Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 26, 2017 | |
Entity Registrant Name | Ascent Capital Group, Inc. | |
Entity Central Index Key | 1,437,106 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Series A Common Stock | ||
Entity Common Stock, Shares Outstanding (in shares) | 11,973,630 | |
Series B Common Stock | ||
Entity Common Stock, Shares Outstanding (in shares) | 381,528 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 31,559 | $ 12,319 |
Marketable securities, at fair value | 80,484 | 77,825 |
Trade receivables, net of allowance for doubtful accounts of $2,625 in 2017 and $3,043 in 2016 | 12,831 | 13,869 |
Prepaid and other current assets | 10,890 | 10,347 |
Assets held for sale | 0 | 10,673 |
Total current assets | 135,764 | 125,033 |
Property and equipment, net of accumulated depreciation of $33,330 in 2017 and $29,071 in 2016 | 29,046 | 28,331 |
Subscriber accounts, net of accumulated amortization of $1,326,947 in 2017 and $1,212,468 in 2016 | 1,359,721 | 1,386,760 |
Dealer network and other intangible assets, net of accumulated amortization of $37,891 in 2017 and $32,976 in 2016 | 11,909 | 16,824 |
Goodwill | 563,549 | 563,549 |
Other assets | 7,253 | 11,935 |
Total assets | 2,107,242 | 2,132,432 |
Current liabilities: | ||
Accounts payable | 10,182 | 11,516 |
Accrued payroll and related liabilities | 4,741 | 5,067 |
Other accrued liabilities | 60,707 | 34,970 |
Deferred revenue | 15,306 | 15,147 |
Holdback liability | 11,204 | 13,916 |
Current portion of long-term debt | 11,000 | 11,000 |
Liabilities of discontinued operations | 0 | 3,500 |
Total current liabilities | 113,140 | 95,116 |
Non-current liabilities: | ||
Long-term debt | 1,772,848 | 1,754,233 |
Long-term holdback liability | 2,251 | 2,645 |
Derivative financial instruments | 15,624 | 16,948 |
Deferred income tax liability, net | 19,894 | 17,769 |
Other liabilities | 7,221 | 7,076 |
Total liabilities | 1,930,978 | 1,893,787 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value. Authorized 5,000,000 shares; no shares issued | 0 | 0 |
Additional paid-in capital | 1,420,502 | 1,417,505 |
Accumulated deficit | (1,231,938) | (1,169,559) |
Accumulated other comprehensive loss, net | (12,424) | (9,425) |
Total stockholders’ equity | 176,264 | 238,645 |
Total liabilities and stockholders’ equity | 2,107,242 | 2,132,432 |
Series A Common Stock | ||
Stockholders’ equity: | ||
Common stock | 120 | 120 |
Series B Common Stock | ||
Stockholders’ equity: | ||
Common stock | 4 | 4 |
Series C Common Stock | ||
Stockholders’ equity: | ||
Common stock | $ 0 | $ 0 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Trade receivables, allowance for doubtful accounts | $ 2,625 | $ 3,043 |
Property and equipment, accumulated depreciation | 33,330 | 29,071 |
Subscriber accounts, accumulated amortization | 1,326,947 | 1,212,468 |
Dealer network and other intangible assets, accumulated amortization | $ 37,891 | $ 32,976 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Series A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, authorized shares (in shares) | 45,000,000 | 45,000,000 |
Common stock, issued shares (in shares) | 11,973,728 | 11,969,152 |
Common stock, outstanding shares (in shares) | 11,973,728 | 11,969,152 |
Series B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, authorized shares (in shares) | 5,000,000 | 5,000,000 |
Common stock, issued shares (in shares) | 381,528 | 381,859 |
Common stock, outstanding shares (in shares) | 381,528 | 381,859 |
Series C Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, authorized shares (in shares) | 45,000,000 | 45,000,000 |
Common stock, issued shares (in shares) | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Net revenue | $ 140,498 | $ 143,656 | $ 281,698 | $ 286,924 |
Operating expenses: | ||||
Cost of services | 29,617 | 27,637 | 59,586 | 57,112 |
Selling, general and administrative, including stock-based compensation | 64,771 | 32,133 | 101,016 | 64,251 |
Radio conversion costs | 77 | 7,596 | 309 | 16,675 |
Amortization of subscriber accounts, dealer network and other intangible assets | 59,965 | 61,937 | 119,512 | 123,259 |
Depreciation | 2,132 | 2,114 | 4,259 | 4,177 |
Gain on disposal of operating assets | (14,579) | 0 | (21,217) | 0 |
Total operating expenses | 141,983 | 131,417 | 263,465 | 265,474 |
Operating income (loss) | (1,485) | 12,239 | 18,233 | 21,450 |
Other income (expense), net: | ||||
Interest income | 563 | 588 | 958 | 1,045 |
Interest expense | (38,165) | (31,587) | (75,651) | (63,011) |
Other income, net | 222 | (1,677) | 464 | (1,319) |
Total other income (expense), net | (37,380) | (32,676) | (74,229) | (63,285) |
Loss from continuing operations before income taxes | (38,865) | (20,437) | (55,996) | (41,835) |
Income tax expense from continuing operations | (4,661) | (1,765) | (6,475) | (3,587) |
Net loss from continuing operations | (43,526) | (22,202) | (62,471) | (45,422) |
Discontinued operations: | ||||
Income from discontinued operations, net of income tax of $0 | 0 | 0 | 92 | 0 |
Net loss | (43,526) | (22,202) | (62,379) | (45,422) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 584 | (354) | 642 | (556) |
Unrealized holding gain on marketable securities, net | 536 | 2,959 | 1,087 | 2,863 |
Unrealized loss on derivative contracts, net | (5,777) | (4,697) | (4,728) | (16,542) |
Total other comprehensive loss, net of tax | (4,657) | (2,092) | (2,999) | (14,235) |
Comprehensive loss | $ (48,183) | $ (24,294) | $ (65,378) | $ (59,657) |
Basic and diluted income (loss) per share: | ||||
Continuing operations (in dollars per share) | $ (3.58) | $ (1.80) | $ (5.14) | $ (3.66) |
Discontinued operations (in dollars per share) | 0 | 0 | 0.01 | 0 |
Net loss (in dollars per share) | $ (3.58) | $ (1.80) | $ (5.13) | $ (3.66) |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) (Parenthetical) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Income tax, discontinued operations | $ 0 | $ 0 | $ 0 | $ 0 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (62,379) | $ (45,422) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Income from discontinued operations, net of income tax | (92) | 0 |
Amortization of subscriber accounts, dealer network and other intangible assets | 119,512 | 123,259 |
Depreciation | 4,259 | 4,177 |
Stock-based compensation | 3,575 | 3,445 |
Deferred income tax expense | 2,104 | 2,105 |
Gain on disposal of operating assets | (21,217) | 0 |
Legal settlement reserve | 28,000 | 0 |
Amortization of debt discount and deferred debt costs | 5,415 | 5,315 |
Bad debt expense | 4,987 | 5,083 |
Other non-cash activity, net | 3,542 | 3,465 |
Changes in assets and liabilities: | ||
Trade receivables | (3,949) | (5,395) |
Prepaid expenses and other assets | (1,192) | 2,197 |
Subscriber accounts - deferred contract costs | (1,547) | (1,294) |
Payables and other liabilities | (8,143) | (5,567) |
Operating activities from discontinued operations, net | (3,408) | 0 |
Net cash provided by operating activities | 69,467 | 91,368 |
Cash flows from investing activities: | ||
Capital expenditures | (5,752) | (3,100) |
Cost of subscriber accounts acquired | (88,287) | (106,805) |
Purchases of marketable securities | (2,626) | (5,036) |
Proceeds from sale of marketable securities | 1,057 | 11,950 |
Decrease in restricted cash | 0 | 55 |
Proceeds from the disposal of operating assets | 32,612 | 0 |
Net cash used in investing activities | (62,996) | (102,936) |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 95,550 | 88,200 |
Payments on long-term debt | (82,350) | (69,700) |
Value of shares withheld for share-based compensation | (431) | (229) |
Purchases and retirement of common stock | 0 | (7,140) |
Net cash provided by financing activities | 12,769 | 11,131 |
Net increase (decrease) in cash and cash equivalents | 19,240 | (437) |
Cash and cash equivalents at beginning of period | 12,319 | 5,577 |
Cash and cash equivalents at end of period | 31,559 | 5,140 |
Supplemental cash flow information: | ||
State taxes paid, net | 3,105 | 2,758 |
Interest paid | 70,226 | 57,043 |
Accrued capital expenditures | $ 493 | $ 585 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Stockholders' Equity - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands | Total | Common StockSeries A Common Stock | Common StockSeries B Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Beginning Balance at Dec. 31, 2016 | $ 238,645 | $ 120 | $ 4 | $ 1,417,505 | $ (1,169,559) | $ (9,425) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net loss | (62,379) | (62,379) | ||||
Other comprehensive income | (2,999) | (2,999) | ||||
Stock-based compensation | 3,428 | 3,428 | ||||
Value of shares withheld for minimum tax liability | (431) | (431) | ||||
Ending Balance at Jun. 30, 2017 | $ 176,264 | $ 120 | $ 4 | $ 1,420,502 | $ (1,231,938) | $ (12,424) |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Ascent Capital Group, Inc. ("Ascent Capital" or the "Company") condensed consolidated financial statements represent the financial position and results of operations of Ascent Capital and its consolidated subsidiaries. Monitronics International, Inc. ("MONI") is the primary, wholly owned, operating subsidiary of the Company. MONI, and its wholly owned subsidiary LiveWatch Security, LLC ("LiveWatch"), monitor signals arising from burglaries, fires, medical alerts and other events through security systems installed at subscribers' premises, as well as providing for interactive and home automation services. 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 ("U.S. GAAP") for complete financial statements. The Company’s unaudited condensed consolidated financial statements as of June 30, 2017 , and for the three and six months ended June 30, 2017 and 2016 , include Ascent Capital 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 Ascent Capital Annual Report on Form 10-K for the year ended December 31, 2016 , filed with the SEC on March 8, 2017 (the " 2016 Form 10-K"). The preparation of financial statements in conformity with U.S. 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 goodwill, other intangible assets, long-lived assets, deferred tax assets, derivative financial instruments, and the amount of the allowance for doubtful accounts. 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. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). Under the update, revenue will be recognized based on a five-step model. The core principle of the model is that revenue will be recognized when the transfer of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In the third quarter of 2015, the FASB deferred the effective date of the standard to annual and interim periods beginning after December 15, 2017. In March and April 2016, the FASB issued amendments to provide clarification on assessment of collectability criteria, presentation of sales taxes and measurement of non-cash consideration. In addition, the amendment provided clarification and included simplification to transaction guidance on contract modifications and completed contracts at transaction. In December 2016, the FASB issued amendments to provide clarification on codification and guidance application. The standard allows the option of either a full retrospective adoption, meaning the standard is applied to all periods presented, or modified retrospective adoption, meaning the standard is applied only to the most current period. The Company currently plans to adopt ASU 2014-09 using the full retrospective approach. However, a final decision regarding the adoption method has not been made at this time. The Company's final determination will depend on the significance of the impact of the new standard on the Company's financial results. The Company is continuing its evaluation of the impact of ASU 2014-09 on the accounting policies, processes, and system requirements. The Company has assigned internal resources in addition to the engagement of a third party service provider to assist in the evaluation. While the Company is in the process of assessing revenue recognition and cost deferral policies across each type of its contracts, the Company does not know or cannot reasonably estimate the impact of the adoption ASU 2014-09 on its financial position, results of operations and cash flows. In February 2016, 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. For leases with a term of twelve months or less, the Company is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Further, ASU 2016-02 requires a finance lease to be recognized as both an interest expense and an amortization of the associated expense. Operating leases generally recognize the associated expense on a straight line basis. ASU 2016-02 requires the Company to adopt the standard using a modified retrospective approach and becomes effective on January 1, 2019. The Company is currently evaluating the impact that ASU 2016-02 will have on its financial position, results of operations and cash flows. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). Currently, the fair value of the reporting unit is compared with the carrying value of the reporting unit (identified as "Step 1"). If the fair value of the reporting unit is lower than its carrying amount, then the implied fair value of goodwill is calculated. If the implied fair value of goodwill is lower than the carrying value of goodwill an impairment is recognized (identified as "Step 2"). ASU 2017-04 eliminates Step 2 from the impairment test; therefore, a goodwill impairment will be recognized as the difference of the fair value and the carrying value. ASU 2017-04 becomes effective on January 1, 2020 with early adoption permitted. The Company is currently evaluating when to adopt the standard. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU 2017-09"). ASU 2017-09 requires modification accounting in Topic 718 to be applied to a change to the terms or conditions of a share-based payment award unless the fair value, vesting conditions and classification of the modified award are the same immediately before and after the modification of the award. ASU 2017-09 is effective for annual and interim periods beginning after December 15, 2017, and requires a prospective approach. Early adoption is permitted. The Company plans to adopt the standard when it becomes effective. The adoption is not expected to have a material impact on the Company's financial position, results of operations and cash flows. |
Investments in Marketable Secur
Investments in Marketable Securities | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments in Marketable Securities | Investments in Marketable Securities Ascent Capital owns marketable securities primarily consisting of diversified corporate bond funds. The following table presents a summary of amounts recorded on the condensed consolidated balance sheets (amounts in thousands): As of June 30, 2017 Cost Basis (b) Unrealized Gains Unrealized Losses Total Equity securities $ 3,704 $ — $ (131 ) $ 3,573 Mutual funds (a) 74,621 2,290 — 76,911 Ending balance $ 78,325 $ 2,290 $ (131 ) $ 80,484 As of December 31, 2016 Cost Basis (b) Unrealized Gains Unrealized Losses Total Equity securities $ 3,767 $ — $ (396 ) $ 3,371 Mutual funds (a) 72,986 1,483 (15 ) 74,454 Ending balance $ 76,753 $ 1,483 $ (411 ) $ 77,825 (a) Primarily consists of corporate bond funds. (b) When an other-than-temporary impairment occurs, the Company reduces the cost basis of the marketable security involved. In the second quarter of 2016, the Company recognized non-cash charges for an other-than-temporary impairment of $1,068,000 on its mutual funds and $836,000 on its equity securities for a total other-than-temporary impairment loss on marketable securities of $1,904,000 . The mutual fund impairments were attributable to a low interest rate environment and widening credit spreads. The equity security impairment was primarily attributable to foreign exchange losses based on weakening of the trading currency of the underlying investment. The following table provides the realized investment gains and losses and the total proceeds received from the sale of marketable securities (amounts in thousands): Three Months Ended Six Months Ended 2017 2016 2017 2016 Gross realized gains $ — 158 $ 6 244 Gross realized losses $ 3 210 $ 3 210 Total proceeds $ 60 7,547 $ 1,057 11,950 |
Assets Held for Sale
Assets Held for Sale | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Assets Held for Sale | Assets Held for Sale In the first and second quarters of 2017, the Company completed the sale of assets held for sale with a net book value of $11,395,000 for a gain of approximately $21,217,000 . |
Other Accrued Liabilities
Other Accrued Liabilities | 6 Months Ended |
Jun. 30, 2017 | |
Payables and Accruals [Abstract] | |
Other Accrued Liabilities | Other Accrued Liabilities Other accrued liabilities consisted of the following (amounts in thousands): June 30, December 31, Interest payable $ 15,410 $ 15,675 Income taxes payable 4,338 2,989 Legal accrual, including settlement reserve 28,484 (a) 476 LiveWatch acquisition retention bonus — 4,990 Derivative financial instruments 2,634 — Other 9,841 10,840 Total Other accrued liabilities $ 60,707 $ 34,970 (a) Amount includes $28,000,000 related to a legal settlement reserve. See note 11, Commitments, Contingencies and Other Liabilities, for further information. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following (amounts in thousands): June 30, December 31, Ascent Capital 4.00% Convertible Senior Notes due July 15, 2020 with an effective rate of 8.3% $ 80,371 $ 78,279 MONI 9.125% Senior Notes due April 1, 2020 with an effective rate of 9.4% 579,188 578,254 MONI term loan, matures September 30, 2022, LIBOR plus 5.50%, subject to a LIBOR floor of 1.00% with an effective rate of 7.0% 1,062,822 1,066,130 MONI $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 6.4% 61,467 42,570 1,783,848 1,765,233 Less current portion of long-term debt (11,000 ) (11,000 ) Long-term debt $ 1,772,848 $ 1,754,233 Convertible Notes The convertible notes total $96,775,000 in aggregate principal amount, mature on July 15, 2020 and bear interest at 4.00% per annum (the "Convertible Notes"). Interest on the Convertible Notes is payable semi-annually on January 15 and July 15 of each year. The Convertible Notes are convertible, under certain circumstances, into cash, shares of Ascent Capital's Series A common stock, par value $0.01 per share (the "Series A Common Stock"), or any combination thereof at Ascent Capital’s election. Holders of the Convertible Notes ("Noteholders") have the right, at their option, to convert all or any portion of such Convertible Notes, subject to the satisfaction of certain conditions, at an initial conversion rate of 9.7272 shares of Series A Common Stock per $1,000 principal amount of Convertible Notes (subject to adjustment in certain situations), which represents an initial conversion price per share of Series A Common Stock of approximately $102.804 (the "Conversion Price"). Ascent Capital is entitled to settle any such conversion by delivery of cash, shares of Series A Common Stock or any combination thereof at Ascent Capital's election. In addition, Noteholders have the right to submit Convertible Notes for conversion, subject to the satisfaction of certain conditions, in the event of certain corporate transactions. In the event of a fundamental change (as such term is defined in the indenture governing the Convertible Notes) at any time prior to the maturity date, each Noteholder shall have the right, at such Noteholder’s option, to require Ascent Capital to repurchase for cash any or all of such Noteholder’s Convertible Notes on the repurchase date specified by Ascent Capital at a repurchase price equal to 100% of the principal amount thereof, together with accrued and unpaid interest, including unpaid additional interest, if any, unless the repurchase date occurs after an interest record date and on or prior to the related interest payment date, as specified in the indenture. The Convertible Notes are within the scope of FASB ASC Subtopic 470-20, Debt with Conversion and Other Options , and as such are required to be separated into a liability and equity component. The carrying amount of the liability component is calculated by measuring the fair value of a similar liability (including any embedded features other than the conversion option) that does not have an associated conversion option. The carrying amount of the equity component is determined by deducting the fair value of the liability component from the initial proceeds ascribed to the Convertible Notes as a whole. The excess of the principal amount of the liability component over its carrying amount, treated as a debt discount, is amortized to interest cost over the expected life of a similar liability that does not have an associated conversion option using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification as prescribed in FASB ASC Subtopic 815-40, Contracts in an Entity’s Own Equity . The Convertible Notes are presented on the consolidated balance sheet as follows (amounts in thousands): As of As of Principal $ 96,775 $ 96,775 Unamortized discount (15,364 ) (17,324 ) Deferred debt costs (1,040 ) (1,172 ) Carrying value $ 80,371 $ 78,279 The Company is using an effective interest rate of 14.0% to calculate the accretion of the debt discount, which is being recorded as interest expense over the expected remaining term to maturity of the Convertible Notes. The Company recognized contractual interest expense of $968,000 and $1,936,000 for both the three and six months ended June 30, 2017 and 2016 . The Company amortized $ 1,065,000 and $2,092,000 of the Convertible Notes debt discount and deferred debt costs into interest expense for the three and six months ended June 30, 2017 , compared to $927,000 and $1,821,000 for three and six months ended June 30, 2016 . Hedging Transactions Relating to the Offering of the Convertible Notes In connection with the issuance of the Convertible Notes, Ascent Capital entered into separate privately negotiated purchased call options (the "Bond Hedge Transactions"). The Bond Hedge Transactions require the counterparties to offset Series A Common Stock deliverable or cash payments made by Ascent Capital upon conversion of the Convertible Notes in the event that the volume-weighted average price of Series A Common Stock on each trading day of the relevant valuation period is greater than the strike price of $102.804 , which corresponds to the Conversion Price of the Convertible Notes. The Bond Hedge Transactions cover, subject to anti-dilution adjustments, approximately 1,007,000 shares of Series A Common Stock, which is equivalent to the number of shares initially issuable upon conversion of the Convertible Notes, and are expected to reduce the potential dilution with respect to the Series A Common Stock, and/or offset potential cash payments Ascent Capital is required to make in excess of the principal amount of the Convertible Notes upon conversion. Concurrently with the Bond Hedge Transactions, Ascent Capital also entered into separate privately negotiated warrant transactions with each of the call option counterparties (the "Warrant Transactions"). The warrants are European options, and are exercisable in tranches on consecutive trading days starting after the maturity of the Convertible Notes. The warrants cover the same initial number of shares of Series A Common Stock, subject to anti-dilution adjustments, as the Bond Hedge Transactions. The Warrant Transactions require Ascent Capital to deliver Series A Common Stock or make cash payments to the counterparties on each expiration date with a value equal to the number of warrants exercisable on that date times the excess of the volume-weighted average price of the Series A Common Stock over the strike price of $118.62 , which effectively reflects a 50% conversion premium on the Convertible Notes. As such, the Warrant Transactions may have a dilutive effect with respect to the Common Stock to the extent the Warrant Transactions are settled with shares of Series A Common Stock. Ascent Capital may elect to settle its delivery obligation under the Warrant Transactions in cash. The Bond Hedge Transactions and Warrant Transactions are separate transactions entered into by Ascent Capital, are not part of the terms of the Convertible Notes and will not affect the Noteholders’ rights under the Convertible Notes. The Noteholders will not have any rights with respect to the Bond Hedge Transactions or the Warrant Transactions. Senior Notes The senior notes total $ 585,000,000 in principal, mature on April 1, 2020 and bear interest at 9.125% per annum (the "Senior Notes"). Interest payments are due semi-annually on April 1 and October 1 of each year. The Senior Notes are guaranteed by all of MONI’s existing domestic subsidiaries. Ascent Capital has not guaranteed any of MONI's obligations under the Senior Notes. As of June 30, 2017 , the Senior Notes had deferred financing costs and unamortized premium, net of accumulated amortization of $ 5,812,000 . Credit Facility On September 30, 2016, MONI 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, 2017 , the Credit Facility term loan has a principal amount of $ 1,091,750,000 , maturing on September 30, 2022. The term loan requires quarterly interest payments and quarterly principal payments of $2,750,000 . The 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 $ 63,500,000 as of June 30, 2017 and matures on September 30, 2021. The Credit Facility revolver 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. As of June 30, 2017 , $ 231,500,000 is available for borrowing under the Credit Facility revolver. At any time after the occurrence of an event of default under the Credit Facility, the lenders may, among other options, declare any amounts outstanding under the Credit Facility immediately due and payable and terminate any commitment to make further loans under the Credit Facility. In addition, failure to comply with restrictions contained in the Senior Notes could lead to an event of default under the Credit Facility. The Credit Facility is secured by a pledge of all of the outstanding stock of MONI and all of its existing subsidiaries and is guaranteed by all of MONI's existing domestic subsidiaries. Ascent Capital has not guaranteed any of MONI's obligations under the Credit Facility. As of June 30, 2017 , MONI has deferred financing costs and unamortized discounts, net of accumulated amortization, of $ 30,961,000 related to 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, MONI has 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”). The Swaps have been designated as effective hedges of the Company’s variable rate debt and qualify for hedge accounting. As a result of these interest rate swaps, MONI's current effective weighted average interest rate on the borrowings under the Credit Facility term loan is 7.18% . See note 7, Derivatives, for further disclosures related to these derivative instruments. The terms of the Convertible Notes, the Senior Notes and the Credit Facility provide for certain financial and nonfinancial covenants. As of June 30, 2017 , the Company was in compliance with all required covenants under these financing arrangements. As of June 30, 2017 , principal payments scheduled to be made on the Company’s debt obligations are as follows (amounts in thousands): Remainder of 2017 $ 5,500 2018 11,000 2019 11,000 2020 692,775 2021 74,500 2022 1,042,250 Thereafter — Total principal payments $ 1,837,025 Less: Unamortized deferred debt costs, discounts and premium, net 53,177 Total debt on condensed consolidated balance sheet $ 1,783,848 |
Derivatives
Derivatives | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives Interest Rate Risk MONI utilizes interest rate swap agreements to reduce the interest rate risk inherent in MONI's variable rate Credit Facility term loan. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatility. The Company incorporates 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. As of June 30, 2017 , the Swaps’ outstanding notional balances, effective dates, maturity dates and interest rates paid and received are noted below: Notional Effective Date Maturity Date Fixed Rate Paid Variable Rate Received $ 521,125,000 March 28, 2013 March 23, 2018 1.884% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 138,112,500 March 28, 2013 March 23, 2018 1.384% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 107,977,387 September 30, 2013 March 23, 2018 1.959% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor 107,977,387 September 30, 2013 March 23, 2018 1.850% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor 191,475,002 March 23, 2018 April 9, 2022 3.110% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 250,000,000 March 23, 2018 April 9, 2022 3.110% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 50,000,000 March 23, 2018 April 9, 2022 2.504% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor 377,000,000 March 23, 2018 September 30, 2022 1.833% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) On March 25, 2013 and September 30, 2016, MONI negotiated amendments to the terms of these interest rate swap agreements (the "Existing Swap Agreements," as amended, the "Amended Swaps"). The Amended Swaps are held with the same counterparties as the Existing Swap Agreements. Upon entering into the Amended Swaps, MONI simultaneously dedesignated the Existing Swap Agreements and redesignated the Amended Swaps as cash flow hedges for the underlying change in the swap terms. The amounts previously recognized in Accumulated other comprehensive loss relating to the dedesignation are recognized in Interest expense over the remaining life of the Amended Swaps. All of the Swaps are designated and qualify as cash flow hedging instruments, with the effective portion of the Swaps' change in fair value recorded in Accumulated other comprehensive loss. Any ineffective portions of the Swaps' change in fair value are recognized in current earnings in Interest expense. Changes in the fair value of the Swaps recognized in Accumulated other comprehensive loss are reclassified to Interest expense when the hedged interest payments on the underlying debt are recognized. Amounts in Accumulated other comprehensive loss expected to be recognized in Interest expense in the coming 12 months total approximately $5,216,000 . 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 2017 2016 2017 2016 Effective portion of loss recognized in Accumulated other comprehensive loss $ (7,243 ) (6,506 ) $ (7,976 ) (20,163 ) Effective portion of loss reclassified from Accumulated other comprehensive loss into Net loss (a) $ (1,466 ) (1,809 ) $ (3,248 ) (3,621 ) Ineffective portion of amount of loss recognized into Net loss (a) $ (110 ) (19 ) $ (92 ) (77 ) (a) Amounts are included in Interest expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss). Foreign Exchange Risk Ascent Capital entered into a foreign currency forward exchange contract to hedge British Pound exposure associated with the sale of a property in the United Kingdom. This foreign currency forward exchange contract matured on June 30, 2017. The notional amount of the foreign exchange contract was £13,500,000 . For the three and six months ended June 30, 2017, Ascent Capital recognized a loss on this instrument of approximately $596,000 and $1,150,000 , respectively. The loss on this instrument is recognized in Selling, general and administrative, including stock-based compensation expense on the condensed consolidated statements of operations and comprehensive income (loss). |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2017 | |
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, 2017 and December 31, 2016 (amounts in thousands): Level 1 Level 2 Level 3 Total June 30, 2017 Investments in marketable securities (a) 80,484 — — 80,484 Interest rate swap agreement - assets (b) — 5,006 — 5,006 Interest rate swap agreements - liabilities (b) — (18,258 ) — (18,258 ) Total $ 80,484 (13,252 ) — $ 67,232 December 31, 2016 Investments in marketable securities (a) 77,825 — — 77,825 Interest rate swap agreement - assets (b) — 8,521 — 8,521 Interest rate swap agreements - liabilities (b) — (16,948 ) — (16,948 ) Total $ 77,825 (8,427 ) — $ 69,398 (a) Level 1 investments primarily consist of diversified corporate bond funds. (b) Interest rate swap agreement asset values are included in Other assets and interest rate swap agreement liability values are included in current Other accrued liabilities or non-current Derivative financial instruments on the consolidated balance sheets depending on the maturity date of the swap. 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, 2017 December 31, 2016 Long term debt, including current portion: Carrying value $ 1,783,848 $ 1,765,233 Fair value (a) 1,795,785 1,770,694 (a) The fair value is based on market quotations from third party financial institutions and is classified as Level 2 in the hierarchy. Ascent Capital’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. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock The following table presents the activity in the Series A Common Stock and Ascent Capital's Series B common stock, par value $0.01 per share (the "Series B Common Stock"), for the six months ended June 30, 2017 : Series A Common Stock Series B Common Stock Outstanding balance at December 31, 2016 11,969,152 381,859 Conversion from Series B to Series A Shares 331 (331 ) Issuance of stock awards 33,806 — Restricted stock forfeitures and tax withholding (29,561 ) — Outstanding balance at June 30, 2017 11,973,728 381,528 Accumulated Other Comprehensive Income (Loss) The following table provides a summary of the changes in Accumulated other comprehensive income (loss) for the period presented (amounts in thousands): Foreign currency translation adjustments Unrealized holding gains and losses on marketable securities, net (a) Unrealized gains and losses on derivative instruments, net (b) Accumulated other comprehensive loss As of December 31, 2016 $ (1,540 ) 1,072 (8,957 ) $ (9,425 ) Gain (loss) through Accumulated other comprehensive loss, net of income tax of $0 642 1,090 (7,976 ) (6,244 ) Reclassifications of loss (gain) into Net loss, net of income tax of $0 — (3 ) 3,248 3,245 Net current period other comprehensive income (loss) 642 1,087 (4,728 ) (2,999 ) As of June 30, 2017 $ (898 ) 2,159 (13,685 ) $ (12,424 ) (a) Amounts reclassified into net loss are included in Other income, net on the condensed consolidated statement of operations. See note 3, Investments in Marketable Securities, for further information. (b) Amounts reclassified into net loss are included in Interest expense on the condensed consolidated statement of operations. See note 7, Derivatives, for further information. |
Basic and Diluted Earnings (Los
Basic and Diluted Earnings (Loss) Per Common Share-Series A and Series B | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings (Loss) Per Common Share-Series A and Series B | Basic and Diluted Earnings (Loss) Per Common Share—Series A and Series B Basic earnings (loss) per common share ("EPS") is computed by dividing net earnings (loss) by the weighted average number of shares of Series A Common Stock and Series B Common Stock outstanding for the period. Diluted EPS is computed by dividing net earnings (loss) by the sum of the weighted average number of shares of Series A Common Stock and Series B Common Stock outstanding and the effect of dilutive securities such as outstanding stock options, unvested restricted stock and restricted stock units. Three Months Ended Six Months Ended 2017 2016 2017 2016 Weighted average Series A and Series B shares — basic and diluted 12,168,582 12,364,767 12,151,417 12,407,830 For all periods presented, diluted EPS is computed the same as basic EPS because the Company recorded a loss from continuing operations, which would make potentially dilutive securities anti-dilutive. For the three and six months ended June 30, 2017 , diluted shares outstanding excluded the effect of 344,037 potentially dilutive unvested restricted stock awards and performance stock units because their inclusion would have been anti-dilutive. For the three and six months ended June 30, 2016 , diluted shares outstanding excluded the effect of 435,347 potentially dilutive stock options and unvested restricted stock awards because their inclusion would have been anti-dilutive. |
Commitments, Contingencies and
Commitments, Contingencies and Other Liabilities | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Other Liabilities | Commitments, Contingencies and Other Liabilities MONI 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) of 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. During the three months ended June 30, 2017, MONI and the plaintiffs agreed to settle this litigation, and MONI has set up a legal reserve for $28,000,000 . MONI is actively seeking to recover $28,000,000 under its insurance policies in connection with the settlement. The settlement remains subject to court approval and the court’s entry of a final order dismissing the actions. 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. |
Reportable Business Segments
Reportable Business Segments | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Reportable Business Segments | Reportable Business Segments Description of Segments The Company operates through two reportable business segments according to the nature and economic characteristics of its services as well as the manner in which the information issued internally by the Company's key decision maker, who is the Company's Chief Executive Officer. The Company's business segments are as follows: MONI The MONI segment is engaged in the business of providing security alarm monitoring services: monitoring signals arising from burglaries, fires, medical alerts and other events through security systems at subscribers' premises, as well as providing customer service and technical support. MONI primarily outsources the sales, installation and most of its field service functions to its dealers. LiveWatch LiveWatch is a Do-It-Yourself home security provider offering professionally monitored security services through a direct-to-consumer sales channel. LiveWatch offers a differentiated go-to-market strategy through direct response TV, internet and radio advertising. When a customer initiates the process to obtain monitoring services, LiveWatch pre-configures the alarm monitoring system based on customer specifications. LiveWatch then packages and ships the equipment directly to the customer. The customer self-installs the equipment on-site and activates the monitoring service over the phone. Other Activities Other Activities primarily consists of Ascent Capital's corporate costs, including administrative and other activities not associated with the operation of the reportable segments, and eliminations. As they arise, transactions between segments are recorded on an arm's length basis using relevant market prices. The following table sets forth selected data from the accompanying condensed consolidated statements of operations for the periods indicated (amounts in thousands): MONI LiveWatch Other Consolidated Three Months Ended June 30, 2017 Net revenue $ 133,536 $ 6,962 $ — $ 140,498 Depreciation and amortization $ 60,975 $ 1,115 $ 7 $ 62,097 Net income (loss) from continuing operations before income taxes $ (43,480 ) $ (4,845 ) $ 9,460 $ (38,865 ) Three Months Ended June 30, 2016 Net revenue $ 138,174 $ 5,482 $ — $ 143,656 Depreciation and amortization $ 62,877 $ 1,085 $ 89 $ 64,051 Net loss from continuing operations before income taxes $ (9,703 ) $ (5,063 ) $ (5,671 ) $ (20,437 ) Six Months Ended June 30, 2017 Net revenue $ 267,944 $ 13,754 $ — $ 281,698 Depreciation and amortization $ 121,483 $ 2,274 $ 14 $ 123,771 Net income (loss) from continuing operations before income taxes $ (56,779 ) $ (10,775 ) $ 11,558 $ (55,996 ) Six Months Ended June 30, 2016 Net revenue $ 276,270 $ 10,654 $ — $ 286,924 Depreciation and amortization $ 125,029 $ 2,230 $ 177 $ 127,436 Net loss from continuing operations before income taxes $ (22,854 ) $ (10,332 ) $ (8,649 ) $ (41,835 ) The following table sets forth selected data from the accompanying condensed consolidated balance sheets for the periods indicated (amounts in thousands): MONI LiveWatch Other Consolidated Balance at June 30, 2017 Subscriber accounts, net of amortization $ 1,338,117 $ 21,604 $ — $ 1,359,721 Goodwill $ 527,502 $ 36,047 $ — $ 563,549 Total assets $ 2,038,719 $ 63,719 $ 4,804 $ 2,107,242 Balance at December 31, 2016 Subscriber accounts, net of amortization $ 1,364,804 $ 21,956 $ — $ 1,386,760 Goodwill $ 527,502 $ 36,047 $ — $ 563,549 Total assets $ 2,062,838 $ 63,916 $ 5,678 $ 2,132,432 |
Recent Accounting Pronounceme20
Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). Under the update, revenue will be recognized based on a five-step model. The core principle of the model is that revenue will be recognized when the transfer of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In the third quarter of 2015, the FASB deferred the effective date of the standard to annual and interim periods beginning after December 15, 2017. In March and April 2016, the FASB issued amendments to provide clarification on assessment of collectability criteria, presentation of sales taxes and measurement of non-cash consideration. In addition, the amendment provided clarification and included simplification to transaction guidance on contract modifications and completed contracts at transaction. In December 2016, the FASB issued amendments to provide clarification on codification and guidance application. The standard allows the option of either a full retrospective adoption, meaning the standard is applied to all periods presented, or modified retrospective adoption, meaning the standard is applied only to the most current period. The Company currently plans to adopt ASU 2014-09 using the full retrospective approach. However, a final decision regarding the adoption method has not been made at this time. The Company's final determination will depend on the significance of the impact of the new standard on the Company's financial results. The Company is continuing its evaluation of the impact of ASU 2014-09 on the accounting policies, processes, and system requirements. The Company has assigned internal resources in addition to the engagement of a third party service provider to assist in the evaluation. While the Company is in the process of assessing revenue recognition and cost deferral policies across each type of its contracts, the Company does not know or cannot reasonably estimate the impact of the adoption ASU 2014-09 on its financial position, results of operations and cash flows. In February 2016, 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. For leases with a term of twelve months or less, the Company is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Further, ASU 2016-02 requires a finance lease to be recognized as both an interest expense and an amortization of the associated expense. Operating leases generally recognize the associated expense on a straight line basis. ASU 2016-02 requires the Company to adopt the standard using a modified retrospective approach and becomes effective on January 1, 2019. The Company is currently evaluating the impact that ASU 2016-02 will have on its financial position, results of operations and cash flows. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). Currently, the fair value of the reporting unit is compared with the carrying value of the reporting unit (identified as "Step 1"). If the fair value of the reporting unit is lower than its carrying amount, then the implied fair value of goodwill is calculated. If the implied fair value of goodwill is lower than the carrying value of goodwill an impairment is recognized (identified as "Step 2"). ASU 2017-04 eliminates Step 2 from the impairment test; therefore, a goodwill impairment will be recognized as the difference of the fair value and the carrying value. ASU 2017-04 becomes effective on January 1, 2020 with early adoption permitted. The Company is currently evaluating when to adopt the standard. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU 2017-09"). ASU 2017-09 requires modification accounting in Topic 718 to be applied to a change to the terms or conditions of a share-based payment award unless the fair value, vesting conditions and classification of the modified award are the same immediately before and after the modification of the award. ASU 2017-09 is effective for annual and interim periods beginning after December 15, 2017, and requires a prospective approach. Early adoption is permitted. The Company plans to adopt the standard when it becomes effective. The adoption is not expected to have a material impact on the Company's financial position, results of operations and cash flows. |
Investments in Marketable Sec21
Investments in Marketable Securities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Activity of Investments Classified as Available-For-Sale Securities | The following table presents a summary of amounts recorded on the condensed consolidated balance sheets (amounts in thousands): As of June 30, 2017 Cost Basis (b) Unrealized Gains Unrealized Losses Total Equity securities $ 3,704 $ — $ (131 ) $ 3,573 Mutual funds (a) 74,621 2,290 — 76,911 Ending balance $ 78,325 $ 2,290 $ (131 ) $ 80,484 As of December 31, 2016 Cost Basis (b) Unrealized Gains Unrealized Losses Total Equity securities $ 3,767 $ — $ (396 ) $ 3,371 Mutual funds (a) 72,986 1,483 (15 ) 74,454 Ending balance $ 76,753 $ 1,483 $ (411 ) $ 77,825 (a) Primarily consists of corporate bond funds. (b) When an other-than-temporary impairment occurs, the Company reduces the cost basis of the marketable security involved. In the second quarter of 2016, the Company recognized non-cash charges for an other-than-temporary impairment of $1,068,000 on its mutual funds and $836,000 on its equity securities for a total other-than-temporary impairment loss on marketable securities of $1,904,000 . The mutual fund impairments were attributable to a low interest rate environment and widening credit spreads. The equity security impairment was primarily attributable to foreign exchange losses based on weakening of the trading currency of the underlying investment. |
Schedule of Realized Gain (Loss) | The following table provides the realized investment gains and losses and the total proceeds received from the sale of marketable securities (amounts in thousands): Three Months Ended Six Months Ended 2017 2016 2017 2016 Gross realized gains $ — 158 $ 6 244 Gross realized losses $ 3 210 $ 3 210 Total proceeds $ 60 7,547 $ 1,057 11,950 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Other Accrued Liabilities | Other accrued liabilities consisted of the following (amounts in thousands): June 30, December 31, Interest payable $ 15,410 $ 15,675 Income taxes payable 4,338 2,989 Legal accrual, including settlement reserve 28,484 (a) 476 LiveWatch acquisition retention bonus — 4,990 Derivative financial instruments 2,634 — Other 9,841 10,840 Total Other accrued liabilities $ 60,707 $ 34,970 (a) Amount includes $28,000,000 related to a legal settlement reserve. See note 11, Commitments, Contingencies and Other Liabilities, for further information. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consisted of the following (amounts in thousands): June 30, December 31, Ascent Capital 4.00% Convertible Senior Notes due July 15, 2020 with an effective rate of 8.3% $ 80,371 $ 78,279 MONI 9.125% Senior Notes due April 1, 2020 with an effective rate of 9.4% 579,188 578,254 MONI term loan, matures September 30, 2022, LIBOR plus 5.50%, subject to a LIBOR floor of 1.00% with an effective rate of 7.0% 1,062,822 1,066,130 MONI $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 6.4% 61,467 42,570 1,783,848 1,765,233 Less current portion of long-term debt (11,000 ) (11,000 ) Long-term debt $ 1,772,848 $ 1,754,233 |
Schedule of Convertible Notes Presented on the Consolidated Balance Sheet | The Convertible Notes are presented on the consolidated balance sheet as follows (amounts in thousands): As of As of Principal $ 96,775 $ 96,775 Unamortized discount (15,364 ) (17,324 ) Deferred debt costs (1,040 ) (1,172 ) Carrying value $ 80,371 $ 78,279 |
Schedule of Principal Payments | As of June 30, 2017 , principal payments scheduled to be made on the Company’s debt obligations are as follows (amounts in thousands): Remainder of 2017 $ 5,500 2018 11,000 2019 11,000 2020 692,775 2021 74,500 2022 1,042,250 Thereafter — Total principal payments $ 1,837,025 Less: Unamortized deferred debt costs, discounts and premium, net 53,177 Total debt on condensed consolidated balance sheet $ 1,783,848 |
Derivatives (Tables)
Derivatives (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Swaps' Outstanding Notional Balance and Terms | As of June 30, 2017 , the Swaps’ outstanding notional balances, effective dates, maturity dates and interest rates paid and received are noted below: Notional Effective Date Maturity Date Fixed Rate Paid Variable Rate Received $ 521,125,000 March 28, 2013 March 23, 2018 1.884% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 138,112,500 March 28, 2013 March 23, 2018 1.384% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 107,977,387 September 30, 2013 March 23, 2018 1.959% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor 107,977,387 September 30, 2013 March 23, 2018 1.850% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor 191,475,002 March 23, 2018 April 9, 2022 3.110% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 250,000,000 March 23, 2018 April 9, 2022 3.110% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) 50,000,000 March 23, 2018 April 9, 2022 2.504% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor 377,000,000 March 23, 2018 September 30, 2022 1.833% 3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a) On March 25, 2013 and September 30, 2016, MONI negotiated amendments to the terms of these interest rate swap agreements (the "Existing Swap Agreements," as amended, the "Amended Swaps"). The Amended Swaps are held with the same counterparties as the Existing Swap Agreements. Upon entering into the Amended Swaps, MONI simultaneously dedesignated the Existing Swap Agreements and redesignated the Amended Swaps as cash flow hedges for the underlying change in the swap terms. The amounts previously recognized in Accumulated other comprehensive loss relating to the dedesignation are recognized in Interest expense over the remaining life of the Amended Swaps. |
Schedule of Impact of the Derivatives Designated as Cash Flow Hedges | 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 2017 2016 2017 2016 Effective portion of loss recognized in Accumulated other comprehensive loss $ (7,243 ) (6,506 ) $ (7,976 ) (20,163 ) Effective portion of loss reclassified from Accumulated other comprehensive loss into Net loss (a) $ (1,466 ) (1,809 ) $ (3,248 ) (3,621 ) Ineffective portion of amount of loss recognized into Net loss (a) $ (110 ) (19 ) $ (92 ) (77 ) (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, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Level of Assets and Liabilities 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, 2017 and December 31, 2016 (amounts in thousands): Level 1 Level 2 Level 3 Total June 30, 2017 Investments in marketable securities (a) 80,484 — — 80,484 Interest rate swap agreement - assets (b) — 5,006 — 5,006 Interest rate swap agreements - liabilities (b) — (18,258 ) — (18,258 ) Total $ 80,484 (13,252 ) — $ 67,232 December 31, 2016 Investments in marketable securities (a) 77,825 — — 77,825 Interest rate swap agreement - assets (b) — 8,521 — 8,521 Interest rate swap agreements - liabilities (b) — (16,948 ) — (16,948 ) Total $ 77,825 (8,427 ) — $ 69,398 (a) Level 1 investments primarily consist of diversified corporate bond funds. (b) Interest rate swap agreement asset values are included in Other assets and interest rate swap agreement liability values are included in current Other accrued liabilities or non-current Derivative financial instruments on the consolidated balance sheets depending on the maturity date of the swap. |
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, 2017 December 31, 2016 Long term debt, including current portion: Carrying value $ 1,783,848 $ 1,765,233 Fair value (a) 1,795,785 1,770,694 (a) The fair value is based on market quotations from third party financial institutions and is classified as Level 2 in the hierarchy. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Activity in the Series A and Series B Common Stock | The following table presents the activity in the Series A Common Stock and Ascent Capital's Series B common stock, par value $0.01 per share (the "Series B Common Stock"), for the six months ended June 30, 2017 : Series A Common Stock Series B Common Stock Outstanding balance at December 31, 2016 11,969,152 381,859 Conversion from Series B to Series A Shares 331 (331 ) Issuance of stock awards 33,806 — Restricted stock forfeitures and tax withholding (29,561 ) — Outstanding balance at June 30, 2017 11,973,728 381,528 |
Summary of the Changes in Accumulated Other Comprehensive Loss | The following table provides a summary of the changes in Accumulated other comprehensive income (loss) for the period presented (amounts in thousands): Foreign currency translation adjustments Unrealized holding gains and losses on marketable securities, net (a) Unrealized gains and losses on derivative instruments, net (b) Accumulated other comprehensive loss As of December 31, 2016 $ (1,540 ) 1,072 (8,957 ) $ (9,425 ) Gain (loss) through Accumulated other comprehensive loss, net of income tax of $0 642 1,090 (7,976 ) (6,244 ) Reclassifications of loss (gain) into Net loss, net of income tax of $0 — (3 ) 3,248 3,245 Net current period other comprehensive income (loss) 642 1,087 (4,728 ) (2,999 ) As of June 30, 2017 $ (898 ) 2,159 (13,685 ) $ (12,424 ) (a) Amounts reclassified into net loss are included in Other income, net on the condensed consolidated statement of operations. See note 3, Investments in Marketable Securities, for further information. (b) Amounts reclassified into net loss are included in Interest expense on the condensed consolidated statement of operations. See note 7, Derivatives, for further information. |
Basic and Diluted Earnings (L27
Basic and Diluted Earnings (Loss) Per Common Share-Series A and Series B (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares Used in Calculation of Basic and Diluted Earnings (Loss) Per Share | Diluted EPS is computed by dividing net earnings (loss) by the sum of the weighted average number of shares of Series A Common Stock and Series B Common Stock outstanding and the effect of dilutive securities such as outstanding stock options, unvested restricted stock and restricted stock units. Three Months Ended Six Months Ended 2017 2016 2017 2016 Weighted average Series A and Series B shares — basic and diluted 12,168,582 12,364,767 12,151,417 12,407,830 |
Reportable Business Segments (T
Reportable Business Segments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table sets forth selected data from the accompanying condensed consolidated balance sheets for the periods indicated (amounts in thousands): MONI LiveWatch Other Consolidated Balance at June 30, 2017 Subscriber accounts, net of amortization $ 1,338,117 $ 21,604 $ — $ 1,359,721 Goodwill $ 527,502 $ 36,047 $ — $ 563,549 Total assets $ 2,038,719 $ 63,719 $ 4,804 $ 2,107,242 Balance at December 31, 2016 Subscriber accounts, net of amortization $ 1,364,804 $ 21,956 $ — $ 1,386,760 Goodwill $ 527,502 $ 36,047 $ — $ 563,549 Total assets $ 2,062,838 $ 63,916 $ 5,678 $ 2,132,432 The following table sets forth selected data from the accompanying condensed consolidated statements of operations for the periods indicated (amounts in thousands): MONI LiveWatch Other Consolidated Three Months Ended June 30, 2017 Net revenue $ 133,536 $ 6,962 $ — $ 140,498 Depreciation and amortization $ 60,975 $ 1,115 $ 7 $ 62,097 Net income (loss) from continuing operations before income taxes $ (43,480 ) $ (4,845 ) $ 9,460 $ (38,865 ) Three Months Ended June 30, 2016 Net revenue $ 138,174 $ 5,482 $ — $ 143,656 Depreciation and amortization $ 62,877 $ 1,085 $ 89 $ 64,051 Net loss from continuing operations before income taxes $ (9,703 ) $ (5,063 ) $ (5,671 ) $ (20,437 ) Six Months Ended June 30, 2017 Net revenue $ 267,944 $ 13,754 $ — $ 281,698 Depreciation and amortization $ 121,483 $ 2,274 $ 14 $ 123,771 Net income (loss) from continuing operations before income taxes $ (56,779 ) $ (10,775 ) $ 11,558 $ (55,996 ) Six Months Ended June 30, 2016 Net revenue $ 276,270 $ 10,654 $ — $ 286,924 Depreciation and amortization $ 125,029 $ 2,230 $ 177 $ 127,436 Net loss from continuing operations before income taxes $ (22,854 ) $ (10,332 ) $ (8,649 ) $ (41,835 ) |
Investments in Marketable Sec29
Investments in Marketable Securities - Schedule of Investment Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2017 | Dec. 31, 2016 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Cost Basis | $ 78,325 | $ 76,753 | |
Unrealized Gains | 2,290 | 1,483 | |
Unrealized Losses | (131) | (411) | |
Total | 80,484 | 77,825 | |
Other than temporary impairment losses, investments, available-for-sale securities | $ 1,904 | ||
Equity securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Cost Basis | 3,704 | 3,767 | |
Unrealized Gains | 0 | 0 | |
Unrealized Losses | (131) | (396) | |
Total | 3,573 | 3,371 | |
Other than temporary impairment losses, investments, available-for-sale securities | 836 | ||
Mutual funds | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Cost Basis | 74,621 | 72,986 | |
Unrealized Gains | 2,290 | 1,483 | |
Unrealized Losses | 0 | (15) | |
Total | $ 76,911 | $ 74,454 | |
Other than temporary impairment losses, investments, available-for-sale securities | $ 1,068 |
Investments in Marketable Sec30
Investments in Marketable Securities - Realized Gain (Loss) On Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Gross realized gains | $ 0 | $ 158 | $ 6 | $ 244 |
Gross realized losses | 3 | 210 | 3 | 210 |
Total proceeds | $ 60 | $ 7,547 | $ 1,057 | $ 11,950 |
Assets Held for Sale - Narrativ
Assets Held for Sale - Narrative (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Property, Plant and Equipment [Abstract] | |
Net book value of assets held for sale during the period | $ 11,395 |
Gain on disposition of assets | $ 21,217 |
Other Accrued Liabilities - Sch
Other Accrued Liabilities - Schedule of Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Loss Contingencies [Line Items] | ||
Interest payable | $ 15,410 | $ 15,675 |
Income taxes payable | 4,338 | 2,989 |
Legal accrual, including settlement reserve | 28,484 | 476 |
LiveWatch acquisition retention bonus | 0 | 4,990 |
Derivative financial instruments | 2,634 | 0 |
Other | 9,841 | 10,840 |
Total Other accrued liabilities | 60,707 | $ 34,970 |
Legal settlement reserve | 28,000 | |
MONI | ||
Loss Contingencies [Line Items] | ||
Legal settlement reserve | $ 28,000 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long Term Debt (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Sep. 30, 2016 | |
Debt Instrument [Line Items] | ||||||
Carrying value | $ 1,783,848,000 | $ 1,783,848,000 | $ 1,765,233,000 | |||
Less current portion of long-term debt | (11,000,000) | (11,000,000) | (11,000,000) | |||
Long-term debt | 1,772,848,000 | 1,772,848,000 | 1,754,233,000 | |||
Interest expense | (38,165,000) | $ (31,587,000) | (75,651,000) | $ (63,011,000) | ||
Convertible Senior Notes 4 Percent Due 2020 | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Carrying value | $ 80,371,000 | $ 80,371,000 | 78,279,000 | |||
Stated interest rate on debt | 4.00% | 4.00% | ||||
Effective interest rate | 8.30% | 8.30% | ||||
Interest expense | $ (968,000) | $ (968,000) | $ (1,936,000) | $ (1,936,000) | ||
Senior Notes 9.125 Percent Due 2020 | MONI | Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Carrying value | $ 579,188,000 | $ 579,188,000 | 578,254,000 | |||
Stated interest rate on debt | 9.125% | 9.125% | ||||
Effective interest rate | 9.40% | 9.40% | ||||
Term Loan Due September 2022 | MONI | Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Carrying value | $ 1,062,822,000 | $ 1,062,822,000 | 1,066,130,000 | |||
Effective interest rate | 7.00% | 7.00% | ||||
Term Loan Due September 2022 | MONI | Term Loan | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Spread on variable rate index | 5.50% | |||||
Variable rate basis floor | 1.00% | |||||
Revolving Credit Facility Due 2021 | MONI | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Carrying value | $ 61,467,000 | $ 61,467,000 | $ 42,570,000 | |||
Effective interest rate | 6.40% | 6.40% | ||||
Borrowing capacity | $ 295,000,000 | $ 295,000,000 | $ 295,000,000 | |||
Revolving Credit Facility Due 2021 | MONI | Revolving Credit Facility | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Spread on variable rate index | 4.00% | |||||
Variable rate basis floor | 1.00% |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands | Sep. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||||
Interest expense | $ 38,165,000 | $ 31,587,000 | $ 75,651,000 | $ 63,011,000 | ||
MONI | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit | 63,500,000 | 63,500,000 | ||||
Remaining borrowing capacity | 231,500,000 | 231,500,000 | ||||
MONI | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, unamortized discount (premium) and debt issuance costs, net | $ 30,961,000 | $ 30,961,000 | ||||
MONI | LIBOR | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Unused capacity commitment fee percentage | 0.50% | |||||
Series A Common Stock | ||||||
Debt Instrument [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||
Term Loan | Interest Rate Swap | MONI | Designated as Hedging Instrument | ||||||
Debt Instrument [Line Items] | ||||||
Derivative, fixed interest rate | 7.18% | 7.18% | ||||
Convertible Senior Notes 4 Percent Due 2020 | Warrant | ||||||
Debt Instrument [Line Items] | ||||||
Strike price (in dollars per share) | $ 118.62 | $ 118.62 | ||||
Warrant strike price, conversion premium, percentage | 50.00% | |||||
Convertible Senior Notes 4 Percent Due 2020 | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Principal | $ 96,775,000 | $ 96,775,000 | ||||
Stated interest rate on debt | 4.00% | 4.00% | ||||
Principal amount for conversion ratio | $ 1,000 | $ 1,000 | ||||
Redemption price percentage | 100.00% | |||||
Effective interest rate to calculate accretion | 14.00% | 14.00% | ||||
Interest expense | $ 968,000 | 968,000 | $ 1,936,000 | 1,936,000 | ||
Amortization of debt discount and deferred debt costs | $ 1,065,000 | $ 927,000 | $ 2,092,000 | $ 1,821,000 | ||
Convertible Senior Notes 4 Percent Due 2020 | Convertible Debt | Series A Common Stock | ||||||
Debt Instrument [Line Items] | ||||||
Conversion ratio on debt | 9.7272 | |||||
Conversion price (in dollars per share) | $ 102.804 | $ 102.804 | ||||
Convertible Senior Notes 4 Percent Due 2020 | Convertible Debt | Series A Common Stock | Call Option | ||||||
Debt Instrument [Line Items] | ||||||
Shares attributable to dilutive effect of debt conversion (in shares) | 1,007 | |||||
Senior Notes 9.125 Percent Due 2020 | Senior Notes Due April 2020 | MONI | ||||||
Debt Instrument [Line Items] | ||||||
Principal | $ 585,000,000 | $ 585,000,000 | ||||
Stated interest rate on debt | 9.125% | 9.125% | ||||
Accumulated amortization, debt issuance costs | $ 5,812,000 | $ 5,812,000 | ||||
Term Loan Due September 2022 | Term Loan | MONI | ||||||
Debt Instrument [Line Items] | ||||||
Principal | $ 1,100,000,000 | 1,091,750,000 | 1,091,750,000 | |||
Debt discount on purchase price, percentage | 1.50% | |||||
Periodic payment of principal and interest | $ 2,750,000 | |||||
Term Loan Due September 2022 | Term Loan | MONI | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Spread on variable rate index | 5.50% | |||||
Variable rate basis floor | 1.00% | |||||
Revolving Credit Facility Due 2021 | Revolving Credit Facility | MONI | ||||||
Debt Instrument [Line Items] | ||||||
Borrowing capacity | $ 295,000,000 | $ 295,000,000 | $ 295,000,000 | |||
Revolving Credit Facility Due 2021 | Revolving Credit Facility | MONI | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Spread on variable rate index | 4.00% | |||||
Variable rate basis floor | 1.00% |
Long-Term Debt - Schedule of Co
Long-Term Debt - Schedule of Convertible Notes (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Principal | $ 1,837,025 | |
Carrying value | 1,783,848 | $ 1,765,233 |
Convertible Senior Notes 4 Percent Due 2020 | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Principal | 96,775 | 96,775 |
Unamortized discount | (15,364) | (17,324) |
Deferred debt costs | (1,040) | (1,172) |
Carrying value | $ 80,371 | $ 78,279 |
Long-Term Debt - Maturities of
Long-Term Debt - Maturities of Long and Short Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Remainder of 2017 | $ 5,500 | |
2,018 | 11,000 | |
2,019 | 11,000 | |
2,020 | 692,775 | |
2,021 | 74,500 | |
2,022 | 1,042,250 | |
Thereafter | 0 | |
Total principal payments | 1,837,025 | |
Unamortized deferred debt costs, discounts and premium, net | 53,177 | |
Carrying value | $ 1,783,848 | $ 1,765,233 |
Derivatives - Summary of Deriva
Derivatives - Summary of Derivative Instruments (Details) | 6 Months Ended |
Jun. 30, 2017USD ($) | |
1.884 % interest rate swaps | |
Derivatives | |
Notional | $ 521,125,000 |
Fixed Rate Paid | 1.884% |
Variable interest rate base | 3 mo.USD-LIBOR-BBA |
Variable interest rate base floor | 1.00% |
1.384 % interest rate swaps | |
Derivatives | |
Notional | $ 138,112,500 |
Fixed Rate Paid | 1.384% |
Variable interest rate base | 3 mo.USD-LIBOR-BBA |
Variable interest rate base floor | 1.00% |
1.959 % interest rate swaps | |
Derivatives | |
Notional | $ 107,977,386.8 |
Fixed Rate Paid | 1.959% |
Variable interest rate base | 3 mo.USD-LIBOR-BBA |
Variable interest rate base floor | 1.00% |
1.850 % interest rate swaps | |
Derivatives | |
Notional | $ 107,977,387 |
Fixed Rate Paid | 1.85% |
Variable interest rate base | 3 mo.USD-LIBOR-BBA |
Variable interest rate base floor | 1.00% |
3.110 % interest rate swaps | |
Derivatives | |
Notional | $ 191,475,002 |
Fixed Rate Paid | 3.11% |
Variable interest rate base | 3 mo.USD-LIBOR-BBA |
Variable interest rate base floor | 1.00% |
3.110 % interest rate swaps | |
Derivatives | |
Notional | $ 250,000,000 |
Fixed Rate Paid | 3.11% |
Variable interest rate base | 3 mo.USD-LIBOR-BBA |
Variable interest rate base floor | 1.00% |
2.504 % Interest rate swaps | |
Derivatives | |
Notional | $ 50,000,000 |
Fixed Rate Paid | 2.504% |
Variable interest rate base | 3 mo.USD-LIBOR-BBA |
Variable interest rate base floor | 1.00% |
1.833 % interest rate swaps | |
Derivatives | |
Notional | $ 377,000,000 |
Fixed Rate Paid | 1.833% |
Variable interest rate base | 3 mo.USD-LIBOR-BBA |
Variable interest rate base floor | 1.00% |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017GBP (£) | Jun. 30, 2017USD ($) | |
Derivatives | ||||||
Selling, general and administrative, including stock-based compensation | $ 64,771 | $ 32,133 | $ 101,016 | $ 64,251 | ||
Foreign Exchange Contract | ||||||
Derivatives | ||||||
Notional amount | £ | £ 13,500,000 | |||||
Selling, general and administrative, including stock-based compensation | $ 596 | $ 1,150 | ||||
Cash Flow Hedging | Interest Rate Swap | ||||||
Derivatives | ||||||
Interest rate cash flow hedge loss to be reclassified during next twelve months, net | $ 5,216 |
Derivatives - Summary of Cash F
Derivatives - Summary of Cash Flow Hedges (Details) - Cash Flow Hedging - Interest Rate Swap - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Derivatives | ||||
Effective portion of loss recognized in Accumulated other comprehensive loss | $ (7,243) | $ (6,506) | $ (7,976) | $ (20,163) |
Effective portion of loss reclassified from Accumulated other comprehensive income into Net Loss | (1,466) | (1,809) | (3,248) | (3,621) |
Ineffective portion of amount of loss recognized into Net loss | $ (110) | $ (19) | $ (92) | $ (77) |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value Measurements | ||
Investments in marketable securities | $ 80,484 | $ 77,825 |
Recurring | ||
Fair Value Measurements | ||
Investments in marketable securities | 80,484 | 77,825 |
Total | 67,232 | 69,398 |
Recurring | Interest Rate Swap | ||
Fair Value Measurements | ||
Interest rate swap agreement - assets | 5,006 | 8,521 |
Interest rate swap agreements - liabilities | (18,258) | (16,948) |
Level 1 | Recurring | ||
Fair Value Measurements | ||
Investments in marketable securities | 80,484 | 77,825 |
Total | 80,484 | 77,825 |
Level 1 | Recurring | Interest Rate Swap | ||
Fair Value Measurements | ||
Interest rate swap agreement - assets | 0 | 0 |
Interest rate swap agreements - liabilities | 0 | 0 |
Level 2 | Recurring | ||
Fair Value Measurements | ||
Investments in marketable securities | 0 | 0 |
Total | (13,252) | (8,427) |
Level 2 | Recurring | Interest Rate Swap | ||
Fair Value Measurements | ||
Interest rate swap agreement - assets | 5,006 | 8,521 |
Interest rate swap agreements - liabilities | (18,258) | (16,948) |
Level 3 | Recurring | ||
Fair Value Measurements | ||
Investments in marketable securities | 0 | 0 |
Total | 0 | 0 |
Level 3 | Recurring | Interest Rate Swap | ||
Fair Value Measurements | ||
Interest rate swap agreement - assets | 0 | 0 |
Interest rate swap agreements - liabilities | $ 0 | $ 0 |
Fair Value Measurements - Sch41
Fair Value Measurements - Schedule of Fair Value Not Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value Disclosures [Abstract] | ||
Carrying value | $ 1,783,848 | $ 1,765,233 |
Fair value | $ 1,795,785 | $ 1,770,694 |
Stockholders' Equity - Activity
Stockholders' Equity - Activity in Common Stock Roll Forward (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Series A Common Stock | ||
Increase (Decrease) in Stockholders' Equity | ||
Outstanding balance, beginning of period (in shares) | 11,969,152 | |
Conversion from Series B to Series A Shares (in shares) | (331) | |
Issuance of stock awards (in shares) | 33,806 | |
Restricted stock forfeitures and tax withholding (in shares) | (29,561) | |
Outstanding balance, end of period (in shares) | 11,973,728 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Series B Common Stock | ||
Increase (Decrease) in Stockholders' Equity | ||
Outstanding balance, beginning of period (in shares) | 381,859 | |
Conversion from Series B to Series A Shares (in shares) | (331) | |
Issuance of stock awards (in shares) | 0 | |
Restricted stock forfeitures and tax withholding (in shares) | 0 | |
Outstanding balance, end of period (in shares) | 381,528 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Stockholders' Equity - Changes
Stockholders' Equity - Changes in Accumulated Other Comprehensive Income (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Changes in accumulated other comprehensive loss | ||||
Beginning Balance | $ 238,645,000 | |||
Net current period other comprehensive income (loss) | $ (4,657,000) | $ (2,092,000) | (2,999,000) | $ (14,235,000) |
Ending Balance | 176,264,000 | 176,264,000 | ||
Gain (loss) through accumulated other comprehensive loss, tax | 0 | |||
Reclassifications of loss (gain) into Net loss, tax | 0 | |||
Foreign currency translation adjustments | ||||
Changes in accumulated other comprehensive loss | ||||
Beginning Balance | (1,540,000) | |||
Gain (loss) through Accumulated other comprehensive loss, net of income tax of $0 | 642,000 | |||
Reclassifications of loss (gain) into Net loss, net of income tax of $0 | 0 | |||
Net current period other comprehensive income (loss) | 642,000 | |||
Ending Balance | (898,000) | (898,000) | ||
Unrealized holding gains and losses on marketable securities, net | ||||
Changes in accumulated other comprehensive loss | ||||
Beginning Balance | 1,072,000 | |||
Gain (loss) through Accumulated other comprehensive loss, net of income tax of $0 | 1,090,000 | |||
Reclassifications of loss (gain) into Net loss, net of income tax of $0 | (3,000) | |||
Net current period other comprehensive income (loss) | 1,087,000 | |||
Ending Balance | 2,159,000 | 2,159,000 | ||
Unrealized gains and losses on derivative instruments, net | ||||
Changes in accumulated other comprehensive loss | ||||
Beginning Balance | (8,957,000) | |||
Gain (loss) through Accumulated other comprehensive loss, net of income tax of $0 | (7,976,000) | |||
Reclassifications of loss (gain) into Net loss, net of income tax of $0 | 3,248,000 | |||
Net current period other comprehensive income (loss) | (4,728,000) | |||
Ending Balance | (13,685,000) | (13,685,000) | ||
Accumulated other comprehensive loss | ||||
Changes in accumulated other comprehensive loss | ||||
Beginning Balance | (9,425,000) | |||
Gain (loss) through Accumulated other comprehensive loss, net of income tax of $0 | (6,244,000) | |||
Reclassifications of loss (gain) into Net loss, net of income tax of $0 | 3,245,000 | |||
Net current period other comprehensive income (loss) | (2,999,000) | |||
Ending Balance | $ (12,424,000) | $ (12,424,000) |
Basic and Diluted Earnings (L44
Basic and Diluted Earnings (Loss) Per Common Share-Series A and Series B - Schedule of Weighted Average Number of Shares (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Weighted average Series A and Series B shares - basic and diluted (in shares) | 12,168,582 | 12,364,767 | 12,151,417 | 12,407,830 |
Basic and Diluted Earnings (L45
Basic and Diluted Earnings (Loss) Per Common Share-Series A and Series B - Narrative (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Excluded stock options and unvested restricted stock units (in shares) | 344,037 | 435,347 | 344,037 | 435,347 |
Commitments, Contingencies an46
Commitments, Contingencies and Other Liabilities - Narrative (Details) $ in Millions | Jun. 30, 2017USD ($) |
Loss Contingencies [Line Items] | |
Legal reserve | $ 28 |
Amount seeking to recover under insurance policies | 28 |
MONI | |
Loss Contingencies [Line Items] | |
Legal reserve | $ 28 |
Reportable Business Segments -
Reportable Business Segments - Narrative (Details) | 6 Months Ended |
Jun. 30, 2017segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Reportable Business Segments 48
Reportable Business Segments - Schedules of Financial Information By Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||
Net revenue | $ 140,498 | $ 143,656 | $ 281,698 | $ 286,924 | |
Depreciation and amortization | 62,097 | 64,051 | 123,771 | 127,436 | |
Net income (loss) from continuing operations before income taxes | (38,865) | (20,437) | (55,996) | (41,835) | |
Subscriber accounts, net of amortization | 1,359,721 | 1,359,721 | $ 1,386,760 | ||
Goodwill | 563,549 | 563,549 | 563,549 | ||
Total assets | 2,107,242 | 2,107,242 | 2,132,432 | ||
Operating Segments | MONI | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue | 133,536 | 138,174 | 267,944 | 276,270 | |
Depreciation and amortization | 60,975 | 62,877 | 121,483 | 125,029 | |
Net income (loss) from continuing operations before income taxes | (43,480) | (9,703) | (56,779) | (22,854) | |
Subscriber accounts, net of amortization | 1,338,117 | 1,338,117 | 1,364,804 | ||
Goodwill | 527,502 | 527,502 | 527,502 | ||
Total assets | 2,038,719 | 2,038,719 | 2,062,838 | ||
Operating Segments | LiveWatch | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue | 6,962 | 5,482 | 13,754 | 10,654 | |
Depreciation and amortization | 1,115 | 1,085 | 2,274 | 2,230 | |
Net income (loss) from continuing operations before income taxes | (4,845) | (5,063) | (10,775) | (10,332) | |
Subscriber accounts, net of amortization | 21,604 | 21,604 | 21,956 | ||
Goodwill | 36,047 | 36,047 | 36,047 | ||
Total assets | 63,719 | 63,719 | 63,916 | ||
Other | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue | 0 | 0 | 0 | 0 | |
Depreciation and amortization | 7 | 89 | 14 | 177 | |
Net income (loss) from continuing operations before income taxes | 9,460 | $ (5,671) | 11,558 | $ (8,649) | |
Subscriber accounts, net of amortization | 0 | 0 | 0 | ||
Goodwill | 0 | 0 | 0 | ||
Total assets | $ 4,804 | $ 4,804 | $ 5,678 |