Brinks Home Security Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Consolidating Guarantor Financial Information

Consolidating Guarantor Financial Information

12 Months Ended

Dec. 31, 2016

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Consolidating Guarantor Financial Information

The Senior Notes were issued by MONI (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 consolidating financial information for the Parent Issuer, the subsidiary Guarantors and the non-guarantors are as follows (amounts in thousands):

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES

Condensed Consolidating Balance Sheet

Amounts in thousands



	As of December 31, 2016
	Parent Issuer		Subsidiary Guarantors	Non-Guarantors	Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	1,739	1,438	—	—		$	3,177
Restricted cash	—		—	—	—		—
Trade receivables, net	13,265		604	—	—		13,869
Prepaid and other current assets	51,251		2,171	—	(44,062	)	9,360
Total current assets	66,255		4,213	—	(44,062	)	26,406

Investment in subsidiaries	22,533		—	—	(22,533	)	—
Property and equipment, net	26,652		1,618	—	—		28,270
Subscriber accounts, net	1,349,285		37,475	—	—		1,386,760
Dealer network and other intangible assets, net	15,762		1,062	—	—		16,824
Goodwill	527,191		36,358	—	—		563,549
Other assets, net	11,889		19	—	—		11,908
Total assets	$	2,019,567	80,745	—	(66,595	)	$	2,033,717

Liabilities and Stockholder's Equity
Current liabilities:
Accounts payable	$	9,919	1,542	—	—		$	11,461
Accrued payroll and related liabilities	3,731		337	—	—		4,068
Other accrued liabilities	25,951		49,690	—	(44,062	)	31,579
Deferred revenue	13,807		1,340	—	—		15,147
Holdback liability	13,434		482	—	—		13,916
Current portion of long-term debt	11,000		—	—	—		11,000
Total current liabilities	77,842		53,391	—	(44,062	)	87,171

Non-current liabilities:
Long-term debt	1,687,778		—	—	—		1,687,778
Long-term holdback instruments	2,645		—	—	—		2,645
Derivative financial instruments	16,948		—	—	—		16,948
Deferred income tax liability, net	15,649		1,681	—	—		17,330
Other liabilities	3,760		3,140	—	—		6,900
Total liabilities	1,804,622		58,212	—	(44,062	)	1,818,772

Total stockholder's equity	214,945		22,533	—	(22,533	)	214,945
Total liabilities and stockholder's equity	2,019,567		80,745	—	(66,595	)	2,033,717

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES

Condensed Consolidating Balance Sheet

Amounts in thousands



	As of Balance at December 31, 2015
	Parent Issuer		Subsidiary Guarantors	Non-Guarantors	Eliminations		Consolidated
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 instruments	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

Consolidating Statement of Operations and Comprehensive Income (Loss)

Amounts in thousands



	Year Ended December 31, 2016
	Parent Issuer			Subsidiary Guarantors		Non-Guarantors	Eliminations		Consolidated

Net revenue	$	543,181		27,191		—	—		$	570,372

Operating expenses:
Cost of services	101,940			13,296		—	—		115,236
Selling, general, and administrative, including stock-based compensation	86,670			27,482		—	—		114,152
Radio conversion costs	18,204			218		—	—		18,422
Amortization of subscriber accounts, dealer network and other intangible assets	240,568			6,185		—	—		246,753
Depreciation	7,784			376		—	—		8,160
Gain on disposal of operating assets	—			—		—	—		—
	455,166			47,557		—	—		502,723
Operating income (loss)	88,015			(20,366	)	—	—		67,649

Other expense:
Equity in loss of subsidiaries	21,387			—		—	(21,387	)	—
Interest expense	127,290			18		—	—		127,308
Refinancing expense	9,500			—		—	—		9,500
	158,177			18		—	(21,387	)	136,808
Loss before income taxes	(70,162		)	(20,384	)	—	21,387		(69,159		)
Income tax expense	6,145			1,003		—	—		7,148
Net loss	(76,307		)	(21,387	)	—	21,387		(76,307		)
Other comprehensive loss:
Unrealized loss on derivative contracts	4,589			—		—	—		4,589
Total other comprehensive loss	(71,718		)	(21,387	)	—	21,387		(71,718		)

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES

Consolidating Statement of Operations and Comprehensive Income (Loss)

Amounts in thousands



	Year Ended December 31, 2015
	Parent Issuer			Subsidiary Guarantors		Non-Guarantors	Eliminations		Consolidated

Net revenue	$	546,597		16,759		—	—		$	563,356

Operating expenses:
Cost of services	100,233			10,013		—	—		110,246
Selling, general, and administrative, including stock-based compensation	86,683			19,604		—	—		106,287
Radio conversion costs	14,369			—		—	—		14,369
Amortization of subscriber accounts, dealer network and other intangible assets	253,773			4,895		—	—		258,668
Depreciation	9,960			106		—	—		10,066
Gain on disposal of operating assets	(5		)	—		—	—		(5		)
	465,013			34,618		—	—		499,631
Operating income (loss)	81,584			(17,859	)	—	—		63,725

Other expense:
Equity in loss of subsidiaries	18,689			—		—	(18,689	)	—
Interest expense	125,394			21		—	—		125,415
Refinancing expense	4,468			—		—	—		4,468
	148,551			21		—	(18,689	)	129,883
Loss before income taxes	(66,967		)	(17,880	)	—	18,689		(66,158		)
Income tax expense	5,481			809		—	—		6,290
Net loss	(72,448		)	(18,689	)	—	18,689		(72,448		)
Other comprehensive loss:
Unrealized loss on derivative contracts	(8,741		)	—		—	—		(8,741		)
Total other comprehensive loss	(81,189		)	(18,689	)	—	18,689		(81,189		)

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES

Consolidating Statements of Cash flows

Amounts in thousands



	Year Ended December 31, 2016
	Parent Issuer			Subsidiary Guarantors		Non-Guarantors	Eliminations	Consolidated
Net cash provided by operating activities	$	181,384		9,143		—	—	$	190,527
Investing activities:
Capital expenditures	(7,997		)	(1,181	)	—	—	(9,178		)
Cost of subscriber accounts acquired	(193,790		)	(7,591	)	—	—	(201,381		)
Increase in restricted cash	55			—		—	—	55
Net cash used in investing activities	(201,732		)	(8,772	)	—	—	(210,504		)
Financing activities:
Proceeds from long-term debt	1,280,700			—		—	—	1,280,700
Payments on long-term debt	(1,238,059		)	—		—	—	(1,238,059		)
Refinance costs	(16,946		)					(16,946		)
Value of shares withheld for share-based compensation	(121		)	—		—	—	(121		)
Dividend to Ascent Capital	(5,000		)	—		—	—	(5,000		)
	20,574			—		—	—	20,574
Net increase in cash and cash equivalents	226			371		—	—	597
Cash and cash equivalents at beginning of period	1,513			1,067		—	—	2,580
Cash and cash equivalents at end of period	$	1,739		1,438		—	—	$	3,177

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES

Consolidating Statements of Cash flows

Amounts in thousands



	Year Ended December 31, 2015
	Parent Issuer			Subsidiary Guarantors		Non-Guarantors	Eliminations	Consolidated
Net cash provided by operating activities	$	201,477		7,685		—	—	$	209,162
Investing activities:
Capital expenditures	(11,866		)	(556	)	—	—	(12,422		)
Cost of subscriber accounts acquired	(260,256		)	(6,302	)	—	—	(266,558		)
Cash paid for acquisition, net of cash acquired	(56,778		)	—		—	—	(56,778		)
Increase in restricted cash	(37		)	—		—	—	(37		)
Proceeds from sale of assets	5			—		—	—	5
Net cash used in investing activities	(328,932		)	(6,858	)	—	—	(335,790		)
Financing activities:
Proceeds from long-term debt	778,000			—		—	—	778,000
Payments on long-term debt	(666,640		)	—		—	—	(666,640		)
Refinance costs	(6,477		)					(6,477		)
Value of shares withheld for share-based compensation	(318		)	—		—	—	(318		)
Contributions from Ascent Capital	22,690							22,690
	127,255			—		—	—	127,255
Net increase in cash and cash equivalents	(200		)	827		—	—	627
Cash and cash equivalents at beginning of period	1,713			240		—	—	1,953
Cash and cash equivalents at end of period	$	1,513		1,067		—	—	$	2,580