Annual report pursuant to Section 13 and 15(d)

Consolidating Guarantor Financial Information

v3.19.1
Consolidating Guarantor Financial Information
12 Months Ended
Dec. 31, 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 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
Amounts in thousands

 
As of December 31, 2018
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
1,697

 
491

 

 

 
2,188

Restricted cash
189

 

 

 

 
189

Trade receivables, net
12,362

 
759

 

 

 
13,121

Prepaid and other current assets
118,119

 
4,042

 

 
(93,983
)
 
28,178

Total current assets
132,367

 
5,292

 

 
(93,983
)
 
43,676

 
 
 
 
 
 
 
 
 
 
Property and equipment, net
34,960

 
1,579

 

 

 
36,539

Subscriber accounts, net
1,160,698

 
34,765

 

 

 
1,195,463

Deferred income tax asset, net
783

 

 

 

 
783

Other assets, net
29,270

 
37

 

 

 
29,307

Total assets
$
1,358,078

 
41,673

 

 
(93,983
)
 
1,305,768

 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholder's (Deficit) Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
11,110

 
989

 

 

 
12,099

Other accrued liabilities
29,016

 
96,052

 

 
(93,983
)
 
31,085

Deferred revenue
11,357

 
1,703

 

 

 
13,060

Holdback liability
11,342

 
171

 

 

 
11,513

Current portion of long-term debt
1,816,450

 

 

 

 
1,816,450

Total current liabilities
1,879,275

 
98,915

 

 
(93,983
)
 
1,884,207

 
 
 
 
 
 
 
 
 
 
Non-current liabilities:
 
 
 
 
 
 
 
 
 
Long-term debt

 

 

 

 

Long-term holdback instruments
1,770

 

 

 

 
1,770

Derivative financial instruments
6,039

 

 

 

 
6,039

Other liabilities
59,969

 

 

 
(57,242
)
 
2,727

Total liabilities
1,947,053

 
98,915

 

 
(151,225
)
 
1,894,743

 
 
 
 
 
 
 
 
 
 
Total stockholder's (deficit) equity
(588,975
)
 
(57,242
)
 

 
57,242

 
(588,975
)
Total liabilities and stockholder's (deficit) equity
$
1,358,078

 
41,673

 

 
(93,983
)
 
1,305,768



MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Balance Sheet
Amounts in thousands

 
As of December 31, 2017
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
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, 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

Other accrued liabilities
50,448

 
69,377

 

 
(66,341
)
 
53,484

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 instruments
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)
Amounts in thousands

 
Year Ended December 31, 2018
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net revenue
$
500,152

 
40,206

 

 

 
540,358

 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
Cost of services
109,201

 
19,738

 

 

 
128,939

Selling, general and administrative, including stock-based and long-term incentive compensation
79,696

 
39,244

 

 

 
118,940

Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets
204,662

 
6,977

 

 

 
211,639

Depreciation
10,371

 
1,063

 

 

 
11,434

Loss on goodwill impairment
527,191

 
36,358

 

 

 
563,549

 
931,121

 
103,380

 

 

 
1,034,501

Operating loss
(430,969
)
 
(63,174
)
 

 

 
(494,143
)
Other expense:
 
 
 
 
 
 
 
 
 
Equity in loss of subsidiaries
61,711

 

 

 
(61,711
)
 

Interest expense
180,770

 

 

 

 
180,770

Unrealized loss on derivative financial instruments
3,151

 

 

 

 
3,151

Refinancing expense
12,238

 

 

 

 
12,238

 
257,870

 

 

 
(61,711
)
 
196,159

Loss before income taxes
(688,839
)
 
(63,174
)
 

 
61,711

 
(690,302
)
Income tax expense
(10,089
)
 
(1,463
)
 

 

 
(11,552
)
Net loss
(678,750
)
 
(61,711
)
 

 
61,711

 
(678,750
)
Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
Unrealized gain on derivative contracts
14,378

 

 

 

 
14,378

Total other comprehensive income
14,378

 

 

 

 
14,378

Comprehensive loss
$
(664,372
)
 
(61,711
)
 

 
61,711

 
(664,372
)


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

 
Year Ended December 31, 2017
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net revenue
$
519,293

 
34,162

 

 

 
553,455

 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
Cost of services
104,103

 
15,090

 

 

 
119,193

Selling, general and administrative, including stock-based and long-term incentive compensation
126,201

 
29,701

 

 

 
155,902

Radio conversion costs
391

 
59

 

 

 
450

Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets
230,313

 
6,475

 

 

 
236,788

Depreciation
8,101

 
717

 

 

 
8,818

 
469,109

 
52,042

 

 

 
521,151

Operating income (loss)
50,184

 
(17,880
)
 

 

 
32,304

Other expense:
 
 
 
 
 
 
 
 
 
Equity in loss of subsidiaries
17,978

 

 

 
(17,978
)
 

Interest expense
145,487

 
5

 

 

 
145,492

 
163,465

 
5

 

 
(17,978
)
 
145,492

Loss before income taxes
(113,281
)
 
(17,885
)
 

 
17,978

 
(113,188
)
Income tax expense (benefit)
(1,986
)
 
93

 

 

 
(1,893
)
Net loss
(111,295
)
 
(17,978
)
 

 
17,978

 
(111,295
)
Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
Unrealized gain on derivative contracts
1,582

 

 

 

 
1,582

Total other comprehensive income
1,582

 

 

 

 
1,582

Comprehensive loss
$
(109,713
)
 
(17,978
)
 

 
17,978

 
(109,713
)

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

 
Year Ended December 31, 2016
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net revenue
$
543,181

 
27,191

 

 

 
570,372

 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
Cost of services
101,940

 
13,296

 

 

 
115,236

Selling, general and administrative, including stock-based and long-term incentive compensation
86,670

 
27,482

 

 

 
114,152

Radio conversion costs
18,204

 
218

 

 

 
18,422

Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets
240,568

 
6,185

 

 

 
246,753

Depreciation
7,784

 
376

 

 

 
8,160

 
455,166

 
47,557

 

 

 
502,723

Operating income (loss)
88,015

 
(20,366
)
 

 

 
67,649

Other expense:
 
 
 
 
 
 
 
 
 
Equity in loss of subsidiaries
21,387

 

 

 
(21,387
)
 

Interest expense
127,290

 
18

 

 

 
127,308

Refinancing expense
9,500

 

 

 

 
9,500

 
158,177

 
18

 

 
(21,387
)
 
136,808

Loss before income taxes
(70,162
)
 
(20,384
)
 

 
21,387

 
(69,159
)
Income tax expense
6,145

 
1,003

 

 

 
7,148

Net loss
(76,307
)
 
(21,387
)
 

 
21,387

 
(76,307
)
Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
Unrealized gain on derivative contracts
4,589

 

 

 

 
4,589

Total other comprehensive income
4,589

 

 

 

 
4,589

Comprehensive loss
$
(71,718
)
 
(21,387
)
 

 
21,387

 
(71,718
)

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Statements of Cash Flows
Amounts in thousands

 
Year Ended December 31, 2018
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net cash provided by operating activities
$
102,569

 
1,934

 

 

 
104,503

Investing activities:
 
 
 
 
 
 
 
 
 
Capital expenditures
(14,327
)
 
(576
)
 

 

 
(14,903
)
Cost of subscriber accounts acquired
(138,986
)
 
(1,464
)
 

 

 
(140,450
)
Net cash used in investing activities
(153,313
)
 
(2,040
)
 

 

 
(155,353
)
Financing activities:
 
 
 
 
 
 
 
 
 
Proceeds from long-term debt
248,800

 

 

 

 
248,800

Payments on long-term debt
(184,100
)
 

 

 

 
(184,100
)
Payments of financing costs
(9,682
)
 

 

 

 
(9,682
)
Value of shares withheld for share-based compensation
(93
)
 

 

 

 
(93
)
Dividend to Ascent Capital
(5,000
)
 

 

 

 
(5,000
)
Net cash provided by financing activities
49,925

 

 

 

 
49,925

Net decrease in cash, cash equivalents and restricted cash
(819
)
 
(106
)
 

 

 
(925
)
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
$
1,886

 
491

 

 

 
2,377


 
Year Ended December 31, 2017
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net cash provided by operating activities
$
147,350

 
2,854

 

 

 
150,204

Investing activities:
 
 
 
 
 
 
 
 
 
Capital expenditures
(13,213
)
 
(1,180
)
 

 

 
(14,393
)
Cost of subscriber accounts acquired
(140,394
)
 
(2,515
)
 

 

 
(142,909
)
Net cash used in investing activities
(153,607
)
 
(3,695
)
 

 

 
(157,302
)
Financing activities:
 
 
 
 
 
 
 
 
 
Proceeds from long-term debt
187,950

 

 

 

 
187,950

Payments on long-term debt
(175,250
)
 

 

 

 
(175,250
)
Value of shares withheld for share-based compensation
(477
)
 

 

 

 
(477
)
Dividend to Ascent Capital
(5,000
)
 

 

 

 
(5,000
)
Net cash provided by financing activities
7,223

 

 

 

 
7,223

Net increase (decrease) in cash, cash equivalents and restricted cash
966

 
(841
)
 

 

 
125

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
$
2,705

 
597

 

 

 
3,302


MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Statements of Cash Flows
Amounts in thousands

 
Year Ended December 31, 2016
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net cash provided by operating activities
$
181,384

 
9,143

 

 

 
190,527

Investing activities:
 
 
 
 
 
 
 
 
 
Capital expenditures
(7,997
)
 
(1,181
)
 

 

 
(9,178
)
Cost of subscriber accounts acquired
(193,790
)
 
(7,591
)
 

 

 
(201,381
)
Net cash used in investing activities
(201,787
)
 
(8,772
)
 

 

 
(210,559
)
Financing activities:
 
 
 
 
 
 
 
 
 
Proceeds from long-term debt
1,280,700

 

 

 

 
1,280,700

Payments on long-term debt
(1,238,059
)
 

 

 

 
(1,238,059
)
Refinance costs
(16,946
)
 

 

 

 
(16,946
)
Value of shares withheld for share-based compensation
(121
)
 

 

 

 
(121
)
Dividend to Ascent Capital
(5,000
)
 

 

 

 
(5,000
)
Net cash provided by financing activities
20,574

 

 

 

 
20,574

Net increase in cash, cash equivalents and restricted cash
171

 
371

 

 

 
542

Cash, cash equivalents and restricted cash at beginning of period
1,568

 
1,067

 

 

 
2,635

Cash, cash equivalents and restricted cash at end of period
$
1,739

 
1,438

 

 

 
3,177