Quarterly report pursuant to Section 13 or 15(d)

Consolidating Guarantor Financial Information

v2.4.0.8
Consolidating Guarantor Financial Information
3 Months Ended
Mar. 31, 2014
Consolidating Guarantor Financial Information  
Consolidating Guarantor Financial Information

(11)                          Consolidating Guarantor Financial Information

 

The Senior Notes were issued and the Credit Facility was entered into by Monitronics (the “Parent Issuer”) and both are guaranteed 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 or Credit Facility.

 

Consolidating guarantor financial information has not been presented for the three months ended March 31, 2013, as substantially all of the Company’s operations were conducted by the Parent Issuer entity. The Company believes that disclosing such information would not provide investors with any additional information that would be material in evaluating the sufficiency of the guarantees.

 

The unaudited condensed consolidating financial information for the Parent Issuer, the Subsidiary Guarantors and the non-guarantors as of and for the three months ended March 31, 2014, as well as the condensed consolidated balance sheet financial information as of December 31, 2013, are as follows:

 

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES

Condensed Consolidating Balance Sheets

(unaudited)

 

 

 

As of March 31, 2014

 

 

 

Parent Issuer

 

Subsidiary
Guarantors

 

Non-Guarantors

 

Eliminations

 

Consolidated

 

 

 

(amounts in thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

29,305

 

2,138

 

 

 

31,443

 

Restricted cash

 

119

 

 

 

 

119

 

Trade receivables, net

 

12,418

 

1,478

 

 

 

13,896

 

Deferred income tax assets, net

 

6,763

 

1,767

 

 

 

8,530

 

Prepaid and other current assets

 

6,139

 

1,968

 

 

(1,238

)

6,869

 

Total current assets

 

54,744

 

7,351

 

 

(1,238

)

60,857

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment in subsidiaries

 

500,660

 

 

 

(500,660

)

 

Property and equipment, net

 

23,560

 

549

 

 

 

24,109

 

Subscriber accounts, net

 

1,021,199

 

314,924

 

 

 

1,336,123

 

Dealer network and other intangible assets, net

 

17,253

 

42,437

 

 

 

59,690

 

Goodwill

 

350,213

 

176,300

 

 

 

526,513

 

Other assets, net

 

28,956

 

97

 

 

 

29,053

 

Total assets

 

$

1,996,585

 

541,658

 

 

(501,898

)

2,036,345

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholder’s Equity

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

4,229

 

950

 

 

 

5,179

 

Accrued payroll and related liabilities

 

2,943

 

395

 

 

 

3,338

 

Other accrued liabilities

 

40,664

 

5,798

 

 

(1,238

)

45,224

 

Deferred revenue

 

11,046

 

4,035

 

 

 

15,081

 

Holdback liability

 

15,973

 

3,254

 

 

 

19,227

 

Current portion of long-term debt

 

9,166

 

 

 

 

9,166

 

Total current liabilities

 

84,021

 

14,432

 

 

(1,238

)

97,215

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current liabilities:

 

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

1,613,598

 

 

 

 

1,613,598

 

Long-term holdback liability

 

 

6,253

 

 

 

6,253

 

Derivative financial instruments

 

3,193

 

 

 

 

3,193

 

Deferred income tax liability, net

 

10,655

 

7,801

 

 

 

18,456

 

Other liabilities

 

2,623

 

12,512

 

 

 

15,135

 

Total liabilities

 

1,714,090

 

40,998

 

 

(1,238

)

1,753,850

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholder’s equity

 

282,495

 

500,660

 

 

(500,660

)

282,495

 

Total liabilities and stockholder’s equity

 

$

1,996,585

 

541,658

 

 

(501,898

)

2,036,345

 

 

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES

Condensed Consolidating Balance Sheets

(unaudited)

 

 

 

As of December 31, 2013

 

 

 

Parent Issuer

 

Subsidiary
Guarantors

 

Non-Guarantors

 

Eliminations

 

Consolidated

 

 

 

(amounts in thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,775

 

2,580

 

 

 

4,355

 

Restricted cash

 

40

 

 

 

 

40

 

Trade receivables, net

 

11,374

 

1,645

 

 

 

13,019

 

Deferred income tax assets, net

 

6,763

 

1,767

 

 

 

8,530

 

Prepaid and other current assets

 

9,916

 

1,003

 

 

(4,600

)

6,319

 

Total current assets

 

29,868

 

6,995

 

 

(4,600

)

32,263

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment in subsidiaries

 

498,820

 

 

 

(498,820

)

 

Property and equipment, net

 

23,572

 

989

 

 

 

24,561

 

Subscriber accounts, net

 

1,025,605

 

315,349

 

 

 

1,340,954

 

Dealer network and other intangible assets, net

 

19,773

 

44,862

 

 

 

64,635

 

Goodwill

 

350,213

 

176,300

 

 

 

526,513

 

Other assets, net

 

29,611

 

 

 

 

29,611

 

Total assets

 

$

1,977,462

 

544,495

 

 

(503,420

)

2,018,537

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholder’s Equity

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

5,491

 

1,404

 

 

 

6,895

 

Accrued payroll and related liabilities

 

2,649

 

530

 

 

 

3,179

 

Other accrued liabilities

 

27,137

 

10,917

 

 

(4,600

)

33,454

 

Deferred revenue

 

11,037

 

3,342

 

 

 

14,379

 

Holdback liability

 

16,640

 

3,118

 

 

 

19,758

 

Current portion of long-term debt

 

9,166

 

 

 

 

9,166

 

Total current liabilities

 

72,120

 

19,311

 

 

(4,600

)

86,831

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current liabilities:

 

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

1,597,627

 

 

 

 

1,597,627

 

Long-term holdback liability

 

 

6,698

 

 

 

6,698

 

Derivative financial instruments

 

2,013

 

 

 

 

2,013

 

Deferred income tax liability, net

 

10,577

 

7,002

 

 

 

17,579

 

Other liabilities

 

3,401

 

12,664

 

 

 

16,065

 

Total liabilities

 

1,685,738

 

45,675

 

 

(4,600

)

1,726,813

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholder’s equity

 

291,724

 

498,820

 

 

(498,820

)

291,724

 

Total liabilities and stockholder’s equity

 

$

1,977,462

 

544,495

 

 

(503,420

)

2,018,537

 

 

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)

(unaudited)

 

 

 

Three months ended March 31, 2014

 

 

 

Parent Issuer

 

Subsidiary
Guarantors

 

Non-Guarantors

 

Eliminations

 

Consolidated

 

 

 

(amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

104,093

 

28,771

 

 

 

132,864

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

17,782

 

4,308

 

 

 

22,090

 

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

 

19,032

 

3,940

 

 

 

22,972

 

Amortization of subscriber accounts, dealer network and other intangible assets

 

45,263

 

16,517

 

 

 

61,780

 

Depreciation

 

1,908

 

475

 

 

 

2,383

 

Restructuring charges

 

 

547

 

 

 

 

547

 

 

 

83,985

 

25,787

 

 

 

109,772

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

20,108

 

2,984

 

 

 

23,092

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expense (income):

 

 

 

 

 

 

 

 

 

 

 

Equity in income of subsidiaries

 

(1,858

)

 

 

1,858

 

 

Interest expense

 

29,046

 

298

 

 

 

29,344

 

 

 

27,188

 

298

 

 

1,858

 

29,344

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

(7,080

)

2,686

 

 

(1,858

)

(6,252

)

Income tax expense

 

771

 

828

 

 

 

1,599

 

Net income (loss)

 

(7,851

)

1,858

 

 

(1,858

)

(7,851

)

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on derivative contracts

 

(1,671

)

 

 

 

(1,671

)

Total other comprehensive loss

 

(1,671

)

 

 

 

(1,671

)

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income (loss)

 

$

(9,522

)

1,858

 

 

(1,858

)

(9,522

)

 

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES

Condensed Consolidating Statement of Cash Flows

(unaudited)

 

 

 

Three months ended March 31, 2014

 

 

 

Parent Issuer

 

Subsidiary
Guarantors

 

Non-
Guarantors

 

Eliminations

 

Consolidated

 

 

 

(amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

53,546

 

13,665

 

 

 

67,211

 

 

 

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

(1,903

)

(35

)

 

 

(1,938

)

Cost of subscriber accounts acquired

 

(39,742

)

(14,047

)

 

 

(53,789

)

Increase in restricted cash

 

(79

)

 

 

 

(79

)

Other investing activities

 

 

(25

)

 

 

(25

)

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

(41,724

)

(14,107

)

 

 

(55,831

)

 

 

 

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

 

 

 

Proceeds from long-term debt

 

42,900

 

 

 

 

42,900

 

Payments on long-term debt

 

(27,192

)

 

 

 

(27,192

)

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by financing activities

 

15,708

 

 

 

 

15,708

 

 

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

27,530

 

(442

)

 

 

27,088

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

1,775

 

2,580

 

 

 

4,355

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

29,305

 

2,138

 

 

 

31,443