Quarterly report pursuant to Section 13 or 15(d)

Consolidating Guarantor Financial Information

v3.2.0.727
Consolidating Guarantor Financial Information
6 Months Ended
Jun. 30, 2015
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
Consolidating Guarantor Financial Information
Consolidating Guarantor Financial Information

The Senior Notes were issued by Monitronics (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. Consolidating guarantor financial information has not been presented for the condensed consolidated balance sheet as of December 31, 2014, for the condensed consolidated statement of operations and other comprehensive income (loss) for the three and six months ended June 30, 2014 and for the condensed consolidated statement of cash flows for the sixth months ended June 30, 2014, 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 are as follows:
MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Balance Sheet
(unaudited)
 
 
As of June 30, 2015
 
Parent Issuer
 
Subsidiary
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Assets
 

 
 

 
 

 
 

 
 

Current assets:
 

 
 

 
 

 
 

 
 

Cash and cash equivalents
$
2,561

 
1,127

 

 

 
$
3,688

Restricted cash
53

 

 

 

 
53

Trade receivables, net
13,494

 
370

 

 

 
13,864

Deferred income tax assets, net
6,567

 

 

 

 
6,567

Prepaid and other current assets
17,465

 
933

 

 
(9,897
)
 
8,501

Total current assets
40,140

 
2,430

 

 
(9,897
)
 
32,673

 
 
 
 
 
 
 
 
 
 
Investment in subsidiaries
55,907

 

 

 
(55,907
)
 

Property and equipment, net
26,537

 
478

 

 

 
27,015

Subscriber accounts, net
1,378,487

 
30,656

 

 

 
1,409,143

Dealer network and other intangible assets, net
34,928

 
1,257

 

 

 
36,185

Goodwill
527,191

 
36,277

 

 

 
563,468

Other assets, net
25,428

 
3

 

 

 
25,431

Total assets
$
2,088,618

 
71,101

 

 
(65,804
)
 
$
2,093,915

 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholder's Equity
 

 
 

 
 

 
 

 
 

Current liabilities:
 

 
 

 
 

 
 

 
 

Accounts payable
$
6,250

 
1,583

 

 

 
$
7,833

Accrued payroll and related liabilities
3,159

 
280

 

 

 
3,439

Other accrued liabilities
30,686

 
10,102

 

 
(9,897
)
 
30,891

Deferred revenue
14,749

 
831

 

 

 
15,580

Holdback liability
17,753

 
199

 

 

 
17,952

Current portion of long-term debt
5,500

 

 

 

 
5,500

Total current liabilities
78,097

 
12,995

 

 
(9,897
)
 
81,195

 
 
 
 
 
 
 
 
 
 
Non-current liabilities:
 

 
 

 
 

 
 

 
 

Long-term debt
1,712,911

 

 

 

 
1,712,911

Long-term holdback liability
4,433

 

 

 

 
4,433

Derivative financial instruments
8,460

 

 

 

 
8,460

Deferred income tax liability, net
17,431

 
404

 

 

 
17,835

Other liabilities
14,048

 
1,795

 

 

 
15,843

Total liabilities
1,835,380

 
15,194

 

 
(9,897
)
 
1,840,677

 
 
 
 
 
 
 
 
 
 
Total stockholder's equity
253,238

 
55,907

 

 
(55,907
)
 
253,238

Total liabilities and stockholder's equity
$
2,088,618

 
71,101

 

 
(65,804
)
 
$
2,093,915



MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
(unaudited)
 
 
Three Months Ended June 30, 2015
 
Parent Issuer
 
Subsidiary
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Net revenue
$
137,051

 
4,492

 

 

 
$
141,543

 
 
 
 
 
 
 
 
 
0

Operating expenses:
 

 
 

 
 

 
 

 
0

Cost of services
25,388

 
2,665

 

 

 
28,053

Selling, general, and administrative, including stock-based compensation
20,630

 
5,067

 

 

 
25,697

Amortization of subscriber accounts, dealer network and other intangible assets
62,233

 
1,293

 

 

 
63,526

Depreciation
2,463

 
21

 

 

 
2,484

Gain on disposal of operating assets

 

 
0

 

 

 
110,714

 
9,046

 

 

 
119,760

Operating income (loss)
26,337

 
(4,554
)
 

 

 
21,783

Other expense:
 

 
 

 
 

 
 

 
 

Equity in loss of subsidiaries
4,773

 

 

 
(4,773
)
 

Interest expense
31,280

 
11

 

 

 
31,291

Refinancing expense
4,468

 

 

 

 
4,468

 
40,521

 
11

 

 
(4,773
)
 
35,759

Loss before income taxes
(14,184
)
 
(4,565
)
 

 
4,773

 
(13,976
)
Income tax expense
1,803

 
208

 

 

 
2,011

Net loss
(15,987
)
 
(4,773
)
 

 
4,773

 
(15,987
)
Other comprehensive income:
 

 
 

 
 

 
 

 
 

Unrealized gain on derivative contracts
1,002

 

 

 

 
1,002

Total other comprehensive income
1,002

 

 

 

 
1,002

Comprehensive loss
$
(14,985
)
 
(4,773
)
 

 
4,773

 
$
(14,985
)
MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
(unaudited)
 
 
Six Months Ended June 30, 2015
 
Parent Issuer
 
Subsidiary
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Net revenue
$
273,651

 
6,308

 

 

 
$
279,959

 
 
 
 
 
 
 
 
 
0

Operating expenses:
 

 
 

 
 

 
 

 
0

Cost of services
50,096

 
3,647

 

 

 
53,743

Selling, general, and administrative, including stock-based compensation
42,130

 
6,991

 

 

 
49,121

Amortization of subscriber accounts, dealer network and other intangible assets
124,741

 
1,926

 

 

 
126,667

Depreciation
4,754

 
27

 

 

 
4,781

Gain on disposal of operating assets
(3
)
 

 

 

 
(3
)
 
221,718

 
12,591

 

 

 
234,309

Operating income (loss)
51,933

 
(6,283
)
 

 

 
45,650

Other expense:
 

 
 

 
 

 
 

 
 

Equity in loss of subsidiaries
6,704

 

 

 
(6,704
)
 

Interest expense
61,518

 
13

 

 

 
61,531

Refinancing expense
4,468

 

 

 

 
4,468

 
72,690

 
13

 

 
(6,704
)
 
65,999

Loss before income taxes
(20,757
)
 
(6,296
)
 

 
6,704

 
(20,349
)
Income tax expense
3,564

 
408

 

 

 
3,972

Net loss
(24,321
)
 
(6,704
)
 

 
6,704

 
(24,321
)
Other comprehensive loss:
 

 
 

 
 

 
 

 
 

Unrealized loss on derivative contracts
(3,461
)
 

 

 

 
(3,461
)
Total other comprehensive loss
(3,461
)
 

 

 

 
(3,461
)
Comprehensive loss
$
(27,782
)
 
(6,704
)
 

 
6,704

 
$
(27,782
)


MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Statement of Cash Flows
(unaudited)
 
 
Six Months Ended June 30, 2015
 
Parent Issuer
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Net cash provided by (used in) operating activities
$
112,060

 
(759
)
 

 

 
$
111,301

Investing activities:
 

 
 

 
 

 
 

 
 

Capital expenditures
(8,021
)
 
(144
)
 

 

 
(8,165
)
Cost of subscriber accounts acquired
(126,562
)
 
(2,982
)
 

 

 
(129,544
)
Cash acquired (paid) on acquisition
(61,115
)
 
4,772

 


 


 
(56,343
)
Increase in restricted cash
(35
)
 

 

 

 
(35
)
Proceeds from disposal of operating assets
3

 

 

 

 
3

Net cash provided by (used in) investing activities
(195,730
)
 
1,646

 

 

 
(194,084
)
Financing activities:
 

 
 

 
 

 
 

 
 

Proceeds from long-term debt
674,050

 

 

 

 
674,050

Payments on long-term debt
(605,990
)
 

 

 

 
(605,990
)
Payments of financing costs
(6,232
)
 

 

 

 
(6,232
)
Contribution from Ascent Capital
22,690

 

 

 

 
22,690

Net cash provided by financing activities
84,518

 

 

 

 
84,518

Net increase in cash and cash equivalents
848

 
887

 

 

 
1,735

Cash and cash equivalents at beginning of period
1,713

 
240

 

 

 
1,953

Cash and cash equivalents at end of period
$
2,561

 
1,127

 

 

 
$
3,688