Quarterly report pursuant to Section 13 or 15(d)

Consolidating Guarantor Financial Information

v3.19.1
Consolidating Guarantor Financial Information
3 Months Ended
Mar. 31, 2019
Condensed Financial Information 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 March 31, 2019
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
23,547

 
384

 

 

 
23,931

Restricted cash
118

 

 

 

 
118

Trade receivables, net
12,286

 
152

 

 

 
12,438

Prepaid and other current assets
71,289

 

 

 
(36,901
)
 
34,388

Total current assets
107,240

 
536

 

 
(36,901
)
 
70,875

 
 
 
 
 
 
 
 
 
 
Property and equipment, net
37,154

 

 

 

 
37,154

Subscriber accounts and deferred contract acquisition costs, net
1,162,903

 
13,873

 

 

 
1,176,776

Deferred income tax asset, net
783

 

 

 

 
783

Operating lease right-of-use asset
19,720

 

 

 

 
19,720

Other assets, net
25,606

 

 

 

 
25,606

Total assets
$
1,353,406

 
14,409

 

 
(36,901
)
 
1,330,914

 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholder's Deficit
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
12,938

 
4

 

 

 
12,942

Other accrued liabilities
47,407

 
36,887

 

 
(36,901
)
 
47,393

Deferred revenue
12,587

 
111

 

 

 
12,698

Holdback liability
11,878

 
163

 

 

 
12,041

Current portion of long-term debt
1,838,900

 

 

 

 
1,838,900

Total current liabilities
1,923,710

 
37,165

 

 
(36,901
)
 
1,923,974

 
 
 
 
 
 
 
 
 
 
Non-current liabilities:
 
 
 
 
 
 
 
 
 
Long-term holdback liability
1,979

 

 

 

 
1,979

Derivative financial instruments
9,287

 

 

 

 
9,287

Operating lease liabilities
16,550

 

 

 

 
16,550

Other liabilities
25,655

 

 

 
(22,756
)
 
2,899

Total liabilities
1,977,181

 
37,165

 

 
(59,657
)
 
1,954,689

 
 
 
 
 
 
 
 
 
 
Total stockholder's deficit
(623,775
)
 
(22,756
)
 

 
22,756

 
(623,775
)
Total liabilities and stockholder's deficit
$
1,353,406

 
14,409

 

 
(36,901
)
 
1,330,914


MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Balance Sheet
(unaudited)
 
 
As of December 31, 2018
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
1,697

 
491

 

 

 
2,188

Restricted cash
189

 

 

 

 
189

Trade receivables, net
12,362

 
759

 

 

 
13,121

Prepaid and other current assets
118,119

 
4,042

 

 
(93,983
)
 
28,178

Total current assets
132,367

 
5,292

 

 
(93,983
)
 
43,676

 
 
 
 
 
 
 
 
 
 
Property and equipment, net
34,960

 
1,579

 

 

 
36,539

Subscriber accounts and deferred contract acquisition costs, net
1,160,698

 
34,765

 

 

 
1,195,463

Deferred income tax asset, net
783

 

 

 

 
783

Other assets, net
29,270

 
37

 

 

 
29,307

Total assets
$
1,358,078

 
41,673

 

 
(93,983
)
 
1,305,768

 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholder's Deficit
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
11,110

 
989

 

 

 
12,099

Other accrued liabilities
29,016

 
96,052

 

 
(93,983
)
 
31,085

Deferred revenue
11,357

 
1,703

 

 

 
13,060

Holdback liability
11,342

 
171

 

 

 
11,513

Current portion of long-term debt
1,816,450

 

 

 

 
1,816,450

Total current liabilities
1,879,275

 
98,915

 

 
(93,983
)
 
1,884,207

 
 
 
 
 
 
 
 
 
 
Non-current liabilities:
 
 
 
 
 
 
 
 
 
Long-term holdback liability
1,770

 

 

 

 
1,770

Derivative financial instruments
6,039

 

 

 

 
6,039

Other liabilities
59,969

 

 

 
(57,242
)
 
2,727

Total liabilities
1,947,053

 
98,915

 

 
(151,225
)
 
1,894,743

 
 
 
 
 
 
 
 
 
 
Total stockholder's deficit
(588,975
)
 
(57,242
)
 

 
57,242

 
(588,975
)
Total liabilities and stockholder's deficit
$
1,358,078

 
41,673

 

 
(93,983
)
 
1,305,768


MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
(unaudited)

 
Three Months Ended March 31, 2019
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Net revenue
$
128,260

 
1,346

 

 

 
129,606

 
 
 
 
 
 
 
 
 
 
Operating expenses:
 

 
 

 
 

 
 

 
 
Cost of services
26,683

 
81

 

 

 
26,764

Selling, general, and administrative, including stock-based compensation
31,164

 
58

 

 

 
31,222

Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets
48,572

 
573

 

 

 
49,145

Depreciation
3,154

 

 

 

 
3,154

 
109,573

 
712

 

 

 
110,285

Operating income
18,687

 
634

 

 

 
19,321

Other expense (income):
 

 
 

 
 

 
 

 
 

Equity in income of subsidiaries
(634
)
 

 

 
634

 

Interest expense
37,433

 

 

 

 
37,433

Unrealized loss on derivative financial instruments
7,773

 

 

 

 
7,773

Refinancing expense
5,214

 

 

 

 
5,214

 
49,786

 

 

 
634

 
50,420

Income (loss) before income taxes
(31,099
)
 
634

 

 
(634
)
 
(31,099
)
Income tax expense
671

 

 

 

 
671

Net income (loss)
(31,770
)
 
634

 

 
(634
)
 
(31,770
)
Other comprehensive income (loss):
 

 
 

 
 

 
 

 
 

Unrealized loss on derivative contracts
(468
)
 

 

 

 
(468
)
Total other comprehensive loss
(468
)
 

 

 

 
(468
)
Comprehensive income (loss)
$
(32,238
)
 
634

 

 
(634
)
 
(32,238
)

MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
(unaudited)

 
Three Months Ended March 31, 2018
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Net revenue
$
124,295

 
9,458

 

 

 
133,753

 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
Cost of services
28,299

 
4,402

 

 

 
32,701

Selling, general, and administrative, including stock-based compensation
22,803

 
9,211

 

 

 
32,014

Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets
52,237

 
2,174

 

 

 
54,411

Depreciation
2,385

 
230

 

 

 
2,615

 
105,724

 
16,017

 

 

 
121,741

Operating income (loss)
18,571

 
(6,559
)
 

 

 
12,012

Other expense:
 

 
 
 
 
 
 
 
 
Equity in loss of subsidiaries
6,740

 

 

 
(6,740
)
 

Interest expense
36,873

 

 

 

 
36,873

 
43,613

 

 

 
(6,740
)
 
36,873

Loss before income taxes
(25,042
)
 
(6,559
)
 

 
6,740

 
(24,861
)
Income tax expense
1,165

 
181

 

 

 
1,346

Net loss
(26,207
)
 
(6,740
)
 

 
6,740

 
(26,207
)
Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
Unrealized gain on derivative contracts
14,406

 

 

 

 
14,406

Total other comprehensive income
14,406

 

 

 

 
14,406

Comprehensive loss
$
(11,801
)
 
(6,740
)
 

 
6,740

 
(11,801
)


MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES
Condensed Consolidating Statement of Cash Flows
(unaudited)
 
 
Three Months Ended March 31, 2019
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Net cash provided by operating activities
$
48,344

 
198

 

 

 
48,542

Investing activities:
 
 
 
 
 
 
 
 
 
Capital expenditures
(2,999
)
 

 

 

 
(2,999
)
Cost of subscriber accounts acquired
(28,545
)
 
(305
)
 

 

 
(28,850
)
Net cash used in investing activities
(31,544
)
 
(305
)
 

 

 
(31,849
)
Financing activities:
 
 
 
 
 
 
 
 
 
Proceeds from long-term debt
43,100

 

 

 

 
43,100

Payments on long-term debt
(18,400
)
 

 

 

 
(18,400
)
Payments of financing costs
(14,720
)
 

 

 

 
(14,720
)
Value of shares withheld for share-based compensation
(1
)
 

 

 

 
(1
)
Dividend to Ascent Capital
(5,000
)
 

 

 

 
(5,000
)
Net cash provided by financing activities
4,979

 

 

 

 
4,979

Net increase (decrease) in cash, cash equivalents and restricted cash
21,779

 
(107
)
 

 

 
21,672

Cash, cash equivalents and restricted cash at beginning of period
1,886

 
491

 

 

 
2,377

Cash, cash equivalents and restricted cash at end of period
$
23,665

 
384

 

 

 
24,049


 
Three Months Ended March 31, 2018
 
Parent Issuer
 
Subsidiary Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
(amounts in thousands)
Net cash provided by operating activities
$
50,059

 
295

 

 

 
50,354

Investing activities:
 
 
 
 
 
 
 
 
 
Capital expenditures
(3,004
)
 
(306
)
 

 

 
(3,310
)
Cost of subscriber accounts acquired
(24,328
)
 
(232
)
 

 

 
(24,560
)
Net cash used in investing activities
(27,332
)
 
(538
)
 

 

 
(27,870
)
Financing activities:
 
 
 
 
 
 
 
 
 
Proceeds from long-term debt
50,000

 

 

 

 
50,000

Payments on long-term debt
(47,750
)
 

 

 

 
(47,750
)
Value of shares withheld for share-based compensation
(42
)
 

 

 

 
(42
)
Net cash provided by financing activities
2,208

 

 

 

 
2,208

Net increase (decrease) in cash, cash equivalents and restricted cash
24,935

 
(243
)
 

 

 
24,692

Cash, cash equivalents and restricted cash at beginning of period
2,705

 
597

 

 

 
3,302

Cash, cash equivalents and restricted cash at end of period
$
27,640

 
354

 

 

 
27,994