Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 07, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | MONITRONICS INTERNATIONAL INC | |
Entity Central Index Key | 0001265107 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Smaller Reporting Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 0 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 11,495 | $ 2,188 |
Restricted cash | 93 | 189 |
Trade receivables, net of allowance for doubtful accounts of $2,843 in 2019 and $3,759 in 2018 | 12,545 | 13,121 |
Prepaid and other current assets | 28,226 | 28,178 |
Total current assets | 52,359 | 43,676 |
Property and equipment, net of accumulated depreciation of $46,806 in 2019 and $40,531 in 2018 | 36,940 | 36,539 |
Subscriber accounts and deferred contract acquisition costs, net of accumulated amortization of $1,719,220 in 2019 and $1,621,242 in 2018 | 1,161,472 | 1,195,463 |
Deferred income tax asset, net | 783 | 783 |
Operating lease right-of-use asset | 19,521 | |
Other assets | 18,649 | 29,307 |
Total assets | 1,289,724 | 1,305,768 |
Current liabilities: | ||
Accounts payable | 0 | 12,099 |
Other accrued liabilities | 3,795 | 31,085 |
Deferred revenue | 0 | 13,060 |
Holdback liability | 0 | 11,513 |
Current portion of long-term debt | 181,400 | 1,816,450 |
Total current liabilities not subject to compromise | 185,195 | 1,884,207 |
Non-current liabilities: | ||
Long-term holdback liability | 0 | 1,770 |
Derivative financial instruments | 0 | 6,039 |
Operating lease liabilities | 16,317 | |
Other liabilities | 0 | 2,727 |
Total liabilities not subject to compromise | 201,512 | 1,894,743 |
Liabilities subject to compromise | 1,767,076 | 0 |
Total liabilities | 1,968,588 | 1,894,743 |
Commitments and contingencies | ||
Stockholder's deficit: | ||
Common stock, $.01 par value. 1,000 shares authorized, issued and outstanding both at June 30, 2019 and December 31, 2018 | 0 | 0 |
Additional paid-in capital | 436,734 | 439,711 |
Accumulated deficit | (1,122,266) | (1,036,294) |
Accumulated other comprehensive income, net | 6,668 | 7,608 |
Total stockholder's deficit | (678,864) | (588,975) |
Total liabilities and stockholder's deficit | $ 1,289,724 | $ 1,305,768 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Trade receivables, allowance for doubtful accounts | $ 2,843 | $ 3,759 |
Property and equipment, accumulated depreciation | 46,806 | 40,531 |
Subscriber accounts and deferred contract acquisition costs, accumulated amortization | $ 1,719,220 | $ 1,621,242 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares (in shares) | 1,000 | 1,000 |
Common stock, issued shares (in shares) | 1,000 | 1,000 |
Common stock, outstanding shares (in shares) | 1,000 | 1,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||||
Net revenue | $ 128,091 | $ 135,013 | $ 257,697 | $ 268,766 | ||
Operating expenses: | ||||||
Cost of services | 28,536 | 33,047 | 55,300 | 65,748 | ||
Selling, general and administrative, including stock-based and long-term incentive compensation | 28,163 | 32,655 | 59,385 | 64,669 | ||
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets | 49,138 | 53,891 | 98,283 | 108,302 | ||
Depreciation | 3,121 | 2,865 | 6,275 | 5,480 | ||
Loss on goodwill impairment | 0 | 214,400 | 0 | 214,400 | ||
Total operating expenses | 108,958 | 336,858 | 219,243 | 458,599 | ||
Operating income (loss) | 19,133 | (201,845) | 38,454 | (189,833) | ||
Other expense: | ||||||
Restructuring and reorganization expense | 33,102 | 0 | 33,102 | 0 | ||
Interest expense | 40,536 | 38,600 | 77,969 | 75,473 | ||
Realized and unrealized (gain) loss, net on derivative financial instruments | (969) | 0 | 6,804 | 0 | ||
Refinancing expense | 0 | 0 | 5,214 | 0 | ||
Total other expense | 72,669 | 38,600 | 123,089 | 75,473 | ||
Loss before income taxes | (53,536) | (240,445) | (84,635) | (265,306) | ||
Income tax expense | 666 | 1,347 | 1,337 | 2,693 | ||
Net loss | (54,202) | $ (31,770) | (241,792) | $ (26,207) | (85,972) | (267,999) |
Other comprehensive income (loss): | ||||||
Unrealized gain (loss) on derivative contracts, net | (472) | 5,521 | (940) | 19,927 | ||
Total other comprehensive income (loss), net of tax | (472) | $ (468) | 5,521 | $ 14,406 | (940) | 19,927 |
Comprehensive loss | $ (54,674) | $ (236,271) | $ (86,912) | $ (248,072) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (85,972) | $ (267,999) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets | 98,283 | 108,302 |
Depreciation | 6,275 | 5,480 |
Stock-based and long-term incentive compensation | 466 | 406 |
Deferred income tax expense | 0 | 1,324 |
Amortization of debt discount and deferred debt costs | 0 | 3,613 |
Restructuring and reorganization expense | 33,102 | 0 |
Unrealized loss on derivative financial instruments, net | 4,577 | 0 |
Refinancing expense | 5,214 | 0 |
Bad debt expense | 5,903 | 5,623 |
Loss on goodwill impairment | 0 | 214,400 |
Other non-cash activity, net | (545) | 1,463 |
Changes in assets and liabilities: | ||
Trade receivables | (5,327) | (5,434) |
Prepaid expenses and other assets | 869 | (2,276) |
Subscriber accounts - deferred contract acquisition costs | (1,781) | (2,586) |
Payables and other liabilities | 39,308 | 5,181 |
Net cash provided by operating activities | 100,372 | 67,497 |
Cash flows from investing activities: | ||
Capital expenditures | (6,767) | (8,928) |
Cost of subscriber accounts acquired | (61,335) | (69,695) |
Net cash used in investing activities | (68,102) | (78,623) |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 43,100 | 105,300 |
Payments on long-term debt | (18,400) | (95,200) |
Payments of restructuring and reorganization costs | (35,352) | 0 |
Payments of refinancing costs | (7,404) | 0 |
Value of shares withheld for share-based compensation | (3) | (69) |
Dividend to Ascent Capital | (5,000) | 0 |
Net cash provided by (used in) financing activities | (23,059) | 10,031 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 9,211 | (1,095) |
Cash, cash equivalents and restricted cash at beginning of period | 2,377 | 3,302 |
Cash, cash equivalents and restricted cash at end of period | 11,588 | 2,207 |
Supplemental cash flow information: | ||
State taxes paid, net | 2,637 | 2,710 |
Interest paid | 36,848 | 71,713 |
Accrued capital expenditures | $ 461 | $ 616 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholder's Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Beginning Balance (in shares) at Dec. 31, 2017 | 1,000 | ||||
Beginning Balance at Dec. 31, 2017 | $ 102,736 | $ 0 | $ 444,330 | $ (334,219) | $ (7,375) |
Increase (Decrease) in Stockholder's Equity | |||||
Net loss | (26,207) | (26,207) | |||
Other comprehensive income (loss) | 14,406 | 14,406 | |||
Stock-based compensation | 47 | 47 | |||
Value of shares withheld for minimum tax liability | (42) | (42) | |||
Ending Balance (in shares) at Mar. 31, 2018 | 1,000 | ||||
Ending Balance at Mar. 31, 2018 | 68,220 | $ 0 | 444,335 | (383,751) | 7,636 |
Beginning Balance (in shares) at Dec. 31, 2017 | 1,000 | ||||
Beginning Balance at Dec. 31, 2017 | 102,736 | $ 0 | 444,330 | (334,219) | (7,375) |
Increase (Decrease) in Stockholder's Equity | |||||
Net loss | (267,999) | ||||
Other comprehensive income (loss) | 19,927 | ||||
Ending Balance (in shares) at Jun. 30, 2018 | 1,000 | ||||
Ending Balance at Jun. 30, 2018 | (167,695) | $ 0 | 444,691 | (625,543) | 13,157 |
Beginning Balance (in shares) at Mar. 31, 2018 | 1,000 | ||||
Beginning Balance at Mar. 31, 2018 | 68,220 | $ 0 | 444,335 | (383,751) | 7,636 |
Increase (Decrease) in Stockholder's Equity | |||||
Net loss | (241,792) | (241,792) | |||
Other comprehensive income (loss) | 5,521 | 5,521 | |||
Stock-based compensation | 383 | 383 | |||
Value of shares withheld for minimum tax liability | (27) | (27) | |||
Ending Balance (in shares) at Jun. 30, 2018 | 1,000 | ||||
Ending Balance at Jun. 30, 2018 | $ (167,695) | $ 0 | 444,691 | (625,543) | 13,157 |
Beginning Balance (in shares) at Dec. 31, 2018 | 1,000 | 1,000 | |||
Beginning Balance at Dec. 31, 2018 | $ (588,975) | $ 0 | 439,711 | (1,036,294) | 7,608 |
Increase (Decrease) in Stockholder's Equity | |||||
Net loss | (31,770) | (31,770) | |||
Other comprehensive income (loss) | (468) | (468) | |||
Dividend paid to Ascent Capital | (5,000) | (5,000) | |||
Contribution from Ascent Capital | 2,250 | 2,250 | |||
Stock-based compensation | 189 | 189 | |||
Value of shares withheld for minimum tax liability | (1) | (1) | |||
Ending Balance (in shares) at Mar. 31, 2019 | 1,000 | ||||
Ending Balance at Mar. 31, 2019 | $ (623,775) | $ 0 | 437,149 | (1,068,064) | 7,140 |
Beginning Balance (in shares) at Dec. 31, 2018 | 1,000 | 1,000 | |||
Beginning Balance at Dec. 31, 2018 | $ (588,975) | $ 0 | 439,711 | (1,036,294) | 7,608 |
Increase (Decrease) in Stockholder's Equity | |||||
Net loss | (85,972) | ||||
Other comprehensive income (loss) | $ (940) | ||||
Ending Balance (in shares) at Jun. 30, 2019 | 1,000 | 1,000 | |||
Ending Balance at Jun. 30, 2019 | $ (678,864) | $ 0 | 436,734 | (1,122,266) | 6,668 |
Beginning Balance (in shares) at Mar. 31, 2019 | 1,000 | ||||
Beginning Balance at Mar. 31, 2019 | (623,775) | $ 0 | 437,149 | (1,068,064) | 7,140 |
Increase (Decrease) in Stockholder's Equity | |||||
Net loss | (54,202) | (54,202) | |||
Other comprehensive income (loss) | (472) | (472) | |||
Stock-based compensation | (413) | (413) | |||
Value of shares withheld for minimum tax liability | $ (2) | (2) | |||
Ending Balance (in shares) at Jun. 30, 2019 | 1,000 | 1,000 | |||
Ending Balance at Jun. 30, 2019 | $ (678,864) | $ 0 | $ 436,734 | $ (1,122,266) | $ 6,668 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Monitronics International, Inc. and its subsidiaries (collectively, "Monitronics" or the "Company", doing business as Brinks Home Security TM ) are wholly owned subsidiaries of Ascent Capital Group, Inc. ("Ascent Capital"). Monitronics provides residential customers and commercial client accounts with monitored home and business security systems, as well as interactive and home automation services, in the United States, Canada and Puerto Rico. Monitronics customers are obtained through our direct-to-consumer sales channel (the "Direct to Consumer Channel") or our exclusive authorized dealer network (the "Dealer Channel"), which provides product and installation services, as well as support to customers. Our Direct to Consumer Channel offers both Do-It-Yourself and professional installation security solutions. As described in note 2, Bankruptcy , on June 30, 2019 (the "Petition Date"), Monitronics and certain of its domestic subsidiaries (collectively, the "Debtors"), filed voluntary petitions for relief (collectively, the "Petitions" and, the cases commenced thereby, the "Chapter 11 Cases") under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of Texas (the "Bankruptcy Court"). The Debtors' Chapter 11 Cases are being jointly administered under the caption In re Monitronics International, Inc., et al., Case No. 19-33650 . The Debtors will continue to operate their businesses as "debtors-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The unaudited interim financial information of the Company has been prepared in accordance with Article 10 of the Securities and Exchange Commission’s (the "SEC") Regulation S-X. Accordingly, it does not include all of the information required by generally accepted accounting principles in the United States ("GAAP") for complete financial statements. The Company’s unaudited condensed consolidated financial statements as of June 30, 2019 , and for the three and six months ended June 30, 2019 and 2018 , include Monitronics and all of its direct and indirect subsidiaries. The accompanying interim condensed consolidated financial statements are unaudited but, in the opinion of management, reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the results for such periods. The results of operations for any interim period are not necessarily indicative of results for the full year. These condensed consolidated financial statements should be read in conjunction with the Monitronics Annual Report on Form 10-K for the year ended December 31, 2018 , filed with the SEC on April 1, 2019 . The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of revenue and expenses for each reporting period. The significant estimates made in preparation of the Company’s condensed consolidated financial statements primarily relate to valuation of subscriber accounts and valuation of deferred tax assets. These estimates are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts them when facts and circumstances change. As the effects of future events cannot be determined with any certainty, actual results could differ from the estimates upon which the carrying values were based. Restructuring Support Agreement On May 20, 2019, Monitronics entered into a Restructuring Support Agreement (the "RSA") with (i) holders of in excess of 66 2/3% in dollar amount of its 9.125% Senior Notes due 2020 (the "Senior Notes"), (ii) holders of in excess of 66 2/3% in dollar amount of term loans under that certain Credit Facility, dated as of March 23, 2012 (as amended, the "Credit Facility"), and (iii) Ascent, to support the restructuring of the capital structure of the Debtors on the terms set forth in the term sheet annexed to the RSA (the "Restructuring Term Sheet"). Under the terms of the RSA, up to approximately $685,000,000 of debt will be converted to equity, including up to approximately $585,000,000 aggregate principal amount of the Senior Notes and $100,000,000 aggregate principal amount of the Company’s term loan under the Credit Facility. The Company expects to also receive $200,000,000 in cash from a combination of an equity rights offering to the Company's noteholders and up to $23,000,000 of a deemed contribution of cash on hand through a merger with Ascent Capital (as discussed below). This cash will be used to, among other things, repay remaining term loan debt. In accordance with the RSA, if, among other things, Ascent Capital receives approval from its stockholders and has a cash amount of greater than $20,000,000 , net of all of its liabilities (as determined in good faith by Ascent Capital, Monitronics and certain of its noteholders) concurrently with the emergence of Monitronics from bankruptcy, Ascent Capital will merge with and into Monitronics, with Monitronics as the surviving company (the "Merger"). At the time of the Merger, all assets of Ascent Capital shall become assets of a "Reorganized" Monitronics and Ascent Capital stockholders will receive up to 5.82% of the outstanding shares of Reorganized Monitronics, depending on the final amount of cash Ascent Capital contributes, which is capped at $23,000,000 . If the Merger is not completed for any reason as noted in the RSA, then the restructuring of Monitronics will be completed without the participation of Ascent Capital and Ascent Capital's equity interests in Monitronics will be cancelled without Ascent Capital recovering any property or value on account of such equity interests. Furthermore, Ascent Capital will be obligated to make a cash contribution to Monitronics in the amount of $3,500,000 upon Monitronics' emergence from bankruptcy if the Merger is not consummated. |
Bankruptcy
Bankruptcy | 6 Months Ended |
Jun. 30, 2019 | |
Reorganizations [Abstract] | |
Bankruptcy | Bankruptcy On the Petition Date, the Chapter 11 Cases were filed in order to effect the Debtors' joint partial prepackaged plan of reorganization (as amended from time to time, the "Plan"). On the Petition Date, the Debtors filed certain motions and applications intended to limit the disruption of the bankruptcy proceedings on its operations (the "First Day Motions"), which were subsequently approved by the Bankruptcy Court. Pursuant to the First Day Motions, and subject to certain terms and dollar limits included therein, the Debtors were authorized to continue to use their unrestricted cash on hand, as well as all cash generated from daily operations, to continue their operations without interruption during the course of the Chapter 11 Cases. Also pursuant to the First Day Motions, the Debtors received Bankruptcy Court authorization to, among other things and subject to the terms and conditions set forth in the applicable orders, pay certain pre-petition employee wages, salaries, health benefits and other employee obligations during their Chapter 11 Cases, pay certain pre-petition claims of their dealers, creditors in the normal course and taxes, continue their cash management programs and insurance policies, as well as continue to honor their dealer program post-petition. The Debtors are authorized under the Bankruptcy Code to pay post-petition expenses incurred in the ordinary course of business without seeking Bankruptcy Court approval. Until the Plan is effective, the Debtors will continue to manage their properties and operate their businesses as a “debtor-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. The Plan confirmation hearing is currently scheduled for August 7, 2019. The Company has applied Accounting Standards Codification (“ASC”) Topic 852 Reorganizations ("ASC 852") in preparing its condensed consolidated financial statements. ASC 852 requires the financial statements for periods subsequent to the Petition Date to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses incurred during the bankruptcy proceedings are recorded as Restructuring and reorganization expense in the unaudited condensed consolidated statements of operations. In addition, pre-petition obligations that may be impacted by the Company's bankruptcy proceedings have been classified on the unaudited condensed consolidated balance sheets at June 30, 2019 as Liabilities subject to compromise. These liabilities are reported at the amounts the Company currently anticipates will be allowed by the Bankruptcy Court, even if they may be settled for lesser amounts. See below for more information regarding restructuring and reorganization items. Debtor-in-possession ("DIP") Financing In connection with the Chapter 11 Cases and subsequent to June 30, 2019, the Debtors received approval from the Bankruptcy Court to enter into a secured superpriority and priming debtor-in-possession revolving credit facility (the “DIP Facility”) with the lenders party thereto, KKR Credit Markets LLC, as lead arranger and bookrunner, KKR Credit Advisors (US) LLC, as structuring advisor, Encina Private Credit SPV, LLC, as administrative agent, swingline lender and letter of credit issuer (the “DIP Administrative Agent”), and certain other financial parties thereto. The DIP Facility is in an amount of up to $245,000,000 , subject to availability under the Debtors’ borrowing base thereunder, including a letter of credit subfacility in the amount of $10,000,000 and a swingline loan commitment of $10,000,000 . Interest on the DIP Facility will accrue at a rate per year equal to the LIBOR rate (with a floor of 1.50% ) plus 5.00% or a base rate (with a floor of 4.50% ) plus 4.00% . The Debtors are required to pay fees in relation to the DIP Facility, including the following: • unused commitment fee: 0.75% per annum on the daily unused amount of the revolving credit portion of the DIP Facility; • letter of credit commitment fronting fee: 0.25% per annum on the average daily amount of the letter of credit exposure of the DIP Facility; and • agent fees: separately agreed upon between the Debtors and the DIP Administrative Agent; The DIP Facility will mature on the earlier of: (i) 45 days after the date of entry of the interim DIP order, if the final DIP order has not been entered by the Bankruptcy Court on or prior to such date; (ii) 12 months after June 30, 2019; (iii) the effective date with respect to any Chapter 11 plan of reorganization, including the Plan; (iv) the filing of a motion by the Debtors seeking the dismissal of any of the Chapter 11 Cases, the dismissal of any Chapter 11 Case, the filing of a motion by the Debtors seeking to convert any of the Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code or the conversion of any of the Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code; (v) the date of a sale of all or substantially all of the Debtors’ assets consummated under section 363 of the Bankruptcy Code; (vi) acceleration of the DIP Facility following an occurrence of an event of default thereunder; or (vii) the appointment of a Chapter 11 trustee. Proceeds of the DIP Facility can be used by the Debtors to (i) pay certain costs, fees and expenses related to the Chapter 11 Cases, (ii) pay in full the claims of the revolving lenders under the Credit Facility, (iii) cash collateralize certain letters of credit previously issued under the Credit Facility, and other letters of credit as approved by the majority lenders under the DIP Facility from time to time, (iv) to fund certain carve-out expenses and (v) fund working capital and general corporate purposes of the Debtors, in all cases, subject to the terms of the DIP Facility and applicable orders of the Bankruptcy Court. The obligations and liabilities of Monitronics under the DIP Facility are secured by a first priority, senior priming lien on, and security interest in, substantially all assets and property of the estate of the Debtors, and the equity in Monitronics owned by Ascent, and are guaranteed by each of Monitronics’ existing and future subsidiaries, subject to certain exceptions. The DIP Facility contains mandatory prepayments (a) if the amount of loans outstanding under the DIP Facility exceeds the lesser of the DIP Facility and the borrowing base thereunder and (b) with the proceeds of certain (i) asset sales, (ii) casualty events (subject, in each case, to certain reinvestment rights) and (iii) issuances of indebtedness not permitted by the DIP Facility. The DIP Facility contains customary representations and warranties and affirmative and negative covenants for agreements of this type, including, among others covenants regarding minimum liquidity, relating to financial reporting, compliance with laws, payment of taxes, preservation of existence, books and records, maintenance of properties and insurance, limitations on liens, restrictions on mergers and restrictions on sales of all or substantially all of the Debtors’ assets, and limitations on changes in the nature of the Debtors’ businesses. Amendment No. 8 to Monitronics' Credit Facility In connection with the Chapter 11 Cases and subsequent to June 30, 2019, the Debtors entered into an Amendment No. 8 to the Credit Facility and Consent to Agency Resignation and Appointment Agreement (“Amendment No. 8”), among Cortland Capital Market Services LLC (“Cortland”), as successor administrative agent, and the lenders party thereto. Pursuant to Amendment No. 8, the Debtors and the required lenders under the Credit Facility approved the resignation of Bank of America, N.A. as administrative agent, and the appointment of Cortland as the successor administrative agent. Amendment No. 8 also made certain other amendments to the Credit Facility to accommodate the appointment of Cortland as the successor administrative agent. Restructuring and reorganization expense The Company has incurred and will continue to incur significant costs associated with the reorganization. Restructuring and reorganization expense for both the three and six months ended June 30, 2019 was $33,102,000 which primarily represent legal and professional fees. The amount of these costs are being expensed as incurred and have been recorded in Restructuring and reorganization expense within the accompanying condensed consolidated statements of operations for the three and six months ended June 30, 2019. The Company has recorded a prepaid expense of $2,250,000 for retainer fees as of June 30, 2019 which is included in Prepaid and other current assets on the condensed consolidated balance sheets. Financial statement classification of Liabilities subject to compromise The accompanying unaudited condensed consolidated balance sheet as of June 30, 2019 includes amounts classified as Liabilities subject to compromise, which represent liabilities the Company anticipates will be allowed as claims in the Chapter 11 Cases. These amounts represent the Company's current estimate of known or potential obligations to be resolved in connection with the Chapter 11 Cases and may differ from actual future settlement amounts paid. Differences between liabilities estimated and claims filed, or to be filed, will be investigated and resolved in connection with the claims resolution process. The Company will continue to evaluate these liabilities throughout the Chapter 11 Cases and adjust estimates as necessary. Such adjustments may be material. See note 9, Liabilities Subject to Compromise , for further information. |
Going Concern
Going Concern | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | Going Concern The Company has substantial indebtedness at June 30, 2019 , including $585,000,000 principal of Senior Notes, maturing on April 1, 2020, and an existing credit facility under the Credit Facility with a term loan in principal of $1,072,500,000 as of June 30, 2019 , maturing September 30, 2022, and a revolving credit facility with an outstanding balance of $181,400,000 as of June 30, 2019 , maturing September 30, 2021 (the term loan and the revolver, together, the "Credit Facility"). Based on the Company's substantial level of indebtedness and, as described in note 1, Basis of Presentation and note 2, Bankruptcy , the Company's filing of the Chapter 11 Cases as well as the uncertainty surrounding such filings, management continues to conclude there is substantial doubt regarding our ability to continue as a going concern within one year from the issuance date of these condensed consolidated financial statements. Management continues to pursue completion of the Chapter 11 Cases and consummation of all the transactions contemplated in the RSA and the Plan to greatly reduce its debt leverage. Emergence from the Chapter 11 Cases will require the Company to obtain new exit refinancing, which generally has been agreed to in principal, but the exact terms of which are currently under negotiation. No assurance can be provided as to the outcome of the Chapter 11 Cases, and should the Bankruptcy Court not approve the Plan in its current state, or at all, the Company may be forced to seek alternative forms of restructuring or commence liquidation procedures. Our condensed consolidated financial statements as of June 30, 2019 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (the "FASB") issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 requires the lessee to recognize assets and liabilities for leases with lease terms of more than twelve months. The Company adopted ASU 2016-02 using a modified retrospective approach at January 1, 2019, as outlined in ASU 2018-11, Leases (Topic 842): Targeted Improvements. Under this method of adoption, there is no impact to the comparative condensed consolidated statements of operations and condensed consolidated balance sheets. The Company determined that there was no cumulative effect adjustment to beginning Accumulated deficit on the condensed consolidated balance sheets. The Company will continue to report periods prior to January 1, 2019 in its financial statements under prior guidance as outlined in Accounting Standards Codification Topic 840, "Leases". In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed carry forward of historical lease classifications. Adoption of this standard had no impact on the Company's Loss before income taxes and the condensed consolidated statements of cash flows. Upon adoption as of January 1, 2019, the Company recognized an Operating lease right-of-use asset of $20,240,000 and a total Operating lease liability of $20,761,000 . The difference between the two amounts were due to decreases in prepaid rent and deferred rent recorded under prior lease accounting in Prepaid and other current assets and Other accrued liabilities, respectively, on the condensed consolidated balance sheets. See note 13, Leases , for further information. |
Other Accrued Liabilities
Other Accrued Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Other Accrued Liabilities | Other Accrued Liabilities Other accrued liabilities consisted of the following (amounts in thousands): June 30, December 31, Accrued payroll and related liabilities $ — $ 4,459 Interest payable — 14,446 Income taxes payable — 2,742 Operating lease liabilities 3,795 — Other — 9,438 Total Other accrued liabilities $ 3,795 $ 31,085 Given the Petition Date of the Chapter 11 Cases, Accrued payroll and related liabilities, Interest payable, Income taxes payable and Other accrued liabilities as of June 30, 2019 are classified as Liabilities subject to compromise on the condensed consolidated balance sheet due to their unsecured nature. Subject to certain exceptions, under the Bankruptcy Code, the Debtors may assume, assign, or reject certain executory contracts and unexpired leases subject to the approval of the Bankruptcy Court and certain other conditions. The Company plans on affirming all of its operating leases during the Chapter 11 Cases. Also, since all of the operating leases are secured against the fair value of the underlying assets and the fair value of the underlying assets are greater than the operating lease liability, all Operating lease liabilities as of June 30, 2019 have been classified as Liabilities not subject to compromise. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt consisted of the following (amounts in thousands): June 30, December 31, 9.125% Senior Notes due April 1, 2020 with an effective interest rate of 9.1% $ 585,000 $ 585,000 Ascent Intercompany Loan due October 1, 2020 with an effective rate of 12.5% — 12,000 Term loan, matures September 30, 2022, LIBOR plus 5.50%, subject to a LIBOR floor of 1.00%, with an effective rate of 8.6% 1,072,500 1,075,250 $295 million revolving credit facility, matures September 30, 2021, LIBOR plus 4.00%, subject to a LIBOR floor of 1.00%, with an effective rate of 7.5% 181,400 144,200 1,838,900 1,816,450 Less: Current portion of long-term debt, not subject to compromise (181,400 ) (1,816,450 ) Long-term debt subject to compromise 1,657,500 — Less: Amounts reclassified to Liabilities subject to compromise (1,657,500 ) — Long-term debt $ — $ — Senior Notes The Senior Notes total $585,000,000 in principal, mature on April 1, 2020 and bear interest at 9.125% per annum. Interest payments are due semi-annually on April 1 and October 1 of each year. Ascent Capital has not guaranteed any of the Company's obligations under the Senior Notes. In connection with management’s negotiations with its creditors, the Company did not make its Senior Notes interest payment of $26,691,000 due on April 1, 2019. Under the terms of the RSA, which is pending approval in Bankruptcy Court, the Senior Notes will be converted to equity. See note 1, Basis of Presentation for further information. As the Senior Notes are unsecured debt, they have been reclassified to Liabilities subject to compromise on the unaudited condensed consolidated balance sheets. See note 9, Liabilities Subject to Compromise for further information. The Senior Notes are guaranteed by all of the Company's existing domestic subsidiaries. See note 14, Consolidating Guarantor Financial Information for further information. Ascent Intercompany Loan On February 29, 2016, the Company retired the existing intercompany loan with an outstanding principal amount of $100,000,000 and executed and delivered a Promissory Note to Ascent Capital in a principal amount of $12,000,000 (the "Ascent Intercompany Loan"), with the $88,000,000 remaining principal being treated as a capital contribution. The entire principal amount under the Ascent Intercompany Loan would have been due on October 1, 2020. The Ascent Intercompany Loan bore interest at a rate equal to 12.5% per annum, payable semi-annually in cash in arrears on January 12 and July 12 of each year. Borrowings under the Ascent Intercompany Loan constituted unsecured obligations of the Company and were not guaranteed by any of the Company’s subsidiaries. In January 2019, the Company repaid $9,750,000 of the Ascent Intercompany Loan and $2,250,000 was contributed to our stated capital. Credit Facility On September 30, 2016, the Company entered into an amendment ("Amendment No. 6") with the lenders of its existing senior secured credit agreement dated March 23, 2012, and as amended and restated on April 9, 2015, February 17, 2015, August 16, 2013, March 25, 2013, and November 7, 2012 (the "Existing Credit Agreement"). Amendment No. 6 provided for, among other things, the issuance of a $1,100,000,000 senior secured term loan at a 1.5% discount and a new $295,000,000 super priority revolver (the Existing Credit Agreement together with Amendment No. 6, the "Credit Facility"). As of June 30, 2019 , the Credit Facility term loan has an outstanding principal balance of $1,072,500,000 , maturing on September 30, 2022. The Credit Facility term loan requires quarterly interest payments and quarterly principal payments of $2,750,000 . The Company did not make its quarterly principal repayment in the second quarter of 2019. The Credit Facility term loan bears interest at LIBOR plus 5.5% , subject to a LIBOR floor of 1.0% . The Credit Facility revolver has a principal amount outstanding of $181,400,000 and an aggregate of $1,000,000 available under two standby letters of credit issued as of June 30, 2019 , maturing on September 30, 2021. The Credit Facility revolver typically bears interest at LIBOR plus 4.0% , subject to a LIBOR floor of 1.0% . There is a commitment fee of 0.5% on unused portions of the Credit Facility revolver. In conjunction with negotiations around certain defaults of the Credit Facility in the first quarter of 2019, the Credit Facility revolver lenders allowed us to continue to borrow under the revolving credit facility for up to $195,000,000 at an alternate base rate plus 3.0% and the Credit Facility term loan lenders allowed the term loan to renew with interest due on an alternate base rate plus 4.5% . Additionally, for the period of April 24, 2019 through May 20, 2019, an additional 2.0% default interest rate was accrued and paid on the Credit Facility term loan and revolver. On July 3, 2019, with approval from the Bankruptcy Court, the Credit Facility revolver principal and interest was repaid in full with proceeds from the DIP Facility. As such, the Credit Facility revolver principal amount is presented as Current portion of long-term debt and a liability not subject to compromise on the unaudited condensed consolidated balance sheets. Under the terms of the RSA, which is pending approval in Bankruptcy Court, $100,000,000 of the Credit Facility term loan will be converted into equity and the remaining portion will be repaid upon emergence with proceeds from exit financing that are currently being negotiated. See note 1, Basis of Presentation for further information. As the Credit Facility term loan will be partially repaid and partially converted to equity, it has been reclassified to Liabilities subject to compromise on the unaudited condensed consolidated balance sheets. See note 9, Liabilities Subject to Compromise for further information. The Credit Facility is secured by a pledge of all of the outstanding stock of the Company and all of its existing subsidiaries and is guaranteed by all of the Company’s existing domestic subsidiaries. Ascent Capital has not guaranteed any of the Company’s obligations under the Credit Facility. In order to reduce the financial risk related to changes in interest rates associated with the floating rate term loan under the Credit Facility term loan, the Company had entered into interest rate swap agreements with terms similar to the Credit Facility term loan (all outstanding interest rate swap agreements are collectively referred to as the “Swaps”). Prior to December of 2018, all of the Swaps were designated as effective hedges of the Company's variable rate debt and qualified for hedge accounting. However, in December of 2018, given the potential for changes in the Company's future expected interest payments that the Swap hedged, all of the Swaps no longer qualified as a cash flow hedge and were de-designated as such. In April of 2019, all of the outstanding Swaps were settled and terminated with their respective counterparties. See note 7, Derivatives , for further disclosures related to the settlement of these derivative instruments. As of June 30, 2019 , principal payments scheduled to be made on the Company’s debt obligations, assuming certain accelerated maturities due to Chapter 11 Cases, are as follows (amounts in thousands): Remainder of 2019 $ 1,838,900 2020 — 2021 — 2022 — 2023 — 2024 — Thereafter — Total principal payments 1,838,900 Less: Unamortized deferred debt costs and discounts — Total debt carrying value $ 1,838,900 |
Derivatives
Derivatives | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives Historically, the Company utilized Swaps to reduce the interest rate risk inherent in the Company's variable rate Credit Facility term loan. The valuation of these instruments was determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflected the contractual terms of the derivatives, including the period to maturity, and used observable market-based inputs, including interest rate curves and implied volatility. The Company incorporated credit valuation adjustments to appropriately reflect the respective counterparty's nonperformance risk in the fair value measurements. See note 8, Fair Value Measurements , for additional information about the credit valuation adjustments. Prior to December of 2018, all of the Swaps were designated and qualified as cash flow hedging instruments, with the effective portion of the Swaps' change in fair value recorded in Accumulated other comprehensive income (loss). However, in December of 2018, given the potential for changes in the Company's future expected interest payments that these Swaps hedged, all of the Swaps no longer qualified as a cash flow hedge and were de-designated as such. Before the de-designation, changes in the fair value of the Swaps were recognized in Accumulated other comprehensive income (loss) and were reclassified to Interest expense when the hedged interest payments on the underlying debt were recognized. After the de-designation, changes in the fair value of the Swaps are recognized in Unrealized loss on derivative financial instruments on the condensed consolidated statements of operations and comprehensive income (loss). For the three months ended June 30, 2019 , the Company recorded an Unrealized gain on derivative financial instruments of $3,196,000 . For the six months ended June 30, 2019 , the Company recorded an Unrealized loss on derivative financial instruments of $4,577,000 . On April 30, 2019, the various counterparties and the Company agreed to settle and terminate all of the outstanding swap agreements, which required us to pay $8,767,000 in termination amount to certain counterparties and required a certain counterparty to pay $6,540,000 in termination amount to us, resulting in a Realized net loss on derivative financial instruments of $2,227,000 . Amounts recognized in Accumulated other comprehensive income (loss) as of the de-designation date will be amortized to Interest expense on the condensed consolidated statements of operations and comprehensive income (loss) over the remaining term of the hedged forecasted transactions of the Swaps which were 3 month LIBOR interest payments. Amounts in Accumulated other comprehensive income (loss) expected to be recognized in Interest expense in the coming 12 months total approximately $1,888,000 . The impact of the derivatives designated as cash flow hedges on the condensed consolidated financial statements is depicted below (amounts in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 Effective portion of gain recognized in Accumulated other comprehensive income (loss) $ — 5,096 $ — 18,764 Effective portion of loss reclassified from Accumulated other comprehensive income (loss) into Net loss (a) $ (472 ) (425 ) $ (940 ) (1,163 ) (a) Amounts are included in Interest expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss). |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements According to the FASB ASC Topic 820, Fair Value Measurement , fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants and requires that assets and liabilities carried at fair value are classified and disclosed in the following three categories: • Level 1 - Quoted prices for identical instruments in active markets. • Level 2 - Quoted prices for similar instruments in active or inactive markets and valuations derived from models where all significant inputs are observable in active markets. • Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable in any market. The following summarizes the fair value level of assets and liabilities that are measured on a recurring basis at June 30, 2019 and December 31, 2018 (amounts in thousands): Level 1 Level 2 Level 3 Total June 30, 2019 Interest rate swap agreements - assets (a) $ — — — — Interest rate swap agreements - liabilities (a) — — — — Total $ — — — — December 31, 2018 Interest rate swap agreements - assets (a) $ — 10,552 — 10,552 Interest rate swap agreements - liabilities (a) — (6,039 ) — (6,039 ) Total $ — 4,513 — 4,513 (a) Swap asset values are included in non-current Other assets and Swap liability values are included in non-current Derivative financial instruments on the condensed consolidated balance sheets. The Company has determined that the significant inputs used to value the Swaps fall within Level 2 of the fair value hierarchy. As a result, the Company has determined that its derivative valuations are classified in Level 2 of the fair value hierarchy. Carrying values and fair values of financial instruments that are not carried at fair value are as follows (amounts in thousands): June 30, 2019 December 31, 2018 Long term debt, including current portion and amounts classified as Liabilities subject to compromise: Carrying value $ 1,838,900 1,816,450 Fair value (a) 1,215,943 1,218,606 (a) The fair value is based on market quotations from third party financial institutions and is classified as Level 2 in the hierarchy. The Company’s other financial instruments, including cash and cash equivalents, accounts receivable and accounts payable are carried at cost, which approximates their fair value because of their short-term maturity. |
Liabilities Subject to Compromi
Liabilities Subject to Compromise | 6 Months Ended |
Jun. 30, 2019 | |
Reorganizations [Abstract] | |
Liabilities Subject to Compromise | Liabilities Subject to Compromise As discussed in note 1, Basis of Presentation , beginning on the Petition Date, the Company has been operating as debtor in possession under the jurisdiction of the Bankruptcy Court and in accordance with provisions of the Bankruptcy Code. On the accompanying unaudited condensed consolidated balance sheets, the caption "Liabilities subject to compromise" reflects the expected allowed amount of the prepetition claims that are not fully secured and that have at least a possibility of not being repaid at the full claim amount. Liabilities subject to compromise at June 30, 2019 consisted of the following (in thousands): June 30, Current liabilities: Accounts payable $ 10,471 Accrued payroll and related liabilities 5,276 Interest payable 56,534 Income taxes payable 1,449 Other accrued liabilities 7,373 Deferred revenue 11,802 Dealer holdback liability 12,673 Senior Notes 585,000 Credit Facility term loan 1,072,500 Total current liabilities subject to compromise 1,763,078 Non-current liabilities: Long-term dealer holdback liability 1,817 Other liabilities 2,181 Total liabilities subject to compromise 1,767,076 Determination of the value at which liabilities will ultimately be settled cannot be made until the Bankruptcy Court approves the Plan. The Company will continue to evaluate the amount and classification of its pre-petition liabilities. Any additional liabilities that are subject to compromise will be recognized accordingly, and the aggregate amount of liabilities subject to compromise may change. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table provides a summary of the changes in Accumulated other comprehensive income (loss) for the six months ended June 30, 2019 (amounts in thousands): Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2018 $ 7,608 Reclassifications of unrealized loss on derivatives into Net loss, net of income tax of $0 (a) (468 ) Balance at March 31, 2019 $ 7,140 Reclassifications of unrealized loss on derivatives into Net loss, net of income tax of $0 (a) (472 ) Balance at June 30, 2019 $ 6,668 (a) Amounts reclassified into Net loss are included in Interest expense on the condensed consolidated statements of operations. See note 7, Derivatives , for further information. The following table provides a summary of the changes in Accumulated other comprehensive income (loss) for the six months ended June 30, 2018 (amounts in thousands): Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2017 $ (7,375 ) Impact of adoption of ASU 2017-12 605 Adjusted balance at January 1, 2018 (6,770 ) Unrealized gain on derivatives recognized through Accumulated other comprehensive income (loss), net of income tax of $0 13,668 Reclassifications of unrealized loss on derivatives into Net loss, net of income tax of $0 (a) 738 Net period Other comprehensive income 14,406 Balance at March 31, 2018 $ 7,636 Unrealized gain on derivatives recognized through Accumulated other comprehensive income (loss), net of income tax of $0 5,096 Reclassifications of unrealized loss on derivatives into Net loss, net of income tax of $0 (a) 425 Net period Other comprehensive income 5,521 Balance at June 30, 2018 $ 13,157 (a) Amounts reclassified into Net loss are included in Interest expense on the condensed consolidated statements of operations. |
Commitments, Contingencies and
Commitments, Contingencies and Other Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Other Liabilities | Commitments, Contingencies and Other Liabilities The Company was named as a defendant in multiple putative class actions consolidated in U.S. District Court (Northern District of West Virginia) on behalf of purported class(es) for persons who claim to have received telemarketing calls in violation of various state and federal laws. The actions were brought by plaintiffs seeking monetary damages on behalf of all plaintiffs who received telemarketing calls made by a Monitronics Authorized Dealer, or any Authorized Dealer's lead generator or sub-dealer. In the second quarter of 2017, the Company and the plaintiffs agreed to settle this litigation for $28,000,000 ("the Settlement Amount"). In the third quarter of 2017, the Company paid $5,000,000 of the Settlement Amount pursuant to the settlement agreement with the plaintiffs. In the third quarter of 2018, the Company paid the remaining $23,000,000 of the Settlement Amount. The Company recovered a portion of the Settlement Amount under its insurance policies held with multiple carriers. In the fourth quarter of 2018, we settled our claims against two such carriers in which those carriers paid us an aggregate of $12,500,000 . In April of 2019, Monitronics settled a claim against one such carrier in which that carrier paid the Company $4,800,000 . In addition to the above, the Company is also involved in litigation and similar claims incidental to the conduct of its business, including from time to time, contractual disputes, claims related to alleged security system failures and claims related to alleged violations of the U.S. Telephone Consumer Protection Act. Matters that are probable of unfavorable outcome to the Company and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, management's estimate of the outcomes of such matters and experience in contesting, litigating and settling similar matters. In management's opinion, none of the pending actions are likely to have a material adverse impact on the Company's financial position or results of operations. The Company accrues and expenses legal fees related to loss contingency matters as incurred. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of Revenue Revenue is disaggregated by source of revenue as follows (in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 Alarm monitoring revenue $ 119,085 124,844 $ 240,564 249,685 Product and installation revenue 7,585 9,477 14,118 17,624 Other revenue 1,421 692 3,015 1,457 Total Net revenue $ 128,091 135,013 $ 257,697 268,766 Contract Balances The following table provides information about receivables, contract assets and contract liabilities from contracts with customers (in thousands): June 30, December 31, Trade receivables, net $ 12,545 13,121 Contract assets, net - current portion (a) 11,985 13,452 Contract assets, net - long-term portion (b) 13,743 16,154 Deferred revenue 11,802 13,060 (a) Amount is included in Prepaid and other current assets in the unaudited condensed consolidated balance sheets. (b) Amount is included in Other assets in the unaudited condensed consolidated balance sheets. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company primarily leases buildings and equipment. The Company determines if a contract is a lease at the inception of the arrangement. The Company reviews all options to extend, terminate, or purchase its right of use assets at the inception of the lease and accounts for these options when they are reasonably certain of being exercised. Certain real estate leases contain lease and non-lease components, which are accounted for separately. Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheet. Lease expense for these leases is recognized on a straight-line basis over the lease term. All of the Company's leases are currently determined to be operating leases. Components of Lease Expense The components of lease expense were as follows (in thousands): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Operating lease cost (a) $ 120 251 Operating lease cost (b) 975 1,971 Total operating lease cost $ 1,095 2,222 (a) Amount is included in Cost of services in the unaudited condensed consolidated statements of operations. (b) Amount is included in Selling, general and administrative, including stock-based and long-term incentive compensation in the unaudited condensed consolidated statements of operations. Remaining Lease Term and Discount Rate The following table presents the weighted-average remaining lease term and the weighted-average discount rate: As of June 30, 2019 Weighted-average remaining lease term for operating leases (in years) 10.1 Weighted-average discount rate for operating leases 11.8 % All of the Company's lease contracts do not provide a readily determinable implicit rate. For these contracts, the Company's estimated incremental borrowing rate is based on information available either upon adoption of ASU 2016-02 or at the inception of the lease. Supplemental Cash Flow Information The following is the supplemental cash flow information associated with the Company's leases (in thousands): Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases 2,132 Maturities of Lease Liabilities As of June 30, 2019 , maturities of lease liabilities were as follows: Remainder of 2019 $ 1,749 2020 3,923 2021 3,195 2022 3,069 2023 3,087 Thereafter 20,329 Total lease payments $ 35,352 Less: Interest (15,240 ) Total lease obligations $ 20,112 Subject to certain exceptions, under the Bankruptcy Code, the Debtors may assume, assign, or reject certain executory contracts and unexpired leases subject to the approval of the Bankruptcy Court and certain other conditions. The Company plans on affirming all of its operating leases during the Chapter 11 Cases. Also, all of the operating leases are secured against the fair value of the underlying assets and the fair value of the underlying assets are greater than the operating lease liability, all Operating lease liabilities as of June 30, 2019 have been classified as Liabilities not subject to compromise. Disclosures Related to Periods Prior to Adoption of ASU 2016-02 The Company adopted ASU 2016-02 using a modified retrospective method at January 1, 2019 as described in note 4, Recent Accounting Pronouncements . As required, the following disclosure is provided for periods prior to adoption. Minimum lease commitments as of December 31, 2018 that have initial or remaining noncancelable lease terms in excess of one year are as follows (in thousands): Year Ended December 31: 2019 $ 4,628 2020 4,207 2021 3,093 2022 3,068 2023 3,087 Thereafter 20,329 Minimum lease commitments $ 38,412 |
Consolidating Guarantor Financi
Consolidating Guarantor Financial Information | 6 Months Ended |
Jun. 30, 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 (Debtor-In-Possession) Condensed Consolidating Balance Sheet (unaudited) As of June 30, 2019 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Assets Current assets: Cash and cash equivalents $ 11,282 213 — — 11,495 Restricted cash 93 — — — 93 Trade receivables, net 12,413 132 — — 12,545 Prepaid and other current assets 63,977 — — (35,751 ) 28,226 Total current assets 87,765 345 — (35,751 ) 52,359 Property and equipment, net 36,940 — — — 36,940 Subscriber accounts and deferred contract acquisition costs, net 1,147,972 13,500 — — 1,161,472 Deferred income tax asset, net 783 — — — 783 Operating lease right-of-use asset 19,521 — — — 19,521 Other assets, net 18,649 — — — 18,649 Total assets $ 1,311,630 13,845 — (35,751 ) 1,289,724 Liabilities and Stockholder's Deficit Current liabilities: Accounts payable $ — — — — — Other accrued liabilities 3,795 — — — 3,795 Deferred revenue — — — — — Holdback liability — — — — — Current portion of long-term debt 181,400 — — — 181,400 Total current liabilities not subject to compromise 185,195 — — — 185,195 Non-current liabilities: Long-term holdback liability — — — — — Derivative financial instruments — — — — — Operating lease liabilities 16,317 — — — 16,317 Other liabilities 22,166 — — (22,166 ) — Total liabilities not subject to compromise 223,678 — — (22,166 ) 201,512 Liabilities subject to compromise 1,766,816 36,011 — (35,751 ) 1,767,076 Total liabilities 1,990,494 36,011 — (57,917 ) 1,968,588 Total stockholder's deficit (678,864 ) (22,166 ) — 22,166 (678,864 ) Total liabilities and stockholder's deficit $ 1,311,630 13,845 — (35,751 ) 1,289,724 MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES (Debtor-In-Possession) 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 not subject to compromise 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 not subject to compromise 1,947,053 98,915 — (151,225 ) 1,894,743 Liabilities subject to compromise — — — — — 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 (Debtor-In-Possession) Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) (unaudited) Three Months Ended June 30, 2019 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Net revenue $ 126,784 1,307 — — 128,091 Operating expenses: Cost of services 28,496 40 — — 28,536 Selling, general, and administrative, including stock-based compensation 28,051 112 — — 28,163 Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets 48,567 571 — — 49,138 Depreciation 3,121 — — — 3,121 108,235 723 — — 108,958 Operating income 18,549 584 — — 19,133 Other expense (income): Equity in income of subsidiaries (584 ) — — 584 — Restructuring and reorganization items 33,102 — — — 33,102 Interest expense 40,536 — — — 40,536 Realized loss on derivative financial instruments (969 ) — — — (969 ) Refinancing expense — — — — — 72,085 — — 584 72,669 Income (loss) before income taxes (53,536 ) 584 — (584 ) (53,536 ) Income tax expense 666 — — — 666 Net income (loss) (54,202 ) 584 — (584 ) (54,202 ) Other comprehensive income (loss): Unrealized loss on derivative contracts (472 ) — — — (472 ) Total other comprehensive loss (472 ) — — — (472 ) Comprehensive income (loss) $ (54,674 ) 584 — (584 ) (54,674 ) MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES (Debtor-In-Possession) Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) (unaudited) Three Months Ended June 30, 2018 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Net revenue $ 124,126 10,887 — — 135,013 Operating expenses: Cost of services 27,865 5,182 — — 33,047 Selling, general, and administrative, including stock-based compensation 22,616 10,039 — — 32,655 Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets 52,091 1,800 — — 53,891 Depreciation 2,622 243 — — 2,865 Loss on goodwill impairment 214,089 311 — — 214,400 319,283 17,575 — — 336,858 Operating loss (195,157 ) (6,688 ) — — (201,845 ) Other expense: Equity in loss of subsidiaries 6,870 — — (6,870 ) — Interest expense 38,600 — — — 38,600 45,470 — — (6,870 ) 38,600 Loss before income taxes (240,627 ) (6,688 ) — 6,870 (240,445 ) Income tax expense 1,165 182 — — 1,347 Net loss (241,792 ) (6,870 ) — 6,870 (241,792 ) Other comprehensive income (loss): Unrealized gain on derivative contracts 5,521 — — — 5,521 Total other comprehensive income 5,521 — — — 5,521 Comprehensive loss $ (236,271 ) (6,870 ) — 6,870 (236,271 ) MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES (Debtor-In-Possession) Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) (unaudited) Six Months Ended June 30, 2019 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Net revenue $ 255,044 2,653 — — 257,697 Operating expenses: Cost of services 55,179 121 — — 55,300 Selling, general, and administrative, including stock-based compensation 59,215 170 — — 59,385 Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets 97,139 1,144 — — 98,283 Depreciation 6,275 — — — 6,275 217,808 1,435 — — 219,243 Operating income 37,236 1,218 — — 38,454 Other expense (income): Equity in income of subsidiaries (1,218 ) — — 1,218 — Restructuring and reorganization items 33,102 — — — 33,102 Interest expense 77,969 — — — 77,969 Realized and unrealized loss on derivative financial instruments 6,804 — — — 6,804 Refinancing expense 5,214 — — — 5,214 121,871 — — 1,218 123,089 Income (loss) before income taxes (84,635 ) 1,218 — (1,218 ) (84,635 ) Income tax expense 1,337 — — — 1,337 Net income (loss) (85,972 ) 1,218 — (1,218 ) (85,972 ) Other comprehensive income (loss): Unrealized loss on derivative contracts (940 ) — — — (940 ) Total other comprehensive loss (940 ) — — — (940 ) Comprehensive income (loss) $ (86,912 ) 1,218 — (1,218 ) (86,912 ) MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES (Debtor-In-Possession) Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) (unaudited) Six Months Ended June 30, 2018 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Net revenue $ 248,421 20,345 — — 268,766 Operating expenses: Cost of services 56,164 9,584 — — 65,748 Selling, general, and administrative, including stock-based compensation 45,419 19,250 — — 64,669 Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets 104,328 3,974 — — 108,302 Depreciation 5,007 473 — — 5,480 Loss on goodwill impairment 214,089 311 — — 214,400 425,007 33,592 — — 458,599 Operating loss (176,586 ) (13,247 ) — — (189,833 ) Other expense: Equity in loss of subsidiaries 13,610 — — (13,610 ) — Interest expense 75,473 — — — 75,473 89,083 — — (13,610 ) 75,473 Loss before income taxes (265,669 ) (13,247 ) — 13,610 (265,306 ) Income tax expense 2,330 363 — — 2,693 Net loss (267,999 ) (13,610 ) — 13,610 (267,999 ) Other comprehensive income (loss): Unrealized gain on derivative contracts 19,927 — — — 19,927 Total other comprehensive income 19,927 — — — 19,927 Comprehensive loss $ (248,072 ) (13,610 ) — 13,610 (248,072 ) MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES (Debtor-In-Possession) Condensed Consolidating Statement of Cash Flows (unaudited) Six Months Ended June 30, 2019 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Net cash provided by operating activities $ 100,126 246 — — 100,372 Investing activities: Capital expenditures (6,767 ) — — — (6,767 ) Cost of subscriber accounts acquired (60,811 ) (524 ) — — (61,335 ) Net cash used in investing activities (67,578 ) (524 ) — — (68,102 ) Financing activities: Proceeds from long-term debt 43,100 — — — 43,100 Payments on long-term debt (18,400 ) — — — (18,400 ) Payments of restructuring and reorganization costs (35,352 ) — — — (35,352 ) Payments of refinancing costs (7,404 ) — — — (7,404 ) Value of shares withheld for share-based compensation (3 ) — — — (3 ) Dividend to Ascent Capital (5,000 ) — — — (5,000 ) Net cash used in financing activities (23,059 ) — — — (23,059 ) Net increase (decrease) in cash, cash equivalents and restricted cash 9,489 (278 ) — — 9,211 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 $ 11,375 213 — — 11,588 MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES (Debtor-In-Possession) Condensed Consolidating Statement of Cash Flows (unaudited) Six Months Ended June 30, 2018 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Net cash provided by operating activities $ 66,082 1,415 — — 67,497 Investing activities: Capital expenditures (8,449 ) (479 ) — — (8,928 ) Cost of subscriber accounts acquired (68,983 ) (712 ) — — (69,695 ) Net cash used in investing activities (77,432 ) (1,191 ) — — (78,623 ) Financing activities: Proceeds from long-term debt 105,300 — — — 105,300 Payments on long-term debt (95,200 ) — — — (95,200 ) Value of shares withheld for share-based compensation (69 ) — — — (69 ) Net cash provided by financing activities 10,031 — — — 10,031 Net increase (decrease) in cash, cash equivalents and restricted cash (1,319 ) 224 — — (1,095 ) 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 $ 1,386 821 — — 2,207 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (the "FASB") issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 requires the lessee to recognize assets and liabilities for leases with lease terms of more than twelve months. The Company adopted ASU 2016-02 using a modified retrospective approach at January 1, 2019, as outlined in ASU 2018-11, Leases (Topic 842): Targeted Improvements. Under this method of adoption, there is no impact to the comparative condensed consolidated statements of operations and condensed consolidated balance sheets. The Company determined that there was no cumulative effect adjustment to beginning Accumulated deficit on the condensed consolidated balance sheets. The Company will continue to report periods prior to January 1, 2019 in its financial statements under prior guidance as outlined in Accounting Standards Codification Topic 840, "Leases". In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed carry forward of historical lease classifications. Adoption of this standard had no impact on the Company's Loss before income taxes and the condensed consolidated statements of cash flows. Upon adoption as of January 1, 2019, the Company recognized an Operating lease right-of-use asset of $20,240,000 and a total Operating lease liability of $20,761,000 . The difference between the two amounts were due to decreases in prepaid rent and deferred rent recorded under prior lease accounting in Prepaid and other current assets and Other accrued liabilities, respectively, on the condensed consolidated balance sheets. See note 13, Leases , for further information. |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Other Accrued Liabilities | Other accrued liabilities consisted of the following (amounts in thousands): June 30, December 31, Accrued payroll and related liabilities $ — $ 4,459 Interest payable — 14,446 Income taxes payable — 2,742 Operating lease liabilities 3,795 — Other — 9,438 Total Other accrued liabilities $ 3,795 $ 31,085 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consisted of the following (amounts in thousands): June 30, December 31, 9.125% Senior Notes due April 1, 2020 with an effective interest rate of 9.1% $ 585,000 $ 585,000 Ascent Intercompany Loan due October 1, 2020 with an effective rate of 12.5% — 12,000 Term loan, matures September 30, 2022, LIBOR plus 5.50%, subject to a LIBOR floor of 1.00%, with an effective rate of 8.6% 1,072,500 1,075,250 $295 million revolving credit facility, matures September 30, 2021, LIBOR plus 4.00%, subject to a LIBOR floor of 1.00%, with an effective rate of 7.5% 181,400 144,200 1,838,900 1,816,450 Less: Current portion of long-term debt, not subject to compromise (181,400 ) (1,816,450 ) Long-term debt subject to compromise 1,657,500 — Less: Amounts reclassified to Liabilities subject to compromise (1,657,500 ) — Long-term debt $ — $ — |
Schedule of Maturities of Long-Term Debt Including Short Term Borrowings | As of June 30, 2019 , principal payments scheduled to be made on the Company’s debt obligations, assuming certain accelerated maturities due to Chapter 11 Cases, are as follows (amounts in thousands): Remainder of 2019 $ 1,838,900 2020 — 2021 — 2022 — 2023 — 2024 — Thereafter — Total principal payments 1,838,900 Less: Unamortized deferred debt costs and discounts — Total debt carrying value $ 1,838,900 |
Derivatives (Tables)
Derivatives (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Impact of the Derivatives Designated as Cash Flow Hedges on the Condensed Consolidated Financial Statements | The impact of the derivatives designated as cash flow hedges on the condensed consolidated financial statements is depicted below (amounts in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 Effective portion of gain recognized in Accumulated other comprehensive income (loss) $ — 5,096 $ — 18,764 Effective portion of loss reclassified from Accumulated other comprehensive income (loss) into Net loss (a) $ (472 ) (425 ) $ (940 ) (1,163 ) (a) Amounts are included in Interest expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss). |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Level of Assets and Liabilities that are Measured on a Recurring Basis | The following summarizes the fair value level of assets and liabilities that are measured on a recurring basis at June 30, 2019 and December 31, 2018 (amounts in thousands): Level 1 Level 2 Level 3 Total June 30, 2019 Interest rate swap agreements - assets (a) $ — — — — Interest rate swap agreements - liabilities (a) — — — — Total $ — — — — December 31, 2018 Interest rate swap agreements - assets (a) $ — 10,552 — 10,552 Interest rate swap agreements - liabilities (a) — (6,039 ) — (6,039 ) Total $ — 4,513 — 4,513 (a) Swap asset values are included in non-current Other assets and Swap liability values are included in non-current Derivative financial instruments on the condensed consolidated balance sheets. |
Schedule of Carrying Values and Fair Values of Financial Instruments that are Not Carried at Fair Value | Carrying values and fair values of financial instruments that are not carried at fair value are as follows (amounts in thousands): June 30, 2019 December 31, 2018 Long term debt, including current portion and amounts classified as Liabilities subject to compromise: Carrying value $ 1,838,900 1,816,450 Fair value (a) 1,215,943 1,218,606 (a) The fair value is based on market quotations from third party financial institutions and is classified as Level 2 in the hierarchy. |
Liabilities Subject to Compro_2
Liabilities Subject to Compromise (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Reorganizations [Abstract] | |
Schedule of Liabilities Subject To Compromise | Liabilities subject to compromise at June 30, 2019 consisted of the following (in thousands): June 30, Current liabilities: Accounts payable $ 10,471 Accrued payroll and related liabilities 5,276 Interest payable 56,534 Income taxes payable 1,449 Other accrued liabilities 7,373 Deferred revenue 11,802 Dealer holdback liability 12,673 Senior Notes 585,000 Credit Facility term loan 1,072,500 Total current liabilities subject to compromise 1,763,078 Non-current liabilities: Long-term dealer holdback liability 1,817 Other liabilities 2,181 Total liabilities subject to compromise 1,767,076 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Loss | The following table provides a summary of the changes in Accumulated other comprehensive income (loss) for the six months ended June 30, 2019 (amounts in thousands): Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2018 $ 7,608 Reclassifications of unrealized loss on derivatives into Net loss, net of income tax of $0 (a) (468 ) Balance at March 31, 2019 $ 7,140 Reclassifications of unrealized loss on derivatives into Net loss, net of income tax of $0 (a) (472 ) Balance at June 30, 2019 $ 6,668 (a) Amounts reclassified into Net loss are included in Interest expense on the condensed consolidated statements of operations. See note 7, Derivatives , for further information. The following table provides a summary of the changes in Accumulated other comprehensive income (loss) for the six months ended June 30, 2018 (amounts in thousands): Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2017 $ (7,375 ) Impact of adoption of ASU 2017-12 605 Adjusted balance at January 1, 2018 (6,770 ) Unrealized gain on derivatives recognized through Accumulated other comprehensive income (loss), net of income tax of $0 13,668 Reclassifications of unrealized loss on derivatives into Net loss, net of income tax of $0 (a) 738 Net period Other comprehensive income 14,406 Balance at March 31, 2018 $ 7,636 Unrealized gain on derivatives recognized through Accumulated other comprehensive income (loss), net of income tax of $0 5,096 Reclassifications of unrealized loss on derivatives into Net loss, net of income tax of $0 (a) 425 Net period Other comprehensive income 5,521 Balance at June 30, 2018 $ 13,157 (a) Amounts reclassified into Net loss are included in Interest expense on the condensed consolidated statements of operations. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Disaggregated by Source | Revenue is disaggregated by source of revenue as follows (in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 Alarm monitoring revenue $ 119,085 124,844 $ 240,564 249,685 Product and installation revenue 7,585 9,477 14,118 17,624 Other revenue 1,421 692 3,015 1,457 Total Net revenue $ 128,091 135,013 $ 257,697 268,766 |
Contract with Customer, Asset and Liability | The following table provides information about receivables, contract assets and contract liabilities from contracts with customers (in thousands): June 30, December 31, Trade receivables, net $ 12,545 13,121 Contract assets, net - current portion (a) 11,985 13,452 Contract assets, net - long-term portion (b) 13,743 16,154 Deferred revenue 11,802 13,060 (a) Amount is included in Prepaid and other current assets in the unaudited condensed consolidated balance sheets. (b) Amount is included in Other assets in the unaudited condensed consolidated balance sheets. |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Components of Lease Expense and Supplemental Cash Flow Information | The components of lease expense were as follows (in thousands): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Operating lease cost (a) $ 120 251 Operating lease cost (b) 975 1,971 Total operating lease cost $ 1,095 2,222 (a) Amount is included in Cost of services in the unaudited condensed consolidated statements of operations. (b) Amount is included in Selling, general and administrative, including stock-based and long-term incentive compensation in the unaudited condensed consolidated statements of operations. Remaining Lease Term and Discount Rate The following table presents the weighted-average remaining lease term and the weighted-average discount rate: As of June 30, 2019 Weighted-average remaining lease term for operating leases (in years) 10.1 Weighted-average discount rate for operating leases 11.8 % Supplemental Cash Flow Information The following is the supplemental cash flow information associated with the Company's leases (in thousands): Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases 2,132 |
Maturities of Lease Liabilities | As of June 30, 2019 , maturities of lease liabilities were as follows: Remainder of 2019 $ 1,749 2020 3,923 2021 3,195 2022 3,069 2023 3,087 Thereafter 20,329 Total lease payments $ 35,352 Less: Interest (15,240 ) Total lease obligations $ 20,112 |
Disclosures Related to Periods Prior to Adoption of ASU 2016-02 | Minimum lease commitments as of December 31, 2018 that have initial or remaining noncancelable lease terms in excess of one year are as follows (in thousands): Year Ended December 31: 2019 $ 4,628 2020 4,207 2021 3,093 2022 3,068 2023 3,087 Thereafter 20,329 Minimum lease commitments $ 38,412 |
Consolidating Guarantor Finan_2
Consolidating Guarantor Financial Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Consolidating Balance Sheet | MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES (Debtor-In-Possession) Condensed Consolidating Balance Sheet (unaudited) As of June 30, 2019 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Assets Current assets: Cash and cash equivalents $ 11,282 213 — — 11,495 Restricted cash 93 — — — 93 Trade receivables, net 12,413 132 — — 12,545 Prepaid and other current assets 63,977 — — (35,751 ) 28,226 Total current assets 87,765 345 — (35,751 ) 52,359 Property and equipment, net 36,940 — — — 36,940 Subscriber accounts and deferred contract acquisition costs, net 1,147,972 13,500 — — 1,161,472 Deferred income tax asset, net 783 — — — 783 Operating lease right-of-use asset 19,521 — — — 19,521 Other assets, net 18,649 — — — 18,649 Total assets $ 1,311,630 13,845 — (35,751 ) 1,289,724 Liabilities and Stockholder's Deficit Current liabilities: Accounts payable $ — — — — — Other accrued liabilities 3,795 — — — 3,795 Deferred revenue — — — — — Holdback liability — — — — — Current portion of long-term debt 181,400 — — — 181,400 Total current liabilities not subject to compromise 185,195 — — — 185,195 Non-current liabilities: Long-term holdback liability — — — — — Derivative financial instruments — — — — — Operating lease liabilities 16,317 — — — 16,317 Other liabilities 22,166 — — (22,166 ) — Total liabilities not subject to compromise 223,678 — — (22,166 ) 201,512 Liabilities subject to compromise 1,766,816 36,011 — (35,751 ) 1,767,076 Total liabilities 1,990,494 36,011 — (57,917 ) 1,968,588 Total stockholder's deficit (678,864 ) (22,166 ) — 22,166 (678,864 ) Total liabilities and stockholder's deficit $ 1,311,630 13,845 — (35,751 ) 1,289,724 MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES (Debtor-In-Possession) 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 not subject to compromise 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 not subject to compromise 1,947,053 98,915 — (151,225 ) 1,894,743 Liabilities subject to compromise — — — — — 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 |
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) | MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES (Debtor-In-Possession) Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) (unaudited) Three Months Ended June 30, 2019 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Net revenue $ 126,784 1,307 — — 128,091 Operating expenses: Cost of services 28,496 40 — — 28,536 Selling, general, and administrative, including stock-based compensation 28,051 112 — — 28,163 Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets 48,567 571 — — 49,138 Depreciation 3,121 — — — 3,121 108,235 723 — — 108,958 Operating income 18,549 584 — — 19,133 Other expense (income): Equity in income of subsidiaries (584 ) — — 584 — Restructuring and reorganization items 33,102 — — — 33,102 Interest expense 40,536 — — — 40,536 Realized loss on derivative financial instruments (969 ) — — — (969 ) Refinancing expense — — — — — 72,085 — — 584 72,669 Income (loss) before income taxes (53,536 ) 584 — (584 ) (53,536 ) Income tax expense 666 — — — 666 Net income (loss) (54,202 ) 584 — (584 ) (54,202 ) Other comprehensive income (loss): Unrealized loss on derivative contracts (472 ) — — — (472 ) Total other comprehensive loss (472 ) — — — (472 ) Comprehensive income (loss) $ (54,674 ) 584 — (584 ) (54,674 ) MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES (Debtor-In-Possession) Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) (unaudited) Three Months Ended June 30, 2018 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Net revenue $ 124,126 10,887 — — 135,013 Operating expenses: Cost of services 27,865 5,182 — — 33,047 Selling, general, and administrative, including stock-based compensation 22,616 10,039 — — 32,655 Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets 52,091 1,800 — — 53,891 Depreciation 2,622 243 — — 2,865 Loss on goodwill impairment 214,089 311 — — 214,400 319,283 17,575 — — 336,858 Operating loss (195,157 ) (6,688 ) — — (201,845 ) Other expense: Equity in loss of subsidiaries 6,870 — — (6,870 ) — Interest expense 38,600 — — — 38,600 45,470 — — (6,870 ) 38,600 Loss before income taxes (240,627 ) (6,688 ) — 6,870 (240,445 ) Income tax expense 1,165 182 — — 1,347 Net loss (241,792 ) (6,870 ) — 6,870 (241,792 ) Other comprehensive income (loss): Unrealized gain on derivative contracts 5,521 — — — 5,521 Total other comprehensive income 5,521 — — — 5,521 Comprehensive loss $ (236,271 ) (6,870 ) — 6,870 (236,271 ) MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES (Debtor-In-Possession) Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) (unaudited) Six Months Ended June 30, 2019 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Net revenue $ 255,044 2,653 — — 257,697 Operating expenses: Cost of services 55,179 121 — — 55,300 Selling, general, and administrative, including stock-based compensation 59,215 170 — — 59,385 Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets 97,139 1,144 — — 98,283 Depreciation 6,275 — — — 6,275 217,808 1,435 — — 219,243 Operating income 37,236 1,218 — — 38,454 Other expense (income): Equity in income of subsidiaries (1,218 ) — — 1,218 — Restructuring and reorganization items 33,102 — — — 33,102 Interest expense 77,969 — — — 77,969 Realized and unrealized loss on derivative financial instruments 6,804 — — — 6,804 Refinancing expense 5,214 — — — 5,214 121,871 — — 1,218 123,089 Income (loss) before income taxes (84,635 ) 1,218 — (1,218 ) (84,635 ) Income tax expense 1,337 — — — 1,337 Net income (loss) (85,972 ) 1,218 — (1,218 ) (85,972 ) Other comprehensive income (loss): Unrealized loss on derivative contracts (940 ) — — — (940 ) Total other comprehensive loss (940 ) — — — (940 ) Comprehensive income (loss) $ (86,912 ) 1,218 — (1,218 ) (86,912 ) MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES (Debtor-In-Possession) Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) (unaudited) Six Months Ended June 30, 2018 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Net revenue $ 248,421 20,345 — — 268,766 Operating expenses: Cost of services 56,164 9,584 — — 65,748 Selling, general, and administrative, including stock-based compensation 45,419 19,250 — — 64,669 Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets 104,328 3,974 — — 108,302 Depreciation 5,007 473 — — 5,480 Loss on goodwill impairment 214,089 311 — — 214,400 425,007 33,592 — — 458,599 Operating loss (176,586 ) (13,247 ) — — (189,833 ) Other expense: Equity in loss of subsidiaries 13,610 — — (13,610 ) — Interest expense 75,473 — — — 75,473 89,083 — — (13,610 ) 75,473 Loss before income taxes (265,669 ) (13,247 ) — 13,610 (265,306 ) Income tax expense 2,330 363 — — 2,693 Net loss (267,999 ) (13,610 ) — 13,610 (267,999 ) Other comprehensive income (loss): Unrealized gain on derivative contracts 19,927 — — — 19,927 Total other comprehensive income 19,927 — — — 19,927 Comprehensive loss $ (248,072 ) (13,610 ) — 13,610 (248,072 ) |
Condensed Consolidating Statement of Cash Flows | MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES (Debtor-In-Possession) Condensed Consolidating Statement of Cash Flows (unaudited) Six Months Ended June 30, 2019 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Net cash provided by operating activities $ 100,126 246 — — 100,372 Investing activities: Capital expenditures (6,767 ) — — — (6,767 ) Cost of subscriber accounts acquired (60,811 ) (524 ) — — (61,335 ) Net cash used in investing activities (67,578 ) (524 ) — — (68,102 ) Financing activities: Proceeds from long-term debt 43,100 — — — 43,100 Payments on long-term debt (18,400 ) — — — (18,400 ) Payments of restructuring and reorganization costs (35,352 ) — — — (35,352 ) Payments of refinancing costs (7,404 ) — — — (7,404 ) Value of shares withheld for share-based compensation (3 ) — — — (3 ) Dividend to Ascent Capital (5,000 ) — — — (5,000 ) Net cash used in financing activities (23,059 ) — — — (23,059 ) Net increase (decrease) in cash, cash equivalents and restricted cash 9,489 (278 ) — — 9,211 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 $ 11,375 213 — — 11,588 MONITRONICS INTERNATIONAL, INC. AND SUBSIDIARIES (Debtor-In-Possession) Condensed Consolidating Statement of Cash Flows (unaudited) Six Months Ended June 30, 2018 Parent Issuer Subsidiary Guarantors Non-Guarantors Eliminations Consolidated (amounts in thousands) Net cash provided by operating activities $ 66,082 1,415 — — 67,497 Investing activities: Capital expenditures (8,449 ) (479 ) — — (8,928 ) Cost of subscriber accounts acquired (68,983 ) (712 ) — — (69,695 ) Net cash used in investing activities (77,432 ) (1,191 ) — — (78,623 ) Financing activities: Proceeds from long-term debt 105,300 — — — 105,300 Payments on long-term debt (95,200 ) — — — (95,200 ) Value of shares withheld for share-based compensation (69 ) — — — (69 ) Net cash provided by financing activities 10,031 — — — 10,031 Net increase (decrease) in cash, cash equivalents and restricted cash (1,319 ) 224 — — (1,095 ) 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 $ 1,386 821 — — 2,207 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) | May 20, 2019 | Jun. 30, 2019 |
Restructuring Support Agreement | ||
Finite-Lived Intangible Assets [Line Items] | ||
Debt to be converted to equity (up to) | $ 685,000,000 | |
Expected cash to be received from equity rights offering | 200,000,000 | |
Deemed contribution of cash on hand to be received through merger with Ascent Capital (up to) | 23,000,000 | |
Merger criteria, minimum threshold of cash net of liabilities, if circumstances met | $ 20,000,000 | |
Percentage of existing shareholder ownership after reorganization, if circumstances met | 5.82% | |
Maximum final cash contributions | $ 23,000,000 | |
Restructuring Support Agreement | Ascent Capital | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cash contribution obligation after reorganization, if merger not consummated | $ 3,500,000 | |
Senior Notes 9.125 Percent Due 2020 | Senior Notes | ||
Finite-Lived Intangible Assets [Line Items] | ||
Interest rate on debt | 9.125% | |
Senior Notes 9.125 Percent Due 2020 | Senior Notes | Restructuring Support Agreement | ||
Finite-Lived Intangible Assets [Line Items] | ||
Percentage of borrowings outstanding | 66.6667% | |
Interest rate on debt | 9.125% | |
Debt to be converted to equity (up to) | $ 585,000,000 | |
Term Loan Due September 2022 | Term Loan | Restructuring Support Agreement | ||
Finite-Lived Intangible Assets [Line Items] | ||
Percentage of borrowings outstanding | 66.6667% | |
Debt to be converted to equity (up to) | $ 100,000,000 |
Bankruptcy - Narrative (Details
Bankruptcy - Narrative (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Line of Credit Facility [Line Items] | |||||
Restructuring and reorganization expense | $ 33,102,000 | $ 0 | $ 33,102,000 | $ 0 | |
Prepaid expense, retainer fee | $ 2,250,000 | 2,250,000 | $ 2,250,000 | ||
Revolving Credit Facility | LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Unused capacity commitment fee, percentage | 0.50% | ||||
Letter of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing capacity | 1,000,000 | 1,000,000 | $ 1,000,000 | ||
DIP Facility | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing capacity | $ 245,000,000 | 245,000,000 | 245,000,000 | ||
Unused capacity commitment fee, percentage | 0.75% | ||||
Maturity period, after date of entry of interim DIP order, if circumstances met | 45 days | ||||
DIP Facility | Revolving Credit Facility | LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Variable rate basis floor | 1.50% | ||||
Spread on variable rate index | 5.00% | ||||
DIP Facility | Revolving Credit Facility | Base Rate | |||||
Line of Credit Facility [Line Items] | |||||
Variable rate basis floor | 4.50% | ||||
Spread on variable rate index | 4.00% | ||||
DIP Facility | Letter of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing capacity | $ 10,000,000 | 10,000,000 | 10,000,000 | ||
Fronting fee on unused capacity, percentage | 0.25% | ||||
DIP Facility | Swingline Loan | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing capacity | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 |
Going Concern - Narrative (Deta
Going Concern - Narrative (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2016 |
Debt Instrument [Line Items] | |||
Long-term debt | $ 1,838,900,000 | $ 1,816,450,000 | |
Senior Notes 9.125 Percent Due 2020 | Senior Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt | 585,000,000 | 585,000,000 | |
Term Loan Due September 2022 | Term Loan | |||
Debt Instrument [Line Items] | |||
Long-term debt | 1,072,500,000 | 1,075,250,000 | |
Debt instrument, face amount | 1,072,500,000 | $ 1,100,000,000 | |
Revolving Credit Facility Due 2021 | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 181,400,000 | $ 144,200,000 |
Recent Accounting Pronounceme_3
Recent Accounting Pronouncements - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use asset | $ 19,521 | |
Operating lease liabilities | $ 16,317 | |
ASU 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use asset | $ 20,240 | |
Operating lease liabilities | $ 20,761 |
Other Accrued Liabilities - Sch
Other Accrued Liabilities - Schedule of Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued payroll and related liabilities | $ 0 | $ 4,459 |
Interest payable | 0 | 14,446 |
Income taxes payable | 0 | 2,742 |
Operating lease liabilities | 3,795 | |
Other | 0 | 9,438 |
Total Other accrued liabilities | $ 3,795 | $ 31,085 |
Debt - Schedule of Long-Term De
Debt - Schedule of Long-Term Debt (Details) - USD ($) | 6 Months Ended | |||
Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2016 | Feb. 29, 2016 | |
Debt Instrument [Line Items] | ||||
Total debt carrying value | $ 1,838,900,000 | $ 1,816,450,000 | ||
Less: Current portion of long-term debt, not subject to compromise | (181,400,000) | (1,816,450,000) | ||
Long-term debt subject to compromise | 1,657,500,000 | 0 | ||
Less: Amounts reclassified to Liabilities subject to compromise | (1,657,500,000) | 0 | ||
Long-term debt | 0 | 0 | ||
Senior Notes | Senior Notes 9.125 Percent Due 2020 | ||||
Debt Instrument [Line Items] | ||||
Total debt carrying value | $ 585,000,000 | 585,000,000 | ||
Debt interest rate | 9.125% | |||
Effective interest rate | 9.10% | |||
Ascent Intercompany Loan | Promissory Note Due to Ascent Capital due October 2020 | ||||
Debt Instrument [Line Items] | ||||
Total debt carrying value | $ 0 | 12,000,000 | $ 12,000,000 | |
Effective interest rate | 12.50% | |||
Term Loan | Term Loan Due September 2022 | ||||
Debt Instrument [Line Items] | ||||
Total debt carrying value | $ 1,072,500,000 | 1,075,250,000 | ||
Effective interest rate | 8.60% | |||
Term Loan | Term Loan Due September 2022 | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable debt | 5.50% | |||
Floor on variable debt | 1.00% | |||
Revolving Credit Facility | Revolving Credit Facility Due 2021 | ||||
Debt Instrument [Line Items] | ||||
Total debt carrying value | $ 181,400,000 | $ 144,200,000 | ||
Effective interest rate | 7.50% | |||
Maximum borrowing on line | $ 295,000,000 | $ 295,000,000 | ||
Revolving Credit Facility | Revolving Credit Facility Due 2021 | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable debt | 4.00% | |||
Floor on variable debt | 1.00% |
Debt - Narrative (Details)
Debt - Narrative (Details) | May 20, 2019USD ($) | Sep. 30, 2016USD ($) | Feb. 29, 2016USD ($) | May 20, 2019 | Jan. 31, 2019USD ($) | Jun. 30, 2019USD ($)letters_of_credit | Jun. 30, 2018USD ($) | Apr. 01, 2019USD ($) | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | |||||||||
Long-term debt | $ 1,838,900,000 | $ 1,816,450,000 | |||||||
Payments on long-term debt | 18,400,000 | $ 95,200,000 | |||||||
Letter of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing on line | $ 1,000,000 | ||||||||
Letters of credit | letters_of_credit | 2 | ||||||||
LIBOR | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Commitment fee for line of credit | 0.50% | ||||||||
Principal Owner | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal being treated as a capital contribution | $ 88,000,000 | $ 2,250,000 | |||||||
Parent Company | |||||||||
Debt Instrument [Line Items] | |||||||||
Payments on long-term debt | $ 18,400,000 | $ 95,200,000 | |||||||
Senior Notes 9.125 Percent Due 2020 | Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt | $ 585,000,000 | 585,000,000 | |||||||
Debt interest rate | 9.125% | ||||||||
Interest payment not made | $ 26,691,000 | ||||||||
Promissory Note Due 2020 | Promissory Note | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt | $ 12,000,000 | $ 0 | 12,000,000 | ||||||
Payments on long-term debt | $ 9,750,000 | ||||||||
Promissory Note Due 2020 | Promissory Note | Parent Company | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt interest rate | 12.50% | ||||||||
Extinguishment of debt | $ 100,000,000 | ||||||||
Term Loan Due September 2022 | Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt | 1,072,500,000 | 1,075,250,000 | |||||||
Debt instrument, face amount | $ 1,100,000,000 | 1,072,500,000 | |||||||
Debt discount on purchase price | 1.50% | ||||||||
Line of credit facility, periodic payment | $ 2,750,000 | ||||||||
Additional default interest rate | 2.00% | ||||||||
Term Loan Due September 2022 | Term Loan | LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable debt | 5.50% | ||||||||
Floor on variable debt | 1.00% | ||||||||
Term Loan Due September 2022 | Term Loan | Alternate Base | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable debt | 4.50% | ||||||||
Revolving Credit Facility Due 2021 | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt | $ 181,400,000 | $ 144,200,000 | |||||||
Maximum borrowing on line | $ 295,000,000 | $ 295,000,000 | |||||||
Revolving Credit Facility Due 2021 | Revolving Credit Facility | LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable debt | 4.00% | ||||||||
Floor on variable debt | 1.00% | ||||||||
Revolving Credit Facility Waiver Agreement | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing on line | $ 195,000,000 | ||||||||
Revolving Credit Facility Waiver Agreement | Revolving Credit Facility | Alternate Base | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable debt | 3.00% | ||||||||
Restructuring Support Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt to be converted to equity (up to) | $ 685,000,000 | ||||||||
Restructuring Support Agreement | Senior Notes 9.125 Percent Due 2020 | Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt interest rate | 9.125% | 9.125% | |||||||
Debt to be converted to equity (up to) | $ 585,000,000 | ||||||||
Restructuring Support Agreement | Term Loan Due September 2022 | Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt to be converted to equity (up to) | $ 100,000,000 |
Debt - Schedule of Long Term De
Debt - Schedule of Long Term Debt Maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Remainder of 2019 | $ 1,838,900 | |
2020 | 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
Thereafter | 0 | |
Total principal payments | 1,838,900 | |
Less: | ||
Unamortized deferred debt costs and discounts | 0 | |
Total debt carrying value | $ 1,838,900 | $ 1,816,450 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) - USD ($) $ in Thousands | Apr. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized gain (loss) on derivatives | $ 3,196 | $ (4,577) | $ 0 | |
Termination amount | $ 8,767 | |||
Realized loss on derivatives | 2,227 | |||
Counterparty | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Termination amount | $ 6,540 | |||
Interest Rate Swap | Cash flow hedge | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Cash flow hedge loss to be reclassified during next 12 months | $ (1,888) | $ (1,888) |
Derivatives - Summary of Deriva
Derivatives - Summary of Derivatives Designated as Cash Flow Hedges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Effective portion of gain recognized in Accumulated other comprehensive income (loss) | $ 5,096 | $ 13,668 | ||||
Interest Rate Swap | Cash flow hedge | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Effective portion of gain recognized in Accumulated other comprehensive income (loss) | $ 0 | 5,096 | $ 0 | $ 18,764 | ||
Effective portion of loss reclassified from Accumulated other comprehensive income (loss) into Net loss | [1] | $ (472) | $ (425) | $ (940) | $ (1,163) | |
[1] | Amounts are included in Interest expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss). |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measured On Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate swap agreements - assets | [1] | $ 0 | $ 10,552 |
Interest rate swap agreements - liabilities | [1] | 0 | (6,039) |
Total | 0 | 4,513 | |
Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate swap agreements - assets | [1] | 0 | 0 |
Interest rate swap agreements - liabilities | [1] | 0 | 0 |
Total | 0 | 0 | |
Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate swap agreements - assets | [1] | 0 | 10,552 |
Interest rate swap agreements - liabilities | [1] | 0 | (6,039) |
Total | 0 | 4,513 | |
Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate swap agreements - assets | [1] | 0 | 0 |
Interest rate swap agreements - liabilities | [1] | 0 | 0 |
Total | $ 0 | $ 0 | |
[1] | Swap asset values are included in non-current Other assets and Swap liability values are included in non-current Derivative financial instruments on the condensed consolidated balance sheets. |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Instruments Not Carried at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | |
Long term debt, including current portion and amounts classified as Liabilities subject to compromise: | |||
Carrying value | $ 1,838,900 | $ 1,816,450 | |
Level 2 | |||
Long term debt, including current portion and amounts classified as Liabilities subject to compromise: | |||
Carrying value | 1,838,900 | 1,816,450 | |
Fair value | [1] | $ 1,215,943 | $ 1,218,606 |
[1] | The fair value is based on market quotations from third party financial institutions and is classified as Level 2 in the hierarchy. |
Liabilities Subject to Compro_3
Liabilities Subject to Compromise - Schedule of Liabilities Subject to Compromise (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current liabilities: | ||
Accounts payable | $ 10,471 | |
Accrued payroll and related liabilities | 5,276 | |
Interest payable | 56,534 | |
Income taxes payable | 1,449 | |
Other accrued liabilities | 7,373 | |
Deferred revenue | 11,802 | |
Dealer holdback liability | 12,673 | |
Total current liabilities subject to compromise | 1,763,078 | |
Non-current liabilities: | ||
Long-term dealer holdback liability | 1,817 | |
Total liabilities subject to compromise | 2,181 | |
Total liabilities subject to compromise | 1,767,076 | $ 0 |
Senior Notes | ||
Current liabilities: | ||
Debt | 585,000 | |
Term Loan | ||
Current liabilities: | ||
Debt | $ 1,072,500 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Summary of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jan. 01, 2018 | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||
Beginning Balance | $ (623,775) | $ (588,975) | $ 68,220 | $ 102,736 | $ (588,975) | $ 102,736 | |||||
Adjusted balance at January 1, 2018 | $ 80,016 | ||||||||||
Unrealized gain on derivatives recognized through Accumulated other comprehensive income (loss), net of income tax of $0 | 5,096 | 13,668 | |||||||||
Net period Other comprehensive income | (472) | (468) | 5,521 | 14,406 | (940) | 19,927 | |||||
Ending Balance | (678,864) | (623,775) | (167,695) | 68,220 | (678,864) | (167,695) | |||||
Unrealized gain on derivatives recognized through Accumulated other comprehensive income (loss), tax | 0 | 0 | |||||||||
Accounting Standards Update 2017-12 | |||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||
Impact of adoption of ASU 2017-12 | 605 | ||||||||||
AOCI Attributable to Parent | |||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||
Beginning Balance | 7,140 | 7,608 | 7,636 | (7,375) | 7,608 | (7,375) | |||||
Adjusted balance at January 1, 2018 | (6,770) | ||||||||||
Net period Other comprehensive income | (472) | (468) | 5,521 | 14,406 | |||||||
Ending Balance | 6,668 | 7,140 | 13,157 | 7,636 | $ 6,668 | $ 13,157 | |||||
AOCI Attributable to Parent | Accounting Standards Update 2017-12 | |||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||
Impact of adoption of ASU 2017-12 | $ 605 | ||||||||||
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | |||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||
Reclassifications of unrealized loss on derivatives into Net loss, net of income tax of $0 | (472) | [1] | (468) | [1] | 425 | [2] | 738 | [2] | |||
Reclassifications of unrealized loss on derivatives into Net loss, tax | $ 0 | $ 0 | $ 0 | $ 0 | |||||||
[1] | Amounts reclassified into Net loss are included in Interest expense on the condensed consolidated statements of operations. See note 7, Derivatives, for further information. | ||||||||||
[2] | Amounts reclassified into Net loss are included in Interest expense on the condensed consolidated statements of operations. |
Commitments, Contingencies an_2
Commitments, Contingencies and Other Liabilities - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |||
Apr. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | |
Loss Contingencies [Line Items] | |||||
Legal settlement reserve | $ 28 | ||||
Damages paid | $ 23 | $ 5 | |||
Settled Litigation | |||||
Loss Contingencies [Line Items] | |||||
Proceeds from legal settlements | $ 4.8 | $ 12.5 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregated Revenue by Source (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Total Net revenue | $ 128,091 | $ 135,013 | $ 257,697 | $ 268,766 |
Alarm monitoring revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Net revenue | 119,085 | 124,844 | 240,564 | 249,685 |
Product and installation revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Net revenue | 7,585 | 9,477 | 14,118 | 17,624 |
Other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Net revenue | $ 1,421 | $ 692 | $ 3,015 | $ 1,457 |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |||
Trade receivables, net | $ 12,545 | $ 13,121 | |
Contract assets, net - current portion | [1] | 11,985 | 13,452 |
Contract assets, net - long-term portion | [2] | 13,743 | 16,154 |
Deferred revenue | 11,802 | ||
Deferred revenue, December 2018 | $ 0 | $ 13,060 | |
[1] | Amount is included in Prepaid and other current assets in the unaudited condensed consolidated balance sheets. | ||
[2] | Amount is included in Other assets in the unaudited condensed consolidated balance sheets. |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | ||
Lessee, Lease, Description [Line Items] | |||
Total operating lease cost | $ 1,095 | $ 2,222 | |
Cost of Services | |||
Lessee, Lease, Description [Line Items] | |||
Total operating lease cost | [1] | 120 | 251 |
Selling, General and Administrative Expenses | |||
Lessee, Lease, Description [Line Items] | |||
Total operating lease cost | [2] | $ 975 | $ 1,971 |
[1] | Amount is included in Cost of services in the unaudited condensed consolidated statements of operations. | ||
[2] | Amount is included in Selling, general and administrative, including stock-based and long-term incentive compensation in the unaudited condensed consolidated statements of operations. |
Leases - Remaining Lease Term a
Leases - Remaining Lease Term and Discount Rate (Details) | Jun. 30, 2019 |
Leases [Abstract] | |
Weighted-average remaining lease term for operating leases (in years) | 10 years 1 month 6 days |
Weighted-average discount rate for operating leases | 11.80% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities | |
Operating cash flows from operating leases | $ 2,132 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
Remainder of 2019 | $ 1,749 |
2020 | 3,923 |
2021 | 3,195 |
2022 | 3,069 |
2023 | 3,087 |
Thereafter | 20,329 |
Total lease payments | 35,352 |
Less: Interest | (15,240) |
Total lease obligations | $ 20,112 |
Leases - Disclosures Related to
Leases - Disclosures Related to Periods Prior to Adoption of ASU 2016-02 (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 4,628 |
2020 | 4,207 |
2021 | 3,093 |
2022 | 3,068 |
2023 | 3,087 |
Thereafter | 20,329 |
Minimum lease commitments | $ 38,412 |
Consolidating Guarantor Finan_3
Consolidating Guarantor Financial Information - Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||||||
Cash and cash equivalents | $ 11,495 | $ 2,188 | ||||
Restricted cash | 93 | 189 | ||||
Trade receivables, net | 12,545 | 13,121 | ||||
Prepaid and other current assets | 28,226 | 28,178 | ||||
Total current assets | 52,359 | 43,676 | ||||
Property and equipment, net | 36,940 | 36,539 | ||||
Subscriber accounts and deferred contract acquisition costs, net | 1,161,472 | 1,195,463 | ||||
Deferred income tax asset, net | 783 | 783 | ||||
Operating lease right-of-use asset | 19,521 | |||||
Other assets | 18,649 | 29,307 | ||||
Total assets | 1,289,724 | 1,305,768 | ||||
Current liabilities: | ||||||
Accounts payable | 0 | 12,099 | ||||
Other accrued liabilities | 3,795 | 31,085 | ||||
Deferred revenue | 0 | 13,060 | ||||
Holdback liability | 0 | 11,513 | ||||
Current portion of long-term debt | 181,400 | 1,816,450 | ||||
Total current liabilities not subject to compromise | 185,195 | 1,884,207 | ||||
Non-current liabilities: | ||||||
Long-term holdback liability | 0 | 1,770 | ||||
Derivative financial instruments | 0 | 6,039 | ||||
Operating lease liabilities | 16,317 | |||||
Other liabilities | 0 | 2,727 | ||||
Total liabilities not subject to compromise | 201,512 | 1,894,743 | ||||
Liabilities subject to compromise | 1,767,076 | 0 | ||||
Total liabilities | 1,968,588 | 1,894,743 | ||||
Stockholder's deficit: | ||||||
Total stockholder's deficit | (678,864) | $ (623,775) | (588,975) | $ (167,695) | $ 68,220 | $ 102,736 |
Total liabilities and stockholder's deficit | 1,289,724 | 1,305,768 | ||||
Eliminations | ||||||
Current assets: | ||||||
Cash and cash equivalents | 0 | 0 | ||||
Restricted cash | 0 | 0 | ||||
Trade receivables, net | 0 | 0 | ||||
Prepaid and other current assets | (35,751) | (93,983) | ||||
Total current assets | (35,751) | (93,983) | ||||
Property and equipment, net | 0 | 0 | ||||
Subscriber accounts and deferred contract acquisition costs, net | 0 | 0 | ||||
Deferred income tax asset, net | 0 | 0 | ||||
Operating lease right-of-use asset | 0 | |||||
Other assets | 0 | 0 | ||||
Total assets | (35,751) | (93,983) | ||||
Current liabilities: | ||||||
Accounts payable | 0 | 0 | ||||
Other accrued liabilities | 0 | (93,983) | ||||
Deferred revenue | 0 | 0 | ||||
Holdback liability | 0 | 0 | ||||
Current portion of long-term debt | 0 | 0 | ||||
Total current liabilities not subject to compromise | 0 | (93,983) | ||||
Non-current liabilities: | ||||||
Long-term holdback liability | 0 | 0 | ||||
Derivative financial instruments | 0 | 0 | ||||
Operating lease liabilities | 0 | |||||
Other liabilities | (22,166) | (57,242) | ||||
Total liabilities not subject to compromise | (22,166) | (151,225) | ||||
Liabilities subject to compromise | (35,751) | 0 | ||||
Total liabilities | (57,917) | (151,225) | ||||
Stockholder's deficit: | ||||||
Total stockholder's deficit | 22,166 | 57,242 | ||||
Total liabilities and stockholder's deficit | (35,751) | (93,983) | ||||
Parent Issuer | ||||||
Current assets: | ||||||
Cash and cash equivalents | 11,282 | 1,697 | ||||
Restricted cash | 93 | 189 | ||||
Trade receivables, net | 12,413 | 12,362 | ||||
Prepaid and other current assets | 63,977 | 118,119 | ||||
Total current assets | 87,765 | 132,367 | ||||
Property and equipment, net | 36,940 | 34,960 | ||||
Subscriber accounts and deferred contract acquisition costs, net | 1,147,972 | 1,160,698 | ||||
Deferred income tax asset, net | 783 | 783 | ||||
Operating lease right-of-use asset | 19,521 | |||||
Other assets | 18,649 | 29,270 | ||||
Total assets | 1,311,630 | 1,358,078 | ||||
Current liabilities: | ||||||
Accounts payable | 0 | 11,110 | ||||
Other accrued liabilities | 3,795 | 29,016 | ||||
Deferred revenue | 0 | 11,357 | ||||
Holdback liability | 0 | 11,342 | ||||
Current portion of long-term debt | 181,400 | 1,816,450 | ||||
Total current liabilities not subject to compromise | 185,195 | 1,879,275 | ||||
Non-current liabilities: | ||||||
Long-term holdback liability | 0 | 1,770 | ||||
Derivative financial instruments | 0 | 6,039 | ||||
Operating lease liabilities | 16,317 | |||||
Other liabilities | 22,166 | 59,969 | ||||
Total liabilities not subject to compromise | 223,678 | 1,947,053 | ||||
Liabilities subject to compromise | 1,766,816 | 0 | ||||
Total liabilities | 1,990,494 | 1,947,053 | ||||
Stockholder's deficit: | ||||||
Total stockholder's deficit | (678,864) | (588,975) | ||||
Total liabilities and stockholder's deficit | 1,311,630 | 1,358,078 | ||||
Subsidiary Guarantors | ||||||
Current assets: | ||||||
Cash and cash equivalents | 213 | 491 | ||||
Restricted cash | 0 | 0 | ||||
Trade receivables, net | 132 | 759 | ||||
Prepaid and other current assets | 0 | 4,042 | ||||
Total current assets | 345 | 5,292 | ||||
Property and equipment, net | 0 | 1,579 | ||||
Subscriber accounts and deferred contract acquisition costs, net | 13,500 | 34,765 | ||||
Deferred income tax asset, net | 0 | 0 | ||||
Operating lease right-of-use asset | 0 | |||||
Other assets | 0 | 37 | ||||
Total assets | 13,845 | 41,673 | ||||
Current liabilities: | ||||||
Accounts payable | 0 | 989 | ||||
Other accrued liabilities | 0 | 96,052 | ||||
Deferred revenue | 0 | 1,703 | ||||
Holdback liability | 0 | 171 | ||||
Current portion of long-term debt | 0 | 0 | ||||
Total current liabilities not subject to compromise | 0 | 98,915 | ||||
Non-current liabilities: | ||||||
Long-term holdback liability | 0 | 0 | ||||
Derivative financial instruments | 0 | 0 | ||||
Operating lease liabilities | 0 | |||||
Other liabilities | 0 | 0 | ||||
Total liabilities not subject to compromise | 0 | 98,915 | ||||
Liabilities subject to compromise | 36,011 | 0 | ||||
Total liabilities | 36,011 | 98,915 | ||||
Stockholder's deficit: | ||||||
Total stockholder's deficit | (22,166) | (57,242) | ||||
Total liabilities and stockholder's deficit | 13,845 | 41,673 | ||||
Non-Guarantors | ||||||
Current assets: | ||||||
Cash and cash equivalents | 0 | 0 | ||||
Restricted cash | 0 | 0 | ||||
Trade receivables, net | 0 | 0 | ||||
Prepaid and other current assets | 0 | 0 | ||||
Total current assets | 0 | 0 | ||||
Property and equipment, net | 0 | 0 | ||||
Subscriber accounts and deferred contract acquisition costs, net | 0 | 0 | ||||
Deferred income tax asset, net | 0 | 0 | ||||
Operating lease right-of-use asset | 0 | |||||
Other assets | 0 | 0 | ||||
Total assets | 0 | 0 | ||||
Current liabilities: | ||||||
Accounts payable | 0 | 0 | ||||
Other accrued liabilities | 0 | 0 | ||||
Deferred revenue | 0 | 0 | ||||
Holdback liability | 0 | 0 | ||||
Current portion of long-term debt | 0 | 0 | ||||
Total current liabilities not subject to compromise | 0 | 0 | ||||
Non-current liabilities: | ||||||
Long-term holdback liability | 0 | 0 | ||||
Derivative financial instruments | 0 | 0 | ||||
Operating lease liabilities | 0 | |||||
Other liabilities | 0 | 0 | ||||
Total liabilities not subject to compromise | 0 | 0 | ||||
Liabilities subject to compromise | 0 | 0 | ||||
Total liabilities | 0 | 0 | ||||
Stockholder's deficit: | ||||||
Total stockholder's deficit | 0 | 0 | ||||
Total liabilities and stockholder's deficit | $ 0 | $ 0 |
Consolidating Guarantor Finan_4
Consolidating Guarantor Financial Information - Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Condensed Income Statements, Captions [Line Items] | ||||||
Net revenue | $ 128,091 | $ 135,013 | $ 257,697 | $ 268,766 | ||
Operating expenses: | ||||||
Cost of services | 28,536 | 33,047 | 55,300 | 65,748 | ||
Selling, general, and administrative, including stock-based compensation | 28,163 | 32,655 | 59,385 | 64,669 | ||
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets | 49,138 | 53,891 | 98,283 | 108,302 | ||
Depreciation | 3,121 | 2,865 | 6,275 | 5,480 | ||
Loss on goodwill impairment | 0 | 214,400 | 0 | 214,400 | ||
Total operating expenses | 108,958 | 336,858 | 219,243 | 458,599 | ||
Operating income (loss) | 19,133 | (201,845) | 38,454 | (189,833) | ||
Other expense: | ||||||
Equity in loss of subsidiaries | 0 | 0 | 0 | 0 | ||
Restructuring and reorganization expense | 33,102 | 0 | 33,102 | 0 | ||
Interest expense | 40,536 | 38,600 | 77,969 | 75,473 | ||
Realized and unrealized (gain) loss, net on derivative financial instruments | (969) | 0 | 6,804 | 0 | ||
Refinancing expense | 0 | 0 | 5,214 | 0 | ||
Total other expense | 72,669 | 38,600 | 123,089 | 75,473 | ||
Loss before income taxes | (53,536) | (240,445) | (84,635) | (265,306) | ||
Income tax expense | 666 | 1,347 | 1,337 | 2,693 | ||
Net loss | (54,202) | $ (31,770) | (241,792) | $ (26,207) | (85,972) | (267,999) |
Other comprehensive income (loss): | ||||||
Unrealized gain (loss) on derivative contracts, net | (472) | 5,521 | (940) | 19,927 | ||
Total other comprehensive income (loss), net of tax | (472) | $ (468) | 5,521 | $ 14,406 | (940) | 19,927 |
Comprehensive loss | (54,674) | (236,271) | (86,912) | (248,072) | ||
Eliminations | ||||||
Condensed Income Statements, Captions [Line Items] | ||||||
Net revenue | 0 | 0 | 0 | 0 | ||
Operating expenses: | ||||||
Cost of services | 0 | 0 | 0 | 0 | ||
Selling, general, and administrative, including stock-based compensation | 0 | 0 | 0 | 0 | ||
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets | 0 | 0 | 0 | 0 | ||
Depreciation | 0 | 0 | 0 | 0 | ||
Loss on goodwill impairment | 0 | 0 | ||||
Total operating expenses | 0 | 0 | 0 | 0 | ||
Operating income (loss) | 0 | 0 | 0 | 0 | ||
Other expense: | ||||||
Equity in loss of subsidiaries | 584 | (6,870) | 1,218 | (13,610) | ||
Restructuring and reorganization expense | 0 | 0 | ||||
Interest expense | 0 | 0 | 0 | 0 | ||
Realized and unrealized (gain) loss, net on derivative financial instruments | 0 | 0 | ||||
Refinancing expense | 0 | 0 | ||||
Total other expense | 584 | (6,870) | 1,218 | (13,610) | ||
Loss before income taxes | (584) | 6,870 | (1,218) | 13,610 | ||
Income tax expense | 0 | 0 | 0 | 0 | ||
Net loss | (584) | 6,870 | (1,218) | 13,610 | ||
Other comprehensive income (loss): | ||||||
Unrealized gain (loss) on derivative contracts, net | 0 | 0 | 0 | 0 | ||
Total other comprehensive income (loss), net of tax | 0 | 0 | 0 | 0 | ||
Comprehensive loss | (584) | 6,870 | (1,218) | 13,610 | ||
Parent Issuer | ||||||
Condensed Income Statements, Captions [Line Items] | ||||||
Net revenue | 126,784 | 124,126 | 255,044 | 248,421 | ||
Operating expenses: | ||||||
Cost of services | 28,496 | 27,865 | 55,179 | 56,164 | ||
Selling, general, and administrative, including stock-based compensation | 28,051 | 22,616 | 59,215 | 45,419 | ||
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets | 48,567 | 52,091 | 97,139 | 104,328 | ||
Depreciation | 3,121 | 2,622 | 6,275 | 5,007 | ||
Loss on goodwill impairment | 214,089 | 214,089 | ||||
Total operating expenses | 108,235 | 319,283 | 217,808 | 425,007 | ||
Operating income (loss) | 18,549 | (195,157) | 37,236 | (176,586) | ||
Other expense: | ||||||
Equity in loss of subsidiaries | (584) | 6,870 | (1,218) | 13,610 | ||
Restructuring and reorganization expense | 33,102 | 33,102 | ||||
Interest expense | 40,536 | 38,600 | 77,969 | 75,473 | ||
Realized and unrealized (gain) loss, net on derivative financial instruments | (969) | 6,804 | ||||
Refinancing expense | 0 | 5,214 | ||||
Total other expense | 72,085 | 45,470 | 121,871 | 89,083 | ||
Loss before income taxes | (53,536) | (240,627) | (84,635) | (265,669) | ||
Income tax expense | 666 | 1,165 | 1,337 | 2,330 | ||
Net loss | (54,202) | (241,792) | (85,972) | (267,999) | ||
Other comprehensive income (loss): | ||||||
Unrealized gain (loss) on derivative contracts, net | (472) | 5,521 | (940) | 19,927 | ||
Total other comprehensive income (loss), net of tax | (472) | 5,521 | (940) | 19,927 | ||
Comprehensive loss | (54,674) | (236,271) | (86,912) | (248,072) | ||
Subsidiary Guarantors | ||||||
Condensed Income Statements, Captions [Line Items] | ||||||
Net revenue | 1,307 | 10,887 | 2,653 | 20,345 | ||
Operating expenses: | ||||||
Cost of services | 40 | 5,182 | 121 | 9,584 | ||
Selling, general, and administrative, including stock-based compensation | 112 | 10,039 | 170 | 19,250 | ||
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets | 571 | 1,800 | 1,144 | 3,974 | ||
Depreciation | 0 | 243 | 0 | 473 | ||
Loss on goodwill impairment | 311 | 311 | ||||
Total operating expenses | 723 | 17,575 | 1,435 | 33,592 | ||
Operating income (loss) | 584 | (6,688) | 1,218 | (13,247) | ||
Other expense: | ||||||
Equity in loss of subsidiaries | 0 | 0 | 0 | 0 | ||
Restructuring and reorganization expense | 0 | 0 | ||||
Interest expense | 0 | 0 | 0 | 0 | ||
Realized and unrealized (gain) loss, net on derivative financial instruments | 0 | 0 | ||||
Refinancing expense | 0 | 0 | ||||
Total other expense | 0 | 0 | 0 | 0 | ||
Loss before income taxes | 584 | (6,688) | 1,218 | (13,247) | ||
Income tax expense | 0 | 182 | 0 | 363 | ||
Net loss | 584 | (6,870) | 1,218 | (13,610) | ||
Other comprehensive income (loss): | ||||||
Unrealized gain (loss) on derivative contracts, net | 0 | 0 | 0 | 0 | ||
Total other comprehensive income (loss), net of tax | 0 | 0 | 0 | 0 | ||
Comprehensive loss | 584 | (6,870) | 1,218 | (13,610) | ||
Non-Guarantors | ||||||
Condensed Income Statements, Captions [Line Items] | ||||||
Net revenue | 0 | 0 | 0 | 0 | ||
Operating expenses: | ||||||
Cost of services | 0 | 0 | 0 | 0 | ||
Selling, general, and administrative, including stock-based compensation | 0 | 0 | 0 | 0 | ||
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets | 0 | 0 | 0 | 0 | ||
Depreciation | 0 | 0 | 0 | 0 | ||
Loss on goodwill impairment | 0 | 0 | ||||
Total operating expenses | 0 | 0 | 0 | 0 | ||
Operating income (loss) | 0 | 0 | 0 | 0 | ||
Other expense: | ||||||
Equity in loss of subsidiaries | 0 | 0 | 0 | 0 | ||
Restructuring and reorganization expense | 0 | 0 | ||||
Interest expense | 0 | 0 | 0 | 0 | ||
Realized and unrealized (gain) loss, net on derivative financial instruments | 0 | 0 | ||||
Refinancing expense | 0 | 0 | ||||
Total other expense | 0 | 0 | 0 | 0 | ||
Loss before income taxes | 0 | 0 | 0 | 0 | ||
Income tax expense | 0 | 0 | 0 | 0 | ||
Net loss | 0 | 0 | 0 | 0 | ||
Other comprehensive income (loss): | ||||||
Unrealized gain (loss) on derivative contracts, net | 0 | 0 | 0 | 0 | ||
Total other comprehensive income (loss), net of tax | 0 | 0 | 0 | 0 | ||
Comprehensive loss | $ 0 | $ 0 | $ 0 | $ 0 |
Consolidating Guarantor Finan_5
Consolidating Guarantor Financial Information - Condensed Consolidating Statement of Cash Flow (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net cash provided by operating activities | $ 100,372 | $ 67,497 |
Investing activities: | ||
Capital expenditures | (6,767) | (8,928) |
Cost of subscriber accounts acquired | (61,335) | (69,695) |
Net cash used in investing activities | (68,102) | (78,623) |
Financing activities: | ||
Proceeds from long-term debt | 43,100 | 105,300 |
Payments on long-term debt | (18,400) | (95,200) |
Payments of restructuring and reorganization costs | (35,352) | 0 |
Payments of refinancing costs | (7,404) | 0 |
Value of shares withheld for share-based compensation | (3) | (69) |
Dividend to Ascent Capital | (5,000) | |
Net cash provided by (used in) financing activities | (23,059) | 10,031 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 9,211 | (1,095) |
Cash, cash equivalents and restricted cash at beginning of period | 2,377 | 3,302 |
Cash, cash equivalents and restricted cash at end of period | 11,588 | 2,207 |
Eliminations | ||
Cash flows from operating activities: | ||
Net cash provided by operating activities | 0 | 0 |
Investing activities: | ||
Capital expenditures | 0 | 0 |
Cost of subscriber accounts acquired | 0 | 0 |
Net cash used in investing activities | 0 | 0 |
Financing activities: | ||
Proceeds from long-term debt | 0 | 0 |
Payments on long-term debt | 0 | 0 |
Payments of restructuring and reorganization costs | 0 | |
Payments of refinancing costs | 0 | |
Value of shares withheld for share-based compensation | 0 | 0 |
Dividend to Ascent Capital | 0 | |
Net cash provided by (used in) financing activities | 0 | 0 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 0 | 0 |
Cash, cash equivalents and restricted cash at beginning of period | 0 | 0 |
Cash, cash equivalents and restricted cash at end of period | 0 | 0 |
Parent Issuer | ||
Cash flows from operating activities: | ||
Net cash provided by operating activities | 100,126 | 66,082 |
Investing activities: | ||
Capital expenditures | (6,767) | (8,449) |
Cost of subscriber accounts acquired | (60,811) | (68,983) |
Net cash used in investing activities | (67,578) | (77,432) |
Financing activities: | ||
Proceeds from long-term debt | 43,100 | 105,300 |
Payments on long-term debt | (18,400) | (95,200) |
Payments of restructuring and reorganization costs | (35,352) | |
Payments of refinancing costs | (7,404) | |
Value of shares withheld for share-based compensation | (3) | (69) |
Dividend to Ascent Capital | (5,000) | |
Net cash provided by (used in) financing activities | (23,059) | 10,031 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 9,489 | (1,319) |
Cash, cash equivalents and restricted cash at beginning of period | 1,886 | 2,705 |
Cash, cash equivalents and restricted cash at end of period | 11,375 | 1,386 |
Subsidiary Guarantors | ||
Cash flows from operating activities: | ||
Net cash provided by operating activities | 246 | 1,415 |
Investing activities: | ||
Capital expenditures | 0 | (479) |
Cost of subscriber accounts acquired | (524) | (712) |
Net cash used in investing activities | (524) | (1,191) |
Financing activities: | ||
Proceeds from long-term debt | 0 | 0 |
Payments on long-term debt | 0 | 0 |
Payments of restructuring and reorganization costs | 0 | |
Payments of refinancing costs | 0 | |
Value of shares withheld for share-based compensation | 0 | 0 |
Dividend to Ascent Capital | 0 | |
Net cash provided by (used in) financing activities | 0 | 0 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (278) | 224 |
Cash, cash equivalents and restricted cash at beginning of period | 491 | 597 |
Cash, cash equivalents and restricted cash at end of period | 213 | 821 |
Non-Guarantors | ||
Cash flows from operating activities: | ||
Net cash provided by operating activities | 0 | 0 |
Investing activities: | ||
Capital expenditures | 0 | 0 |
Cost of subscriber accounts acquired | 0 | 0 |
Net cash used in investing activities | 0 | 0 |
Financing activities: | ||
Proceeds from long-term debt | 0 | 0 |
Payments on long-term debt | 0 | 0 |
Payments of restructuring and reorganization costs | 0 | |
Payments of refinancing costs | 0 | |
Value of shares withheld for share-based compensation | 0 | 0 |
Dividend to Ascent Capital | 0 | |
Net cash provided by (used in) financing activities | 0 | 0 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 0 | 0 |
Cash, cash equivalents and restricted cash at beginning of period | 0 | 0 |
Cash, cash equivalents and restricted cash at end of period | $ 0 | $ 0 |
Uncategorized Items - mtii-2019
Label | Element | Value |
Additional Paid-in Capital [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 444,330,000 |
Retained Earnings [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ (357,544,000) |
Common Stock [Member] | ||
Common Stock, Shares, Outstanding | us-gaap_CommonStockSharesOutstanding | 1,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 0 |
Accounting Standards Update 2017-12 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (605,000) |
Accounting Standards Update 2014-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (22,720,000) |
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (22,720,000) |