Quarterly report pursuant to Section 13 or 15(d)

Consolidating Guarantor Financial Information

v2.4.0.8
Consolidating Guarantor Financial Information
9 Months Ended
Sep. 30, 2013
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 U.S. 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 year ended December 31, 2012, and three and nine months ended September 30, 2012, 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 and nine months ended September 30, 2013, are as follows:

 

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES

Condensed Consolidating Balance Sheets

(unaudited)

 

 

 

As of September 30, 2013

 

 

 

Parent Issuer

 

Subsidiary
Guarantors

 

Non-Guarantors

 

Eliminations

 

Consolidated

 

 

 

(amounts in thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

27,647

 

1,799

 

 

 

29,446

 

Restricted cash

 

2,680

 

 

 

 

2,680

 

Trade receivables, net

 

11,720

 

1,901

 

 

 

13,621

 

Deferred income tax assets, net

 

5,100

 

 

 

 

5,100

 

Prepaid and other current assets

 

15,849

 

1,307

 

 

(3,851

)

13,305

 

Total current assets

 

62,996

 

5,007

 

 

(3,851

)

64,152

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment in subsidiaries

 

499,391

 

 

 

(499,391

)

 

Property and equipment, net

 

21,836

 

1,310

 

 

 

23,146

 

Subscriber accounts, net

 

1,026,558

 

311,843

 

 

 

1,338,401

 

Dealer network and other intangible assets, net

 

22,293

 

47,287

 

 

 

69,580

 

Goodwill

 

349,227

 

173,033

 

 

 

522,260

 

Other assets, net

 

29,672

 

 

 

 

29,672

 

Total assets

 

$

2,011,973

 

538,480

 

 

(503,242

)

2,047,211

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholder's Equity

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

4,508

 

1,732

 

 

 

6,240

 

Accrued payroll and related liabilities

 

2,787

 

1,089

 

 

 

3,876

 

Other accrued liabilities

 

44,720

 

9,457

 

 

(3,851

)

50,326

 

Deferred revenue

 

10,599

 

3,732

 

 

 

14,331

 

Purchase holdbacks

 

16,440

 

2,989

 

 

 

19,429

 

Current portion of long-term debt

 

9,166

 

 

 

 

9,166

 

Total current liabilities

 

88,220

 

18,999

 

 

(3,851

)

103,368

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current liabilities:

 

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

1,605,760

 

 

 

 

1,605,760

 

Long-term purchase holdbacks

 

 

6,756

 

 

 

6,756

 

Derivative financial instruments

 

6,491

 

 

 

 

6,491

 

Deferred income tax liability, net

 

9,144

 

451

 

 

 

9,595

 

Other liabilities

 

3,245

 

12,883

 

 

 

16,128

 

Total liabilities

 

1,712,860

 

39,089

 

 

(3,851

)

1,748,098

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholder’s equity

 

299,113

 

499,391

 

 

(499,391

)

299,113

 

Total liabilities and stockholder's equity

 

$

2,011,973

 

538,480

 

 

(503,242

)

2,047,211

 

 

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)

(unaudited)

 

 

 

Three months ended September 30, 2013

 

 

 

Parent Issuer

 

Subsidiary
Guarantors

 

Non-Guarantors

 

Eliminations

 

Consolidated

 

 

 

(amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

104,350

 

11,494

 

 

 

115,844

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

17,482

 

2,673

 

 

 

20,155

 

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

 

17,820

 

2,148

 

 

 

19,968

 

Amortization of subscriber accounts, dealer network and other intangible assets

 

48,096

 

7,650

 

 

 

55,746

 

Depreciation

 

1,698

 

212

 

 

 

1,910

 

Restructuring charges

 

 

402

 

 

 

 

402

 

 

 

85,096

 

13,085

 

 

 

98,181

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

19,254

 

(1,591

)

 

 

17,663

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expense:

 

 

 

 

 

 

 

 

 

 

 

Equity in loss of subsidiaries

 

2,223

 

 

 

(2,223

)

 

Interest expense

 

25,572

 

160

 

 

 

25,732

 

 

 

27,795

 

160

 

 

(2,223

)

25,732

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

(8,541

)

(1,751

)

 

2,223

 

(8,069

)

Income tax expense

 

769

 

472

 

 

 

1,241

 

Net loss

 

(9,310

)

(2,223

)

 

2,223

 

(9,310

)

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on derivative contracts

 

(4,526

)

 

 

 

(4,526

)

Total other comprehensive loss

 

(4,526

)

 

 

 

(4,526

)

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss

 

$

(13,836

)

(2,223

)

 

2,223

 

(13,836

)

 

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)

(unaudited)

 

 

 

Nine months ended September 30, 2013

 

 

 

Parent Issuer

 

Subsidiary
Guarantors

 

Non-Guarantors

 

Eliminations

 

Consolidated

 

 

 

(amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

306,781

 

11,494

 

 

 

318,275

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

48,278

 

2,673

 

 

 

50,951

 

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

 

51,836

 

2,148

 

 

 

53,984

 

Amortization of subscriber accounts, dealer network and other intangible assets

 

138,409

 

7,650

 

 

 

146,059

 

Depreciation

 

4,907

 

212

 

 

 

5,119

 

Restructuring charges

 

 

402

 

 

 

 

402

 

Gain on sale of operating assets

 

(2

)

 

 

 

 

 

 

(2

)

 

 

243,428

 

13,085

 

 

 

256,513

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

63,353

 

(1,591

)

 

 

61,762

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expense:

 

 

 

 

 

 

 

 

 

 

 

Equity in loss of subsidiaries

 

2,223

 

 

 

(2,223

)

 

Interest expense

 

66,165

 

160

 

 

 

66,325

 

 

 

68,388

 

160

 

 

(2,223

)

66,325

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

(5,035

)

(1,751

)

 

2,223

 

(4,563

)

Income tax expense

 

2,334

 

472

 

 

 

2,806

 

Net loss

 

(7,369

)

(2,223

)

 

2,223

 

(7,369

)

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on derivative contracts

 

7,404

 

 

 

 

7,404

 

Total other comprehensive income

 

7,404

 

 

 

 

7,404

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income loss

 

$

35

 

(2,223

)

 

2,223

 

35

 

 

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES

Condensed Consolidating Statement of Cash Flows

(unaudited)

 

 

 

Nine months ended September 30, 2013

 

 

 

Parent Issuer

 

Subsidiary
Guarantors

 

Non-Guarantors

 

Eliminations

 

Consolidated

 

 

 

(amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

160,606

 

9,272

 

 

 

169,878

 

 

 

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

(6,184

)

(119

)

 

 

(6,303

)

Purchases of subscriber accounts

 

(164,077

)

(10,450

)

 

 

(174,527

)

Cash acquired (paid) on acquisition

 

(482,891

)

3,096

 

 

 

(479,795

)

Proceeds from sale of operating assets

 

2

 

 

 

 

2

 

Decrease in restricted cash

 

(40

)

 

 

 

(40

)

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

(653,190

)

(7,473

)

 

 

(660,663

)

 

 

 

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

 

 

 

Proceeds from long-term debt

 

591,375

 

 

 

 

591,375

 

Payments of long-term debt

 

(85,455

)

 

 

 

(85,455

)

Payments of deferred financing costs and refinancing costs

 

(8,122

)

 

 

 

(8,122

)

Contribution from Ascent Capital

 

20,000

 

 

 

 

20,000

 

Dividend to Ascent Capital

 

(1,000

)

 

 

 

(1,000

)

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by financing activities

 

516,798

 

 

 

 

516,798

 

 

 

 

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

24,214

 

1,799

 

 

 

26,013

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

3,433

 

 

 

 

3,433

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

27,647

 

1,799

 

 

 

29,446