Annual report pursuant to Section 13 and 15(d)

Reportable Business Segments

v3.3.1.900
Reportable Business Segments
12 Months Ended
Dec. 31, 2015
Segment Reporting [Abstract]  
Reportable Business Segments
Reportable Business Segments

Description of Segments

The Company operates through two reportable business segments according to the nature and economic characteristics of its services as well as the manner in which the information issued internally by the Company's key decision maker, who is the Company's Chief Executive Officer. The Company's business segments are as follows:

Monitronics

The Monitronics segment is primarily engaged in the business of providing security alarm monitoring services: monitoring signals arising from burglaries, fires, medical alerts and other events through security systems at subscribers' premises, as well as providing customer service and technical support. Monitronics outsources the sales, installation and most of its field service functions to its dealers. By outsourcing the low margin, high fixed-cost elements of its business to a large network of independent service providers, Monitronics is able to allocate capital to growing its revenue-generating account base rather than to local offices or depreciating hard assets.

LiveWatch

LiveWatch is a do-it-yourself ("DIY") home security provider offering professionally monitored security services through a direct-to-consumer sales channel. LiveWatch offers a differentiated go-to-market strategy through direct response TV, internet and radio advertising. When a customer initiates the process to obtain monitoring services, LiveWatch pre-configures the alarm monitoring system based on customer specifications. LiveWatch then packages and ships the equipment directly to the customer. The customer self-installs the equipment on-site and activates the monitoring service over the phone.
    
The business segment management reporting and controlling systems are based on the same accounting policies as those described in note 2, Summary of Significant Account Accounting Policies. As they arise, transactions between segments are recorded on an arm's length basis using relevant market prices.

For the year ended December 31, 2015 (amounts in thousands):
 
 
Monitronics
 
LiveWatch
 
Consolidated
Net revenue
 
$
548,622

 
$
14,734

 
$
563,356

Depreciation and amortization
 
$
264,870

 
$
3,864

 
$
268,734

Net loss from continuing operations before income taxes
 
$
(47,793
)
 
$
(18,365
)
 
$
(66,158
)


As of December 31, 2015 (amounts in thousands):
 
 
Monitronics
 
LiveWatch
 
Eliminations
 
Consolidated
Subscriber accounts, net of amortization
 
$
1,400,515

 
$
23,023

 
$

 
$
1,423,538

Goodwill
 
$
527,502

 
$
36,047

 
$

 
$
563,549

Total assets
 
$
2,033,180

 
$
63,267

 
$
(26,180
)
 
$
2,070,267



Prior to the acquisition of LiveWatch in February 2015, the Company had one operating segment. Therefore, no segment presentation is provided for fiscal year 2014.