Document and Entity Information
Document and Entity Information Document - $ / shares | 3 Months Ended | ||
Mar. 31, 2021 | Apr. 28, 2021 | Dec. 31, 2020 | |
Document Information [Line Items] | |||
Document Quarterly Report | true | ||
Document Transition Report | false | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Entity Tax Identification Number | 47-4116383 | ||
Entity Incorporation, State or Country Code | DE | ||
Trading Symbol | ADT | ||
Entity Registrant Name | ADT Inc. | ||
Entity Address, Address Line One | 1501 Yamato Road | ||
Entity Address, City or Town | Boca Raton | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 33431 | ||
City Area Code | 561 | ||
Local Phone Number | 988-3600 | ||
Entity Interactive Data Current | Yes | ||
Entity Central Index Key | 0001703056 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-Q | ||
Document Period End Date | Mar. 31, 2021 | ||
Entity File Number | 001-38352 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | Q1 | ||
Amendment Flag | false | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Current Reporting Status | Yes | ||
Security Exchange Name | NYSE | ||
Entity Filer Category | Large Accelerated Filer | ||
Common Stock | |||
Document Information [Line Items] | |||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | |
Entity Common Stock, Shares Outstanding | 765,375,520 | ||
Common Class B | |||
Document Information [Line Items] | |||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | |
Entity Common Stock, Shares Outstanding | 54,744,525 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 122,554 | $ 204,998 |
Accounts receivable, net of allowance for credit losses of $66,830 and $68,342, respectively | 331,698 | 336,033 |
Inventories, net | 181,404 | 174,839 |
Work-in-progress | 43,235 | 41,312 |
Prepaid expenses and other current assets | 188,930 | 210,212 |
Total current assets | 867,821 | 967,394 |
Property and equipment, net | 326,657 | 325,716 |
Subscriber system assets, net | 2,695,466 | 2,663,228 |
Intangible assets, net | 5,809,295 | 5,906,690 |
Goodwill | 5,242,973 | 5,236,302 |
Deferred subscriber acquisition costs, net | 692,505 | 654,019 |
Other assets | 376,931 | 363,587 |
Total assets | 16,011,648 | 16,116,936 |
Current liabilities: | ||
Current maturities of long-term debt | 80,170 | 44,764 |
Accounts payable | 348,441 | 321,595 |
Deferred revenue | 355,773 | 345,582 |
Accrued expenses and other current liabilities | 530,572 | 584,151 |
Total current liabilities | 1,314,956 | 1,296,092 |
Long-term debt | 9,445,820 | 9,447,780 |
Deferred subscriber acquisition revenue | 900,458 | 832,166 |
Deferred tax liabilities | 973,163 | 990,899 |
Other liabilities | 399,341 | 510,663 |
Total liabilities | 13,033,738 | 13,077,600 |
Commitments and contingencies (See Note 12) | ||
Stockholders' equity: | ||
Preferred stock—authorized 1,000,000 shares of $0.01 par value; zero issued and outstanding as of March 31, 2021 and December 31, 2020. | 0 | 0 |
Additional paid-in capital | 6,644,332 | 6,640,763 |
Accumulated deficit | (3,568,615) | (3,491,069) |
Accumulated other comprehensive loss | (106,103) | (118,615) |
Total stockholders' equity | 2,977,910 | 3,039,336 |
Total liabilities and stockholders' equity | 16,011,648 | 16,116,936 |
Common Class B | ||
Stockholders' equity: | ||
Common stock—authorized 3,999,000,000 shares of $0.01 par value; issued and outstanding shares of 774,884,351 and 771,013,638 as of March 31, 2021 and December 31, 2020, respectively. | 547 | 547 |
Common Stock | ||
Stockholders' equity: | ||
Common stock—authorized 3,999,000,000 shares of $0.01 par value; issued and outstanding shares of 774,884,351 and 771,013,638 as of March 31, 2021 and December 31, 2020, respectively. | $ 7,749 | $ 7,710 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Allowance for doubtful accounts receivable, current | $ 66,830 | $ 68,342 |
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Issued | 0 | 0 |
Common Stock | ||
Common stock authorized (in shares) | 3,999,000,000 | 3,999,000,000 |
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock issued (in shares) | 774,884,351 | 771,013,638 |
Common stock outstanding (in shares) | 774,884,351 | 771,013,638 |
Common Class B | ||
Common stock authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock issued (in shares) | 54,744,525 | |
Common stock outstanding (in shares) | 54,744,525 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue | $ 1,304,704 | $ 1,369,752 |
Cost of revenue (exclusive of depreciation and amortization shown separately below) | 381,166 | 407,986 |
Selling, general and administrative expenses | 449,602 | 453,304 |
Depreciation and intangible asset amortization | 469,809 | 489,024 |
Merger, restructuring, integration, and other | 20,507 | 108,794 |
Operating loss | (16,380) | (89,356) |
Interest expense, net | (47,724) | (225,367) |
Loss on extinguishment of debt | (156) | (65,843) |
Other income | 1,803 | 2,309 |
Loss before income taxes | (62,457) | (378,257) |
Income tax benefit | 14,563 | 77,964 |
Net loss | $ (47,894) | $ (300,293) |
Common Stock | ||
Weighted-average shares outstanding - basic: | ||
Basic and diluted (in shares) | 762,704 | 759,092 |
Earnings Per Share, Basic and Diluted | $ (0.06) | $ (0.40) |
Common Class B | ||
Weighted-average shares outstanding - basic: | ||
Basic and diluted (in shares) | 54,745 | 0 |
Earnings Per Share, Basic and Diluted | $ (0.06) | $ 0 |
Monitoring and related services | ||
Revenue | $ 1,062,766 | $ 1,045,957 |
Installation and other | ||
Revenue | $ 241,938 | $ 323,795 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Net loss | $ (47,894) | $ (300,293) |
Other comprehensive income (loss), net of tax: | ||
Cash flow hedges | 11,666 | (96,063) |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Tax and Reclassification Adjustment, Attributable to Parent | 846 | 7 |
Total other comprehensive income (loss), net of tax | 12,512 | (96,056) |
Comprehensive loss | (35,382) | (396,349) |
Retained Earnings [Member] | ||
Net loss | $ (47,894) | $ (300,293) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Common Class B | Common StockCommon Stock | Common StockCommon Class B | Additional Paid-In Capital | Accumulated Deficit | Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2019 | 753,622,000 | |||||||||
Beginning balance at Dec. 31, 2019 | $ 3,184,369 | $ (2,157) | $ 7,536 | $ 5,977,402 | $ (2,742,193) | $ (2,157) | $ (58,376) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Other comprehensive loss, net of tax | (96,056) | (96,056) | ||||||||
Net loss | (300,293) | (300,293) | ||||||||
Stock Issued During Period, Shares, Dividend Reinvestment Plan | 0 | |||||||||
Dividends | (27,114) | 27,117 | ||||||||
Stock Issued During Period, Value, Dividend Reinvestment Plan | $ 0 | 3 | ||||||||
Share-based compensation expense (in shares) | 0 | |||||||||
Share-based compensation expense | 23,499 | 23,499 | ||||||||
Other (in shares) | (247,000) | |||||||||
Other | (1,263) | $ 2 | (173) | (1,092) | ||||||
Stock Issued During Period, Shares, New Issues | 16,279,000 | |||||||||
Stock Issued During Period, Value, New Issues | 113,841 | $ 163 | 113,678 | |||||||
Ending balance (in shares) at Mar. 31, 2020 | 770,148,000 | |||||||||
Ending balance at Mar. 31, 2020 | 2,894,826 | $ 7,701 | 6,114,409 | (3,072,852) | (154,432) | |||||
Beginning balance (in shares) at Dec. 31, 2020 | 771,013,638 | 771,014,000 | 54,745,000 | |||||||
Beginning balance at Dec. 31, 2020 | 3,039,336 | $ 7,710 | $ 547 | 6,640,763 | (3,491,069) | (118,615) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Other comprehensive loss, net of tax | 12,512 | 12,512 | ||||||||
Net loss | (47,894) | (47,894) | ||||||||
Stock Issued During Period, Shares, Dividend Reinvestment Plan | 0 | 0 | ||||||||
Dividends | (29,132) | 29,136 | ||||||||
Stock Issued During Period, Value, Dividend Reinvestment Plan | $ 0 | $ 0 | 4 | |||||||
Share-based compensation expense (in shares) | 0 | 0 | ||||||||
Stock Repurchased and Retired During Period, Value | 0 | |||||||||
Share-based compensation expense | 16,019 | 16,019 | ||||||||
Other (in shares) | (3,870,000) | 0 | ||||||||
Other | (12,931) | $ 39 | $ 0 | (12,454) | (516) | |||||
Ending balance (in shares) at Mar. 31, 2021 | 774,884,351 | 54,744,525 | 774,884,000 | 54,745,000 | ||||||
Ending balance at Mar. 31, 2021 | $ 2,977,910 | $ 7,749 | $ 547 | $ 6,644,332 | $ (3,568,615) | $ (106,103) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (47,894) | $ (300,293) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and intangible asset amortization | 469,809 | 489,024 |
Amortization of deferred subscriber acquisition costs | 28,642 | 22,627 |
Amortization of deferred subscriber acquisition revenue | (37,159) | (29,477) |
Share-based compensation expense | 16,019 | 23,499 |
Deferred income taxes | (21,815) | (82,507) |
Provision for losses on receivables and inventory | 14,250 | 45,692 |
Loss on extinguishment of debt | 156 | 65,843 |
Intangible asset impairments | 17,883 | 0 |
Unrealized (gain) loss on interest rate swap contracts | (106,517) | 69,563 |
Other non-cash items, net | 38,815 | 48,656 |
Changes in operating assets and liabilities, net of the effects of acquisitions: | ||
Deferred subscriber acquisition costs | (67,402) | (48,194) |
Deferred subscriber acquisition revenue | 58,170 | 39,714 |
Other, net | (3,623) | (93,918) |
Net cash provided by operating activities | 359,334 | 250,229 |
Cash flows from investing activities: | ||
Dealer generated customer accounts and bulk account purchases | (198,761) | (62,247) |
Subscriber system asset expenditures | (144,345) | (64,830) |
Purchases of property and equipment | (41,505) | (34,571) |
Acquisition of businesses, net of cash acquired | (15,909) | (179,569) |
Other investing, net | 1,408 | 2,782 |
Net cash used in investing activities | (399,112) | (338,435) |
Cash flows from financing activities: | ||
Proceeds from long-term borrowings | 10,729 | 1,640,000 |
Proceeds from receivables facility | 29,670 | 0 |
Repayment of long-term borrowings, including call premiums | (17,937) | (1,438,044) |
Repayment of receivables facility | (7,367) | 0 |
Dividends on common stock | (28,980) | (26,291) |
Deferred financing costs | (114) | (14,139) |
Other financing, net | (26,686) | (3,915) |
Net cash (used in) provided by financing activities | (40,685) | 157,611 |
Net (decrease) increase in cash and cash equivalents and restricted cash and restricted cash equivalents | (80,463) | 69,405 |
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period | 207,747 | 48,736 |
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period | 127,284 | 118,141 |
Supplemental schedule of non-cash investing and financing activities: | ||
Issuance of shares for acquisition of business | $ 0 | $ 113,841 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies Organization and Business ADT Inc., together with its wholly-owned subsidiaries (collectively, the “Company”), is a leading provider of security, automation, and smart home solutions serving consumers and businesses in the United States (“U.S.”). ADT Inc. was incorporated in the State of Delaware in May 2015 as a holding company with no assets or liabilities. In July 2015, the Company acquired Protection One, Inc. and ASG Intermediate Holding Corp. (collectively, the “Formation Transactions”), which were instrumental in the commencement of the Company’s operations. In May 2016, the Company acquired The ADT Security Corporation (formerly named The ADT Corporation) (“The ADT Corporation”) (the “ADT Acquisition”). The Company primarily conducts business under the ADT brand name. In January 2018, the Company completed an initial public offering (“IPO”) and its common stock (“Common Stock”) began trading on the New York Stock Exchange under the symbol “ADT.” In September 2020, the Company issued and sold 54,744,525 shares of Class B common stock, par value of $0.01 per share (“Class B Common Stock”), for an aggregate purchase price of $450 million to Google LLC (“Google”) in a private placement pursuant to a securities purchase agreement dated July 31, 2020 (the “Securities Purchase Agreement”). The Company is majority owned by Prime Security Services TopCo Parent, L.P. (“Ultimate Parent”). Ultimate Parent is majority owned by Apollo Investment Fund VIII, L.P. and its related funds that are directly or indirectly managed by affiliates of Apollo Global Management, Inc. (together with its subsidiaries and affiliates, “Apollo” or the “Sponsor”). Basis of Presentation and Significant Accounting Policies The preparation of the condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (“GAAP”) requires the Company to select accounting policies and make estimates that affect amounts reported in the condensed consolidated financial statements and the accompanying notes. The Company’s estimates are based on the relevant information available at the end of each period. Actual results could differ materially from these estimates under different assumptions or market conditions. The condensed consolidated financial statements included herein are unaudited, but in the opinion of management, such financial statements include all adjustments, consisting of normal recurring adjustments, necessary to summarize fairly the Company’s financial position, results of operations, and cash flows for the interim periods presented. The interim results reported in these condensed consolidated financial statements should not be taken as indicative of results that may be expected for future interim periods or the full year. For a more comprehensive understanding of the Company and its interim results, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Annual Report”), which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 25, 2021. The Company’s accounting policies used in the preparation of these condensed consolidated financial statements do not differ from those used in the annual consolidated financial statements, unless otherwise noted. The Condensed Consolidated Balance Sheet as of December 31, 2020 included herein was derived from the audited consolidated financial statements as of that date but does not include all the footnote disclosures from the annual consolidated financial statements. The condensed consolidated financial statements include the accounts of ADT Inc. and its wholly-owned subsidiaries and have been prepared in U.S. dollars in accordance with GAAP. All intercompany transactions have been eliminated. Certain prior period amounts have been reclassified to conform with the current period presentation. Segment Change Effective in the first quarter of 2021, the manner in which the Company’s Chief Executive Officer, who is the chief operating decision maker (the “CODM”), evaluates performance and makes decisions about how to allocate resources changed. Therefore, the Company now reports results in two operating and reportable segments, Consumer and Small Business (“CSB”) and Commercial, rather than a single operating and reportable segment. Where applicable, prior periods have been retrospectively adjusted to reflect the new operating and reportable segment structure. The accounting policies of the Company’s reportable segments are the same as those for the consolidated financial statements. The Company organizes its segments based on customer type as follows: • Consumer and Small Business (CSB) - Customers in the CSB segment are comprised of residential homeowners, small business operators, and other individual consumers. The CSB segment primarily includes (i) revenue and operating costs from the sale, installation, servicing, and monitoring of integrated security and automation systems, as well as other offerings such as mobile security and home health solutions; (ii) other operating costs associated with support functions related to these operations; and (iii) general corporate costs and other income and expense items not included in the Commercial segment. Results for the Company’s Canadian operations prior to its sale in the fourth quarter of 2019 are included in the CSB segment based on the primary customer market served in Canada. • Commercial - Customers in the Commercial segment are comprised of larger businesses with more expansive facilities (typically larger than 10,000 square feet) and/or multi-site operations, which often require more sophisticated integrated solutions. The Commercial segment primarily includes (i) revenue and operating costs from the sale, installation, servicing, and monitoring of integrated security and automation systems, fire detection and suppression systems, and other related offerings; (ii) other operating costs associated with support functions of these operations; and (iii) dedicated corporate and other costs. Refer to Note 13 “Segment Information” for additional information on the Company’s segments. COVID-19 Pandemic During March 2020, the World Health Organization declared the outbreak of a novel coronavirus as a pandemic (the “COVID-19 Pandemic”), which has become widespread in the U.S. Containment efforts and responses to the COVID-19 Pandemic have varied by individuals, businesses, and state and local municipalities, and in certain areas of the U.S., initial and precautionary measures helped mitigate the spread of the coronavirus, while subsequent easing of such measures has resulted in the re-emergence of the coronavirus. The COVID-19 Pandemic has had a notable adverse impact on general economic conditions, including the temporary closures of many businesses, increased governmental regulations, and reduced consumer spending due to significant unemployment and other effects attributable to the COVID-19 Pandemic. In order to continue to both protect its employees and serve its customers, the Company has adjusted and is continuously evolving certain aspects of its operations, which includes (i) detailed protocols for infectious disease safety for employees, (ii) daily wellness checks for employees, and (iii) certain work from home actions, including for the majority of the Company’s call center professionals. The Company considered the on-going and pervasive economic impact of the COVID-19 Pandemic in its assessment of its financial position, results of operations, cash flows, and certain accounting estimates as of and for the three months ended March 31, 2021. Due to the evolving and uncertain nature of the COVID-19 Pandemic, it is possible that the effects of the COVID-19 Pandemic could materially impact the Company’s estimates and condensed consolidated financial statements in future reporting periods. Cash and Cash Equivalents and Restricted Cash and Restricted Cash Equivalents All highly liquid investments with original maturities of three months or less from the time of purchase are considered to be cash equivalents. Restricted cash and restricted cash equivalents are cash and cash equivalents that are restricted for a specific purpose and cannot be included in the general cash and cash equivalents account. Restricted cash and restricted cash equivalents are reflected in prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets. The following table presents a reconciliation of the amount of cash and cash equivalents and restricted cash and restricted cash equivalents reported in the Condensed Consolidated Balance Sheets to the total of the same of such amounts shown in the Condensed Consolidated Statements of Cash Flows: (in thousands) March 31, 2021 December 31, 2020 Cash and cash equivalents $ 122,554 $ 204,998 Restricted cash and restricted cash equivalents 4,730 2,749 Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period $ 127,284 $ 207,747 Subscriber System Assets, net and Deferred Subscriber Acquisition Costs, net The Company capitalizes certain costs associated with transactions in which the Company retains ownership of the security system as well as incremental selling expenses related to acquiring customers. These costs include equipment, installation costs, and other incremental costs and are recorded in subscriber system assets, net, and deferred subscriber acquisition costs, net, in the Condensed Consolidated Balance Sheets. These assets embody a probable future economic benefit as they contribute to the generation of future monitoring and related services revenue for the Company. Subscriber system assets represent capitalized equipment and installation costs incurred in connection with transactions in which the Company retains ownership of the security system. Upon customer termination, the Company may retrieve such assets. Depreciation expense relating to subscriber system assets, which is included in depreciation and intangible asset amortization in the Condensed Consolidated Statements of Operations, was $123 million and $134 million for the three months ended March 31, 2021 and 2020, respectively. The following table presents the gross carrying amount, accumulated depreciation, and net carrying amount of subscriber system assets: (in thousands) March 31, 2021 December 31, 2020 Gross carrying amount $ 4,964,620 $ 4,815,286 Accumulated depreciation (2,269,154) (2,152,058) Subscriber system assets, net $ 2,695,466 $ 2,663,228 Deferred subscriber acquisition costs represent incremental selling expenses (primarily commissions) related to acquiring customers. Amortization expense relating to deferred subscriber acquisition costs included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations was $29 million and $23 million for the three months ended March 31, 2021 and 2020, respectively. Subscriber system assets and any related deferred subscriber acquisition costs resulting from customer acquisitions are accounted for on a pooled basis based on the month and year of acquisition. The Company depreciates and amortizes its pooled subscriber system assets and related deferred subscriber acquisition costs using an accelerated method over the estimated life of the customer relationship, which is 15 years. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: (in thousands) March 31, 2021 December 31, 2020 Accrued interest $ 71,011 $ 123,935 Payroll-related accruals 103,453 99,771 Operating lease liabilities 31,104 30,689 Fair value of interest rate swaps 64,864 65,462 Other accrued liabilities 260,140 264,294 Accrued expenses and other current liabilities $ 530,572 $ 584,151 Radio Conversion Costs During 2019, the Company commenced a program to replace the 3G and Code-Division Multiple Access (“CDMA”) cellular equipment used in many of its security systems as a result of the 3G and CDMA cellular network providers notifying the Company that they will be retiring their 3G and CDMA networks during 2022. The Company continues to estimate the range of net costs over the course of this program at $225 million to $300 million, which consists of costs, net of any revenue the Company collects from customers, associated with these radio replacements and cellular network conversions. From inception of this program through March 31, 2021, the Company has incurred $136 million of net costs, of which $59 million has been incurred during the three months ended March 31, 2021. The Company seeks to minimize these costs by converting customers during routine service visits whenever possible. The replacement program and pace of replacement are subject to change and may be influenced by the Company’s ability to access customer sites due to the COVID-19 Pandemic; cost-sharing opportunities with suppliers, carriers, and customers; and the extent to which the Company is able to implement its Cell Bounce solution, as described below. Given the current network retirement dates, the Company expects most of the remaining net costs to be incurred during 2021 and expects to continue collecting a portion of the incremental revenue thereafter. During November 2020, the Company acquired Cell Bounce, a technology company with proprietary radio conversion technology in the form of a user-installable device, which was intended to facilitate the transition of customers on 3G networks in a cost efficient and timely manner. However, as a result of recent worldwide shortages for certain electronic components, the Company may be unable to produce the expected volume of Cell Bounce product in order to achieve the expected benefits. As a result, the Company expects to continue to replace 3G radios primarily using traditional methods and to utilize Cell Bounce for any customers the Company is unable to upgrade through these traditional methods to the extent possible. During the three months ended March 31, 2021 and 2020, the Company incurred radio conversion costs associated with these replacement programs and cellular network conversions of $70 million and $16 million, respectively, and recognized incremental radio conversion revenue of $11 million and $9 million, respectively. Radio conversion costs are included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. Radio conversion revenue is included in monitoring and related services revenue in the Condensed Consolidated Statement of Operations. Fair Value of Financial Instruments The Company’s financial instruments primarily consist of cash and cash equivalents, restricted cash and restricted cash equivalents, accounts receivable, retail installment contract receivables, accounts payable, debt, and derivative financial instruments. Due to their short-term and/or liquid nature, the fair values of cash, restricted cash, accounts receivable, and accounts payable approximate their respective carrying amounts. Cash Equivalents - Included in cash and cash equivalents are investments in money market mutual funds, which totaled $41 million and $143 million as of March 31, 2021 and December 31, 2020, respectively. These investments are classified as Level 1 fair value measurements, which represent unadjusted quoted prices in active markets for identical assets or liabilities. Retail Installment Contract Receivables, net - The fair value of the Company’s retail installment contract receivables was determined using a discounted cash flow model. The resulting fair value is classified as a Level 3 fair value measurement. The following table presents the net carrying amount and fair value of retail installment contract receivables: March 31, 2021 December 31, 2020 (in thousands) Carrying Fair Carrying Fair Retail installment contract receivables, net $ 174,870 $ 136,400 $ 141,591 $ 112,676 Long-Term Debt Instruments - The fair value of the Company’s debt instruments was determined using broker-quoted market prices, which represent prices based on quoted prices for similar assets or liabilities as well as other observable market data. The carrying amounts of debt outstanding, if any, under the Company’s revolving credit facility and receivables facility approximate fair values as interest rates on these borrowings approximate current market rates. The resulting fair values are classified as Level 2 fair value measurements. The following table presents the carrying amount and fair value of the Company’s long-term debt instruments subject to fair value disclosures: March 31, 2021 December 31, 2020 (in thousands) Carrying Fair Carrying Fair Long-term debt instruments, excluding finance lease obligations $ 9,463,947 $ 9,971,382 $ 9,431,216 $ 10,127,291 Derivative Financial Instruments - Derivative financial instruments are reported at fair value as either assets or liabilities in the Condensed Consolidated Balance Sheets. These fair values are primarily calculated using discounted cash flow models that utilize observable inputs, such as quoted forward interest rates, and incorporate credit risk adjustments to reflect the risk of default by the counterparty or the Company. The resulting fair value is classified as a Level 2 fair value measurement. Guarantees In the normal course of business, the Company is liable for contract completion and product performance. The Company’s guarantees primarily relate to standby letters of credit related to its insurance programs and totaled $76 million and $83 million as of March 31, 2021 and December 31, 2020, respectively. The Company does not believe such obligations will materially affect its financial position, results of operations, or cash flows. Recently Adopted Accounting Pronouncements Financial Accounting Standards Board Accounting Standards Update (“ASU”) 2020-06, Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity , provides guidance to ease the potential burden of accounting for convertible instruments, derivatives related to an entity’s own equity, and the related earnings per share considerations. The Company early adopted the guidance as of January 1, 2021. The impact from adoption was not material. ASU 2021-01, Reference Rate Reform (Topic 848) : Facilitation of the Effects of Reference Rate Reform on Financial Reporting amends ASU 2020-04, which was disclosed in the Company’s 2020 Annual Report. ASU 2021-01 clarifies the scope and guidance of Topic 848 and allows derivatives impacted by the reference rate reform to qualify for certain optional expedients and exceptions for contract modifications and hedge accounting. The guidance is optional and is effective for a limited period of time through December 31, 2022. As of March 31, 2021, this guidance had no impact on the Condensed Consolidated Financial Statements. The Company will continue to evaluate this guidance. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue and Receivables The Company generates revenue primarily through contractual monthly recurring fees received for monitoring and related services provided to customers. In transactions in which the Company provides monitoring and related services but retains ownership of the security system, the Company’s performance obligations primarily include monitoring, related services (such as maintenance agreements), and a material right associated with the one-time non-refundable fees received in connection with the initiation of a monitoring contract that the customer will not be required to pay again upon a renewal of the contract, which is referred to as deferred subscriber acquisition revenue. The portion of the transaction price associated with monitoring and related services revenue is recognized when the services are provided to the customer and is reflected in monitoring and related services revenue in the Condensed Consolidated Statements of Operations. Deferred subscriber acquisition revenue is deferred and recorded as deferred subscriber acquisition revenue in the Condensed Consolidated Balance Sheets upon initiation of a monitoring contract. Deferred subscriber acquisition revenue is amortized on a pooled basis into installation and other revenue in the Condensed Consolidated Statements of Operations over the estimated life of the customer relationship using an accelerated method consistent with the amortization of subscriber system assets and deferred subscriber acquisition costs associated with the transaction. Amortization of deferred subscriber acquisition revenue was $37 million and $29 million for the three months ended March 31, 2021 and 2020, respectively. In transactions involving a security or fire safety system that is sold outright to the customer, the Company’s performance obligations generally include the sale and installation of the system as well as any monitoring and related services. For such arrangements, the Company allocates a portion of the transaction price to each performance obligation based on relative standalone selling price, which is determined using observable internal or external pricing and profitability metrics. Revenue associated with the sale and installation of a system is recognized either at a point in time or over time based upon the nature of the transaction and contractual terms and is reflected in installation and other revenue in the Condensed Consolidated Statements of Operations. For revenue recognized over time, progress toward complete satisfaction of the performance obligation is primarily measured using a cost-to-cost measure of progress method. The cost input that drives revenue recognition for contracts where revenue is recognized over time is based primarily on contract cost incurred to date compared to total estimated contract cost. This measure of progress method includes forecasts based on the best information available and reflects the Company’s judgment to faithfully depict the value of the services transferred to the customer. The portion of the transaction price associated with monitoring and related services revenue is recognized when services are provided to the customer and is reflected in monitoring and related services revenue in the Condensed Consolidated Statements of Operations. Revenue from product sales related to the sale and installation of security and fire safety systems was $203 million and $293 million for the three months ended March 31, 2021 and 2020, respectively. Cost of revenue from product sales related to the sale and installation of security and fire safety systems was $160 million and $212 million for the three months ended March 31, 2021 and 2020, respectively. Early termination of the contract by the customer results in a termination charge in accordance with the terms of the contract. Contract termination charges are recognized in revenue when collectability is probable and are reflected in monitoring and related services revenue in the Condensed Consolidated Statements of Operations. The Company records revenue in the Condensed Consolidated Statements of Operations net of sales and other taxes. Amounts collected from customers for sales and other taxes are reported as a liability net of the related amounts remitted. Customer billings for services not yet rendered are deferred and recognized as revenue as services are provided. These fees are recorded as current deferred revenue in the Condensed Consolidated Balance Sheets as the Company expects to satisfy any remaining performance obligations, as well as recognize the related revenue, within the next twelve months. Accordingly, the Company has applied the practical expedient regarding deferred revenue to exclude the value of remaining performance obligations if (i) the contract has an original expected term of one year or less or (ii) the Company recognizes revenue in proportion to the amount it has the right to invoice for services performed. The following table presents the Company’s disaggregated revenue: Three Months Ended (in thousands) March 31, 2021 March 31, 2020 CSB: Monitoring and related services $ 951,248 $ 938,032 Installation and other 87,357 173,135 Total CSB 1,038,605 1,111,167 Commercial: Monitoring and related services 111,518 107,925 Installation and other (1) 154,581 150,660 Total Commercial 266,099 258,585 Total revenue $ 1,304,704 $ 1,369,752 ________________ (1) Approximately half of installation and other revenue generated by the Commercial segment is recognized over time. Revenue Model Initiative and Equipment Ownership Model Change During February 2020, the Company launched a new revenue model initiative for certain residential customers, which (i) revised the amount and nature of fees due at installation, (ii) introduced a 60-month monitoring contract option, and (iii) introduced a new retail installment contract option that allows qualifying residential customers to repay the fees due at installation over a 24-, 36-, or 60-month interest-free period. Due to the requirements of the Company’s initial third-party consumer financing program, the Company also transitioned its security system ownership model from a predominately Company-owned model to a predominately customer-owned model (the “Equipment Ownership Model Change”). During March 2020, the Company entered into an uncommitted receivables securitization financing agreement (the “Receivables Facility”), which allowed the Company to receive financing secured by retail installment contract receivables from transactions under a customer-owned model. During April 2020, the Company amended the Receivables Facility to also permit financing secured by retail installment contract receivables from transactions occurring under a Company-owned model. As a result, the Company started to transition its security system ownership model to a predominately Company-owned model in May 2020. Refer to Note 6 “Debt” for further discussion regarding the Receivables Facility. Accounts Receivable, net Accounts receivable represent unconditional rights to consideration due from customers in the ordinary course of business and are generally due in one year or less. Accounts receivable are recorded at amortized cost less an allowance for credit losses that are not expected to be recovered. The allowance for credit losses is recognized at inception and is reassessed each reporting period. The Company’s allowance for credit losses is evaluated on a pooled basis based on customer type. For each pool of customers, the allowance for credit losses is estimated based on the delinquency status of the underlying receivables and the related historical loss experience, as adjusted for current and expected future conditions, if applicable. The allowance for the individual pools of customers was not material. During the three months ended March 31, 2021, the provision for credit losses, write-offs, and recoveries were not material. Retail Installment Contract Receivables, net During February 2020, the Company introduced a new retail installment contract option that allows qualifying residential customers to repay the fees due at installation over a 24-, 36-, or 60-month interest-free period. The financing component of the Company’s retail installment contract receivables is not significant. Retail installment contracts are available for residential transactions occurring under both Company-owned and customer-owned models. When originating a retail installment contract, the Company utilizes external credit scores to assess credit quality of a customer and to determine eligibility for the retail installment contract. In addition, a customer is required to enroll in the Company’s automated payment process in order to enter into a retail installment contract. Subsequent to origination, the Company monitors the delinquency status of retail installment contract receivables as the key credit quality indicator. As of March 31, 2021, the current and delinquent billed retail installment contract receivables were not material. Retail installment contract receivables are recorded at amortized cost less an allowance for credit losses that are not expected to be recovered. The allowance for credit losses is recognized at inception and reassessed each reporting period. The allowance for credit losses on retail installment contract receivables was not material for the periods presented. The following table presents unbilled retail installment contract receivables, net, recognized in the Condensed Consolidated Balance Sheets: (in thousands) March 31, 2021 December 31, 2020 Retail installment contract receivables, gross $ 178,077 $ 145,957 Allowance for credit losses (3,207) (4,366) Retail installment contract receivables, net $ 174,870 $ 141,591 Classification: Accounts receivable, net $ 55,091 $ 47,023 Other assets 119,779 94,568 Retail installment contract receivables, net $ 174,870 $ 141,591 As of March 31, 2021 and December 31, 2020, retail installment contract receivables, net, used as collateral for borrowings under the Receivables Facility were $143 million and $109 million, respectively. Contract Assets, net Contract assets are recorded when the Company has transferred goods or services to the customer in the ordinary course of business but does not have an unconditional right to such consideration. The contract asset is reclassified to accounts receivable as services are performed and billed, which results in the Company’s unconditional right to the consideration. The Company has the right to bill the customer as service is provided over time, which generally occurs over the course of a 24-, 36-, or 60-month period. The financing component of contract assets is not significant. The Company records an allowance for credit losses against its contract assets for expected credit losses that are not expected to be recovered. The allowance for credit losses is recognized at inception and is reassessed each reporting period. The allowance for credit losses on contract assets was not material for the periods presented. The following table presents contract assets, net, related to residential transactions recognized in the Condensed Consolidated Balance Sheets: (in thousands) March 31, 2021 December 31, 2020 Contract assets, gross $ 161,672 $ 161,563 Allowance for credit losses (27,143) (29,558) Contract assets, net $ 134,529 $ 132,005 Classification: Prepaid expenses and other current assets $ 65,881 $ 59,382 Other assets 68,648 72,623 Contract assets, net $ 134,529 $ 132,005 The Company recognized approximately $20 million and $65 million of contract assets during the three months ended March 31, 2021 and 2020, respectively. |
Acquisitions and Dispositions
Acquisitions and Dispositions | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisitions and Dispositions | Acquisitions During the three months ended March 31, 2021, total consideration related to business acquisitions was $16 million. In January 2020, the Company acquired its largest independent dealer, Defender Holdings, Inc. (“Defenders”) (the “Defenders Acquisition”) for total consideration of approximately $290 million, which consisted of cash paid of $173 million, net of cash acquired, and the issuance of approximately 16 million shares of the Company’s Common Stock with a fair value of $114 million. During the three months ended March 31, 2020, other business acquisitions were not material. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill During the fourth quarter of 2020, the Company changed its reporting units, which included the reassignment of assets, liabilities, and financial operating results, as well as an applicable portion of goodwill based on a relative fair value approach, related to the Company’s commercial customers from the U.S. reporting unit (now referred to as CSB) into the former Red Hawk reporting unit (now referred to as Commercial). As discussed in Note 1 “Description of Business and Summary of Significant Accounting Policies,” effective in the first quarter of 2021, the Company’s operating and reportable segments are CSB, which is now comprised of the CSB reporting unit, and Commercial, which is now comprised of the Commercial reporting unit. Both of the Company’s reporting units were previously included in a single operating and reportable segment. The change in reportable segments did not further impact the Company’s reporting units. The following table presents changes in the carrying amount of goodwill by reportable segment during the three months ended March 31, 2021: (in thousands) CSB Commercial Total Goodwill Beginning balance, as previously reported N/A N/A $ 5,236,302 Beginning balance, after change in reportable segments $ 4,915,857 $ 320,445 $ 5,236,302 Acquisitions — 6,279 6,279 Other (25) 417 392 Ending balance $ 4,915,832 $ 327,141 $ 5,242,973 _________________ N/A—Not applicable. The Company had no accumulated goodwill impairment losses as of March 31, 2021 and December 31, 2020. There were no material measurement period adjustments to purchase price allocations during the three months ended March 31, 2021. Other Intangible Assets The following table summarizes the gross carrying amounts, accumulated amortization, and net carrying amounts of the Company’s other intangible assets: March 31, 2021 December 31, 2020 (in thousands) Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Definite-lived intangible assets: Contracts and related customer relationships $ 8,236,971 $ (4,916,344) $ 3,320,627 $ 8,306,746 $ (4,932,590) $ 3,374,156 Dealer relationships 1,518,020 (399,440) 1,118,580 1,518,020 (379,475) 1,138,545 Other 225,963 (188,875) 37,088 247,536 (186,547) 60,989 Total definite-lived intangible assets 9,980,954 (5,504,659) 4,476,295 10,072,302 (5,498,612) 4,573,690 Indefinite-lived intangible assets: Trade name 1,333,000 — 1,333,000 1,333,000 — 1,333,000 Intangible assets $ 11,313,954 $ (5,504,659) $ 5,809,295 $ 11,405,302 $ (5,498,612) $ 5,906,690 The following table presents changes in the net carrying amount of contracts and related customer relationships during the three months ended March 31, 2021: (in thousands) Beginning balance $ 3,374,156 Acquisition of customer relationships 5,601 Customer contract additions, net of dealer charge-backs 213,624 Amortization (272,754) Ending balance $ 3,320,627 During the three months ended March 31, 2021, the Company paid $199 million to purchase contracts with customers under the ADT Authorized Dealer Program and from other third parties. The weighted-average amortization period for contracts with customers purchased under the ADT Authorized Dealer Program and from other third parties was 12 years during the three months ended March 31, 2021. Contracts and related customer relationships includes the purchase of customer accounts from a third-party in February 2021 for a total contractual purchase price of $91 million, subject to reduction based on customer retention. The Company paid cash at closing of $73 million, which is included in dealer generated customer accounts and bulk account purchases on the Condensed Consolidated Statements of Cash Flows. The following table presents amortization expense for definite-lived intangible assets: Three Months Ended (in thousands) March 31, 2021 March 31, 2020 Definite-lived intangible asset amortization expense $ 299,327 $ 306,956 Intangible Asset Impairments During the three months ended March 31, 2021, the Company recognized $18 million in impairment losses on its other definite-lived intangible assets primarily due to lower than expected benefits from the Cell Bounce developed technology intangible asset, which is included in the CSB segment, as a result of recent worldwide shortages for certain electronic components. The fair value was determined using an income-based approach, and the loss is reflected in merger, restructuring, integration, and other in the Condensed Consolidated Statements of Operations. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company’s debt is comprised of the following: (in thousands, except as otherwise indicated) Balance as of Debt Description Issued Maturity Interest Rate Interest Payable March 31, 2021 December 31, 2020 First Lien Term Loan due 2026 9/23/2019 9/23/2026 Adj. LIBOR +2.75% Quarterly $ 2,778,900 $ 2,778,900 Second Lien Notes due 2028 1/28/2020 1/15/2028 6.250% 1/15 and 7/15 1,300,000 1,300,000 First Lien Notes due 2024 4/4/2019 4/15/2024 5.250% 2/15 and 8/15 750,000 750,000 First Lien Notes due 2026 4/4/2019 4/15/2026 5.750% 3/15 and 9/15 1,350,000 1,350,000 First Lien Notes due 2027 8/20/2020 8/31/2027 3.375% 6/15 and 12/15 1,000,000 1,000,000 ADT Notes due 2022 7/5/2012 7/15/2022 3.500% 1/15 and 7/15 1,000,000 1,000,000 ADT Notes due 2023 1/14/2013 6/15/2023 4.125% 6/15 and 12/15 700,000 700,000 ADT Notes due 2032 5/2/2016 7/15/2032 4.875% 1/15 and 7/15 728,016 728,016 ADT Notes due 2042 7/5/2012 7/15/2042 4.875% 1/15 and 7/15 21,896 21,896 Receivables Facility 3/5/2020 2/20/2026 LIBOR +0.85% Monthly 98,077 75,775 Finance lease obligations N/A N/A N/A N/A 62,043 61,328 Less: Unamortized debt discount, net (19,122) (19,993) Less: Unamortized deferred financing costs (61,556) (64,638) Less: Unamortized purchase accounting fair value adjustment and other (182,264) (188,740) Total debt 9,525,990 9,492,544 Less: Current maturities of long-term debt (80,170) (44,764) Long-term debt $ 9,445,820 $ 9,447,780 _________________ N/A—Not applicable. Refer to Note 3 “Leases” for additional information regarding the Company’s finance leases. Significant changes in the Company’s debt during the three months ended March 31, 2021 were as follows: First Lien Credit Agreement In January 2021, the Company amended and restated its first lien credit agreement dated as of July 1, 2015 (together with subsequent amendments and restatements, the “First Lien Credit Agreement”) to refinance the term loan facility (the “First Lien Term Loan due 2026”), which reduced the applicable margin for Adjusted London Interbank Offered Rate (“LIBOR”) loans from 3.25% to 2.75% and reduced the LIBOR floor from 1.00% to 0.75%. Additionally, the amendment requires the Company to make quarterly payments equal to 0.25% of the aggregate outstanding principal amount of the First Lien Term Loan due 2026, or approximately $7 million per quarter. The Company may make voluntary prepayments on the First Lien Term Loan due 2026 at any time prior to maturity at par, subject to a 1.00% prepayment premium in the event of certain specified events at any time during the six months after the closing date of the amendment. As of March 31, 2021, the Company had an available borrowing capacity of $400 million under its first lien revolving credit facility (the “First Lien Revolving Credit Facility”) and no borrowings outstanding. Receivables Facility Under the terms of the Receivables Facility, the Company may receive up to $200 million of financing secured by the Company’s retail installment contract receivables. In March 2021, the Company amended the Receivables Facility to, among other things, extend the revolving period until March 4, 2022, and reduced the LIBOR floor from 1.00% to 0.85%. The Company obtains financing by selling or contributing certain retail installment contract receivables to the Company’s wholly-owned consolidated bankruptcy-remote special purpose entity (“SPE”), which, pursuant to the Receivables Facility, borrows funds secured by the transferred retail installment contract receivables. The SPE is a separate legal entity with its own creditors who will be entitled, prior to and upon the liquidation of the SPE, to be satisfied out of the SPE’s assets prior to any assets in the SPE becoming available to the Company (other than the SPE). Accordingly, the assets of the SPE are not available to pay creditors of the Company (other than the SPE), although collections from the transferred retail installment contract receivables in excess of amounts required to repay the SPE’s creditors may be remitted to the Company during and after the term of the Receivables Facility. The SPE’s creditors have legal recourse to the transferred retail installment contract receivables owned by the SPE, but do not have any recourse to the Company (other than the SPE) for the payment of principal and interest on the SPE’s financing. The Company services the transferred retail installment contract receivables and is responsible for ensuring that amounts collected from the transferred retail installment contract receivables are remitted to a segregated bank account in the name of the SPE. On a monthly basis, the segregated account is utilized to make required principal, interest, and other payments due under the Receivables Facility. The segregated account is considered restricted cash and is reflected in prepaid expenses and other current assets in the Company’s Condensed Consolidated Balance Sheets. Borrowings under the Receivables Facility along with the transferred retail installment contract receivables are included in the Condensed Consolidated Balance Sheets. Borrowings and repayments under the Receivables Facility are reflected as cash flows from financing activities in the Condensed Consolidated Statements of Cash Flows. During the three months ended March 31, 2021, the Company received proceeds of $30 million under the Receivables Facility and repaid $7 million. As of March 31, 2021 and December 31, 2020, the Company had outstanding balances of $98 million and $76 million, respectively. As of March 31, 2021, the Company had an uncommitted available borrowing capacity of $102 million under the Receivables Facility. The Receivables Facility did not have a material impact to the Condensed Consolidated Statements of Operations during the three months ended March 31, 2021 and 2020. Variable Interest Entity The SPE, as described above, meets the definition of a variable interest entity (“VIE”) for which the Company is the primary beneficiary as it has the power to direct the SPE’s activities and the obligation to absorb losses or the right to receive benefits of the SPE. As such, the assets, liabilities, and financial results of operations of the SPE are consolidated in the Company’s condensed consolidated financial statements. As of March 31, 2021 and December 31, 2020, the SPE’s assets and liabilities primarily consisted of unbilled retail installment contract receivables, net, of $143 million and $109 million, respectively, and borrowings under the Receivables Facility of $98 million and $76 million, respectively. Loss on Extinguishment of Debt During the three months ended March 31, 2021, loss on extinguishment was not material. During the three months ended March 31, 2020, loss on extinguishment of debt totaled $66 million and related to the call premium and write-off of unamortized deferred financing costs in connection with the $1.2 billion redemption of the Company’s second-priority secured notes in February 2020. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Unrecognized Tax Benefits During the three months ended March 31, 2021, the Company did not have a material change to its unrecognized tax benefits. The Company’s unrecognized tax benefits relate to tax years that remain subject to audit by the taxing authorities in the U.S. federal, state and local, and foreign jurisdictions. Based on the current status of its income tax audits, the Company does not believe that a significant portion of its unrecognized tax benefits will be resolved in the next twelve months. Effective Tax Rate The Company’s income tax benefit for the three months ended March 31, 2021 was $15 million, resulting in an effective tax rate for the period of 23.3%. The effective tax rate primarily represents the federal statutory rate of 21.0%, a state statutory tax rate, net of federal benefits, of 2.8%, a 2.8% favorable impact of share-based compensation, partially offset by a 1.6% unfavorable impact of state legislative changes. Income tax benefit for the three months ended March 31, 2020 was $78 million, resulting in an effective tax rate for the period of 20.6%. The effective tax rate primarily represents the federal income tax rate of 21.0%, a state statutory tax rate, net of federal benefits, of 3.0%, a 2.4% unfavorable impact related to an increase in unrecognized tax benefits, and a 1.7% unfavorable impact from an increase in valuation allowances primarily related to tax credits not expected to be utilized prior to expiration. The effective tax rate can vary from period to period due to permanent tax adjustments, discrete items such as the settlement of income tax audits and changes in tax laws, as well as recurring factors such as changes in the overall state tax rate. COVID-19 Pandemic In response to the COVID-19 Pandemic, the American Rescue Plan Act of 2021 (the “2021 Rescue Act”) and the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) were signed into law during March 2021 and March 2020, respectively, and included significant corporate income tax and payroll tax provisions intended to provide economic relief to address the impact of the COVID-19 Pandemic. During 2020, the Company recognized favorable cash flow impacts related to the accelerated refund of previously generated alternative minimum tax credits, as well as from the deferral of remittance of certain 2020 payroll taxes, with 50% of the deferred amount due by the end of 2021, and the remainder due by the end of 2022. The Company also recognized a benefit from an increase in the interest expense limitation from 30% to 50% for tax years 2019 and 2020. In connection with the 2021 Rescue Act, the Company noted risks of an unfavorable impact to the Company’s future results of operations and cash flows due to revised Internal Revenue Code Section 162(m) limits on the deduction for executive compensation, effective in tax years after 2026. During the first quarter of 2021, various revenue raising corporate tax provisions were also proposed, including a potential increase in the corporate tax rate and the enactment of a minimum tax on book income. The Company will continue to monitor and assess the potential unfavorable impacts of such proposals. In addition, states have begun proposing and enacting legislation to address the unfavorable financial impacts of the COVID-19 Pandemic, which includes tax rate changes, decoupling from favorable federal legislation under the CARES Act (such as an increased interest expense limitation from 30% to 50%), and limiting the use of net operating losses. As of March 31, 2021, there has been no material impact to the Company from these state legislative changes. However, the Company expects the trend to continue through the remainder of 2021, and these changes could have material impacts to the Company’s results of operations and cash flows. The Company will continue to assess the impacts as states finalize and enact these legislative changes. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Contractual Obligations During the three months ended March 31, 2021, the Company entered into various commitments to purchase certain parts used in the program to replace 3G and CDMA cellular equipment used in the Company’s security systems. As of March 31, 2021, the Company had $85 million outstanding related to these obligations. In addition, the Company entered into an agreement in February 2021 with a third party to purchase customer accounts, if certain conditions are met, up to approximately $67 million over the remaining course of the agreement. The timing and ultimate amount of these purchases are uncertain. There have been no other material changes to the Company’s contractual obligations as compared to December 31, 2020. Legal Proceedings The Company is subject to various claims and lawsuits in the ordinary course of business, which include contractual disputes; worker’s compensation; employment matters; product, general, and auto liability claims; claims that the Company has infringed on the intellectual property rights of others; claims related to alleged security system failures; and consumer and employment class actions. The Company is also subject to regulatory and governmental examinations, information requests and subpoenas, inquiries, investigations, and threatened legal actions and proceedings. In connection with such formal and informal inquiries, the Company receives numerous requests, subpoenas, and orders for documents, testimony, and information in connection with various aspects of its activities. The Company records accruals for losses that are probable and reasonably estimable. These accruals are based on a variety of factors such as judgment, probability of loss, opinions of internal and external legal counsel, and actuarially determined estimates of claims incurred but not yet reported based upon historical claims experience. Legal costs in connection with claims and lawsuits in the ordinary course of business are expensed as incurred. Additionally, the Company records insurance recovery receivables from third-party insurers when recovery has been determined to be probable. The Company’s accrual for ongoing claims and lawsuits not within scope of an insurance program was not material and in most cases the Company has not accrued for any losses as the ultimate outcome or the range of possible loss cannot be estimated. The Company’s accrual for ongoing claims and lawsuits within scope of an insurance program totaled $92 million and $89 million as of March 31, 2021 and December 31, 2020, respectively. Environmental Matters In October 2013, the Company was notified by subpoena that the Office of the Attorney General of California, in conjunction with the Alameda County District Attorney, is investigating whether the Company’s electronic waste disposal policies, procedures, and practices are in violation of the California Business and Professions Code and the California Health and Safety Code. During 2016, Protection One, Inc. was also notified by the same parties that it was subject to a similar investigation. The investigations have been inactive since December 2016 other than a status conference conducted in May 2019. The Company is coordinating joint handling of both investigations and continues to fully cooperate with the respective authorities. Los Angeles Alarm Permit Class Action In June 2013, the Company was served with a class action complaint in California State Court entitled Villegas v. ADT . In this complaint, the plaintiff asserted that the Company violated certain provisions of the California Alarm Act and the Los Angeles Municipal Alarm Ordinance for its alleged failures to obtain alarm permits for its Los Angeles customers and disclose the alarm permit fee in its customer contracts. The plaintiff seeks to recover damages for putative class members who were required to pay enhanced false alarm fines as a result of the Company not obtaining a valid alarm permit at the time of alarm system installation. The case was initially dismissed by the trial court and judgment was entered in the Company’s favor in October 2014, which the plaintiff appealed. In September 2016, the California Appellate Court reversed and remanded the case back to the trial court. In November 2018, the trial court granted the plaintiff’s motion for class certification and certified four subclasses of customers who received fines from the City of Los Angeles. The case settled in January 2020, and the settlement received preliminary approval from the court in February 2021. A hearing for final approval is scheduled in July 2021. Wage and Hour Class Action In January 2020, the Company acquired Defenders, which is defending against litigation brought by Teddy Archer and seven other security advisors who claim unpaid overtime under the Fair Labor Standards Act (the “FLSA”), breach of contract under state law in all states, and a violation of state wage-hour laws in California, New Jersey, New York, and Washington. The lawsuit was originally filed in March 2018 in the United States District Court for the District of Delaware. During 2018, the court conditionally certified the case as an FLSA collective action. The plaintiffs seek to represent a nationwide class for unpaid wages. The parties are actively engaged in discovery. Unauthorized Access by a Former Technician In April 2020, after investigating a customer inquiry, the Company self-disclosed that a former technician based in Dallas, Texas had, during service visits, added his personal email address to approximately 200 of the Company’s customers’ accounts, which provided this employee with varying levels of unauthorized personal access to such customers’ in-home security systems. In response, the Company initiated an affirmative outreach effort to notify all customers affected by this activity and to address their concerns. Since the disclosure, four lawsuits have been filed against the Company, and the Company intervened in a fifth lawsuit filed against the former technician. In May 2020, the Company was served with a class action complaint in a case captioned Shana Doty v. ADT LLC and filed in the U.S. District Court for the Southern District of Florida. By an amended complaint, the plaintiff asserts causes of action on behalf of herself and other Company customers similarly situated, and seeks to recover damages for breach of contract, negligence, intrusion upon seclusion, violation of the Computer Fraud and Abuse Act, negligent hiring, supervision and retention, and intentional infliction of emotional distress. The Company moved to dismiss the plaintiff’s amended complaint. In December 2020, the federal district court dismissed the causes of action for Intrusion Upon Seclusion and violation of the Computer Fraud and Abuse Act, and further ruled that plaintiff may not seek to hold the Company vicariously liable for any intentional torts committed by the former technician. The Company’s motion was denied on plaintiff’s other claims. In June 2020, the Company was served with a class action complaint in a case captioned Alexia Preddy v. ADT LLC and filed in the U.S. District Court for the Southern District of Florida. By an amended complaint, the plaintiff asserts causes of action on behalf of herself and others similarly situated as individuals residing in homes of Company customers, and seeks to recover damages for negligence, intrusion upon seclusion, violation of the Computer Fraud and Abuse Act, negligent hiring, supervision and retention, and intentional infliction of emotional distress. The Company moved to dismiss the plaintiff’s amended complaint and to compel arbitration. In December 2020, the federal district court granted the Company’s motion to compel arbitration. The case is stayed and administratively closed pending arbitration. The Company’s motion to dismiss was denied as moot. In April 2021, the Company received notice that a new class action complaint had been filed in the U.S. District Court for the Southern District of Florida on behalf of Randy Doty, the husband of the plaintiff in Shana Doty v. ADT LLC. The Company has not yet been formally served. The claims alleged in the new complaint follow the claims asserted in Alexa Preddy v. ADT LLC, the case which has been stayed pending arbitration. The Company was previously served with a complaint filed in Texas state court by an individual Company customer in July 2020, intervened in a putative Texas state court class action filed against the former technician in August 2020, and may be subject to future legal claims. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial InstrumentsThe Company's derivative financial instruments primarily consist of LIBOR-based interest rate swap contracts, which were entered into with the objective of managing exposure to variability in interest rates on the Company's debt. All interest rate swap contracts are reported in the Condensed Consolidated Balance Sheets at fair value. For interest rate swap contracts not designated as cash flow hedges, unrealized gains and losses are recognized in interest expense, net, in the Condensed Consolidated Statements of Operations. For interest rate swap contracts designated as cash flow hedges, unrealized gains and losses are recognized as a component of accumulated other comprehensive income (“AOCI”) in the Condensed Consolidated Balance Sheets and are reclassified into interest expense, net, in the same period in which the related interest on debt affects earnings. For interest rate swap contracts that have been de-designated as cash flow hedges and for which the forecasted cash flows are probable or reasonably possible of occurring, unrealized gains and losses previously recognized as a component of AOCI are reclassified into interest expense, net, in the same period in which the related interest on variable-rate debt affects earnings through the original maturity date of the related interest rate swap contracts. For interest rate swap contracts that have been de-designated as cash flow hedges and for which the forecasted cash flows are probable of not occurring, unrealized gains and losses previously recognized as a component of AOCI are immediately reclassified into interest expense, net. The cash flows associated with interest rate swap contracts that included an other-than-significant financing element at inception are reflected as cash flows from financing activities in the Condensed Consolidated Statements of Cash Flows. The following table presents the Company’s interest rate swaps as of March 31, 2021 and December 31, 2020 ( in thousands ): Execution Maturity Designation Notional Amount January 2019 April 2022 Not designated $ 125,000 February 2019 April 2022 Not designated 300,000 October 2019 September 2026 Not designated 2,800,000 Total notional amount $ 3,225,000 As a result of changes in the interest rate environment during 2020, the Company's interest rate swap contracts previously designated as cash flow hedges with an aggregate notional amount of $3 billion were no longer highly effective beginning in March 2020. Accordingly, the Company de-designated the cash flow hedges, and the unrealized gains and losses for the period in which these cash flow hedges were no longer highly effective were recognized in interest expense, net. As the forecasted cash flows are probable or reasonably possible of occurring, unrealized losses previously recognized as a component of AOCI prior to de-designation will be reclassified into interest expense, net, in the same period in which the related interest on variable-rate debt affects earnings through the maturity dates of the interest rate swap contracts. The unrealized impact of interest rate swap contracts recognized in interest expense, net, in the Condensed Consolidated Statements of Operations was a gain of $107 million and a loss of $70 million during the three months ended March 31, 2021 and 2020, respectively. During the three months ended March 31, 2021 and 2020, the Company paid $14 million and $3 million, respectively, related to settlements on interest rate swap contracts that included an other-than-insignificant financing element at inception, which is reflected in cash flows from financing activities in the Condensed Consolidated Statement of Cash Flows. The following table presents the fair value of the Company’s interest rate swaps and related classification in the Condensed Consolidated Balance Sheets: (in thousands) March 31, 2021 December 31, 2020 Accrued expenses and other current liabilities $ 64,864 $ 65,462 Other liabilities 104,459 210,378 Fair value of interest rate swaps $ 169,323 $ 275,840 As of March 31, 2021 and December 31, 2020, AOCI, net of tax, related to cash flow hedges was $106 million and $118 million, respectively. |
Share-based Compensation
Share-based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Compensation | Share-based Compensation Share-based compensation expense totaled $16 million and $23 million during the three months ended March 31, 2021 and 2020, respectively. Restricted Stock Units During the three months ended March 31, 2021, the Company granted approximately 5 million restricted stock units (“RSUs”) under the 2018 Omnibus Incentive Plan (the “2018 Plan”). These RSUs are service-based awards with a three-year graded vesting period from the date of grant. The fair value of the RSUs is equal to the closing price per share of the Company’s Common Stock on the date of grant, which resulted in a weighted-average grant date fair value of $7.74. The RSUs include retirement provisions that allow awards to continue to vest in accordance with the granted terms in its entirety when a participant reaches retirement eligibility, as long as 12 months of service have been provided since the date of grant. RSUs are entitled to dividend equivalent units, which are granted as additional RSUs and are subject to the same vesting and forfeiture conditions as the underlying RSUs. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
DividendReinvestmentPlan [policy text block] | During February 2019, the Company approved a dividend reinvestment plan (the “DRIP”), which allowed stockholders to designate all or a portion of the cash dividends on their shares of common stock for reinvestment in additional shares of the Company’s Common Stock. |
Equity | Equity The Company has two classes of common stock, Common Stock and Class B Common Stock, both of which entitle stockholders to one vote for each share. Each share of Class B Common Stock has equal status and rights to dividends as a share of Common Stock. The holders of Class B Common Stock have one vote for each share of Class B Common Stock held on all matters on which stockholders are entitled to vote generally except for voting on the election, appointment, or removal of directors of the Company. Additionally, each share of Class B Common Stock will immediately become convertible into one share of Common Stock, at the option of the holder, subject to certain timing and restrictions. Dividends The following table presents the Company’s dividends declared on common stock during the three months ended March 31, 2021 and 2020: (in thousands, except per share data) Common Stock Class B Common Stock Dividends Declaration Date Record Date Payment Date Per Share Aggregate Per Share Aggregate 2/25/2021 3/18/2021 4/1/2021 $ 0.035 $ 27,220 $ 0.035 $ 1,916 3/5/2020 3/19/2020 4/2/2020 $ 0.035 $ 27,117 $ — $ — On May 5, 2021, the Company announced a dividend of $0.035 per share to holders of Common Stock and Class B Common Stock of record on June 17, 2021, which will be distributed on July 1, 2021. During February 2019, the Company approved a dividend reinvestment plan (the “DRIP”), which allowed stockholders to designate all or a portion of the cash dividends on their shares of common stock for reinvestment in additional shares of the Company’s Common Stock. Dividends settled in shares of Common Stock were not material during the three months ended March 31, 2021 and 2020. The DRIP terminated in accordance with its terms on February 27, 2021. Share Repurchase Program During February 2019, the Company approved a share repurchase program (the “Share Repurchase Program”), which authorized the Company to repurchase shares of the Company’s Common Stock (up to a certain amount). There were no repurchases of any shares of Common Stock under the Share Repurchase Program during the three months ended March 31, 2021 and 2020. The Share Repurchase Program terminated in accordance with its terms on March 23, 2021. Accumulated Other Comprehensive Loss There were no material reclassifications out of AOCI during the three months ended March 31, 2021 and 2020. As of March 31, 2021, approximately $60 million of AOCI associated with cash flow hedges is estimated to be reclassified to interest expense, net, within the next twelve months. |
Net Loss per Share
Net Loss per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Net Loss Per Share The Company applies the two-class method for computing and presenting net loss per share for each class of common stock. The two-class method allocates current period net loss to each class of common stock and participating securities based on (i) dividends declared and (ii) participation rights in the remaining undistributed losses. Basic net loss per share is computed by dividing the net loss allocated to each class of common stock using the two-class method by the related weighted-average number of shares outstanding during the period. Diluted net loss per share gives effect to all securities representing potential common shares that were dilutive and outstanding during the period for each class of common stock. Potential shares of Common Stock include (i) incremental shares of Common Stock calculated using the treasury stock method for share-based compensation awards, (ii) incremental shares of Common Stock issuable upon the conversion of Class B Common Stock, and (iii) incremental shares of Common Stock calculated using the treasury stock method for warrants to purchase additional shares of Common Stock that were issued in connection with a business combination. For purposes of the diluted net loss per share of Common Stock computation, all potential shares of Common Stock that would be dilutive were excluded because their effect would be anti-dilutive. As a result, basic net loss per share of Common Stock is equal to diluted net loss per share of Common Stock for the periods presented. For purposes of the diluted net loss per share of Class B Common Stock computation, basic net loss per share of Class B Common Stock is equal to diluted net loss per share of Class B Common Stock because there were no potential shares of Class B Common Stock outstanding, and the Company reported a net loss during the three months ended March 31, 2021. The following table provides the computations of basic and diluted net loss per share for each class of common stock: Three Months Ended March 31, 2021 March 31, 2020 (in thousands, except per share amounts) Common Stock Class B Common Stock Common Stock Class B Common Stock Allocation of net loss - basic and diluted $ (44,673) $ (3,221) $ (300,293) $ — Weighted-average shares outstanding - basic and diluted 762,704 54,745 759,092 — Net loss per share - basic and diluted $ (0.06) $ (0.06) $ (0.40) $ — |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company’s related party transactions primarily relate to management, consulting, and transaction advisory services provided by Apollo, as well as monitoring and related services provided to or products and services received from other entities controlled by Apollo. There were no significant related party transactions as of and for the three months ended March 31, 2021 and three months ended March 31, 2020. |
Leases (Notes)
Leases (Notes) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases of Lessee Disclosure [Text Block] | Leases Company as Lessor The Company is a lessor in certain transactions in which the Company provides monitoring and related services but retains ownership of the security system as the Company has identified a lease component associated with the right-of-use of the security system and a non-lease component associated with monitoring and related services. For transactions in which (i) the timing and pattern of transfer is the same for the lease and non-lease components, and (ii) the lease component would be classified as an operating lease if accounted for separately, the Company applies the practical expedient to aggregate the lease and non-lease components and accounts for the combined transaction based upon its predominant characteristic, which is the non-lease component. As a result, the Company accounts for the combined component as a single performance obligation under the applicable revenue guidance and the underlying assets are reflected within subscriber system assets, net, in the Condensed Consolidated Balance Sheets. Certain of the Company’s transactions do not qualify for the practical expedient as the lease component represents a sales-type lease, and as such, the Company accounts for the lease and non-lease components separately. The Company’s sales-type leases are not material. Company as Lessee The Company leases real estate, vehicles, and equipment with various lease terms and maturities that extend out through 2030 from various counterparties as part of normal operations. The Company applies the practical expedient to not separate the lease and non-lease components and accounts for the combined component as a lease. Additionally, the Company’s right-of-use assets and lease liabilities include leases with an initial lease term of 12 months or less. The Company’s right-of-use assets and lease liabilities primarily represent (a) lease payments that are fixed at the commencement of a lease and (b) variable lease payments that depend on an index or rate. Lease payments are recognized as lease cost on a straight-line basis over the lease term, which is determined as the non-cancelable period, periods in which termination options are reasonably certain of not being exercised, and periods in which renewal options are reasonably certain of being exercised. The discount rate for a lease is determined using the Company’s incremental borrowing rate that coincides with the lease term at the commencement of a lease. The incremental borrowing rate is estimated based on publicly available data for the Company’s debt instruments and other instruments with similar characteristics. Lease payments that are not fixed or that are not dependent on an index or rate and vary because of changes in usage or other factors are included in variable lease costs. Variable lease costs are recorded in the period in which the obligation is incurred and primarily relate to fuel, repair, and maintenance payments that vary based on the usage of leased vehicles. The Company’s leases do not contain material residual value guarantees or restrictive covenants. The Company’s subleases are not material. The following table presents operating and finance leases recognized in the Condensed Consolidated Balance Sheets: Leases ( in thousands ) Presentation Classification March 31, 2021 December 31, 2020 Assets: Operating Current Prepaid expenses and other current assets $ 647 $ 684 Operating Non-current Other assets 129,238 138,408 Finance Non-current Property and equipment, net (1) 56,018 54,414 Total right-of-use assets $ 185,903 $ 193,506 Liabilities: Operating Current Accrued expenses and other current liabilities $ 31,104 $ 30,689 Finance Current Current maturities of long-term debt 29,138 26,955 Operating Non-current Other liabilities 106,938 115,694 Finance Non-current Long-term debt 32,905 34,373 Total lease liabilities $ 200,085 $ 207,711 _________________ (1) Finance right-of-use assets are recorded net of accumulated depreciation of approximately $72 million and $67 million as of March 31, 2021 and December 31, 2020, respectively. The following table presents the components of total lease cost: Three Months Ended Lease Cost ( in thousands ) March 31, 2021 March 31, 2020 Operating lease cost $ 12,893 $ 14,600 Finance lease cost Amortization of right-of-use assets 6,311 6,077 Interest on lease liabilities 695 833 Variable lease costs 12,978 12,798 Total lease cost $ 32,877 $ 34,308 The following table presents cash flow and supplemental information associated with the Company’s leases: Three Months Ended Other information ( in thousands ) March 31, 2021 March 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 12,539 $ 14,213 Operating cash flows from finance leases $ 695 $ 833 Financing cash flows from finance leases $ 7,208 $ 6,642 Right-of-use assets obtained in exchange for new: Operating lease liabilities $ 2,187 $ 15,999 Finance lease liabilities $ 8,072 $ 4,627 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Effective in the first quarter of 2021, the manner in which the Company’s Chief Executive Officer, who is the CODM, evaluates performance and makes decisions about how to allocate resources changed. Therefore, the Company now reports results in two operating and reportable segments, CSB and Commercial, rather than a single operating and reportable segment. Refer to Note 1 “Description of Business and Summary of Significant Accounting Policies,” for a description of the Company’s segments. Where applicable, prior periods have been retrospectively adjusted to reflect the new operating and reportable segment structure. The CODM uses Adjusted EBITDA, which is the segment profit measure, to evaluate segment performance. Adjusted EBITDA is defined as net income or loss adjusted for (i) interest, (ii) taxes, (iii) depreciation and amortization, including depreciation of subscriber system assets and other fixed assets and amortization of dealer and other intangible assets, (iv) amortization of deferred costs and deferred revenue associated with subscriber acquisitions, (v) share-based compensation expense, (vi) merger, restructuring, integration, and other, (vii) losses on extinguishment of debt, (viii) radio conversion costs, net, (ix) financing and consent fees, (x) acquisition related adjustments, and (xi) other charges and non-cash items. The CODM does not review the Company's assets by segment; therefore, such information is not presented. The following table presents total revenue by segment and a reconciliation to consolidated total revenue: Three Months Ended (in thousands) March 31, 2021 March 31, 2020 CSB $ 1,038,605 $ 1,111,167 Commercial 266,099 258,585 Total Revenue $ 1,304,704 $ 1,369,752 The following table presents Adjusted EBITDA by segment and a reconciliation to consolidated net loss before taxes: Three Months Ended (in thousands) March 31, 2021 March 31, 2020 Adjusted EBITDA by segment: CSB $ 519,478 $ 537,075 Commercial 22,653 2,414 Total $ 542,131 $ 539,489 Reconciliation to consolidated net loss before taxes: Total segment Adjusted EBITDA $ 542,131 $ 539,489 Less: Interest expense, net 47,724 225,367 Depreciation and intangible asset amortization 469,809 489,024 Amortization of deferred subscriber acquisition costs 28,642 22,627 Amortization of deferred subscriber acquisition revenue (37,159) (29,477) Share-based compensation expense 16,019 23,499 Merger, restructuring, integration, and other 20,507 108,794 Loss on extinguishment of debt 156 65,843 Radio conversion costs, net (1) 58,729 6,639 Financing and consent fees (2) 3,346 5,250 Acquisition related adjustments (3) (248) 1,377 Other (4) (2,937) (1,197) Net loss before taxes $ (62,457) $ (378,257) ___________________ (1) Represents costs, net of any incremental revenue earned, associated with replacing cellular technology used in many of the Company’s security systems pursuant to a replacement program. (2) Represents fees expensed associated with financing transactions. (3) Represents amortization of purchase accounting adjustments and compensation arrangements related to acquisitions. (4) Represents other charges and non-cash items. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
amortization policy for Deferred SAC and SAS [Policy Text Block] | Subscriber system assets and any related deferred subscriber acquisition costs resulting from customer acquisitions are accounted for on a pooled basis based on the month and year of acquisition. The Company depreciates and amortizes its pooled subscriber system assets and related deferred subscriber acquisition costs using an accelerated method over the estimated life of the customer relationship, which is 15 years. |
Deferred Subscriber Acquisition Costs [Policy Text Block] | Deferred subscriber acquisition costs represent incremental selling expenses (primarily commissions) related to acquiring customers. Amortization expense relating to deferred subscriber acquisition costs included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations was $29 million and $23 million for the three months ended March 31, 2021 and 2020, respectively. |
Basis of Presentation | The condensed consolidated financial statements included herein are unaudited, but in the opinion of management, such financial statements include all adjustments, consisting of normal recurring adjustments, necessary to summarize fairly the Company’s financial position, results of operations, and cash flows for the interim periods presented. The interim results reported in these condensed consolidated financial statements should not be taken as indicative of results that may be expected for future interim periods or the full year. For a more comprehensive understanding of the Company and its interim results, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Annual Report”), which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 25, 2021. The Company’s accounting policies used in the preparation of these condensed consolidated financial statements do not differ from those used in the annual consolidated financial statements, unless otherwise noted. The Condensed Consolidated Balance Sheet as of December 31, 2020 included herein was derived from the audited consolidated financial statements as of that date but does not include all the footnote disclosures from the annual consolidated financial statements. The condensed consolidated financial statements include the accounts of ADT Inc. and its wholly-owned subsidiaries and have been prepared in U.S. dollars in accordance with GAAP. All intercompany transactions have been eliminated. Certain prior period amounts have been reclassified to conform with the current period presentation. Segment Change Effective in the first quarter of 2021, the manner in which the Company’s Chief Executive Officer, who is the chief operating decision maker (the “CODM”), evaluates performance and makes decisions about how to allocate resources changed. Therefore, the Company now reports results in two operating and reportable segments, Consumer and Small Business (“CSB”) and Commercial, rather than a single operating and reportable segment. Where applicable, prior periods have been retrospectively adjusted to reflect the new operating and reportable segment structure. The accounting policies of the Company’s reportable segments are the same as those for the consolidated financial statements. The Company organizes its segments based on customer type as follows: • Consumer and Small Business (CSB) - Customers in the CSB segment are comprised of residential homeowners, small business operators, and other individual consumers. The CSB segment primarily includes (i) revenue and operating costs from the sale, installation, servicing, and monitoring of integrated security and automation systems, as well as other offerings such as mobile security and home health solutions; (ii) other operating costs associated with support functions related to these operations; and (iii) general corporate costs and other income and expense items not included in the Commercial segment. Results for the Company’s Canadian operations prior to its sale in the fourth quarter of 2019 are included in the CSB segment based on the primary customer market served in Canada. • Commercial - Customers in the Commercial segment are comprised of larger businesses with more expansive facilities (typically larger than 10,000 square feet) and/or multi-site operations, which often require more sophisticated integrated solutions. The Commercial segment primarily includes (i) revenue and operating costs from the sale, installation, servicing, and monitoring of integrated security and automation systems, fire detection and suppression systems, and other related offerings; (ii) other operating costs associated with support functions of these operations; and (iii) dedicated corporate and other costs. Refer to Note 13 “Segment Information” for additional information on the Company’s segments. COVID-19 Pandemic During March 2020, the World Health Organization declared the outbreak of a novel coronavirus as a pandemic (the “COVID-19 Pandemic”), which has become widespread in the U.S. Containment efforts and responses to the COVID-19 Pandemic have varied by individuals, businesses, and state and local municipalities, and in certain areas of the U.S., initial and precautionary measures helped mitigate the spread of the coronavirus, while subsequent easing of such measures has resulted in the re-emergence of the coronavirus. The COVID-19 Pandemic has had a notable adverse impact on general economic conditions, including the temporary closures of many businesses, increased governmental regulations, and reduced consumer spending due to significant unemployment and other effects attributable to the COVID-19 Pandemic. In order to continue to both protect its employees and serve its customers, the Company has adjusted and is continuously evolving certain aspects of its operations, which includes (i) detailed protocols for infectious disease safety for employees, (ii) daily wellness checks for employees, and (iii) certain work from home actions, including for the majority of the Company’s call center professionals. The Company considered the on-going and pervasive economic impact of the COVID-19 Pandemic in its assessment of its financial position, results of operations, cash flows, and certain accounting estimates as of and for the three months ended March 31, 2021. Due to the evolving and uncertain nature of the COVID-19 Pandemic, it is possible that the effects of the COVID-19 Pandemic could materially impact the Company’s estimates and condensed consolidated financial statements in future reporting periods. |
Subscriber System Assets, Net | Subscriber System Assets, net and Deferred Subscriber Acquisition Costs, net The Company capitalizes certain costs associated with transactions in which the Company retains ownership of the security system as well as incremental selling expenses related to acquiring customers. These costs include equipment, installation costs, and other incremental costs and are recorded in subscriber system assets, net, and deferred subscriber acquisition costs, net, in the Condensed Consolidated Balance Sheets. These assets embody a probable future economic benefit as they contribute to the generation of future monitoring and related services revenue for the Company. |
Financial Instruments | Fair Value of Financial InstrumentsThe Company’s financial instruments primarily consist of cash and cash equivalents, restricted cash and restricted cash equivalents, accounts receivable, retail installment contract receivables, accounts payable, debt, and derivative financial instruments. Due to their short-term and/or liquid nature, the fair values of cash, restricted cash, accounts receivable, and accounts payable approximate their respective carrying amounts |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents | Cash and Cash Equivalents and Restricted Cash and Restricted Cash Equivalents All highly liquid investments with original maturities of three months or less from the time of purchase are considered to be cash equivalents. Restricted cash and restricted cash equivalents are cash and cash equivalents that are restricted for a specific purpose and cannot be included in the general cash and cash equivalents account. Restricted cash and restricted cash equivalents are reflected in prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets. Cash Equivalents - Included in cash and cash equivalents are investments in money market mutual funds, which totaled $41 million and $143 million as of March 31, 2021 and December 31, 2020, respectively. These investments are classified as Level 1 fair value measurements, which represent unadjusted quoted prices in active markets for identical assets or liabilities. |
Retail Installment Contract Receivables | Retail Installment Contract Receivables, net - The fair value of the Company’s retail installment contract receivables was determined using a discounted cash flow model. The resulting fair value is classified as a Level 3 fair value measurement. |
Derivative Financial Instruments | The Company's derivative financial instruments primarily consist of LIBOR-based interest rate swap contracts, which were entered into with the objective of managing exposure to variability in interest rates on the Company's debt. All interest rate swap contracts are reported in the Condensed Consolidated Balance Sheets at fair value. For interest rate swap contracts not designated as cash flow hedges, unrealized gains and losses are recognized in interest expense, net, in the Condensed Consolidated Statements of Operations. For interest rate swap contracts designated as cash flow hedges, unrealized gains and losses are recognized as a component of accumulated other comprehensive income (“AOCI”) in the Condensed Consolidated Balance Sheets and are reclassified into interest expense, net, in the same period in which the related interest on debt affects earnings. For interest rate swap contracts that have been de-designated as cash flow hedges and for which the forecasted cash flows are probable or reasonably possible of occurring, unrealized gains and losses previously recognized as a component of AOCI are reclassified into interest expense, net, in the same period in which the related interest on variable-rate debt affects earnings through the original maturity date of the related interest rate swap contracts. For interest rate swap contracts that have been de-designated as cash flow hedges and for which the forecasted cash flows are probable of not occurring, unrealized gains and losses previously recognized as a component of AOCI are immediately reclassified into interest expense, net. The cash flows associated with interest rate swap contracts that included an other-than-significant financing element at inception are reflected as cash flows from financing activities in the Condensed Consolidated Statements of Cash Flows. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Financial Accounting Standards Board Accounting Standards Update (“ASU”) 2020-06, Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity , provides guidance to ease the potential burden of accounting for convertible instruments, derivatives related to an entity’s own equity, and the related earnings per share considerations. The Company early adopted the guidance as of January 1, 2021. The impact from adoption was not material. ASU 2021-01, Reference Rate Reform (Topic 848) : Facilitation of the Effects of Reference Rate Reform on Financial Reporting amends ASU 2020-04, which was disclosed in the Company’s 2020 Annual Report. ASU 2021-01 clarifies the scope and guidance of Topic 848 and allows derivatives impacted by the reference rate reform to qualify for certain optional expedients and exceptions for contract modifications and hedge accounting. The guidance is optional and is effective for a limited period of time through December 31, 2022. As of March 31, 2021, this guidance had no impact on the Condensed Consolidated Financial Statements. The Company will continue to evaluate this guidance. |
Radio conversion costs | Radio conversion costs are included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. Radio conversion revenue is included in monitoring and related services revenue in the Condensed Consolidated Statement of Operations. |
Segment Reporting, Policy | Segment Change Effective in the first quarter of 2021, the manner in which the Company’s Chief Executive Officer, who is the chief operating decision maker (the “CODM”), evaluates performance and makes decisions about how to allocate resources changed. Therefore, the Company now reports results in two operating and reportable segments, Consumer and Small Business (“CSB”) and Commercial, rather than a single operating and reportable segment. Where applicable, prior periods have been retrospectively adjusted to reflect the new operating and reportable segment structure. The accounting policies of the Company’s reportable segments are the same as those for the consolidated financial statements. The Company organizes its segments based on customer type as follows: • Consumer and Small Business (CSB) - Customers in the CSB segment are comprised of residential homeowners, small business operators, and other individual consumers. The CSB segment primarily includes (i) revenue and operating costs from the sale, installation, servicing, and monitoring of integrated security and automation systems, as well as other offerings such as mobile security and home health solutions; (ii) other operating costs associated with support functions related to these operations; and (iii) general corporate costs and other income and expense items not included in the Commercial segment. Results for the Company’s Canadian operations prior to its sale in the fourth quarter of 2019 are included in the CSB segment based on the primary customer market served in Canada. • Commercial - Customers in the Commercial segment are comprised of larger businesses with more expansive facilities (typically larger than 10,000 square feet) and/or multi-site operations, which often require more sophisticated integrated solutions. The Commercial segment primarily includes (i) revenue and operating costs from the sale, installation, servicing, and monitoring of integrated security and automation systems, fire detection and suppression systems, and other related offerings; (ii) other operating costs associated with support functions of these operations; and (iii) dedicated corporate and other costs. |
Debt | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Financial Instruments | Long-Term Debt Instruments - The fair value of the Company’s debt instruments was determined using broker-quoted market prices, which represent prices based on quoted prices for similar assets or liabilities as well as other observable market data. The carrying amounts of debt outstanding, if any, under the Company’s revolving credit facility and receivables facility approximate fair values as interest rates on these borrowings approximate current market rates. The resulting fair values are classified as Level 2 fair value measurements. |
Derivative | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Financial Instruments | Derivative Financial Instruments - Derivative financial instruments are reported at fair value as either assets or liabilities in the Condensed Consolidated Balance Sheets. These fair values are primarily calculated using discounted cash flow models that utilize observable inputs, such as quoted forward interest rates, and incorporate credit risk adjustments to reflect the risk of default by the counterparty or the Company. The resulting fair value is classified as a Level 2 fair value measurement. |
Revenue Revenue (Policies)
Revenue Revenue (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue [Abstract] | |
Receivable [Policy Text Block] | Accounts Receivable, netAccounts receivable represent unconditional rights to consideration due from customers in the ordinary course of business and are generally due in one year or less. Accounts receivable are recorded at amortized cost less an allowance for credit losses that are not expected to be recovered. The allowance for credit losses is recognized at inception and is reassessed each reporting period. |
Revenue Outright Sale Policy [Policy Text Block] | In transactions involving a security or fire safety system that is sold outright to the customer, the Company’s performance obligations generally include the sale and installation of the system as well as any monitoring and related services. For such arrangements, the Company allocates a portion of the transaction price to each performance obligation based on relative standalone selling price, which is determined using observable internal or external pricing and profitability metrics. Revenue associated with the sale and installation of a system is recognized either at a point in time or over time based upon the nature of the transaction and contractual terms and is reflected in installation and other revenue in the Condensed Consolidated Statements of Operations. For revenue recognized over time, progress toward complete satisfaction of the performance obligation is primarily measured using a cost-to-cost measure of progress method. The cost input that drives revenue recognition for contracts where revenue is recognized over time is based primarily on contract cost incurred to date compared to total estimated contract cost. This measure of progress method includes forecasts based on the best information available and reflects the Company’s judgment to faithfully depict the value of the services transferred to the customer. The portion of the transaction price associated with monitoring and related services revenue is recognized when services are provided to the customer and is reflected in monitoring and related services revenue in the Condensed Consolidated Statements of Operations. Revenue from product sales related to the sale and installation of security and fire safety systems was $203 million and $293 million for the three months ended March 31, 2021 and 2020, respectively. Cost of revenue from product sales related to the sale and installation of security and fire safety systems was $160 million and $212 million for the three months ended March 31, 2021 and 2020, respectively. Early termination of the contract by the customer results in a termination charge in accordance with the terms of the contract. Contract termination charges are recognized in revenue when collectability is probable and are reflected in monitoring and related services revenue in the Condensed Consolidated Statements of Operations. The Company records revenue in the Condensed Consolidated Statements of Operations net of sales and other taxes. Amounts collected from customers for sales and other taxes are reported as a liability net of the related amounts remitted. |
Revenue from Contract with Customer [Policy Text Block] | The Company generates revenue primarily through contractual monthly recurring fees received for monitoring and related services provided to customers. In transactions in which the Company provides monitoring and related services but retains ownership of the security system, the Company’s performance obligations primarily include monitoring, related services (such as maintenance agreements), and a material right associated with the one-time non-refundable fees received in connection with the initiation of a monitoring contract that the customer will not be required to pay again upon a renewal of the contract, which is referred to as deferred subscriber acquisition revenue. The portion of the transaction price associated with monitoring and related services revenue is recognized when the services are provided to the customer and is reflected in monitoring and related services revenue in the Condensed Consolidated Statements of Operations.Customer billings for services not yet rendered are deferred and recognized as revenue as services are provided. These fees are recorded as current deferred revenue in the Condensed Consolidated Balance Sheets as the Company expects to satisfy any remaining performance obligations, as well as recognize the related revenue, within the next twelve months. Accordingly, the Company has applied the practical expedient regarding deferred revenue to exclude the value of remaining performance obligations if (i) the contract has an original expected term of one year or less or (ii) the Company recognizes revenue in proportion to the amount it has the right to invoice for services performed. |
Deferred Subscriber Acquisition Costs [Policy Text Block] | Deferred subscriber acquisition costs represent incremental selling expenses (primarily commissions) related to acquiring customers. Amortization expense relating to deferred subscriber acquisition costs included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations was $29 million and $23 million for the three months ended March 31, 2021 and 2020, respectively. |
Financing Receivable, Allowance for Credit Losses, Policy for Uncollectible Amounts [Policy Text Block] | Retail Installment Contract Receivables, net During February 2020, the Company introduced a new retail installment contract option that allows qualifying residential customers to repay the fees due at installation over a 24-, 36-, or 60-month interest-free period. The financing component of the Company’s retail installment contract receivables is not significant. Retail installment contracts are available for residential transactions occurring under both Company-owned and customer-owned models. When originating a retail installment contract, the Company utilizes external credit scores to assess credit quality of a customer and to determine eligibility for the retail installment contract. In addition, a customer is required to enroll in the Company’s automated payment process in order to enter into a retail installment contract. Subsequent to origination, the Company monitors the delinquency status of retail installment contract receivables as the key credit quality indicator. As of March 31, 2021, the current and delinquent billed retail installment contract receivables were not material. Retail installment contract receivables are recorded at amortized cost less an allowance for credit losses that are not expected to be recovered. The allowance for credit losses is recognized at inception and reassessed each reporting period. The allowance for credit losses on retail installment contract receivables was not material for the periods presented. |
ADT Contract Assets, Allowance for Credit Loses [Policy Text Block] | The Company records an allowance for credit losses against its contract assets for expected credit losses that are not expected to be recovered. The allowance for credit losses is recognized at inception and is reassessed each reporting period. The allowance for credit losses on contract assets was not material for the periods presented. |
Contract Liability Policy [Policy Text Block] | Deferred subscriber acquisition revenue is deferred and recorded as deferred subscriber acquisition revenue in the Condensed Consolidated Balance Sheets upon initiation of a monitoring contract. Deferred subscriber acquisition revenue is amortized on a pooled basis into installation and other revenue in the Condensed Consolidated Statements of Operations over the estimated life of the customer relationship using an accelerated method consistent with the amortization of subscriber system assets and deferred subscriber acquisition costs associated with the transaction. |
contracts with customers, contract assets policy [Policy Text Block] | Contract Assets, netContract assets are recorded when the Company has transferred goods or services to the customer in the ordinary course of business but does not have an unconditional right to such consideration. The contract asset is reclassified to accounts receivable as services are performed and billed, which results in the Company’s unconditional right to the consideration. The Company has the right to bill the customer as service is provided over time, which generally occurs over the course of a 24-, 36-, or 60-month period. |
Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy | The Company’s allowance for credit losses is evaluated on a pooled basis based on customer type. For each pool of customers, the allowance for credit losses is estimated based on the delinquency status of the underlying receivables and the related historical loss experience, as adjusted for current and expected future conditions, if applicable. |
Debt (Policies)
Debt (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Securitization Financing Agreement | The Company services the transferred retail installment contract receivables and is responsible for ensuring that amounts collected from the transferred retail installment contract receivables are remitted to a segregated bank account in the name of the SPE. On a monthly basis, the segregated account is utilized to make required principal, interest, and other payments due under the Receivables Facility. The segregated account is considered restricted cash and is reflected in prepaid expenses and other current assets in the Company’s Condensed Consolidated Balance Sheets. Borrowings under the Receivables Facility along with the transferred retail installment contract receivables are included in the Condensed Consolidated Balance Sheets. Borrowings and repayments under the Receivables Facility are reflected as cash flows from financing activities in the Condensed Consolidated Statements of Cash Flows. |
Commitment and Contingencies (P
Commitment and Contingencies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal costs accrual | The Company records accruals for losses that are probable and reasonably estimable. These accruals are based on a variety of factors such as judgment, probability of loss, opinions of internal and external legal counsel, and actuarially determined estimates of claims incurred but not yet reported based upon historical claims experience. Legal costs in connection with claims and lawsuits in the ordinary course of business are expensed as incurred. Additionally, the Company records insurance recovery receivables from third-party insurers when recovery has been determined to be probable. |
Derivative Financial Instrume_2
Derivative Financial Instruments Derivative Policy (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | The Company's derivative financial instruments primarily consist of LIBOR-based interest rate swap contracts, which were entered into with the objective of managing exposure to variability in interest rates on the Company's debt. All interest rate swap contracts are reported in the Condensed Consolidated Balance Sheets at fair value. For interest rate swap contracts not designated as cash flow hedges, unrealized gains and losses are recognized in interest expense, net, in the Condensed Consolidated Statements of Operations. For interest rate swap contracts designated as cash flow hedges, unrealized gains and losses are recognized as a component of accumulated other comprehensive income (“AOCI”) in the Condensed Consolidated Balance Sheets and are reclassified into interest expense, net, in the same period in which the related interest on debt affects earnings. For interest rate swap contracts that have been de-designated as cash flow hedges and for which the forecasted cash flows are probable or reasonably possible of occurring, unrealized gains and losses previously recognized as a component of AOCI are reclassified into interest expense, net, in the same period in which the related interest on variable-rate debt affects earnings through the original maturity date of the related interest rate swap contracts. For interest rate swap contracts that have been de-designated as cash flow hedges and for which the forecasted cash flows are probable of not occurring, unrealized gains and losses previously recognized as a component of AOCI are immediately reclassified into interest expense, net. The cash flows associated with interest rate swap contracts that included an other-than-significant financing element at inception are reflected as cash flows from financing activities in the Condensed Consolidated Statements of Cash Flows. |
Equity Share Repurchase (Polici
Equity Share Repurchase (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Share Repurchase and Retirement [Policy Text Block] | During February 2019, the Company approved a share repurchase program (the “Share Repurchase Program”), which authorized the Company to repurchase shares of the Company’s Common Stock (up to a certain amount). |
Net Loss per Share EPS Policy (
Net Loss per Share EPS Policy (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share, Policy [Policy Text Block] | The Company applies the two-class method for computing and presenting net loss per share for each class of common stock. The two-class method allocates current period net loss to each class of common stock and participating securities based on (i) dividends declared and (ii) participation rights in the remaining undistributed losses. Basic net loss per share is computed by dividing the net loss allocated to each class of common stock using the two-class method by the related weighted-average number of shares outstanding during the period. Diluted net loss per share gives effect to all securities representing potential common shares that were dilutive and outstanding during the period for each class of common stock. Potential shares of Common Stock include (i) incremental shares of Common Stock calculated using the treasury stock method for share-based compensation awards, (ii) incremental shares of Common Stock issuable upon the conversion of Class B Common Stock, and (iii) incremental shares of Common Stock calculated using the treasury stock method for warrants to purchase additional shares of Common Stock that were issued in connection with a business combination. For purposes of the diluted net loss per share of Common Stock computation, all potential shares of Common Stock that would be dilutive were excluded because their effect would be anti-dilutive. As a result, basic net loss per share of Common Stock is equal to diluted net loss per share of Common Stock for the periods presented. |
Leases (Policies)
Leases (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Lessor, Leases [Policy Text Block] | The Company is a lessor in certain transactions in which the Company provides monitoring and related services but retains ownership of the security system as the Company has identified a lease component associated with the right-of-use of the security system and a non-lease component associated with monitoring and related services. For transactions in which (i) the timing and pattern of transfer is the same for the lease and non-lease components, and (ii) the lease component would be classified as an operating lease if accounted for separately, the Company applies the practical expedient to aggregate the lease and non-lease components and accounts for the combined transaction based upon its predominant characteristic, which is the non-lease component. As a result, the Company accounts for the combined component as a single performance obligation under the applicable revenue guidance and the underlying assets are reflected within subscriber system assets, net, in the Condensed Consolidated Balance Sheets. Certain of the Company’s transactions do not qualify for the practical expedient as the lease component represents a sales-type lease, and as such, the Company accounts for the lease and non-lease components separately. The Company’s sales-type leases are not material. |
Lessee, Leases [Policy Text Block] | The Company leases real estate, vehicles, and equipment with various lease terms and maturities that extend out through 2030 from various counterparties as part of normal operations. The Company applies the practical expedient to not separate the lease and non-lease components and accounts for the combined component as a lease. Additionally, the Company’s right-of-use assets and lease liabilities include leases with an initial lease term of 12 months or less. The Company’s right-of-use assets and lease liabilities primarily represent (a) lease payments that are fixed at the commencement of a lease and (b) variable lease payments that depend on an index or rate. Lease payments are recognized as lease cost on a straight-line basis over the lease term, which is determined as the non-cancelable period, periods in which termination options are reasonably certain of not being exercised, and periods in which renewal options are reasonably certain of being exercised. The discount rate for a lease is determined using the Company’s incremental borrowing rate that coincides with the lease term at the commencement of a lease. The incremental borrowing rate is estimated based on publicly available data for the Company’s debt instruments and other instruments with similar characteristics. Lease payments that are not fixed or that are not dependent on an index or rate and vary because of changes in usage or other factors are included in variable lease costs. Variable lease costs are recorded in the period in which the obligation is incurred and primarily relate to fuel, repair, and maintenance payments that vary based on the usage of leased vehicles. The Company’s leases do not contain material residual value guarantees or restrictive covenants. The Company’s subleases are not material. |
Segment Reporting (Policies)
Segment Reporting (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting, Policy | Segment Change Effective in the first quarter of 2021, the manner in which the Company’s Chief Executive Officer, who is the chief operating decision maker (the “CODM”), evaluates performance and makes decisions about how to allocate resources changed. Therefore, the Company now reports results in two operating and reportable segments, Consumer and Small Business (“CSB”) and Commercial, rather than a single operating and reportable segment. Where applicable, prior periods have been retrospectively adjusted to reflect the new operating and reportable segment structure. The accounting policies of the Company’s reportable segments are the same as those for the consolidated financial statements. The Company organizes its segments based on customer type as follows: • Consumer and Small Business (CSB) - Customers in the CSB segment are comprised of residential homeowners, small business operators, and other individual consumers. The CSB segment primarily includes (i) revenue and operating costs from the sale, installation, servicing, and monitoring of integrated security and automation systems, as well as other offerings such as mobile security and home health solutions; (ii) other operating costs associated with support functions related to these operations; and (iii) general corporate costs and other income and expense items not included in the Commercial segment. Results for the Company’s Canadian operations prior to its sale in the fourth quarter of 2019 are included in the CSB segment based on the primary customer market served in Canada. • Commercial - Customers in the Commercial segment are comprised of larger businesses with more expansive facilities (typically larger than 10,000 square feet) and/or multi-site operations, which often require more sophisticated integrated solutions. The Commercial segment primarily includes (i) revenue and operating costs from the sale, installation, servicing, and monitoring of integrated security and automation systems, fire detection and suppression systems, and other related offerings; (ii) other operating costs associated with support functions of these operations; and (iii) dedicated corporate and other costs. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: (in thousands) March 31, 2021 December 31, 2020 Accrued interest $ 71,011 $ 123,935 Payroll-related accruals 103,453 99,771 Operating lease liabilities 31,104 30,689 Fair value of interest rate swaps 64,864 65,462 Other accrued liabilities 260,140 264,294 Accrued expenses and other current liabilities $ 530,572 $ 584,151 |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments and Securities | The following table presents the carrying amount and fair value of the Company’s long-term debt instruments subject to fair value disclosures: March 31, 2021 December 31, 2020 (in thousands) Carrying Fair Carrying Fair Long-term debt instruments, excluding finance lease obligations $ 9,463,947 $ 9,971,382 $ 9,431,216 $ 10,127,291 |
Schedule of Cash and Cash Equivalents | The following table presents a reconciliation of the amount of cash and cash equivalents and restricted cash and restricted cash equivalents reported in the Condensed Consolidated Balance Sheets to the total of the same of such amounts shown in the Condensed Consolidated Statements of Cash Flows: (in thousands) March 31, 2021 December 31, 2020 Cash and cash equivalents $ 122,554 $ 204,998 Restricted cash and restricted cash equivalents 4,730 2,749 Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period $ 127,284 $ 207,747 |
Schedule of Carrying Values and Fair Values of Retail Installment Contract Receivables | The following table presents the net carrying amount and fair value of retail installment contract receivables: March 31, 2021 December 31, 2020 (in thousands) Carrying Fair Carrying Fair Retail installment contract receivables, net $ 174,870 $ 136,400 $ 141,591 $ 112,676 |
Subscriber System Assets | The following table presents the gross carrying amount, accumulated depreciation, and net carrying amount of subscriber system assets: (in thousands) March 31, 2021 December 31, 2020 Gross carrying amount $ 4,964,620 $ 4,815,286 Accumulated depreciation (2,269,154) (2,152,058) Subscriber system assets, net $ 2,695,466 $ 2,663,228 |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | The following table presents unbilled retail installment contract receivables, net, recognized in the Condensed Consolidated Balance Sheets: (in thousands) March 31, 2021 December 31, 2020 Retail installment contract receivables, gross $ 178,077 $ 145,957 Allowance for credit losses (3,207) (4,366) Retail installment contract receivables, net $ 174,870 $ 141,591 Classification: Accounts receivable, net $ 55,091 $ 47,023 Other assets 119,779 94,568 Retail installment contract receivables, net $ 174,870 $ 141,591 |
Disaggregation of Revenue | The following table presents the Company’s disaggregated revenue: Three Months Ended (in thousands) March 31, 2021 March 31, 2020 CSB: Monitoring and related services $ 951,248 $ 938,032 Installation and other 87,357 173,135 Total CSB 1,038,605 1,111,167 Commercial: Monitoring and related services 111,518 107,925 Installation and other (1) 154,581 150,660 Total Commercial 266,099 258,585 Total revenue $ 1,304,704 $ 1,369,752 ________________ (1) Approximately half of installation and other revenue generated by the Commercial segment is recognized over time. |
Contract with Customer, Asset and Liability [Table Text Block] | The following table presents contract assets, net, related to residential transactions recognized in the Condensed Consolidated Balance Sheets: (in thousands) March 31, 2021 December 31, 2020 Contract assets, gross $ 161,672 $ 161,563 Allowance for credit losses (27,143) (29,558) Contract assets, net $ 134,529 $ 132,005 Classification: Prepaid expenses and other current assets $ 65,881 $ 59,382 Other assets 68,648 72,623 Contract assets, net $ 134,529 $ 132,005 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Schedule of Indefinite-Lived Intangible Assets | The following table summarizes the gross carrying amounts, accumulated amortization, and net carrying amounts of the Company’s other intangible assets: March 31, 2021 December 31, 2020 (in thousands) Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Definite-lived intangible assets: Contracts and related customer relationships $ 8,236,971 $ (4,916,344) $ 3,320,627 $ 8,306,746 $ (4,932,590) $ 3,374,156 Dealer relationships 1,518,020 (399,440) 1,118,580 1,518,020 (379,475) 1,138,545 Other 225,963 (188,875) 37,088 247,536 (186,547) 60,989 Total definite-lived intangible assets 9,980,954 (5,504,659) 4,476,295 10,072,302 (5,498,612) 4,573,690 Indefinite-lived intangible assets: Trade name 1,333,000 — 1,333,000 1,333,000 — 1,333,000 Intangible assets $ 11,313,954 $ (5,504,659) $ 5,809,295 $ 11,405,302 $ (5,498,612) $ 5,906,690 | |
Schedule of Finite-Lived Intangible Assets | The following table summarizes the gross carrying amounts, accumulated amortization, and net carrying amounts of the Company’s other intangible assets: March 31, 2021 December 31, 2020 (in thousands) Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Definite-lived intangible assets: Contracts and related customer relationships $ 8,236,971 $ (4,916,344) $ 3,320,627 $ 8,306,746 $ (4,932,590) $ 3,374,156 Dealer relationships 1,518,020 (399,440) 1,118,580 1,518,020 (379,475) 1,138,545 Other 225,963 (188,875) 37,088 247,536 (186,547) 60,989 Total definite-lived intangible assets 9,980,954 (5,504,659) 4,476,295 10,072,302 (5,498,612) 4,573,690 Indefinite-lived intangible assets: Trade name 1,333,000 — 1,333,000 1,333,000 — 1,333,000 Intangible assets $ 11,313,954 $ (5,504,659) $ 5,809,295 $ 11,405,302 $ (5,498,612) $ 5,906,690 The following table presents changes in the net carrying amount of contracts and related customer relationships during the three months ended March 31, 2021: (in thousands) Beginning balance $ 3,374,156 Acquisition of customer relationships 5,601 Customer contract additions, net of dealer charge-backs 213,624 Amortization (272,754) Ending balance $ 3,320,627 | |
Schedule of Goodwill | (in thousands) CSB Commercial Total Goodwill Beginning balance, as previously reported N/A N/A $ 5,236,302 Beginning balance, after change in reportable segments $ 4,915,857 $ 320,445 $ 5,236,302 Acquisitions — 6,279 6,279 Other (25) 417 392 Ending balance $ 4,915,832 $ 327,141 $ 5,242,973 | |
Finite-lived Intangible Assets Amortization Expense | amortization expense for definite-lived intangible assets: Three Months Ended (in thousands) March 31, 2021 March 31, 2020 Definite-lived intangible asset amortization expense $ 299,327 $ 306,956 | |
Goodwill, Impaired, Accumulated Impairment Loss | $ 0 | $ 0 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company’s debt is comprised of the following: (in thousands, except as otherwise indicated) Balance as of Debt Description Issued Maturity Interest Rate Interest Payable March 31, 2021 December 31, 2020 First Lien Term Loan due 2026 9/23/2019 9/23/2026 Adj. LIBOR +2.75% Quarterly $ 2,778,900 $ 2,778,900 Second Lien Notes due 2028 1/28/2020 1/15/2028 6.250% 1/15 and 7/15 1,300,000 1,300,000 First Lien Notes due 2024 4/4/2019 4/15/2024 5.250% 2/15 and 8/15 750,000 750,000 First Lien Notes due 2026 4/4/2019 4/15/2026 5.750% 3/15 and 9/15 1,350,000 1,350,000 First Lien Notes due 2027 8/20/2020 8/31/2027 3.375% 6/15 and 12/15 1,000,000 1,000,000 ADT Notes due 2022 7/5/2012 7/15/2022 3.500% 1/15 and 7/15 1,000,000 1,000,000 ADT Notes due 2023 1/14/2013 6/15/2023 4.125% 6/15 and 12/15 700,000 700,000 ADT Notes due 2032 5/2/2016 7/15/2032 4.875% 1/15 and 7/15 728,016 728,016 ADT Notes due 2042 7/5/2012 7/15/2042 4.875% 1/15 and 7/15 21,896 21,896 Receivables Facility 3/5/2020 2/20/2026 LIBOR +0.85% Monthly 98,077 75,775 Finance lease obligations N/A N/A N/A N/A 62,043 61,328 Less: Unamortized debt discount, net (19,122) (19,993) Less: Unamortized deferred financing costs (61,556) (64,638) Less: Unamortized purchase accounting fair value adjustment and other (182,264) (188,740) Total debt 9,525,990 9,492,544 Less: Current maturities of long-term debt (80,170) (44,764) Long-term debt $ 9,445,820 $ 9,447,780 _________________ N/A—Not applicable. Refer to Note 3 “Leases” for additional information regarding the Company’s finance leases. |
Derivative Financial Instrume_3
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivatives [Table Text Block] | The following table presents the fair value of the Company’s interest rate swaps and related classification in the Condensed Consolidated Balance Sheets: (in thousands) March 31, 2021 December 31, 2020 Accrued expenses and other current liabilities $ 64,864 $ 65,462 Other liabilities 104,459 210,378 Fair value of interest rate swaps $ 169,323 $ 275,840 As of March 31, 2021 and December 31, 2020, AOCI, net of tax, related to cash flow hedges was $106 million and $118 million, respectively. |
Schedule of Derivative Instruments [Table Text Block] | The following table presents the Company’s interest rate swaps as of March 31, 2021 and December 31, 2020 ( in thousands ): Execution Maturity Designation Notional Amount January 2019 April 2022 Not designated $ 125,000 February 2019 April 2022 Not designated 300,000 October 2019 September 2026 Not designated 2,800,000 Total notional amount $ 3,225,000 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of Dividends Declared | The following table presents the Company’s dividends declared on common stock during the three months ended March 31, 2021 and 2020: (in thousands, except per share data) Common Stock Class B Common Stock Dividends Declaration Date Record Date Payment Date Per Share Aggregate Per Share Aggregate 2/25/2021 3/18/2021 4/1/2021 $ 0.035 $ 27,220 $ 0.035 $ 1,916 3/5/2020 3/19/2020 4/2/2020 $ 0.035 $ 27,117 $ — $ — |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table provides the computations of basic and diluted net loss per share for each class of common stock: Three Months Ended March 31, 2021 March 31, 2020 (in thousands, except per share amounts) Common Stock Class B Common Stock Common Stock Class B Common Stock Allocation of net loss - basic and diluted $ (44,673) $ (3,221) $ (300,293) $ — Weighted-average shares outstanding - basic and diluted 762,704 54,745 759,092 — Net loss per share - basic and diluted $ (0.06) $ (0.06) $ (0.40) $ — |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Lease, Cost [Table Text Block] | The following table presents the components of total lease cost: Three Months Ended Lease Cost ( in thousands ) March 31, 2021 March 31, 2020 Operating lease cost $ 12,893 $ 14,600 Finance lease cost Amortization of right-of-use assets 6,311 6,077 Interest on lease liabilities 695 833 Variable lease costs 12,978 12,798 Total lease cost $ 32,877 $ 34,308 |
Leases, Operating and Finance [Table Text Block] | The following table presents operating and finance leases recognized in the Condensed Consolidated Balance Sheets: Leases ( in thousands ) Presentation Classification March 31, 2021 December 31, 2020 Assets: Operating Current Prepaid expenses and other current assets $ 647 $ 684 Operating Non-current Other assets 129,238 138,408 Finance Non-current Property and equipment, net (1) 56,018 54,414 Total right-of-use assets $ 185,903 $ 193,506 Liabilities: Operating Current Accrued expenses and other current liabilities $ 31,104 $ 30,689 Finance Current Current maturities of long-term debt 29,138 26,955 Operating Non-current Other liabilities 106,938 115,694 Finance Non-current Long-term debt 32,905 34,373 Total lease liabilities $ 200,085 $ 207,711 _________________ (1) Finance right-of-use assets are recorded net of accumulated depreciation of approximately $72 million and $67 million as of March 31, 2021 and December 31, 2020, respectively. |
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | The following table presents cash flow and supplemental information associated with the Company’s leases: Three Months Ended Other information ( in thousands ) March 31, 2021 March 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 12,539 $ 14,213 Operating cash flows from finance leases $ 695 $ 833 Financing cash flows from finance leases $ 7,208 $ 6,642 Right-of-use assets obtained in exchange for new: Operating lease liabilities $ 2,187 $ 15,999 Finance lease liabilities $ 8,072 $ 4,627 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | The following table presents total revenue by segment and a reconciliation to consolidated total revenue: Three Months Ended (in thousands) March 31, 2021 March 31, 2020 CSB $ 1,038,605 $ 1,111,167 Commercial 266,099 258,585 Total Revenue $ 1,304,704 $ 1,369,752 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | The following table presents Adjusted EBITDA by segment and a reconciliation to consolidated net loss before taxes: Three Months Ended (in thousands) March 31, 2021 March 31, 2020 Adjusted EBITDA by segment: CSB $ 519,478 $ 537,075 Commercial 22,653 2,414 Total $ 542,131 $ 539,489 Reconciliation to consolidated net loss before taxes: Total segment Adjusted EBITDA $ 542,131 $ 539,489 Less: Interest expense, net 47,724 225,367 Depreciation and intangible asset amortization 469,809 489,024 Amortization of deferred subscriber acquisition costs 28,642 22,627 Amortization of deferred subscriber acquisition revenue (37,159) (29,477) Share-based compensation expense 16,019 23,499 Merger, restructuring, integration, and other 20,507 108,794 Loss on extinguishment of debt 156 65,843 Radio conversion costs, net (1) 58,729 6,639 Financing and consent fees (2) 3,346 5,250 Acquisition related adjustments (3) (248) 1,377 Other (4) (2,937) (1,197) Net loss before taxes $ (62,457) $ (378,257) ___________________ (1) Represents costs, net of any incremental revenue earned, associated with replacing cellular technology used in many of the Company’s security systems pursuant to a replacement program. (2) Represents fees expensed associated with financing transactions. (3) Represents amortization of purchase accounting adjustments and compensation arrangements related to acquisitions. (4) Represents other charges and non-cash items. |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 27 Months Ended | 48 Months Ended | ||
Feb. 28, 2018 | Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||||||
Radio Conversion Cost | $ 59,000 | $ 136,000 | ||||
Guarantor Obligations, Maximum Exposure, Undiscounted | 76,000 | 76,000 | $ 83,000 | |||
Capitalized Contract Cost, Amortization | 28,642 | $ 22,627 | ||||
Money market funds | $ 41,000 | 41,000 | 143,000 | |||
Revenue from Contract with Customer, Term of Customer Relationship | 15 years | |||||
Retained earnings (accumulated deficit) | $ (3,568,615) | (3,568,615) | (3,491,069) | |||
Deferred tax liabilities | $ 973,163 | $ 973,163 | $ 990,899 | |||
Litigation settlement, payment term | 48 months | |||||
Financial Instruments | Fair Value of Financial InstrumentsThe Company’s financial instruments primarily consist of cash and cash equivalents, restricted cash and restricted cash equivalents, accounts receivable, retail installment contract receivables, accounts payable, debt, and derivative financial instruments. Due to their short-term and/or liquid nature, the fair values of cash, restricted cash, accounts receivable, and accounts payable approximate their respective carrying amounts | |||||
Radio Conversion Costs | $ 70,000 | $ 16,000 | ||||
Minimum | Forecast [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Radio Conversion Cost | $ 225,000 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Subscriber System Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Revenue from Contract with Customer, Term of Customer Relationship | 15 years | |
Gross carrying amount | $ 4,964,620 | $ 4,815,286 |
Accumulated depreciation | (2,269,154) | (2,152,058) |
Subscriber system assets, net | $ 2,695,466 | $ 2,663,228 |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - Subscriber System Depreciation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Amortization of deferred subscriber acquisition costs | $ 28,642 | $ 22,627 |
Subscriber system assets, depreciation expense | $ 123,000 | $ 134,000 |
Basis of Presentation and Sum_7
Basis of Presentation and Summary of Significant Accounting Policies - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued interest | $ 71,011 | $ 123,935 |
Payroll-related accruals | 103,453 | 99,771 |
Other accrued liabilities | 260,140 | 264,294 |
Accrued expenses and other current liabilities | $ 530,572 | $ 584,151 |
Basis of Presentation and Sum_8
Basis of Presentation and Summary of Significant Accounting Policies - Carrying Values and Fair Values of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Reported Value Measurement | ||
Debt Instrument [Line Items] | ||
Debt instruments, excluding capital lease obligations | $ 9,463,947 | $ 9,431,216 |
Estimate of Fair Value Measurement | ||
Debt Instrument [Line Items] | ||
Debt instruments, excluding capital lease obligations | $ 9,971,382 | $ 10,127,291 |
Basis of Presentation and Sum_9
Basis of Presentation and Summary of Significant Accounting Policies - Fair value and carrying value of retail installment contract receivables (Details) - Retail Installment Contract - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Retail installment contract receivable, carrying amount | $ 174,870 | $ 141,591 |
Retail installment contract receivable, fair value | $ 136,400 | $ 112,676 |
Basis of Presentation and Su_10
Basis of Presentation and Summary of Significant Accounting Policies - Impact of New Accounting Standard on Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Prepaid expenses and other current assets | $ 188,930 | $ 210,212 |
Other assets | 376,931 | 363,587 |
Liabilities | ||
Deferred tax liabilities | 973,163 | 990,899 |
Stockholders' equity | ||
Accumulated deficit | $ (3,568,615) | $ (3,491,069) |
Basis of Presentation and Su_11
Basis of Presentation and Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 122,554 | $ 204,998 | ||
Restricted cash and cash equivalents in prepaid expenses and other current assets | 4,730 | 2,749 | ||
Cash and cash equivalents and restricted cash and cash equivalents at end of period | $ 127,284 | $ 207,747 | $ 118,141 | $ 48,736 |
Basis of Presentation and Su_12
Basis of Presentation and Summary of Significant Accounting Policies Radio Conversion Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 27 Months Ended | 48 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Dec. 31, 2022 | |
Subsequent Event [Line Items] | ||||
Radio Conversion Cost | $ 59,000 | $ 136,000 | ||
ADT Radio Conversion Revenue | $ 11,000 | $ 9,000 | ||
Forecast [Member] | Minimum | ||||
Subsequent Event [Line Items] | ||||
Radio Conversion Cost | $ 225,000 | |||
Forecast [Member] | Maximum | ||||
Subsequent Event [Line Items] | ||||
Radio Conversion Cost | $ 300,000 |
Basis of Presentation and Su_13
Basis of Presentation and Summary of Significant Accounting Policies Leases, Impact of New Accounting Standard Adoption (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Leases, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Prepaid expenses and other current assets | $ 188,930 | $ 210,212 |
Intangible assets, net | 5,809,295 | 5,906,690 |
Other assets | 376,931 | 363,587 |
Accrued expenses and other current liabilities | 530,572 | 584,151 |
Other liabilities | $ 399,341 | $ 510,663 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Amortization of deferred subscriber acquisition revenue | $ 37,159 | $ 29,477 |
Revenue | 1,304,704 | 1,369,752 |
Security and Fire Safety Systems | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 203,000 | 293,000 |
Cost of Revenue | $ 160,000 | $ 212,000 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | $ 1,304,704 | $ 1,369,752 |
CSB | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 1,038,605 | 1,111,167 |
Commercial | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 266,099 | 258,585 |
Monitoring and related services | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 1,062,766 | 1,045,957 |
Monitoring and related services | CSB | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 951,248 | 938,032 |
Monitoring and related services | Commercial | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 111,518 | 107,925 |
Installation and other | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 241,938 | 323,795 |
Installation and other | CSB | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | 87,357 | 173,135 |
Installation and other | Commercial | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | $ 154,581 | $ 150,660 |
Revenue - Retail Installment Co
Revenue - Retail Installment Contract Receivables Contract Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Capitalized Contract Cost [Line Items] | |||
Contract With Customer, Asset Recognized | $ 20,000 | $ 65,000 | |
Revenue recognized | 37,159 | $ 29,477 | |
Retail Installment Contract | |||
Capitalized Contract Cost [Line Items] | |||
Financing Receivable, before Allowance for Credit Loss | 178,077 | $ 145,957 | |
Financing Receivable, Allowance for Credit Loss | 3,207 | 4,366 | |
Retail installment contract receivable, carrying amount | 174,870 | 141,591 | |
Retail Installment Contract | Accounts receivable, net | |||
Capitalized Contract Cost [Line Items] | |||
Retail installment contract receivable, carrying amount | 55,091 | 47,023 | |
Retail Installment Contract | Other assets | |||
Capitalized Contract Cost [Line Items] | |||
Retail installment contract receivable, carrying amount | $ 119,779 | $ 94,568 |
Revenue - Summary of Contract A
Revenue - Summary of Contract Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Capitalized Contract Cost [Line Items] | ||
Contract with Customer, Asset, before Allowance for Credit Loss | $ 161,672 | $ 161,563 |
Contract with Customer, Asset, Allowance for Credit Loss | 27,143 | 29,558 |
Contract with Customer, Asset, after Allowance for Credit Loss | 134,529 | 132,005 |
Prepaid expenses and other current assets | ||
Capitalized Contract Cost [Line Items] | ||
Contract with Customer, Asset, after Allowance for Credit Loss | 65,881 | 59,382 |
Other assets | ||
Capitalized Contract Cost [Line Items] | ||
Contract with Customer, Asset, after Allowance for Credit Loss | $ 68,648 | $ 72,623 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands, shares in Millions | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||||
Acquisition of businesses, net of cash acquired | $ 15,909 | $ 179,569 | ||
Goodwill | 5,242,973 | $ 5,236,302 | ||
Issuance of shares for acquisition of business | 0 | $ 113,841 | ||
Series of Individually Immaterial Business Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Consideration transferred | 16,000 | |||
Defenders | ||||
Business Acquisition [Line Items] | ||||
Acquisition of businesses, net of cash acquired | $ 173,000 | |||
Consideration transferred | $ 290,000 | |||
Issuance of shares for acquisition of business | $ 114,000 | |||
Defenders | Common Stock | ||||
Business Acquisition [Line Items] | ||||
Shares issued for acquisition (in shares) | 16 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Schedule of Changes in Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | $ 5,236,302 |
Acquisitions | 6,279 |
Other | 392 |
Ending balance | 5,242,973 |
CSB | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | 4,915,857 |
Acquisitions | 0 |
Other | (25) |
Ending balance | 4,915,832 |
Commercial | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | 320,445 |
Acquisitions | 6,279 |
Other | 417 |
Ending balance | $ 327,141 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Gross Carrying Amounts and Accumulated Amortization of Other Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 9,980,954 | $ 10,072,302 |
Accumulated Amortization | (5,504,659) | (5,498,612) |
Net Carrying Amount | 4,476,295 | 4,573,690 |
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 11,313,954 | 11,405,302 |
Net Carrying Amount | 5,809,295 | 5,906,690 |
Trade name | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,333,000 | 1,333,000 |
Customer-Related Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 8,236,971 | 8,306,746 |
Accumulated Amortization | (4,916,344) | (4,932,590) |
Net Carrying Amount | 3,320,627 | 3,374,156 |
Dealer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,518,020 | 1,518,020 |
Accumulated Amortization | (399,440) | (379,475) |
Net Carrying Amount | 1,118,580 | 1,138,545 |
Other Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 225,963 | 247,536 |
Accumulated Amortization | (188,875) | (186,547) |
Net Carrying Amount | $ 37,088 | $ 60,989 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Feb. 28, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Payments to Acquire Intangible Assets | $ 198,761,000 | $ 62,247,000 | ||
Goodwill impairment | $ 0 | $ 0 | ||
Customer-Related Intangible Assets | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Payments to Acquire Intangible Assets | $ 73,000,000 | |||
Acquired finite-lived intangible assets, weighted average useful life | 12 years | |||
Customer contract additions, net of dealer charge-backs | $ 91,000,000 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Changes in Net Carrying Amount of Contracts and Related Customer Relationships (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Feb. 28, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | |
Finite-lived Intangible Assets [Roll Forward] | |||
Balance as of beginning of period | $ 4,573,690 | ||
Amortization | (299,327) | $ (306,956) | |
Balance as of end of period | 4,476,295 | ||
Customer-Related Intangible Assets | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Balance as of beginning of period | 3,374,156 | ||
Customer contract additions, net of dealer charge-backs | $ 91,000 | ||
Amortization | (272,754) | ||
Balance as of end of period | 3,320,627 | ||
Customer Relationships | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Customer contract additions, net of dealer charge-backs | 5,601 | ||
Customer Contracts | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Customer contract additions, net of dealer charge-backs | $ 213,624 |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets - Finite-lived Intangible Assets Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Definite-lived intangible asset amortization expense | $ 299,327 | $ 306,956 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2021 | Jan. 31, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Feb. 01, 2020 |
Debt Instrument [Line Items] | |||||||
Debt Instrument, Unamortized Discount (Premium), Net | $ (19,122) | $ (19,122) | $ (19,993) | ||||
Debt Issuance Costs, Net | (61,556) | (61,556) | (64,638) | ||||
Accretion of Purchase Accounting, Fair Value Adjustment, Debt | (182,264) | (182,264) | (188,740) | ||||
Long-term Debt and Lease Obligation, Including Current Maturities | 9,525,990 | 9,525,990 | 9,492,544 | ||||
Long-term Debt, Current Maturities | (80,170) | (80,170) | (44,764) | ||||
Long-term Debt, Excluding Current Maturities | 9,445,820 | 9,445,820 | 9,447,780 | ||||
ReceivablesFacilityMaximumLimit | 200,000 | 200,000 | |||||
Loss on extinguishment of debt | 156 | $ 65,843 | |||||
Variable Interest Entity, Primary Beneficiary [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Transfers Accounted for as Secured Borrowings, Assets, Carrying Amount | 143,000 | 143,000 | 109,000 | ||||
Transfers Accounted for as Secured Borrowings, Assets, Carrying Amount | 143,000 | 143,000 | 109,000 | ||||
Capital Lease Obligations [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Capital Lease Obligations | 62,043 | 62,043 | 61,328 | ||||
2023 Revolving Credit Facility | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Line of Credit Facility, Maximum Month-end Outstanding Amount | $ 0 | ||||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 400,000 | $ 400,000 | |||||
Prime Notes | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Repurchased face amount | $ 1,200,000 | ||||||
ADT Notes due 2022 [Member] | Notes Payable to Banks [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 3.50% | 3.50% | |||||
ADT Notes due 2022 [Member] | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, gross | $ 1,000,000 | $ 1,000,000 | 1,000,000 | ||||
ADT Notes due 2023 [Member] | Notes Payable to Banks [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 4.125% | 4.125% | |||||
ADT Notes due 2023 [Member] | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, gross | $ 700,000 | $ 700,000 | 700,000 | ||||
ADT Notes due 2032 [Member] | Notes Payable to Banks [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 4.875% | 4.875% | |||||
ADT Notes due 2032 [Member] | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, gross | $ 728,016 | $ 728,016 | 728,016 | ||||
ADT Notes due 2042 [Member] | Notes Payable to Banks [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 4.875% | 4.875% | |||||
ADT Notes due 2042 [Member] | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, gross | $ 21,896 | $ 21,896 | 21,896 | ||||
First Priority Senior Secured Notes due 2024 [Member] | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 5.25% | 5.25% | |||||
Long-term debt, gross | $ 750,000 | $ 750,000 | 750,000 | ||||
First Priority Senior Secured Notes due 2026 [Member] | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 5.75% | 5.75% | |||||
Long-term debt, gross | $ 1,350,000 | $ 1,350,000 | 1,350,000 | ||||
First Lien Term Loan due 2026 [Member] [Member] | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, gross | $ 2,778,900 | 2,778,900 | 2,778,900 | ||||
Debt Instrument, Periodic Payment | $ 7,000 | ||||||
Prepayment premium percentage | 1.00% | ||||||
Second Lien Notes Due 2028 | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 6.25% | 6.25% | |||||
Long-term debt, gross | $ 1,300,000 | $ 1,300,000 | 1,300,000 | ||||
Receivables Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of Credit Facility, Maximum Month-end Outstanding Amount | 98,000 | ||||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 102,000 | $ 102,000 | |||||
Debt Instrument, Maturity Date | Mar. 4, 2022 | ||||||
Receivables Facility [Member] | Variable Interest Entity, Primary Beneficiary [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of Credit Facility, Maximum Month-end Outstanding Amount | $ 98,000 | 76,000 | |||||
Receivables Facility [Member] | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Line of Credit Facility, Maximum Month-end Outstanding Amount | $ 98,077 | $ 75,775 | |||||
Receivables Facility [Member] | London Interbank Offered Rate (LIBOR) | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 0.85% | 1.00% | |||||
First Lien Notes due 2027 [Member] | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 3.375% | 3.375% | |||||
Long-term debt, gross | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | ||||
First Lien Credit Agreement | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Periodic Payment, Percent | 0.25% | ||||||
Variable rate basis, floor | 0.75% | 1.00% | |||||
First Lien Credit Agreement | London Interbank Offered Rate (LIBOR) | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.75% | 3.25% |
Debt Second Lien Notes due 2028
Debt Second Lien Notes due 2028 (Details) - Secured Debt - USD ($) $ in Billions | Mar. 31, 2021 | Feb. 01, 2020 |
Second Lien Notes Due 2028 | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.25% | |
Prime Notes | ||
Debt Instrument [Line Items] | ||
Repurchased face amount | $ 1.2 | |
First Lien Notes due 2027 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.375% |
Mandatorily Redeemable Preferre
Mandatorily Redeemable Preferred Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Related Party Transaction [Line Items] | ||
Loss on extinguishment of debt | $ 156 | $ 65,843 |
Mandatorily Redeemable Preferred Stock | Koch | ||
Related Party Transaction [Line Items] | ||
Loss on extinguishment of debt | $ 213,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit | $ 14,563 | $ 77,964 |
Effective tax rate | 23.30% | 20.60% |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | 2.80% | 3.00% |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | (1.70%) | |
Effective Income Tax Rate Reconciliation, Increase In Unrecognized Tax Benefits, Percent | 2.40% | |
Effective Income Tax Rate Reconciliation, Tax Expense (Benefit), Share-based Payment Arrangement, Percent | 2.80% | |
Effective Income Tax Rate Reconciliation, State Legislative Changes, Percent | 1.60% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Insured Claims | ||
Loss Contingencies [Line Items] | ||
Loss Contingency Accrual | $ 92 | $ 89 |
Commitments and Contingencies P
Commitments and Contingencies Purchase Obligations (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended |
Feb. 28, 2021 | Mar. 31, 2021 | |
Radio Conversion Purchase Commitments | ||
Long-term Purchase Commitment [Line Items] | ||
Purchase commitment, amount | $ 85 | |
Customer Contract Purchase Commitments | ||
Long-term Purchase Commitment [Line Items] | ||
Purchase commitment, amount | $ 67 |
Derivative Financial Instrume_4
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Derivative [Line Items] | |||
Derivative, Notional Amount | $ 3,225,000 | $ 3,000,000 | $ 3,225,000 |
Gain (Loss) on Interest Rate Derivative Instruments Not Designated as Hedging Instruments | (107,000) | 70,000 | |
Prepaid expenses and other current assets | 188,930 | 210,212 | |
Other assets | 376,931 | 363,587 | |
Accrued expenses and other current liabilities | 530,572 | 584,151 | |
Other liabilities | 399,341 | 510,663 | |
Interest Rate Derivatives, at Fair Value, Net | 169,323 | 275,840 | |
Accumulated other comprehensive loss | (106,103) | (118,615) | |
Interest Rate Swap, June 2018 | |||
Derivative [Line Items] | |||
Payments for Derivative Instrument, Financing Activities | 14,000 | $ 3,000 | |
Interest Rate Swap, June 2018 | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Accrued expenses and other current liabilities | 64,864 | ||
Other liabilities | 104,459 | ||
Interest Rate Swap, January 2019 (unhedged) [Member] | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Derivative, Notional Amount | 125,000 | 125,000 | |
Interest Rate Swap, February 2019 (unhedged) [Member] | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Derivative, Notional Amount | 300,000 | 300,000 | |
Interest Rate Swaps, October 2019 [Member] | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Derivative, Notional Amount | 2,800,000 | 2,800,000 | |
Cash Flow Hedging | Interest Rate Swap, June 2018 | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Accrued expenses and other current liabilities | 65,462 | ||
Other liabilities | 210,378 | ||
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member] | |||
Derivative [Line Items] | |||
Accumulated other comprehensive loss | $ (106,000) | $ (118,000) |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 16,019 | $ 23,499 |
Share-based Compensation, 2018 Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |
RSUs granted in period (in shares) | 5,000,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 7.74 | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | 12 months |
Equity - Issuance of Class B Co
Equity - Issuance of Class B Common Stock (Details) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Common Class B | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Equity - Schedule of Dividends
Equity - Schedule of Dividends Declared (Details) - USD ($) $ / shares in Units, $ in Thousands | May 05, 2021 | Feb. 25, 2021 | Mar. 05, 2020 | Mar. 31, 2021 | Mar. 31, 2020 |
Subsequent Event [Line Items] | |||||
Dividends, Common Stock | $ 29,132 | $ 27,114 | |||
Stock Repurchased and Retired During Period, Value | 0 | ||||
Common Class B | |||||
Subsequent Event [Line Items] | |||||
Cash dividends declared per common share (in dollars per share) | $ 0.035 | $ 0 | |||
Common Stock | |||||
Subsequent Event [Line Items] | |||||
Cash dividends declared per common share (in dollars per share) | $ 0.035 | $ 0.035 | |||
Subsequent Event | Common Stock | |||||
Subsequent Event [Line Items] | |||||
Cash dividends declared per common share (in dollars per share) | $ 0.035 | ||||
Dividend Declared [Member] | Common Class B | |||||
Subsequent Event [Line Items] | |||||
Dividends, Common Stock | 1,916 | 0 | |||
Dividend Declared [Member] | Common Stock | |||||
Subsequent Event [Line Items] | |||||
Dividends, Common Stock | $ 27,220 | $ 27,117 |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | May 05, 2021 | Feb. 25, 2021 | Mar. 05, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Payments of dividends | $ 28,980 | $ 26,291 | ||||
Accumulated deficit | (3,568,615) | $ (3,491,069) | ||||
Common Stock | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cash dividends declared per common share (in dollars per share) | $ 0.035 | $ 0.035 | ||||
Common Stock | Subsequent Event | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cash dividends declared per common share (in dollars per share) | $ 0.035 | |||||
Interest Expense | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net | $ 60,000 |
Equity Additional (Details)
Equity Additional (Details) - USD ($) $ / shares in Units, $ in Thousands | May 05, 2021 | Feb. 25, 2021 | Mar. 05, 2020 | Mar. 31, 2021 | Mar. 31, 2020 |
Class of Stock [Line Items] | |||||
Dividends, Common Stock | $ 29,132 | $ 27,114 | |||
Stock Repurchased and Retired During Period, Value | 0 | ||||
Issuance of shares for acquisition of business | 0 | 113,841 | |||
Common Stock | |||||
Class of Stock [Line Items] | |||||
Common Stock, Dividends, Per Share, Declared | $ 0.035 | $ 0.035 | |||
Common Class B | |||||
Class of Stock [Line Items] | |||||
Common Stock, Dividends, Per Share, Declared | $ 0.035 | $ 0 | |||
Dividend Declared [Member] | Common Stock | |||||
Class of Stock [Line Items] | |||||
Dividends, Common Stock | 27,220 | 27,117 | |||
Dividend Declared [Member] | Common Class B | |||||
Class of Stock [Line Items] | |||||
Dividends, Common Stock | $ 1,916 | $ 0 | |||
Subsequent Event | Common Stock | |||||
Class of Stock [Line Items] | |||||
Common Stock, Dividends, Per Share, Declared | $ 0.035 |
Net Loss per Share - Computatio
Net Loss per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Common Stock | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Allocation of net loss - basic and diluted | $ (44,673) | $ (300,293) |
Earnings Per Share, Basic and Diluted | $ (0.06) | $ (0.40) |
Basic and diluted (in shares) | 762,704 | 759,092 |
Common Class B | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Allocation of net loss - basic and diluted | $ (3,221) | $ 0 |
Earnings Per Share, Basic and Diluted | $ (0.06) | $ 0 |
Basic and diluted (in shares) | 54,745 | 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Related Party Transaction [Line Items] | ||
Payments of dividends | $ 28,980 | $ 26,291 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Leases [Abstract] | |||
Operating Lease, Payments | $ 12,539 | $ 14,213 | |
Operating Lease, Cost | 12,893 | 14,600 | |
Capital Leases, Lessee Balance Sheet, Assets by Major Class, Accumulated Depreciation | 72,000 | $ 67,000 | |
Operating Lease, Right of Use Assets, Current | 647 | 684 | |
Operating Lease, Right-of-Use Asset | 129,238 | 138,408 | |
Finance Lease, Right-of-Use Asset | 56,018 | 54,414 | |
Leased Assets | 185,903 | 193,506 | |
Operating Lease, Liability, Current | 31,104 | 30,689 | |
Finance Lease, Liability, Current | 29,138 | 26,955 | |
Operating Lease, Liability | 106,938 | 115,694 | |
Finance Lease, Liability | 32,905 | 34,373 | |
Lease Liability | 200,085 | $ 207,711 | |
Finance Lease, Right-of-Use Asset, Amortization | 6,311 | 6,077 | |
Finance Lease, Interest Expense | 695 | 833 | |
Variable Lease, Cost | 12,978 | 12,798 | |
Lease, Cost | 32,877 | 34,308 | |
Finance Lease, Interest Payment on Liability | 695 | 833 | |
Finance Lease, Principal Payments | 7,208 | 6,642 | |
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | 8,072 | 4,627 | |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 2,187 | $ 15,999 |
Segment Information - Revenue b
Segment Information - Revenue by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | $ 1,304,704 | $ 1,369,752 |
CSB | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | 1,038,605 | 1,111,167 |
Commercial | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | $ 266,099 | $ 258,585 |
Segment Information EBITDA Reco
Segment Information EBITDA Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 27 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Interest expense, net | $ (47,724) | $ (225,367) | |
Depreciation and intangible asset amortization | 469,809 | 489,024 | |
Amortization of deferred subscriber acquisition costs | 28,642 | 22,627 | |
Amortization of deferred subscriber acquisition revenue | (37,159) | (29,477) | |
Share-based compensation expense | 16,019 | 23,499 | |
Merger, restructuring, integration, and other | 20,507 | 108,794 | |
Loss on extinguishment of debt | 156 | 65,843 | |
Radio Conversion Cost | 59,000 | $ 136,000 | |
Financing and consent fees | 114 | 14,139 | |
Net loss before taxes | (62,457) | (378,257) | |
Operating Segments | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Total segment Adjusted EBITDA | 542,131 | 539,489 | |
Operating Segments | CSB | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Total segment Adjusted EBITDA | 519,478 | 537,075 | |
Operating Segments | Commercial | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Total segment Adjusted EBITDA | 22,653 | 2,414 | |
Segment Reconciling Items | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Interest expense, net | 47,724 | 225,367 | |
Depreciation and intangible asset amortization | 469,809 | 489,024 | |
Amortization of deferred subscriber acquisition costs | 28,642 | 22,627 | |
Amortization of deferred subscriber acquisition revenue | 37,159 | 29,477 | |
Share-based compensation expense | 16,019 | 23,499 | |
Merger, restructuring, integration, and other | 20,507 | 108,794 | |
Loss on extinguishment of debt | 156 | 65,843 | |
Radio Conversion Cost | 58,729 | 6,639 | |
Financing and consent fees | 3,346 | 5,250 | |
Acquisition related adjustments | (248) | 1,377 | |
Other | $ (2,937) | $ (1,197) |