Quarterly report pursuant to Section 13 or 15(d)

Consolidating Guarantor Financial Information

v3.10.0.1
Consolidating Guarantor Financial Information
9 Months Ended
Sep. 30, 2018
Condensed Financial Information Disclosure [Abstract]  
Consolidating Guarantor Financial Information
Consolidating Guarantor Financial Information

The Senior Notes were issued by Brinks Home Security (the “Parent Issuer”) and are fully and unconditionally guaranteed, on a joint and several basis, by all of the Company’s existing domestic subsidiaries (“Subsidiary Guarantors”). Ascent Capital has not guaranteed any of the Company’s obligations under the Senior Notes. The unaudited condensed consolidating financial information for the Parent Issuer, the Subsidiary Guarantors and the non-guarantors are as follows:

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Balance Sheet
(unaudited)
 
 
As of September 30, 2018
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
26,614

 
221

 

 

 
26,835

Restricted cash
133

 

 

 

 
133

Trade receivables, net
12,346

 
816

 

 

 
13,162

Prepaid and other current assets
112,574

 
3,728

 

 
(89,508
)
 
26,794

Total current assets
151,667

 
4,765

 

 
(89,508
)
 
66,924

 
 
 
 
 
 
 
 
 
 
Property and equipment, net
34,656

 
1,897

 

 

 
36,553

Subscriber accounts and deferred contract acquisition costs, net
1,180,162

 
35,669

 

 

 
1,215,831

Dealer network and other intangible assets, net

 

 

 

 

Goodwill
313,102

 
36,047

 

 

 
349,149

Other assets, net
36,778

 
34

 

 

 
36,812

Total assets
$
1,716,365

 
78,412

 

 
(89,508
)
 
1,705,269

 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholder's (Deficit) Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
9,874

 
1,762

 

 

 
11,636

Accrued payroll and related liabilities
5,180

 
955

 

 

 
6,135

Other accrued liabilities
38,408

 
91,389

 

 
(89,508
)
 
40,289

Deferred revenue
10,330

 
1,739

 

 

 
12,069

Holdback liability
10,580

 
186

 

 

 
10,766

Current portion of long-term debt
11,000

 

 

 

 
11,000

Total current liabilities
85,372

 
96,031

 

 
(89,508
)
 
91,895

 
 
 
 
 
 
 
 
 
 
Non-current liabilities:
 
 
 
 
 
 
 
 
 
Long-term debt
1,795,119

 

 

 

 
1,795,119

Long-term holdback liability
2,031

 

 

 

 
2,031

Derivative financial instruments
1,139

 

 

 

 
1,139

Deferred income tax liability, net
13,254

 
2,037

 

 

 
15,291

Other liabilities
22,357

 

 

 
(19,656
)
 
2,701

Total liabilities
1,919,272

 
98,068

 

 
(109,164
)
 
1,908,176

 
 
 
 
 
 
 
 
 
 
Total stockholder's (deficit) equity
(202,907
)
 
(19,656
)
 

 
19,656

 
(202,907
)
Total liabilities and stockholder's (deficit) equity
$
1,716,365

 
78,412

 

 
(89,508
)
 
1,705,269


MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Balance Sheet
(unaudited)
 
 
As of December 31, 2017
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
2,705

 
597

 

 

 
3,302

Trade receivables, net
12,082

 
563

 

 

 
12,645

Prepaid and other current assets
74,613

 
2,396

 

 
(66,341
)
 
10,668

Total current assets
89,400

 
3,556

 

 
(66,341
)
 
26,615

 
 
 
 
 
 
 
 
 
 
Investment in subsidiaries
4,554

 

 

 
(4,554
)
 

Property and equipment, net
30,727

 
2,062

 

 

 
32,789

Subscriber accounts and deferred contract acquisition costs, net
1,265,519

 
36,509

 

 

 
1,302,028

Dealer network and other intangible assets, net
6,063

 
931

 

 

 
6,994

Goodwill
527,191

 
36,358

 

 

 
563,549

Other assets, net
9,311

 
29

 

 

 
9,340

Total assets
$
1,932,765

 
79,445

 

 
(70,895
)
 
1,941,315

 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholder's Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
9,705

 
1,368

 

 

 
11,073

Accrued payroll and related liabilities
2,648

 
810

 

 

 
3,458

Other accrued liabilities
47,800

 
68,567

 

 
(66,341
)
 
50,026

Deferred revenue
12,332

 
1,539

 

 

 
13,871

Holdback liability
9,035

 
274

 

 

 
9,309

Current portion of long-term debt
11,000

 

 

 

 
11,000

Total current liabilities
92,520

 
72,558

 

 
(66,341
)
 
98,737

 
 
 
 
 
 
 
 
 
 
Non-current liabilities:
 
 
 
 
 
 
 
 
 
Long-term debt
1,707,297

 

 

 

 
1,707,297

Long-term holdback liability
2,658

 

 

 

 
2,658

Derivative financial instruments
13,491

 

 

 

 
13,491

Deferred income tax liability, net
11,684

 
1,620

 

 

 
13,304

Other liabilities
2,379

 
713

 

 

 
3,092

Total liabilities
1,830,029

 
74,891

 

 
(66,341
)
 
1,838,579

 
 
 
 
 
 
 
 
 
 
Total stockholder's equity
102,736

 
4,554

 

 
(4,554
)
 
102,736

Total liabilities and stockholder's equity
$
1,932,765

 
79,445

 

 
(70,895
)
 
1,941,315


MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
(unaudited)

 
Three Months Ended September 30, 2018
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Net revenue
$
128,320

 
8,836

 

 

 
137,156

 
 
 
 
 
 
 
 
 
 
Operating expenses:
 

 
 

 
 

 
 

 
 
Cost of services
28,801

 
6,258

 

 

 
35,059

Selling, general, and administrative, including stock-based compensation
23,095

 
11,171

 

 

 
34,266

Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets
51,172

 
1,499

 

 

 
52,671

Depreciation
2,640

 
240

 

 

 
2,880

Loss on goodwill impairment

 

 

 

 

 
105,708

 
19,168

 

 

 
124,876

Operating income (loss)
22,612

 
(10,332
)
 

 

 
12,280

Other expense:
 

 
 

 
 

 
 

 
 

Equity in loss of subsidiaries
10,515

 

 

 
(10,515
)
 

Interest expense
39,077

 

 

 

 
39,077

Refinancing expense
5,697

 

 

 

 
5,697

 
55,289

 

 

 
(10,515
)
 
44,774

Loss before income taxes
(32,677
)
 
(10,332
)
 

 
10,515

 
(32,494
)
Income tax expense
1,163

 
183

 

 

 
1,346

Net loss
(33,840
)
 
(10,515
)
 

 
10,515

 
(33,840
)
Other comprehensive income (loss):
 

 
 

 
 

 
 

 
 

Unrealized gain on derivative contracts
3,269

 

 

 

 
3,269

Total other comprehensive income
3,269

 

 

 

 
3,269

Comprehensive loss
$
(30,571
)
 
(10,515
)
 

 
10,515

 
(30,571
)


MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
(unaudited)

 
Three Months Ended September 30, 2017
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Net revenue
$
129,501

 
8,710

 

 

 
138,211

 
 
 
 
 
 
 
 
 
 
Operating expenses:
 

 
 

 
 

 
 

 
 
Cost of services
26,479

 
3,734

 

 

 
30,213

Selling, general, and administrative, including stock-based compensation
25,145

 
8,329

 

 

 
33,474

Radio conversion costs
68

 
6

 

 

 
74

Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets
57,770

 
1,614

 

 

 
59,384

Depreciation
1,980

 
190

 

 

 
2,170

 
111,442

 
13,873

 

 

 
125,315

Operating income (loss)
18,059

 
(5,163
)
 

 

 
12,896

Other expense:
 

 
 

 
 

 
 

 
 

Equity in loss of subsidiaries
5,423

 

 

 
(5,423
)
 

Interest expense
36,665

 

 

 

 
36,665

 
42,088

 

 

 
(5,423
)
 
36,665

Loss before income taxes
(24,029
)
 
(5,163
)
 

 
5,423

 
(23,769
)
Income tax expense
1,507

 
260

 

 

 
1,767

Net loss
(25,536
)
 
(5,423
)
 

 
5,423

 
(25,536
)
Other comprehensive income (loss):
 

 
 

 
 

 
 

 
 

Unrealized gain on derivative contracts
227

 

 

 

 
227

Total other comprehensive income
227

 

 

 

 
227

Comprehensive loss
$
(25,309
)
 
(5,423
)
 

 
5,423

 
(25,309
)

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
(unaudited)

 
Nine Months Ended September 30, 2018
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Net revenue
$
376,741

 
29,181

 

 

 
405,922

 
 
 
 
 
 
 
 
 
 
Operating expenses:
 

 
 

 
 

 
 

 
 
Cost of services
84,965

 
15,842

 

 

 
100,807

Selling, general, and administrative, including stock-based compensation
68,514

 
30,421

 

 

 
98,935

Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets
155,500

 
5,473

 

 

 
160,973

Depreciation
7,647

 
713

 

 

 
8,360

Loss on goodwill impairment
214,089

 
311

 

 

 
214,400

 
530,715

 
52,760

 

 

 
583,475

Operating loss
(153,974
)
 
(23,579
)
 

 

 
(177,553
)
Other expense:
 

 
 

 
 

 
 

 
 

Equity in loss of subsidiaries
24,125

 

 

 
(24,125
)
 

Interest expense
114,550

 

 

 

 
114,550

Refinancing expense
5,697

 

 

 

 
5,697

 
144,372

 

 

 
(24,125
)
 
120,247

Loss before income taxes
(298,346
)
 
(23,579
)
 

 
24,125

 
(297,800
)
Income tax expense
3,493

 
546

 

 

 
4,039

Net loss
(301,839
)
 
(24,125
)
 

 
24,125

 
(301,839
)
Other comprehensive income (loss):
 

 
 

 
 

 
 

 
 

Unrealized gain on derivative contracts
23,196

 

 

 

 
23,196

Total other comprehensive income
23,196

 

 

 

 
23,196

Comprehensive loss
$
(278,643
)
 
(24,125
)
 

 
24,125

 
(278,643
)

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
(unaudited)

 
Nine Months Ended September 30, 2017
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Net revenue
$
394,842

 
25,067

 

 

 
419,909

 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
Cost of services
78,742

 
11,057

 

 

 
89,799

Selling, general, and administrative, including stock-based compensation
103,315

 
23,444

 

 

 
126,759

Radio conversion costs
327

 
56

 

 

 
383

Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets
174,046

 
4,850

 

 

 
178,896

Depreciation
5,916

 
499

 

 

 
6,415

 
362,346

 
39,906

 

 

 
402,252

Operating income (loss)
32,496

 
(14,839
)
 

 

 
17,657

Other expense:
 

 
 
 
 
 
 
 
 
Equity in loss of subsidiaries
15,620

 

 

 
(15,620
)
 

Interest expense
108,975

 
5

 

 

 
108,980

 
124,595

 
5

 

 
(15,620
)
 
108,980

Loss before income taxes
(92,099
)
 
(14,844
)
 

 
15,620

 
(91,323
)
Income tax expense
4,554

 
776

 

 

 
5,330

Net loss
(96,653
)
 
(15,620
)
 

 
15,620

 
(96,653
)
Other comprehensive loss:
 
 
 
 
 
 
 
 
 
Unrealized loss on derivative contracts
(4,501
)
 

 

 

 
(4,501
)
Total other comprehensive loss
(4,501
)
 

 

 

 
(4,501
)
Comprehensive loss
$
(101,154
)
 
(15,620
)
 

 
15,620

 
(101,154
)


MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Statement of Cash Flows
(unaudited)
 
 
Nine Months Ended September 30, 2018
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Net cash provided by operating activities
$
73,070

 
1,388

 

 

 
74,458

Investing activities:
 
 
 
 
 
 
 
 
 
Capital expenditures
(10,966
)
 
(547
)
 

 

 
(11,513
)
Cost of subscriber accounts acquired
(110,314
)
 
(1,217
)
 

 

 
(111,531
)
Net cash used in investing activities
(121,280
)
 
(1,764
)
 

 

 
(123,044
)
Financing activities:
 
 
 
 
 
 
 
 
 
Proceeds from long-term debt
218,950

 

 

 

 
218,950

Payments on long-term debt
(136,600
)
 

 

 

 
(136,600
)
Payments of financing costs
(5,015
)
 

 

 

 
(5,015
)
Value of shares withheld for share-based compensation
(83
)
 

 

 

 
(83
)
Dividend to Ascent Capital
(5,000
)
 

 

 

 
(5,000
)
Net cash provided by financing activities
72,252

 

 

 

 
72,252

Net increase (decrease) in cash, cash equivalents and restricted cash
24,042

 
(376
)
 

 

 
23,666

Cash, cash equivalents and restricted cash at beginning of period
2,705

 
597

 

 

 
3,302

Cash, cash equivalents and restricted cash at end of period
$
26,747

 
221

 

 

 
26,968


 
Nine Months Ended September 30, 2017
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Net cash provided by operating activities
$
125,134

 
2,093

 

 

 
127,227

Investing activities:
 
 
 
 
 
 
 
 
 
Capital expenditures
(9,044
)
 
(955
)
 

 

 
(9,999
)
Cost of subscriber accounts acquired
(116,918
)
 
(2,163
)
 

 

 
(119,081
)
Net cash used in investing activities
(125,962
)
 
(3,118
)
 

 

 
(129,080
)
Financing activities:
 
 
 
 
 
 
 
 
 
Proceeds from long-term debt
159,850

 

 

 

 
159,850

Payments on long-term debt
(132,500
)
 

 

 

 
(132,500
)
Value of shares withheld for share-based compensation
(424
)
 

 

 

 
(424
)
Net cash provided by financing activities
26,926

 

 

 

 
26,926

Net increase (decrease) in cash, cash equivalents and restricted cash
26,098

 
(1,025
)
 

 

 
25,073

Cash, cash equivalents and restricted cash at beginning of period
1,739

 
1,438

 

 

 
3,177

Cash, cash equivalents and restricted cash at end of period
$
27,837

 
413

 

 

 
28,250