Quarterly report pursuant to Section 13 or 15(d)

Consolidating Guarantor Financial Information

v3.5.0.2
Consolidating Guarantor Financial Information
6 Months Ended
Jun. 30, 2016
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. 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, 2016
 
Parent Issuer
 
Subsidiary
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
1,195

 
936

 

 

 
2,131

Trade receivables, net
13,380

 
504

 

 

 
13,884

Prepaid and other current assets
38,400

 
1,985

 

 
(32,245
)
 
8,140

Total current assets
52,975

 
3,425

 

 
(32,245
)
 
24,155

 
 
 
 
 
 
 
 
 
 
Investment in subsidiaries
33,920

 

 

 
(33,920
)
 

Property and equipment, net
25,034

 
1,354

 

 

 
26,388

Subscriber accounts, net
1,375,610

 
35,059

 

 

 
1,410,669

Dealer network and other intangible assets, net
20,612

 
1,127

 

 

 
21,739

Goodwill
527,191

 
36,358

 

 

 
563,549

Other assets, net
3,496

 
12

 

 

 
3,508

Total assets
$
2,038,838

 
77,335

 

 
(66,165
)
 
2,050,008

 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholder's Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
6,622

 
1,437

 

 

 
8,059

Accrued payroll and related liabilities
2,962

 
401

 

 

 
3,363

Other accrued liabilities
27,206

 
36,302

 

 
(32,245
)
 
31,263

Deferred revenue
15,031

 
1,171

 

 

 
16,202

Holdback liability
13,639

 
573

 

 

 
14,212

Current portion of long-term debt
5,500

 

 

 

 
5,500

Total current liabilities
70,960

 
39,884

 

 
(32,245
)
 
78,599

 
 
 
 
 
 
 
 
 
 
Non-current liabilities:
 
 
 
 
 
 
 
 
 
Long-term debt
1,673,160

 

 

 

 
1,673,160

Long-term holdback liability
3,614

 

 

 

 
3,614

Derivative financial instruments
30,073

 

 

 

 
30,073

Deferred income tax liability, net
14,053

 
1,243

 

 

 
15,296

Other liabilities
9,947

 
2,288

 

 

 
12,235

Total liabilities
1,801,807

 
43,415

 

 
(32,245
)
 
1,812,977

 
 
 
 
 
 
 
 
 
 
Total stockholder's equity
237,031

 
33,920

 

 
(33,920
)
 
237,031

Total liabilities and stockholder's equity
$
2,038,838

 
77,335

 

 
(66,165
)
 
2,050,008


MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Balance Sheet
(unaudited)
 
 
As of December 31, 2015
 
Parent Issuer
 
Subsidiary
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
1,513

 
1,067

 

 

 
2,580

Restricted cash
55

 

 

 

 
55

Trade receivables, net
13,224

 
398

 

 

 
13,622

Prepaid and other current assets
30,542

 
1,807

 

 
(22,459
)
 
9,890

Total current assets
45,334

 
3,272

 

 
(22,459
)
 
26,147

 
 
 
 
 
 
 
 
 
 
Investment in subsidiaries
43,920

 

 

 
(43,920
)
 

Property and equipment, net
25,842

 
812

 

 

 
26,654

Subscriber accounts, net
1,390,493

 
33,045

 

 

 
1,423,538

Dealer network and other intangible assets, net
25,462

 
1,192

 

 

 
26,654

Goodwill
527,191

 
36,358

 

 

 
563,549

Other assets, net
3,718

 
7

 

 

 
3,725

Total assets
$
2,061,960

 
74,686

 

 
(66,379
)
 
$
2,070,267

 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholder's Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
7,383

 
1,238

 

 

 
8,621

Accrued payroll and related liabilities
2,894

 
585

 

 

 
3,479

Other accrued liabilities
32,224

 
22,757

 

 
(22,459
)
 
32,522

Deferred revenue
15,151

 
1,056

 

 

 
16,207

Holdback liability
15,986

 
400

 

 

 
16,386

Current portion of long-term debt
5,500

 

 

 

 
5,500

Total current liabilities
79,138

 
26,036

 

 
(22,459
)
 
82,715

 
 
 
 
 
 
 
 
 
 
Non-current liabilities:
 
 
 
 
 
 
 
 
 
Long-term debt
1,739,147

 

 

 

 
1,739,147

Long-term holdback liability
3,786

 

 

 

 
3,786

Derivative financial instruments
13,470

 

 

 

 
13,470

Deferred income tax liability, net
12,391

 
800

 

 

 
13,191

Other liabilities
12,963

 
3,930

 

 

 
16,893

Total liabilities
1,860,895

 
30,766

 

 
(22,459
)
 
1,869,202

 
 
 
 
 
 
 
 
 
 
Total stockholder's equity
201,065

 
43,920

 

 
(43,920
)
 
201,065

Total liabilities and stockholder's equity
$
2,061,960

 
74,686

 

 
(66,379
)
 
2,070,267



MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
(unaudited)
 
Three Months Ended June 30, 2016
 
Parent Issuer
 
Subsidiary
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Net revenue
$
137,212

 
6,444

 

 

 
143,656

 
 
 
 
 
 
 
 
 
0

Operating expenses:
 

 
 

 
 

 
 

 
0

Cost of services
24,504

 
3,133

 

 

 
27,637

Selling, general, and administrative, including stock-based compensation
22,857

 
6,346

 

 

 
29,203

Radio conversion costs
7,542

 
54

 

 

 
7,596

Amortization of subscriber accounts, dealer network and other intangible assets
60,482

 
1,455

 

 

 
61,937

Depreciation
1,939

 
86

 

 

 
2,025

 
117,324

 
11,074

 

 

 
128,398

Operating income (loss)
19,888

 
(4,630
)
 

 

 
15,258

Other expense:
 

 
 

 
 

 
 

 
 

Equity in loss of subsidiaries
4,860

 

 

 
(4,860
)
 

Interest expense
30,019

 
5

 

 

 
30,024

 
34,879

 
5

 

 
(4,860
)
 
30,024

(Loss) income before income taxes
(14,991
)
 
(4,635
)
 

 
4,860

 
(14,766
)
Income tax expense
1,518

 
225

 

 

 
1,743

Net (loss) income
(16,509
)
 
(4,860
)
 

 
4,860

 
(16,509
)
Other comprehensive income (loss):
 

 
 

 
 

 
 

 
 

Unrealized loss on derivative contracts
(4,697
)
 

 

 

 
(4,697
)
Total other comprehensive loss
(4,697
)
 

 

 

 
(4,697
)
Comprehensive (loss) income
$
(21,206
)
 
(4,860
)
 

 
4,860

 
(21,206
)


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
24,938

 
2,665

 

 

 
27,603

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

 
5,067

 

 

 
25,697

Radio conversion costs
450

 

 

 

 
450

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

 
1,293

 

 

 
63,526

Depreciation
2,463

 
21

 

 

 
2,484

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

 
4,773

 
(13,976
)
Income tax expense
1,803

 
208

 

 

 
2,011

Net (loss) income
(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) income
$
(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, 2016
 
 
Parent Issuer
 
Subsidiary
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Net revenue
 
$
274,519

 
12,405

 

 

 
286,924

 
 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
Cost of services
 
50,746

 
6,366

 

 

 
57,112

Selling, general, and administrative, including stock-based compensation
 
45,388

 
12,428

 

 

 
57,816

Radio conversion costs
 
16,621

 
54

 

 

 
16,675

Amortization of subscriber accounts, dealer network and other intangible assets
 
120,310

 
2,949

 

 

 
123,259

Depreciation
 
3,849

 
151

 

 

 
4,000

Gain on disposal of operating assets
 

 

 

 

 

 
 
236,914

 
21,948

 

 

 
258,862

Operating income (loss)
 
37,605

 
(9,543
)
 

 

 
28,062

Other expense:
 
 
 
 
 
 
 
 
 
 
Equity in loss of subsidiaries
 
10,001

 

 

 
(10,001
)
 

Interest expense
 
61,239

 
9

 

 

 
61,248

Refinancing expense
 

 

 

 

 

 
 
71,240

 
9

 

 
(10,001
)
 
61,248

(Loss) income before income taxes
 
(33,635
)
 
(9,552
)
 

 
10,001

 
(33,186
)
Income tax expense
 
3,084

 
449

 

 

 
3,533

Net (loss) income
 
(36,719
)
 
(10,001
)
 

 
10,001

 
(36,719
)
Other comprehensive income:
 
 
 
 
 
 
 
 
 
 
Unrealized gain on derivative contracts
 
(16,542
)
 

 

 

 
(16,542
)
Total other comprehensive loss
 
(16,542
)
 

 

 

 
(16,542
)
Comprehensive (loss) income
 
$
(53,261
)
 
(10,001
)
 

 
10,001

 
(53,261
)

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
49,123

 
3,647

 

 

 
52,770

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

 
6,991

 

 

 
49,121

Radio conversion costs
973

 

 

 

 
973

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

 
6,704

 
(20,349
)
Income tax expense
3,564

 
408

 

 

 
3,972

Net (loss) income
(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) income
$
(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, 2016
 
Parent Issuer
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Net cash provided by operating activities
$
86,581

 
4,320

 

 

 
90,901

Investing activities:
 

 
 

 
 

 
 

 
 

Capital expenditures
(2,408
)
 
(692
)
 

 

 
(3,100
)
Cost of subscriber accounts acquired
(103,046
)
 
(3,759
)
 

 

 
(106,805
)
Increase in restricted cash
55

 

 

 

 
55

Net cash used in investing activities
(105,399
)
 
(4,451
)
 

 

 
(109,850
)
Financing activities:
 

 
 

 
 

 
 

 
 

Proceeds from long-term debt
88,200

 

 

 

 
88,200

Payments on long-term debt
(69,700
)
 

 

 

 
(69,700
)
Net cash provided by financing activities
18,500

 

 

 

 
18,500

Net increase in cash and cash equivalents
(318
)
 
(131
)
 

 

 
(449
)
Cash and cash equivalents at beginning of period
1,513

 
1,067

 

 

 
2,580

Cash and cash equivalents at end of period
$
1,195

 
936

 

 

 
2,131


 
Six Months Ended June 30, 2015
 
Parent Issuer
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Net cash provided by 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 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