 31, 2020 USD ($) | Sep. 30, 2024 USD ($) | Jun. 30, 2024 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2024 USD ($) | Sep. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) vendor | |
Loss Contingencies [Line Items] | ||||||||
Purchase commitment, term | 7 years | |||||||
Guarantor obligations, maximum exposure, undiscounted | $ 74 | $ 74 | $ 78 | |||||
Insured Claims | ||||||||
Loss Contingencies [Line Items] | ||||||||
Loss contingency accrual | 102 | 102 | 110 | |||||
Loss Contingencies [Line Items] | ||||||||
Purchase obligation | 200 | |||||||
Purchase obligation, to be paid, year one and two | 35 | |||||||
Purchase obligation, to be paid, year three and four | 65 | |||||||
Purchase obligation, to be paid, after year four | $ 100 | |||||||
Purchase obligation, cancelation fee percentage of total remaining amount | 30% | |||||||
Payments for long-term purchase obligation | 9 | 19 | ||||||
Google | First Two Years | ||||||||
Loss Contingencies [Line Items] | ||||||||
Purchase commitment, term | 2 years | |||||||
Google | Next Two Years | ||||||||
Loss Contingencies [Line Items] | ||||||||
Purchase commitment, term | 2 years | |||||||
Google | Last Three Years | ||||||||
Loss Contingencies [Line Items] | ||||||||
Purchase commitment, term | 3 years | |||||||
Google | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement | ||||||||
Loss Contingencies [Line Items] | ||||||||
Future milestone contributions | $ 150 | |||||||
Additional future milestone contributions | $ 150 | |||||||
Collaborative arrangement, reimbursement approve | 7 | 22 | ||||||
Recovery of direct costs | $ 28 | $ 40 | ||||||
Other Commitments | ||||||||
Loss Contingencies [Line Items] | ||||||||
Purchase obligation | $ 190 | |||||||
Payments for long-term purchase obligation | $ 44 | $ 144 | ||||||
Number of vendors | vendor | 1 | |||||||
Increase (decrease) in purchase obligation | $ 130 |
LEASES - Schedule of Consolidat
LEASES - Schedule of Consolidated Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
Operating lease, right-of-use asset, current | $ 67 | $ 68 |
Operating lease, right-of-use asset, non-current | 82,983 | 85,649 |
Finance lease, right-of-use asset, non-current | 67,832 | 65,368 |
Total right-of-use assets | 150,882 | 151,085 |
Operating lease, liability, current | 19,147 | 13,035 |
Finance lease, liability, current | 26,533 | 25,741 |
Operating lease, liability, noncurrent | 77,066 | 80,189 |
Finance lease, liability, noncurrent | 47,091 | 43,727 |
Total lease liabilities | 169,837 | 162,692 |
Finance lease, right-of-use asset, accumulated amortization | $ 61,000 | $ 50,000 |
Operating lease, right-of-use asset, statement of financial position [Extensible Enumeration] | Prepaid expenses and other current assets | Prepaid expenses and other current assets |
Finance lease, right-of-use asset, statement of financial position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net |
Operating lease, liability, statement of financial position [Extensible Enumeration] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Finance lease, liability, statement of financial position [Extensible Enumeration] | Current maturities of long-term debt | Current maturities of long-term debt |
Operating lease, liability, noncurrent, statement of financial position [Extensible Enumeration] | Other liabilities | Other liabilities |
Finance lease, liability, noncurrent, statement of financial position [Extensible Enumeration] | Long-term debt | Long-term debt |
LEASES - Schedule of Lease Cost
LEASES - Schedule of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | |
Leases [Abstract] | ||||
Operating lease cost | $ 7,365 | $ 8,832 | $ 20,943 | $ 24,822 |
Amortization of right-of-use assets | 6,095 | 4,355 | 16,203 | 10,144 |
Interest on lease liabilities | 1,109 | 709 | 3,514 | 1,494 |
Variable lease costs | 8,701 | 7,692 | 24,428 | 27,512 |
Total lease cost | $ 23,270 | $ 21,588 | $ 65,088 | $ 63,972 |
LEASES - Supplementary Cash Flo
LEASES - Supplementary Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2024 | Sep. 30, 2023 | |
Leases [Abstract] | ||
Right-of-use assets obtained in exchange for lease obligations - operating leases | $ 14,200 | $ 28,786 |
Right-of-use assets obtained in exchange for lease obligations - finance leases | $ 33,283 | $ 62,203 |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Mar. 06, 2024 | Mar. 31, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | Dec. 31, 2023 | Oct. 31, 2022 | |
Related Party Transaction [Line Items] | |||||||
Opportunity funds, maximum investment amount | $ 300,000 | ||||||
Opportunity funds, investment amount received | $ 100,000 | ||||||
Opportunity fund | $ 87,168 | $ 93,950 | |||||
Payments for opportunity fund | $ 10,000 | $ 6,000 | |||||
ADT | Common Stock | State Farm | |||||||
Related Party Transaction [Line Items] | |||||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 10% | ||||||
Related Party | Loan Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Amounts of transaction | $ 2,000 | 11,000 | |||||
Proceeds from related party debt | $ 9,000 | 71,000 | |||||
Apollo | Related Party | |||||||
Related Party Transaction [Line Items] | |||||||
Treasury stock, shares, acquired (in shares) | 15,000 | 15,000 | |||||
Treasury stock, value, acquired, cost method | $ 93,000 | $ 93,000 | |||||
Shares acquired, average cost per share (in dollars per share) | $ 6.22 | $ 6.22 | |||||
Apollo | Related Party | Term Loan A Facility | |||||||
Related Party Transaction [Line Items] | |||||||
Amounts of transaction | $ 0 | $ 1,000 | |||||
Apollo | Related Party | The Offering | |||||||
Related Party Transaction [Line Items] | |||||||
Shares issued in public offering (in shares) | 65,000 | ||||||
Apollo | Related Party | Over-Allotment Option | |||||||
Related Party Transaction [Line Items] | |||||||
Shares issued in public offering (in shares) | 9,750 |