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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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46-1304852
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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4931 North 300 West
Provo, UT
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84604
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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x
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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||
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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•
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references to “Vivint,” “we,” “us,” “our” and “the Company” are to APX Group Holdings, Inc. and its consolidated subsidiaries;
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•
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references to “Sponsor” are to certain investment funds affiliated with The Blackstone Group L.P.;
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•
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references to the “Merger” are to the acquisition of APX Group and two of its affiliates, Vivint Solar, Inc. and 2GIG Technologies, Inc., on November 16, 2012, by an investor group comprised of certain investment funds affiliated with our Sponsor, and certain co-investors and management investors; and
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•
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the terms “subscriber” and “customer” are used interchangeably.
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•
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accelerate adoption of our smart home solution;
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•
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establish and grow through new customer acquisition channels;
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•
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increase brand awareness;
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•
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meet customer expectations and address key friction points for smart home adoption and use;
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•
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expand our ecosystem with third-party and proprietary devices;
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•
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reduce customer attrition;
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•
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lower net customer acquisition costs;
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•
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improve unit economics and grow subscription revenues per customer over time;
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•
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increase new customer originations, customer usage, and customer satisfaction;
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•
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develop, design, and sell our own Smart Home Services that are differentiated from those of our competitors;
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•
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attract, train and retain an effective sales force and other key personnel;
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•
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upgrade and maintain our information technology systems;
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•
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acquire and protect intellectual property;
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•
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meet future liquidity requirements and comply with restrictive covenants related to our long-term indebtedness;
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•
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enhance our future operating and financial results;
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•
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comply with laws and regulations applicable to our business; and
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•
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successfully defend litigation brought against us.
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•
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risks of the smart home and security industry, including risks of and publicity surrounding the sales, subscriber origination and retention process;
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•
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the highly competitive nature of the smart home and security industry and product introductions and promotional activity by our competitors;
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•
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litigation, complaints or adverse publicity;
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•
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the impact of changes in consumer spending patterns, consumer preferences, local, regional, and national economic conditions, crime, weather, demographic trends and employee availability;
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•
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adverse publicity and product liability claims;
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•
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increases and/or decreases in utility and other energy costs, increased costs related to utility or governmental requirements;
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•
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cost increases or shortages in smart home and security technology products or components;
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•
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the introduction of unsuccessful new Smart Home Services;
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•
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privacy and data protection laws, privacy or data breaches, or the loss of data; and
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•
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the impact to our business, results of operations, financial condition, regulatory compliance and customer experience of the Vivint Flex Pay plan (as defined in Note 1 - Basis of Presentation in the unaudited condensed consolidated financial statements) and our ability to successfully compete in retail sales channels.
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ITEM 1.
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UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
112,966
|
|
|
$
|
3,872
|
|
Accounts and notes receivable, net
|
51,996
|
|
|
40,721
|
|
||
Inventories
|
73,086
|
|
|
115,222
|
|
||
Prepaid expenses and other current assets
|
17,475
|
|
|
16,150
|
|
||
Total current assets
|
255,523
|
|
|
175,965
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
75,882
|
|
|
78,081
|
|
||
Capitalized contract costs, net
|
1,163,480
|
|
|
—
|
|
||
Subscriber acquisition costs, net
|
—
|
|
|
1,308,558
|
|
||
Deferred financing costs, net
|
2,318
|
|
|
3,099
|
|
||
Intangible assets, net
|
278,494
|
|
|
377,451
|
|
||
Goodwill
|
836,290
|
|
|
836,970
|
|
||
Long-term notes receivables and other assets, net
|
122,766
|
|
|
88,723
|
|
||
Total assets
|
$
|
2,734,753
|
|
|
$
|
2,868,847
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
71,364
|
|
|
$
|
107,347
|
|
Accrued payroll and commissions
|
118,913
|
|
|
57,752
|
|
||
Accrued expenses and other current liabilities
|
155,818
|
|
|
74,321
|
|
||
Deferred revenue
|
184,226
|
|
|
88,337
|
|
||
Current portion of capital lease obligations
|
8,511
|
|
|
10,614
|
|
||
Total current liabilities
|
538,832
|
|
|
338,371
|
|
||
|
|
|
|
||||
Notes payable, net
|
2,979,268
|
|
|
2,760,297
|
|
||
Notes payable, net - related party
|
58,905
|
|
|
—
|
|
||
Revolving credit facility
|
—
|
|
|
60,000
|
|
||
Capital lease obligations, net of current portion
|
7,325
|
|
|
11,089
|
|
||
Deferred revenue, net of current portion
|
328,168
|
|
|
264,555
|
|
||
Other long-term obligations
|
95,553
|
|
|
79,020
|
|
||
Deferred income tax liabilities
|
8,816
|
|
|
9,041
|
|
||
Total liabilities
|
4,016,867
|
|
|
3,522,373
|
|
||
Commitments and contingencies (See Note 11)
|
|
|
|
||||
Stockholders’ deficit:
|
|
|
|
||||
Common stock, $0.01 par value, 100 shares authorized; 100 shares issued and outstanding
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
736,328
|
|
|
732,346
|
|
||
Accumulated deficit
|
(1,991,153
|
)
|
|
(1,358,571
|
)
|
||
Accumulated other comprehensive loss
|
(27,289
|
)
|
|
(27,301
|
)
|
||
Total stockholders’ deficit
|
(1,282,114
|
)
|
|
(653,526
|
)
|
||
Total liabilities and stockholders’ deficit
|
$
|
2,734,753
|
|
|
$
|
2,868,847
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Recurring and other revenue
|
$
|
272,335
|
|
|
$
|
219,111
|
|
|
$
|
773,899
|
|
|
$
|
618,752
|
|
Service and other sales revenue
|
—
|
|
|
6,764
|
|
|
—
|
|
|
18,513
|
|
||||
Activation fees
|
—
|
|
|
2,783
|
|
|
—
|
|
|
8,872
|
|
||||
Total revenues
|
272,335
|
|
|
228,658
|
|
|
773,899
|
|
|
646,137
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Operating expenses (exclusive of depreciation and amortization shown separately below)
|
92,703
|
|
|
81,108
|
|
|
265,784
|
|
|
229,776
|
|
||||
Selling expenses (exclusive of amortization of deferred commissions of $40,030; $21,769; $121,609; and $61,193, respectively, which are included in depreciation and amortization shown separately below)
|
41,970
|
|
|
53,821
|
|
|
166,872
|
|
|
134,894
|
|
||||
General and administrative expenses
|
50,542
|
|
|
49,416
|
|
|
150,715
|
|
|
127,179
|
|
||||
Depreciation and amortization
|
130,636
|
|
|
84,460
|
|
|
381,767
|
|
|
241,425
|
|
||||
Restructuring expenses
|
542
|
|
|
—
|
|
|
4,683
|
|
|
—
|
|
||||
Total costs and expenses
|
316,393
|
|
|
268,805
|
|
|
969,821
|
|
|
733,274
|
|
||||
Loss from operations
|
(44,058
|
)
|
|
(40,147
|
)
|
|
(195,922
|
)
|
|
(87,137
|
)
|
||||
Other expenses (income):
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
61,881
|
|
|
58,005
|
|
|
180,998
|
|
|
166,644
|
|
||||
Interest income
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
(104
|
)
|
||||
Other loss (income), net
|
14,510
|
|
|
8,611
|
|
|
(25,999
|
)
|
|
18,808
|
|
||||
Loss before income taxes
|
(120,449
|
)
|
|
(106,763
|
)
|
|
(350,890
|
)
|
|
(272,485
|
)
|
||||
Income tax (benefit) expense
|
(223
|
)
|
|
1,157
|
|
|
(1,562
|
)
|
|
2,308
|
|
||||
Net loss
|
$
|
(120,226
|
)
|
|
$
|
(107,920
|
)
|
|
$
|
(349,328
|
)
|
|
$
|
(274,793
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net loss
|
$
|
(120,226
|
)
|
|
$
|
(107,920
|
)
|
|
$
|
(349,328
|
)
|
|
$
|
(274,793
|
)
|
Other comprehensive income (loss), net of tax effects:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
406
|
|
|
1,967
|
|
|
(670
|
)
|
|
3,543
|
|
||||
Unrealized gain on marketable securities
|
—
|
|
|
(413
|
)
|
|
—
|
|
|
(671
|
)
|
||||
Total other comprehensive income (loss)
|
406
|
|
|
1,554
|
|
|
(670
|
)
|
|
2,872
|
|
||||
Comprehensive loss
|
$
|
(119,820
|
)
|
|
$
|
(106,366
|
)
|
|
$
|
(349,998
|
)
|
|
$
|
(271,921
|
)
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(349,328
|
)
|
|
$
|
(274,793
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Amortization of capitalized contract costs
|
294,802
|
|
|
—
|
|
||
Amortization of subscriber acquisition costs
|
—
|
|
|
149,933
|
|
||
Amortization of customer relationships
|
63,163
|
|
|
71,108
|
|
||
Depreciation and amortization of property, plant and equipment and other intangible assets
|
23,802
|
|
|
20,384
|
|
||
Amortization of deferred financing costs and bond premiums and discounts
|
3,944
|
|
|
5,201
|
|
||
Gain on fair value changes of equity securities
|
(1,385
|
)
|
|
—
|
|
||
(Gain) loss on sale or disposal of assets
|
(49,942
|
)
|
|
338
|
|
||
Loss on early extinguishment of debt
|
14,571
|
|
|
23,040
|
|
||
Stock-based compensation
|
1,651
|
|
|
1,287
|
|
||
Provision for doubtful accounts
|
14,318
|
|
|
14,723
|
|
||
Deferred income taxes
|
—
|
|
|
(378
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts and notes receivable, net
|
(26,830
|
)
|
|
(35,578
|
)
|
||
Inventories
|
42,053
|
|
|
(59,500
|
)
|
||
Prepaid expenses and other current assets
|
(1,327
|
)
|
|
(9,792
|
)
|
||
Capitalized contract costs, net
|
(439,711
|
)
|
|
—
|
|
||
Subscriber acquisition costs, net
|
—
|
|
|
(367,300
|
)
|
||
Long-term notes receivables and other assets, net
|
(30,231
|
)
|
|
(68,117
|
)
|
||
Accounts payable
|
(31,781
|
)
|
|
42,435
|
|
||
Accrued payroll and commissions, expenses and other current and long-term liabilities
|
168,953
|
|
|
132,649
|
|
||
Deferred revenue
|
173,255
|
|
|
205,092
|
|
||
Net cash used in operating activities
|
(130,023
|
)
|
|
(149,268
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(15,355
|
)
|
|
(14,842
|
)
|
||
Proceeds from the sale of intangible assets
|
53,693
|
|
|
—
|
|
||
Proceeds from the sale of capital assets
|
185
|
|
|
275
|
|
||
Acquisition of intangible assets
|
(1,068
|
)
|
|
(1,057
|
)
|
||
Acquisition of other assets
|
—
|
|
|
(156
|
)
|
||
Net cash provided by (used in) investing activities
|
37,455
|
|
|
(15,780
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from notes payable
|
759,000
|
|
|
724,750
|
|
||
Proceeds from notes payable - related party
|
51,000
|
|
|
—
|
|
||
Repayment of notes payable
|
(520,166
|
)
|
|
(450,000
|
)
|
||
Borrowings from revolving credit facility
|
201,000
|
|
|
124,000
|
|
||
Repayments on revolving credit facility
|
(261,000
|
)
|
|
(124,000
|
)
|
||
Proceeds from capital contribution
|
4,700
|
|
|
—
|
|
||
Repayments of capital lease obligations
|
(9,882
|
)
|
|
(7,161
|
)
|
||
Payments of other long-term obligations
|
—
|
|
|
(2,065
|
)
|
||
Financing costs
|
(11,317
|
)
|
|
(17,771
|
)
|
||
Deferred financing costs
|
(9,302
|
)
|
|
(10,730
|
)
|
||
Return of capital
|
(2,369
|
)
|
|
—
|
|
||
Net cash provided by financing activities
|
201,664
|
|
|
237,023
|
|
||
Effect of exchange rate changes on cash
|
(2
|
)
|
|
72
|
|
||
Net increase in cash and cash equivalents
|
109,094
|
|
|
72,047
|
|
||
Cash and cash equivalents:
|
|
|
|
||||
Beginning of period
|
3,872
|
|
|
43,520
|
|
||
End of period
|
$
|
112,966
|
|
|
$
|
115,567
|
|
Supplemental non-cash investing and financing activities:
|
|
|
|
||||
Capital lease additions
|
$
|
4,432
|
|
|
$
|
8,285
|
|
Intangible assets acquisitions included within accounts payable
|
$
|
424
|
|
|
$
|
923
|
|
Capital expenditures included within accounts payable and accrued expenses and other current liabilities
|
$
|
352
|
|
|
$
|
2,502
|
|
Change in fair value of equity securities
|
$
|
—
|
|
|
$
|
293
|
|
Financing costs included within accounts payable and accrued expenses and other current liabilities
|
$
|
974
|
|
|
$
|
982
|
|
|
Nine Months Ended September 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
||||
Beginning balance
|
$
|
5,356
|
|
|
$
|
4,138
|
|
Provision for doubtful accounts
|
14,318
|
|
|
22,465
|
|
||
Write-offs and adjustments
|
(14,026
|
)
|
|
(21,247
|
)
|
||
Balance at end of period
|
$
|
5,648
|
|
|
$
|
5,356
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Amortization of capitalized contract costs
|
$
|
101,498
|
|
|
$
|
—
|
|
|
$
|
294,802
|
|
|
$
|
—
|
|
Amortization of subscriber acquisition costs
|
—
|
|
|
53,730
|
|
|
—
|
|
|
149,933
|
|
||||
Amortization of definite-lived intangibles
|
22,741
|
|
|
25,547
|
|
|
68,193
|
|
|
76,267
|
|
||||
Depreciation of property, plant and equipment
|
6,397
|
|
|
5,183
|
|
|
18,772
|
|
|
15,225
|
|
||||
Total depreciation and amortization
|
$
|
130,636
|
|
|
$
|
84,460
|
|
|
$
|
381,767
|
|
|
$
|
241,425
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Translation (gain) loss
|
$
|
(1,459
|
)
|
|
$
|
(3,076
|
)
|
|
$
|
2,175
|
|
|
$
|
(5,545
|
)
|
Condensed Consolidated Balance Sheets (unaudited)
|
|||||||||||
|
|
|
|
|
|
||||||
|
As Reported
|
|
Adjustments
|
|
Adjusted
|
||||||
|
December 31, 2017
|
|
|
January 1, 2018
|
|||||||
Assets
|
|
|
|
|
|
||||||
Capitalized contract costs, net
|
$
|
—
|
|
|
$
|
1,020,408
|
|
|
$
|
1,020,408
|
|
Subscriber acquisition costs, net
|
1,308,558
|
|
|
(1,308,558
|
)
|
|
—
|
|
|||
Long-term notes receivables and other assets, net
|
88,723
|
|
|
2,713
|
|
|
91,436
|
|
|||
|
|
|
|
|
|
||||||
Liabilities and Stockholders' Deficit
|
|
|
|
|
|
||||||
Accrued expenses and other current liabilities
|
74,321
|
|
|
10,329
|
|
|
84,650
|
|
|||
Deferred revenue
|
88,337
|
|
|
39,868
|
|
|
128,205
|
|
|||
Deferred revenue, net of current portion
|
264,555
|
|
|
(53,062
|
)
|
|
211,493
|
|
|||
Accumulated deficit
|
(1,358,571
|
)
|
|
(282,572
|
)
|
|
(1,641,143
|
)
|
Condensed Consolidated Balance Sheets (unaudited)
|
|||||||||||
|
|
||||||||||
|
September 30, 2018
|
||||||||||
|
As Reported
|
|
Balances Without Adoption of Topic 606
|
|
Effect of Change
Higher/(Lower)
|
||||||
Assets
|
|
|
|
|
|
||||||
Capitalized contract costs, net
|
$
|
1,163,480
|
|
|
$
|
—
|
|
|
$
|
1,163,480
|
|
Subscriber acquisition costs, net
|
—
|
|
|
1,540,097
|
|
|
(1,540,097
|
)
|
|||
Liabilities and Stockholders' Deficit
|
|
|
|
|
|
||||||
Accrued expenses and other current liabilities
|
155,818
|
|
|
145,680
|
|
|
10,138
|
|
|||
Deferred revenue
|
184,226
|
|
|
126,797
|
|
|
57,429
|
|
|||
Deferred revenue, net of current portion
|
328,168
|
|
|
429,248
|
|
|
(101,080
|
)
|
|||
Accumulated deficit
|
(1,991,153
|
)
|
|
(1,647,493
|
)
|
|
(343,660
|
)
|
|||
Accumulated other comprehensive loss
|
(27,289
|
)
|
|
(27,845
|
)
|
|
556
|
|
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||
|
Three months ended September 30, 2018
|
|
Nine months ended September 30, 2018
|
||||||||||||||||||||
|
As Reported
|
|
Balances Without Adoption of Topic 606
|
|
Effect of Change
Higher/(Lower)
|
|
As Reported
|
|
Balances Without Adoption of Topic 606
|
|
Effect of Change
Higher/(Lower)
|
||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Recurring and other revenue
|
$
|
272,335
|
|
|
$
|
243,733
|
|
|
$
|
28,602
|
|
|
$
|
773,899
|
|
|
$
|
703,807
|
|
|
$
|
70,092
|
|
Service and other sales revenue
|
—
|
|
|
15,200
|
|
|
(15,200
|
)
|
|
—
|
|
|
31,998
|
|
|
(31,998
|
)
|
||||||
Activation fees
|
—
|
|
|
2,314
|
|
|
(2,314
|
)
|
|
—
|
|
|
7,455
|
|
|
(7,455
|
)
|
||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating expenses
|
92,703
|
|
|
103,199
|
|
|
(10,496
|
)
|
|
265,784
|
|
|
286,214
|
|
|
(20,430
|
)
|
||||||
Depreciation and amortization
|
130,636
|
|
|
94,509
|
|
|
36,127
|
|
|
381,767
|
|
|
272,319
|
|
|
109,448
|
|
||||||
Loss before income taxes
|
(120,449
|
)
|
|
(105,906
|
)
|
|
(14,543
|
)
|
|
(350,890
|
)
|
|
(292,511
|
)
|
|
(58,379
|
)
|
||||||
Net loss
|
(120,226
|
)
|
|
(105,683
|
)
|
|
(14,543
|
)
|
|
(349,328
|
)
|
|
(290,949
|
)
|
|
(58,379
|
)
|
||||||
Other comprehensive loss, net of tax effects:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustment
|
406
|
|
|
(150
|
)
|
|
556
|
|
|
(670
|
)
|
|
(1,226
|
)
|
|
556
|
|
||||||
Total other comprehensive income (loss)
|
406
|
|
|
(150
|
)
|
|
556
|
|
|
(670
|
)
|
|
(1,226
|
)
|
|
556
|
|
||||||
Comprehensive loss
|
(119,820
|
)
|
|
(105,833
|
)
|
|
(13,987
|
)
|
|
(349,998
|
)
|
|
(292,175
|
)
|
|
(57,823
|
)
|
Condensed Consolidated Statements of Cashflows (unaudited)
|
|||||||||||
|
|
||||||||||
|
Nine Months Ended September 30, 2018
|
||||||||||
|
As Reported
|
|
Balances Without Adoption of Topic 606
|
|
Effect of Change
Higher/(Lower) |
||||||
|
|
|
|
|
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(349,328
|
)
|
|
$
|
(290,949
|
)
|
|
$
|
(58,379
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||||||
Amortization of capitalized contract costs
|
294,802
|
|
|
—
|
|
|
294,802
|
|
|||
Amortization of subscriber acquisition costs
|
—
|
|
|
185,354
|
|
|
(185,354
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Capitalized contract costs – deferred contract costs
|
(439,711
|
)
|
|
—
|
|
|
(439,711
|
)
|
|||
Subscriber acquisition costs – deferred contract costs
|
—
|
|
|
(419,281
|
)
|
|
419,281
|
|
|||
Deferred revenue
|
173,255
|
|
|
203,894
|
|
|
(30,639
|
)
|
|||
Net cash used in operating activities
|
(130,023
|
)
|
|
(130,023
|
)
|
|
—
|
|
|
Other expense and loss on extinguishment
|
|
Deferred financing costs
|
||||||||||||||||||||||||
|
Original premium extinguished
|
|
Previously deferred financing costs extinguished
|
|
New financing costs
|
|
Total other expense and loss on extinguishment
|
|
Previously deferred financing costs rolled over
|
|
New deferred financing costs
|
|
Total deferred financing costs
|
||||||||||||||
Three and nine months ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
September 2018 issuance
|
$
|
(953
|
)
|
|
$
|
4,207
|
|
|
$
|
11,317
|
|
|
$
|
14,571
|
|
|
$
|
—
|
|
|
$
|
10,275
|
|
|
$
|
10,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Three months ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
August 2017 issuance
|
$
|
—
|
|
|
$
|
1,408
|
|
|
$
|
8,881
|
|
|
$
|
10,289
|
|
|
$
|
473
|
|
|
$
|
4,556
|
|
|
$
|
5,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Nine months ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
August 2017 issuance
|
$
|
—
|
|
|
$
|
1,408
|
|
|
$
|
8,881
|
|
|
$
|
10,289
|
|
|
$
|
473
|
|
|
$
|
4,556
|
|
|
$
|
5,029
|
|
February 2017 issuance
|
—
|
|
|
3,259
|
|
|
9,491
|
|
|
12,750
|
|
|
1,476
|
|
|
6,077
|
|
|
7,553
|
|
|||||||
Total
|
$
|
—
|
|
|
$
|
4,667
|
|
|
$
|
18,372
|
|
|
$
|
23,039
|
|
|
$
|
1,949
|
|
|
$
|
10,633
|
|
|
$
|
12,582
|
|
|
Unamortized Deferred Financing Costs
|
||||||||||||||||||||||
|
Balance December 31, 2017
|
|
Additions
|
|
Refinances
|
|
Early Extinguishment
|
|
Amortized
|
|
Balance
September 30,
2018
|
||||||||||||
Revolving Credit Facility
|
$
|
3,099
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(781
|
)
|
|
$
|
2,318
|
|
2019 Notes
|
2,877
|
|
|
—
|
|
|
—
|
|
|
(1,876
|
)
|
|
(1,001
|
)
|
|
—
|
|
||||||
2020 Notes
|
11,209
|
|
|
—
|
|
|
—
|
|
|
(2,331
|
)
|
|
(2,796
|
)
|
|
6,082
|
|
||||||
2022 Private Placement Notes
|
752
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(113
|
)
|
|
639
|
|
||||||
2022 Notes
|
16,067
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,451
|
)
|
|
13,616
|
|
||||||
2023 Notes
|
4,762
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(630
|
)
|
|
4,132
|
|
||||||
Term Loan
|
—
|
|
|
10,275
|
|
|
—
|
|
|
—
|
|
|
(153
|
)
|
|
10,122
|
|
||||||
Total Deferred Financing Costs
|
$
|
38,766
|
|
|
$
|
10,275
|
|
|
$
|
—
|
|
|
$
|
(4,207
|
)
|
|
$
|
(7,925
|
)
|
|
$
|
36,909
|
|
|
Unamortized Deferred Financing Costs
|
||||||||||||||||||||||
|
Balance December 31, 2016
|
|
Additions
|
|
Refinances
|
|
Early Extinguishment
|
|
Amortized
|
|
Balance December 31, 2017
|
||||||||||||
Revolving Credit Facility
|
$
|
4,420
|
|
|
$
|
399
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,720
|
)
|
|
$
|
3,099
|
|
2019 Notes
|
11,693
|
|
|
—
|
|
|
(1,949
|
)
|
|
(4,667
|
)
|
|
(2,200
|
)
|
|
2,877
|
|
||||||
2020 Notes
|
15,053
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,844
|
)
|
|
11,209
|
|
||||||
2022 Private Placement Notes
|
903
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(151
|
)
|
|
752
|
|
||||||
2022 Notes
|
11,714
|
|
|
6,076
|
|
|
1,476
|
|
|
—
|
|
|
(3,199
|
)
|
|
16,067
|
|
||||||
2023 Notes
|
—
|
|
|
4,569
|
|
|
473
|
|
|
—
|
|
|
(280
|
)
|
|
4,762
|
|
||||||
Total Deferred Financing Costs
|
$
|
43,783
|
|
|
$
|
11,044
|
|
|
$
|
—
|
|
|
$
|
(4,667
|
)
|
|
$
|
(11,394
|
)
|
|
$
|
38,766
|
|
|
September 30, 2018
|
||||||||||||||
|
Outstanding
Principal
|
|
Unamortized
Premium (Discount)
|
|
Unamortized Deferred Financing Costs (1)
|
|
Net Carrying
Amount
|
||||||||
8.75% Senior Notes due 2020
|
679,299
|
|
|
2,495
|
|
|
(6,082
|
)
|
|
675,712
|
|
||||
8.875% Senior Secured Notes Due 2022
|
270,000
|
|
|
(2,234
|
)
|
|
(639
|
)
|
|
267,127
|
|
||||
7.875% Senior Secured Notes Due 2022
|
900,000
|
|
|
21,304
|
|
|
(13,616
|
)
|
|
907,688
|
|
||||
7.625% Senior Notes Due 2023
|
400,000
|
|
|
—
|
|
|
(4,132
|
)
|
|
395,868
|
|
||||
Term Loan
|
801,900
|
|
|
—
|
|
|
(10,122
|
)
|
|
791,778
|
|
||||
Total Long-Term Debt
|
$
|
3,051,199
|
|
|
$
|
21,565
|
|
|
$
|
(34,591
|
)
|
|
$
|
3,038,173
|
|
|
December 31, 2017
|
||||||||||||||
|
Outstanding
Principal
|
|
Unamortized
Premium (Discount)
|
|
Unamortized Deferred Financing Costs (1)
|
|
Net Carrying
Amount
|
||||||||
Series D Revolving Credit Facility Due 2019
|
$
|
3,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,000
|
|
Series A, B Revolving Credit Facilities Due 2021
|
57,000
|
|
|
—
|
|
|
—
|
|
|
57,000
|
|
||||
6.375% Senior Secured Notes due 2019
|
269,465
|
|
|
—
|
|
|
(2,877
|
)
|
|
266,588
|
|
||||
8.75% Senior Notes due 2020
|
930,000
|
|
|
4,465
|
|
|
(11,209
|
)
|
|
923,256
|
|
||||
8.875% Senior Secured Notes due 2022
|
270,000
|
|
|
(2,559
|
)
|
|
(752
|
)
|
|
266,689
|
|
||||
7.875% Senior Secured Notes due 2022
|
900,000
|
|
|
24,593
|
|
|
(16,067
|
)
|
|
908,526
|
|
||||
7.625% Senior Secured Notes Due 2023
|
400,000
|
|
|
—
|
|
|
(4,762
|
)
|
|
395,238
|
|
||||
Total Long-Term Debt
|
$
|
2,829,465
|
|
|
$
|
26,499
|
|
|
$
|
(35,667
|
)
|
|
$
|
2,820,297
|
|
|
(1)
|
Unamortized deferred financing costs related to the revolving credit facilities included in deferred financing costs, net on the condensed consolidated balance sheets at
September 30, 2018
and
December 31, 2017
was
$2.3 million
and
$3.1 million
, respectively.
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
RIC receivables, gross
|
$
|
181,353
|
|
|
$
|
131,024
|
|
Deferred interest
|
(41,006
|
)
|
|
(36,048
|
)
|
||
RIC receivables, net of deferred interest
|
$
|
140,347
|
|
|
$
|
94,976
|
|
|
|
|
|
||||
Classified on the condensed consolidated unaudited balance sheets as:
|
|
|
|
||||
Accounts and notes receivable, net
|
$
|
29,350
|
|
|
$
|
16,469
|
|
Long-term notes receivables and other assets, net
|
110,997
|
|
|
78,507
|
|
||
RIC receivables, net
|
$
|
140,347
|
|
|
$
|
94,976
|
|
|
Nine months ended September 30, 2018
|
|
Twelve months ended December 31, 2017
|
||||
Deferred interest, beginning of period
|
$
|
36,048
|
|
|
$
|
—
|
|
Write-offs, net of recoveries
|
(19,105
|
)
|
|
(6,055
|
)
|
||
Change in deferred interest on short-term and long-term RIC receivables
|
24,063
|
|
|
42,103
|
|
||
Deferred interest, end of period
|
$
|
41,006
|
|
|
$
|
36,048
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Prepaid expenses and other current assets
|
|
|
|
||||
Prepaid expenses
|
$
|
9,021
|
|
|
$
|
8,000
|
|
Deposits
|
1,976
|
|
|
1,596
|
|
||
Other
|
6,478
|
|
|
6,554
|
|
||
Total prepaid expenses and other current assets
|
$
|
17,475
|
|
|
$
|
16,150
|
|
Capitalized contract costs
|
|
|
|
||||
Capitalized contract costs
|
$
|
2,310,922
|
|
|
$
|
—
|
|
Accumulated amortization
|
(1,147,442
|
)
|
|
—
|
|
||
Capitalized contract costs, net
|
$
|
1,163,480
|
|
|
$
|
—
|
|
Subscriber acquisition costs
|
|
|
|
||||
Subscriber acquisition costs
|
$
|
—
|
|
|
$
|
1,837,388
|
|
Accumulated amortization
|
—
|
|
|
(528,830
|
)
|
||
Subscriber acquisition costs, net
|
$
|
—
|
|
|
$
|
1,308,558
|
|
Long-term notes receivables and other assets
|
|
|
|
||||
RIC receivables, gross
|
$
|
152,003
|
|
|
$
|
114,556
|
|
RIC deferred interest
|
(41,006
|
)
|
|
(36,049
|
)
|
||
Security deposits
|
6,652
|
|
|
6,427
|
|
||
Investments
|
4,800
|
|
|
3,429
|
|
||
Other
|
317
|
|
|
360
|
|
||
Total long-term notes receivables and other assets, net
|
$
|
122,766
|
|
|
$
|
88,723
|
|
Accrued payroll and commissions
|
|
|
|
||||
Accrued commissions
|
$
|
86,398
|
|
|
$
|
27,485
|
|
Accrued payroll
|
32,515
|
|
|
30,267
|
|
||
Total accrued payroll and commissions
|
$
|
118,913
|
|
|
$
|
57,752
|
|
Accrued expenses and other current liabilities
|
|
|
|
||||
Accrued interest payable
|
$
|
60,496
|
|
|
$
|
28,737
|
|
Current portion of derivative liability
|
58,864
|
|
|
25,473
|
|
||
Service warranty accrual
|
8,938
|
|
|
—
|
|
||
Current portion of notes payable
|
8,100
|
|
|
—
|
|
||
Accrued taxes
|
2,854
|
|
|
4,585
|
|
||
Spectrum license obligation
|
—
|
|
|
3,861
|
|
||
Accrued payroll taxes and withholdings
|
3,542
|
|
|
3,185
|
|
||
Loss contingencies
|
3,131
|
|
|
2,156
|
|
||
Blackstone monitoring fee, a related party
|
4,000
|
|
|
933
|
|
||
Other
|
5,893
|
|
|
5,391
|
|
||
Total accrued expenses and other current liabilities
|
$
|
155,818
|
|
|
$
|
74,321
|
|
|
September 30, 2018
|
|
December 31, 2017
|
|
Estimated Useful
Lives
|
||||
Vehicles
|
$
|
45,448
|
|
|
$
|
42,008
|
|
|
3 - 5 years
|
Computer equipment and software
|
51,384
|
|
|
46,651
|
|
|
3 - 5 years
|
||
Leasehold improvements
|
25,950
|
|
|
20,783
|
|
|
2 - 15 years
|
||
Office furniture, fixtures and equipment
|
19,000
|
|
|
17,202
|
|
|
7 years
|
||
Build-to-suit lease building
|
8,268
|
|
|
8,268
|
|
|
10.5 years
|
||
Construction in process
|
2,671
|
|
|
4,299
|
|
|
|
||
Property, plant and equipment, gross
|
152,721
|
|
|
139,211
|
|
|
|
||
Accumulated depreciation and amortization
|
(76,839
|
)
|
|
(61,130
|
)
|
|
|
||
Property, plant and equipment, net
|
$
|
75,882
|
|
|
$
|
78,081
|
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
|
|
||||||||||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Estimated
Useful Lives |
||||||||||||
Definite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer contracts
|
$
|
968,203
|
|
|
$
|
(699,652
|
)
|
|
$
|
268,551
|
|
|
$
|
970,147
|
|
|
$
|
(637,780
|
)
|
|
$
|
332,367
|
|
|
10 years
|
2GIG 2.0 technology
|
17,000
|
|
|
(14,788
|
)
|
|
2,212
|
|
|
17,000
|
|
|
(13,274
|
)
|
|
3,726
|
|
|
8 years
|
||||||
Other technology
|
2,917
|
|
|
(1,563
|
)
|
|
1,354
|
|
|
2,917
|
|
|
(1,250
|
)
|
|
1,667
|
|
|
5 - 7 years
|
||||||
Space Monkey technology
|
7,100
|
|
|
(5,333
|
)
|
|
1,767
|
|
|
7,100
|
|
|
(4,066
|
)
|
|
3,034
|
|
|
6 years
|
||||||
Patents
|
11,720
|
|
|
(7,733
|
)
|
|
3,987
|
|
|
10,616
|
|
|
(5,835
|
)
|
|
4,781
|
|
|
5 years
|
||||||
Total definite-lived intangible assets:
|
$
|
1,006,940
|
|
|
$
|
(729,069
|
)
|
|
$
|
277,871
|
|
|
$
|
1,007,780
|
|
|
$
|
(662,205
|
)
|
|
$
|
345,575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Spectrum licenses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31,253
|
|
|
$
|
—
|
|
|
$
|
31,253
|
|
|
|
IP addresses
|
564
|
|
|
—
|
|
|
564
|
|
|
564
|
|
|
—
|
|
|
564
|
|
|
|
||||||
Domain names
|
59
|
|
|
—
|
|
|
59
|
|
|
59
|
|
|
—
|
|
|
59
|
|
|
|
||||||
Total Indefinite-lived intangible assets
|
623
|
|
|
—
|
|
|
623
|
|
|
31,876
|
|
|
—
|
|
|
31,876
|
|
|
|
||||||
Total intangible assets, net
|
$
|
1,007,563
|
|
|
$
|
(729,069
|
)
|
|
$
|
278,494
|
|
|
$
|
1,039,656
|
|
|
$
|
(662,205
|
)
|
|
$
|
377,451
|
|
|
|
|
|
||
2018 - Remaining Period
|
$
|
22,791
|
|
2019
|
79,218
|
|
|
2020
|
67,980
|
|
|
2021
|
58,765
|
|
|
2022
|
48,844
|
|
|
Thereafter
|
69
|
|
|
Total estimated amortization expense
|
$
|
277,667
|
|
|
September 30, 2018
|
||||||||||||||||||||||
|
Adjusted Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
|
Cash and Cash Equivalents
|
|
Long-Term Notes Receivables and Other Assets, net
|
||||||||||||
Cash
|
$
|
7,960
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,960
|
|
|
$
|
7,960
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
105,006
|
|
|
—
|
|
|
—
|
|
|
105,006
|
|
|
105,006
|
|
|
—
|
|
||||||
Corporate securities
|
2,703
|
|
|
1,385
|
|
|
—
|
|
|
4,088
|
|
|
—
|
|
|
4,088
|
|
||||||
Subtotal
|
107,709
|
|
|
1,385
|
|
|
—
|
|
|
109,094
|
|
|
105,006
|
|
|
4,088
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
115,669
|
|
|
$
|
1,385
|
|
|
$
|
—
|
|
|
$
|
117,054
|
|
|
$
|
112,966
|
|
|
$
|
4,088
|
|
|
December 31, 2017
|
||||||||||||||||||||||
|
Adjusted Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
|
Cash and Cash Equivalents
|
|
Long-Term Notes Receivables and Other Assets, net
|
||||||||||||
Cash
|
$
|
3,866
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,866
|
|
|
$
|
3,866
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|
—
|
|
||||||
Corporate securities
|
4,018
|
|
|
—
|
|
|
(1,315
|
)
|
|
2,703
|
|
|
—
|
|
|
2,703
|
|
||||||
Subtotal
|
4,024
|
|
|
—
|
|
|
(1,315
|
)
|
|
2,709
|
|
|
6
|
|
|
2,703
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
7,890
|
|
|
$
|
—
|
|
|
$
|
(1,315
|
)
|
|
$
|
6,575
|
|
|
$
|
3,872
|
|
|
$
|
2,703
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
|
Stated Interest Rate
|
|||||||||||||
Issuance
|
|
Face Value
|
|
Estimated Fair Value
|
|
Face Value
|
|
Estimated Fair Value
|
|
||||||||||
2019 Notes
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
269,465
|
|
|
$
|
273,507
|
|
|
6.375
|
%
|
2020 Notes
|
|
679,299
|
|
|
680,114
|
|
|
930,000
|
|
|
952,134
|
|
|
8.75
|
%
|
||||
2022 Private Placement Notes
|
|
270,000
|
|
|
276,692
|
|
|
270,000
|
|
|
276,486
|
|
|
8.875
|
%
|
||||
2022 Notes
|
|
900,000
|
|
|
920,250
|
|
|
900,000
|
|
|
966,420
|
|
|
7.875
|
%
|
||||
2023 Notes
|
|
400,000
|
|
|
370,000
|
|
|
400,000
|
|
|
425,000
|
|
|
7.625
|
%
|
||||
Term Loan
|
|
801,900
|
|
|
801,900
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|||||
Total
|
|
$
|
3,051,199
|
|
|
$
|
3,048,956
|
|
|
$
|
2,769,465
|
|
|
$
|
2,893,547
|
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Consumer Financing Program Contractual Obligations:
|
|
|
|
||||
Fair value
|
$
|
112,554
|
|
|
$
|
46,496
|
|
Notional amount
|
355,527
|
|
|
163,032
|
|
||
|
|
|
|
||||
Classified on the condensed consolidated unaudited balance sheets as:
|
|
|
|
||||
Accrued expenses and other current liabilities
|
58,864
|
|
|
25,473
|
|
||
Other long-term obligations
|
53,690
|
|
|
21,023
|
|
||
Total Consumer Financing Program Contractual Obligation
|
$
|
112,554
|
|
|
$
|
46,496
|
|
|
Nine months ended September 30, 2018
|
|
Twelve months ended December 31, 2017
|
||||
Balance, beginning of period
|
$
|
46,496
|
|
|
$
|
—
|
|
Additions
|
78,995
|
|
|
44,913
|
|
||
Settlements
|
(22,805
|
)
|
|
(7,972
|
)
|
||
Losses included in earnings
|
9,868
|
|
|
9,555
|
|
||
Balance, end of period
|
$
|
112,554
|
|
|
$
|
46,496
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Operating expenses
|
$
|
102
|
|
|
$
|
9
|
|
|
$
|
147
|
|
|
$
|
49
|
|
Selling expenses
|
235
|
|
|
55
|
|
|
361
|
|
|
165
|
|
||||
General and administrative expenses
|
770
|
|
|
337
|
|
|
1,143
|
|
|
1,073
|
|
||||
Total stock-based compensation
|
$
|
1,107
|
|
|
$
|
401
|
|
|
$
|
1,651
|
|
|
$
|
1,287
|
|
|
Rent Expense
|
|
||||||||||||||
|
For the three months ended,
|
|
For the nine months ended
,
|
|
||||||||||||
|
September 30, 2018
|
|
September 30, 2017
|
|
September 30, 2018
|
|
September 30, 2017
|
Lease Term
|
||||||||
Arrangement
|
|
|
|
|
|
|
|
|
||||||||
Warehouse, office space and other
|
$
|
3,731
|
|
|
$
|
3,489
|
|
|
$
|
10,410
|
|
|
$
|
9,374
|
|
11 - 15 years
|
Wireless towers and spectrum
|
1,056
|
|
|
1,169
|
|
|
3,144
|
|
|
3,513
|
|
1 - 10 years
|
||||
Total Rent Expense
|
$
|
4,787
|
|
|
$
|
4,658
|
|
|
$
|
13,554
|
|
|
$
|
12,887
|
|
|
•
|
A Master Intercompany Framework Agreement which establishes a framework for the ongoing relationship between the Company and Solar and contains master terms regarding the protection of each other’s confidential information, and master procedural terms, such as notice procedures, restrictions on assignment, interpretive provisions, governing law and dispute resolution;
|
•
|
A Non-Competition Agreement in which the Company and Solar each define their current areas of business and their competitors, and agree not to directly or indirectly engage in the other’s business for three years;
|
•
|
A Transition Services Agreement pursuant to which the Company will provide to Solar various enterprise services, including services relating to information technology and infrastructure, human resources and employee benefits, administration services and facilities-related services;
|
•
|
A Marketing and Customer Relations Agreement which governs various cross-marketing initiatives between the Company and Solar, in particularly the provision of sales leads from each company to the other; and
|
•
|
A Trademark License Agreement pursuant to which the licensor, a special purpose subsidiary majority-owned by the Company and minority-owned by Solar, will grant Solar a royalty-free exclusive license to the trademark “VIVINT SOLAR” in the field of selling renewable energy or energy storage products and services.
|
|
Contract
termination
costs
|
|
Employee severance
and termination
benefits
|
|
Total
|
||||||
Accrued restructuring balance as of December 31, 2016
|
$
|
649
|
|
|
$
|
—
|
|
|
$
|
649
|
|
Cash payments
|
(91
|
)
|
|
—
|
|
|
(91
|
)
|
|||
Accrued restructuring balance as of December 31, 2017
|
558
|
|
|
—
|
|
|
558
|
|
|||
Restructuring charges
|
—
|
|
|
4,683
|
|
|
4,683
|
|
|||
Cash payments
|
(68
|
)
|
|
(3,992
|
)
|
|
(4,060
|
)
|
|||
Accrued restructuring balance as of September 30, 2018
|
$
|
490
|
|
|
$
|
691
|
|
|
$
|
1,181
|
|
|
|
United States
|
|
Canada
|
|
Total
|
||||||
Revenue from external customers
|
|
|
|
|
|
|
||||||
Three months ended September 30, 2018
|
|
$
|
253,635
|
|
|
$
|
18,700
|
|
|
$
|
272,335
|
|
Three months ended September 30, 2017
|
|
211,077
|
|
|
17,581
|
|
|
228,658
|
|
|||
Nine months ended September 30, 2018
|
|
719,690
|
|
|
54,209
|
|
|
773,899
|
|
|||
Nine months ended September 30, 2017
|
|
597,842
|
|
|
48,295
|
|
|
646,137
|
|
|
Parent
|
|
APX
Group, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets
|
$
|
—
|
|
|
$
|
110,625
|
|
|
$
|
292,080
|
|
|
$
|
89,026
|
|
|
$
|
(236,208
|
)
|
|
$
|
255,523
|
|
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
75,346
|
|
|
536
|
|
|
—
|
|
|
75,882
|
|
||||||
Capitalized contract costs, net
|
—
|
|
|
—
|
|
|
1,086,964
|
|
|
76,516
|
|
|
—
|
|
|
1,163,480
|
|
||||||
Deferred financing costs, net
|
—
|
|
|
2,318
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,318
|
|
||||||
Investment in subsidiaries
|
—
|
|
|
1,711,422
|
|
|
—
|
|
|
—
|
|
|
(1,711,422
|
)
|
|
—
|
|
||||||
Intercompany receivable
|
—
|
|
|
—
|
|
|
6,303
|
|
|
—
|
|
|
(6,303
|
)
|
|
—
|
|
||||||
Intangible assets, net
|
—
|
|
|
—
|
|
|
257,383
|
|
|
21,111
|
|
|
—
|
|
|
278,494
|
|
||||||
Goodwill
|
—
|
|
|
—
|
|
|
809,678
|
|
|
26,612
|
|
|
—
|
|
|
836,290
|
|
||||||
Long-term notes receivables and other assets
|
—
|
|
|
106
|
|
|
104,566
|
|
|
18,200
|
|
|
(106
|
)
|
|
122,766
|
|
||||||
Total Assets
|
$
|
—
|
|
|
$
|
1,824,471
|
|
|
$
|
2,632,320
|
|
|
$
|
232,001
|
|
|
$
|
(1,954,039
|
)
|
|
$
|
2,734,753
|
|
Liabilities and Stockholders’ (Deficit) Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities
|
$
|
—
|
|
|
$
|
68,412
|
|
|
$
|
530,668
|
|
|
$
|
175,960
|
|
|
$
|
(236,208
|
)
|
|
$
|
538,832
|
|
Intercompany payable
|
—
|
|
|
—
|
|
|
—
|
|
|
6,303
|
|
|
(6,303
|
)
|
|
—
|
|
||||||
Notes payable and revolving credit facility, net of current portion
|
—
|
|
|
3,038,173
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,038,173
|
|
||||||
Capital lease obligations, net of current portion
|
—
|
|
|
—
|
|
|
7,283
|
|
|
42
|
|
|
—
|
|
|
7,325
|
|
||||||
Deferred revenue, net of current portion
|
—
|
|
|
—
|
|
|
309,634
|
|
|
18,534
|
|
|
—
|
|
|
328,168
|
|
||||||
Other long-term obligations
|
—
|
|
|
—
|
|
|
95,553
|
|
|
—
|
|
|
—
|
|
|
95,553
|
|
||||||
Accumulated losses of investee, net
|
1,282,114
|
|
|
|
|
|
|
|
|
(1,282,114
|
)
|
|
—
|
|
|||||||||
Deferred income tax liability
|
—
|
|
|
—
|
|
|
106
|
|
|
8,816
|
|
|
(106
|
)
|
|
8,816
|
|
||||||
Total (deficit) equity
|
(1,282,114
|
)
|
|
(1,282,114
|
)
|
|
1,689,076
|
|
|
22,346
|
|
|
(429,308
|
)
|
|
(1,282,114
|
)
|
||||||
Total liabilities and stockholders’ (deficit) equity
|
$
|
—
|
|
|
$
|
1,824,471
|
|
|
$
|
2,632,320
|
|
|
$
|
232,001
|
|
|
$
|
(1,954,039
|
)
|
|
$
|
2,734,753
|
|
|
Parent
|
|
APX
Group, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets
|
$
|
—
|
|
|
$
|
4,150
|
|
|
$
|
284,293
|
|
|
$
|
49,935
|
|
|
$
|
(162,413
|
)
|
|
$
|
175,965
|
|
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
77,345
|
|
|
736
|
|
|
—
|
|
|
78,081
|
|
||||||
Subscriber acquisition costs, net
|
—
|
|
|
—
|
|
|
1,214,678
|
|
|
93,880
|
|
|
—
|
|
|
1,308,558
|
|
||||||
Deferred financing costs, net
|
—
|
|
|
3,099
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,099
|
|
||||||
Investment in subsidiaries
|
—
|
|
|
2,188,221
|
|
|
—
|
|
|
—
|
|
|
(2,188,221
|
)
|
|
—
|
|
||||||
Intercompany receivable
|
—
|
|
|
—
|
|
|
6,303
|
|
|
—
|
|
|
(6,303
|
)
|
|
—
|
|
||||||
Intangible assets, net
|
—
|
|
|
—
|
|
|
350,710
|
|
|
26,741
|
|
|
—
|
|
|
377,451
|
|
||||||
Goodwill
|
—
|
|
|
—
|
|
|
809,678
|
|
|
27,292
|
|
|
—
|
|
|
836,970
|
|
||||||
Long-term notes receivables and other assets
|
—
|
|
|
106
|
|
|
78,173
|
|
|
10,550
|
|
|
(106
|
)
|
|
88,723
|
|
||||||
Total Assets
|
$
|
—
|
|
|
$
|
2,195,576
|
|
|
$
|
2,821,180
|
|
|
$
|
209,134
|
|
|
$
|
(2,357,043
|
)
|
|
$
|
2,868,847
|
|
Liabilities and Stockholders’ (Deficit) Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities
|
$
|
—
|
|
|
$
|
28,805
|
|
|
$
|
343,398
|
|
|
$
|
128,581
|
|
|
$
|
(162,413
|
)
|
|
$
|
338,371
|
|
Intercompany payable
|
—
|
|
|
—
|
|
|
—
|
|
|
6,303
|
|
|
(6,303
|
)
|
|
—
|
|
||||||
Notes payable and revolving credit facility, net of current portion
|
—
|
|
|
2,820,297
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,820,297
|
|
||||||
Capital lease obligations, net of current portion
|
—
|
|
|
—
|
|
|
10,791
|
|
|
298
|
|
|
—
|
|
|
11,089
|
|
||||||
Deferred revenue, net of current portion
|
—
|
|
|
—
|
|
|
248,643
|
|
|
15,912
|
|
|
—
|
|
|
264,555
|
|
||||||
Accumulated Losses of Investee, net
|
653,526
|
|
|
|
|
|
|
|
|
|
|
|
(653,526
|
)
|
|
—
|
|
||||||
Other long-term obligations
|
—
|
|
|
—
|
|
|
79,020
|
|
|
—
|
|
|
—
|
|
|
79,020
|
|
||||||
Deferred income tax liability
|
—
|
|
|
—
|
|
|
106
|
|
|
9,041
|
|
|
(106
|
)
|
|
9,041
|
|
||||||
Total (deficit) equity
|
(653,526
|
)
|
|
(653,526
|
)
|
|
2,139,222
|
|
|
48,999
|
|
|
(1,534,695
|
)
|
|
(653,526
|
)
|
||||||
Total liabilities and stockholders’ (deficit) equity
|
$
|
—
|
|
|
$
|
2,195,576
|
|
|
$
|
2,821,180
|
|
|
$
|
209,134
|
|
|
$
|
(2,357,043
|
)
|
|
$
|
2,868,847
|
|
|
Parent
|
|
APX
Group, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
260,462
|
|
|
$
|
12,512
|
|
|
$
|
(639
|
)
|
|
$
|
272,335
|
|
Costs and expenses
|
—
|
|
|
—
|
|
|
303,009
|
|
|
14,023
|
|
|
(639
|
)
|
|
316,393
|
|
||||||
Loss from operations
|
—
|
|
|
—
|
|
|
(42,547
|
)
|
|
(1,511
|
)
|
|
—
|
|
|
(44,058
|
)
|
||||||
Loss from subsidiaries
|
(120,226
|
)
|
|
(44,640
|
)
|
|
—
|
|
|
—
|
|
|
164,866
|
|
|
—
|
|
||||||
Other expense (income), net
|
—
|
|
|
75,586
|
|
|
2,227
|
|
|
(1,422
|
)
|
|
—
|
|
|
76,391
|
|
||||||
Loss before income tax expenses
|
(120,226
|
)
|
|
(120,226
|
)
|
|
(44,774
|
)
|
|
(89
|
)
|
|
164,866
|
|
|
(120,449
|
)
|
||||||
Income tax expense (benefit)
|
—
|
|
|
—
|
|
|
55
|
|
|
(278
|
)
|
|
—
|
|
|
(223
|
)
|
||||||
Net (loss) income
|
(120,226
|
)
|
|
(120,226
|
)
|
|
(44,829
|
)
|
|
189
|
|
|
164,866
|
|
|
(120,226
|
)
|
||||||
Other comprehensive loss, net of tax effects:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (loss) income
|
(120,226
|
)
|
|
(120,226
|
)
|
|
(44,829
|
)
|
|
189
|
|
|
164,866
|
|
|
(120,226
|
)
|
||||||
Foreign currency translation adjustment
|
406
|
|
|
406
|
|
|
—
|
|
|
406
|
|
|
(812
|
)
|
|
406
|
|
||||||
Total other comprehensive loss
|
406
|
|
|
406
|
|
|
—
|
|
|
406
|
|
|
(812
|
)
|
|
406
|
|
||||||
Comprehensive (loss) income
|
$
|
(119,820
|
)
|
|
$
|
(119,820
|
)
|
|
$
|
(44,829
|
)
|
|
$
|
595
|
|
|
$
|
164,054
|
|
|
$
|
(119,820
|
)
|
|
Parent
|
|
APX
Group, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
216,560
|
|
|
$
|
12,770
|
|
|
$
|
(672
|
)
|
|
$
|
228,658
|
|
Costs and expenses
|
—
|
|
|
—
|
|
|
257,988
|
|
|
11,489
|
|
|
(672
|
)
|
|
268,805
|
|
||||||
(Loss) income from operations
|
—
|
|
|
—
|
|
|
(41,428
|
)
|
|
1,281
|
|
|
—
|
|
|
(40,147
|
)
|
||||||
Loss from subsidiaries
|
(107,920
|
)
|
|
(40,608
|
)
|
|
—
|
|
|
—
|
|
|
148,528
|
|
|
—
|
|
||||||
Other expense (income), net
|
—
|
|
|
67,312
|
|
|
2,356
|
|
|
(3,052
|
)
|
|
—
|
|
|
66,616
|
|
||||||
(Loss) income before income tax expenses
|
(107,920
|
)
|
|
(107,920
|
)
|
|
(43,784
|
)
|
|
4,333
|
|
|
148,528
|
|
|
(106,763
|
)
|
||||||
Income tax (benefit) expense
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
1,191
|
|
|
—
|
|
|
1,157
|
|
||||||
Net (loss) income
|
(107,920
|
)
|
|
(107,920
|
)
|
|
(43,750
|
)
|
|
3,142
|
|
|
148,528
|
|
|
(107,920
|
)
|
||||||
Other comprehensive loss, net of tax effects:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (loss) income
|
(107,920
|
)
|
|
(107,920
|
)
|
|
(43,750
|
)
|
|
3,142
|
|
|
148,528
|
|
|
(107,920
|
)
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
1,967
|
|
|
—
|
|
|
1,967
|
|
|
(1,967
|
)
|
|
1,967
|
|
||||||
Unrealized gain on marketable securities
|
—
|
|
|
(413
|
)
|
|
(413
|
)
|
|
—
|
|
|
413
|
|
|
(413
|
)
|
||||||
Total other comprehensive income
|
—
|
|
|
1,554
|
|
|
(413
|
)
|
|
1,967
|
|
|
(1,554
|
)
|
|
1,554
|
|
||||||
Comprehensive (loss) income
|
$
|
(107,920
|
)
|
|
$
|
(106,366
|
)
|
|
$
|
(44,163
|
)
|
|
$
|
5,109
|
|
|
$
|
146,974
|
|
|
$
|
(106,366
|
)
|
|
Parent
|
|
APX
Group, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
738,250
|
|
|
$
|
37,590
|
|
|
$
|
(1,941
|
)
|
|
$
|
773,899
|
|
Costs and expenses
|
—
|
|
|
—
|
|
|
930,065
|
|
|
41,697
|
|
|
(1,941
|
)
|
|
969,821
|
|
||||||
Loss from operations
|
—
|
|
|
—
|
|
|
(191,815
|
)
|
|
(4,107
|
)
|
|
—
|
|
|
(195,922
|
)
|
||||||
Loss from subsidiaries
|
(349,328
|
)
|
|
(155,883
|
)
|
|
—
|
|
|
—
|
|
|
505,211
|
|
|
—
|
|
||||||
Other expense (income), net
|
—
|
|
|
193,445
|
|
|
(40,737
|
)
|
|
2,260
|
|
|
—
|
|
|
154,968
|
|
||||||
Loss before income tax expenses
|
(349,328
|
)
|
|
(349,328
|
)
|
|
(151,078
|
)
|
|
(6,367
|
)
|
|
505,211
|
|
|
(350,890
|
)
|
||||||
Income tax expense (benefit)
|
—
|
|
|
—
|
|
|
157
|
|
|
(1,719
|
)
|
|
—
|
|
|
(1,562
|
)
|
||||||
Net loss
|
(349,328
|
)
|
|
(349,328
|
)
|
|
(151,235
|
)
|
|
(4,648
|
)
|
|
505,211
|
|
|
(349,328
|
)
|
||||||
Other comprehensive loss, net of tax effects:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss
|
(349,328
|
)
|
|
(349,328
|
)
|
|
(151,235
|
)
|
|
(4,648
|
)
|
|
505,211
|
|
|
(349,328
|
)
|
||||||
Foreign currency translation adjustment
|
(670
|
)
|
|
(670
|
)
|
|
—
|
|
|
(670
|
)
|
|
1,340
|
|
|
(670
|
)
|
||||||
Total other comprehensive loss
|
(670
|
)
|
|
(670
|
)
|
|
—
|
|
|
(670
|
)
|
|
1,340
|
|
|
(670
|
)
|
||||||
Comprehensive loss
|
$
|
(349,998
|
)
|
|
$
|
(349,998
|
)
|
|
$
|
(151,235
|
)
|
|
$
|
(5,318
|
)
|
|
$
|
506,551
|
|
|
$
|
(349,998
|
)
|
|
Parent
|
|
APX
Group, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
612,075
|
|
|
$
|
36,085
|
|
|
$
|
(2,023
|
)
|
|
$
|
646,137
|
|
Costs and expenses
|
—
|
|
|
—
|
|
|
703,656
|
|
|
31,641
|
|
|
(2,023
|
)
|
|
733,274
|
|
||||||
(Loss) income from operations
|
—
|
|
|
—
|
|
|
(91,581
|
)
|
|
4,444
|
|
|
—
|
|
|
(87,137
|
)
|
||||||
Loss from subsidiaries
|
(274,793
|
)
|
|
(88,104
|
)
|
|
—
|
|
|
—
|
|
|
362,897
|
|
|
—
|
|
||||||
Other expense (income), net
|
—
|
|
|
186,689
|
|
|
4,097
|
|
|
(5,438
|
)
|
|
—
|
|
|
185,348
|
|
||||||
(Loss) income before income tax expenses
|
(274,793
|
)
|
|
(274,793
|
)
|
|
(95,678
|
)
|
|
9,882
|
|
|
362,897
|
|
|
(272,485
|
)
|
||||||
Income tax (benefit) expense
|
—
|
|
|
—
|
|
|
(303
|
)
|
|
2,611
|
|
|
—
|
|
|
2,308
|
|
||||||
Net (loss) income
|
(274,793
|
)
|
|
(274,793
|
)
|
|
(95,375
|
)
|
|
7,271
|
|
|
362,897
|
|
|
(274,793
|
)
|
||||||
Other comprehensive loss, net of tax effects:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (loss) income
|
(274,793
|
)
|
|
(274,793
|
)
|
|
(95,375
|
)
|
|
7,271
|
|
|
362,897
|
|
|
(274,793
|
)
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
3,543
|
|
|
—
|
|
|
3,543
|
|
|
(3,543
|
)
|
|
3,543
|
|
||||||
Unrealized gain on marketable securities
|
—
|
|
|
(671
|
)
|
|
(671
|
)
|
|
—
|
|
|
671
|
|
|
(671
|
)
|
||||||
Total other comprehensive income
|
—
|
|
|
2,872
|
|
|
(671
|
)
|
|
3,543
|
|
|
(2,872
|
)
|
|
2,872
|
|
||||||
Comprehensive (loss) income
|
$
|
(274,793
|
)
|
|
$
|
(271,921
|
)
|
|
$
|
(96,046
|
)
|
|
$
|
10,814
|
|
|
$
|
360,025
|
|
|
$
|
(271,921
|
)
|
|
Parent
|
|
APX
Group, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash used in operating activities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(130,718
|
)
|
|
$
|
695
|
|
|
$
|
—
|
|
|
$
|
(130,023
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
—
|
|
|
—
|
|
|
(15,355
|
)
|
|
—
|
|
|
—
|
|
|
(15,355
|
)
|
||||||
Proceeds from sale of intangibles
|
—
|
|
|
—
|
|
|
53,693
|
|
|
—
|
|
|
—
|
|
|
53,693
|
|
||||||
Proceeds from sale of capital assets
|
—
|
|
|
—
|
|
|
185
|
|
|
—
|
|
|
—
|
|
|
185
|
|
||||||
Investment in subsidiary
|
(2,331
|
)
|
|
(104,906
|
)
|
|
—
|
|
|
—
|
|
|
107,237
|
|
|
—
|
|
||||||
Acquisition of intangible assets
|
—
|
|
|
—
|
|
|
(1,068
|
)
|
|
—
|
|
|
—
|
|
|
(1,068
|
)
|
||||||
Net cash (used in) provided by investing activities
|
(2,331
|
)
|
|
(104,906
|
)
|
|
37,455
|
|
|
—
|
|
|
107,237
|
|
|
37,455
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from notes payable
|
—
|
|
|
810,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
810,000
|
|
||||||
Repayment on notes payable
|
—
|
|
|
(520,166
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(520,166
|
)
|
||||||
Borrowings from revolving credit facility
|
—
|
|
|
201,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
201,000
|
|
||||||
Repayments on revolving credit facility
|
—
|
|
|
(261,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(261,000
|
)
|
||||||
Proceeds from capital contribution
|
4,700
|
|
|
4,700
|
|
|
107,275
|
|
|
—
|
|
|
(111,975
|
)
|
|
4,700
|
|
||||||
Repayments of capital lease obligations
|
—
|
|
|
—
|
|
|
(9,611
|
)
|
|
(271
|
)
|
|
—
|
|
|
(9,882
|
)
|
||||||
Financing costs
|
—
|
|
|
(11,317
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,317
|
)
|
||||||
Deferred financing costs
|
—
|
|
|
(9,302
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,302
|
)
|
||||||
Return of capital
|
(2,369
|
)
|
|
(2,369
|
)
|
|
(2,369
|
)
|
|
—
|
|
|
4,738
|
|
|
(2,369
|
)
|
||||||
Net cash provided by (used in) financing activities
|
2,331
|
|
|
211,546
|
|
|
95,295
|
|
|
(271
|
)
|
|
(107,237
|
)
|
|
201,664
|
|
||||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||||
Net increase in cash and cash equivalents
|
—
|
|
|
106,640
|
|
|
2,032
|
|
|
422
|
|
|
—
|
|
|
109,094
|
|
||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning of period
|
—
|
|
|
3,661
|
|
|
(572
|
)
|
|
783
|
|
|
—
|
|
|
3,872
|
|
||||||
End of period
|
$
|
—
|
|
|
$
|
110,301
|
|
|
$
|
1,460
|
|
|
$
|
1,205
|
|
|
$
|
—
|
|
|
$
|
112,966
|
|
|
Parent
|
|
APX
Group, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash (used in) provided by operating activities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(154,360
|
)
|
|
$
|
5,092
|
|
|
$
|
—
|
|
|
$
|
(149,268
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
—
|
|
|
—
|
|
|
(14,842
|
)
|
|
—
|
|
|
—
|
|
|
(14,842
|
)
|
||||||
Investment in subsidiary
|
—
|
|
|
(157,400
|
)
|
|
—
|
|
|
—
|
|
|
157,400
|
|
|
—
|
|
||||||
Acquisition of intangible assets
|
—
|
|
|
—
|
|
|
(1,057
|
)
|
|
—
|
|
|
—
|
|
|
(1,057
|
)
|
||||||
Proceeds from sale of capital assets
|
—
|
|
|
—
|
|
|
275
|
|
|
—
|
|
|
—
|
|
|
275
|
|
||||||
Acquisition of other assets
|
—
|
|
|
—
|
|
|
(156
|
)
|
|
—
|
|
|
—
|
|
|
(156
|
)
|
||||||
Net cash used in investing activities
|
—
|
|
|
(157,400
|
)
|
|
(15,780
|
)
|
|
—
|
|
|
157,400
|
|
|
(15,780
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from notes payable
|
—
|
|
|
724,750
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
724,750
|
|
||||||
Repayment on notes payable
|
—
|
|
|
(450,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(450,000
|
)
|
||||||
Borrowings from revolving credit facility
|
—
|
|
|
124,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
124,000
|
|
||||||
Repayments on revolving credit facility
|
—
|
|
|
(124,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(124,000
|
)
|
||||||
Intercompany receivable
|
—
|
|
|
—
|
|
|
3,621
|
|
|
—
|
|
|
(3,621
|
)
|
|
—
|
|
||||||
Intercompany payable
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,621
|
)
|
|
3,621
|
|
|
—
|
|
||||||
Proceeds from capital contributions
|
—
|
|
|
—
|
|
|
157,400
|
|
|
—
|
|
|
(157,400
|
)
|
|
—
|
|
||||||
Repayments of capital lease obligations
|
—
|
|
|
—
|
|
|
(6,899
|
)
|
|
(262
|
)
|
|
—
|
|
|
(7,161
|
)
|
||||||
Payments of other long-term obligations
|
—
|
|
|
—
|
|
|
(2,065
|
)
|
|
—
|
|
|
—
|
|
|
(2,065
|
)
|
||||||
Financing costs
|
—
|
|
|
(17,771
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,771
|
)
|
||||||
Deferred financing costs
|
—
|
|
|
(10,730
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,730
|
)
|
||||||
Net cash provided by (used in) financing activities
|
—
|
|
|
246,249
|
|
|
152,057
|
|
|
(3,883
|
)
|
|
(157,400
|
)
|
|
237,023
|
|
||||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
—
|
|
|
72
|
|
|
—
|
|
|
72
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
88,849
|
|
|
(18,083
|
)
|
|
1,281
|
|
|
—
|
|
|
72,047
|
|
||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning of period
|
—
|
|
|
24,680
|
|
|
18,186
|
|
|
654
|
|
|
—
|
|
|
43,520
|
|
||||||
End of period
|
$
|
—
|
|
|
$
|
113,529
|
|
|
$
|
103
|
|
|
$
|
1,935
|
|
|
$
|
—
|
|
|
$
|
115,567
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
number of subscriber additions,
|
•
|
net subscriber acquisition costs,
|
•
|
AMRU,
|
•
|
the total price paid by new subscribers for our Products under the Vivint Flex Pay plan,
|
•
|
the mix of subscribers purchasing our Products through the Consumer Financing Program versus through RICs,
|
•
|
subscriber attrition,
|
•
|
the costs to monitor and service our subscribers,
|
•
|
the level of general and administrative expenses; and
|
•
|
the availability and cost of capital required to generate new subscribers.
|
|
Twelve months ended September 30, 2018
|
|
Twelve months ended September 30, 2017
|
||
Beginning balance of subscribers
|
1,270,478
|
|
|
1,142,571
|
|
New subscribers
|
337,327
|
|
|
260,953
|
|
Attrition
|
(157,620
|
)
|
|
(133,046
|
)
|
Ending balance of subscribers
|
1,450,185
|
|
|
1,270,478
|
|
Monthly average subscribers
|
1,340,075
|
|
|
1,180,116
|
|
Attrition rate
|
11.8
|
%
|
|
11.3
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
||||||||||||||
Total revenues
|
$
|
272,335
|
|
|
$
|
228,658
|
|
|
$
|
773,899
|
|
|
$
|
646,137
|
|
Total costs and expenses
|
316,393
|
|
|
268,805
|
|
|
969,821
|
|
|
733,274
|
|
||||
Loss from operations
|
(44,058
|
)
|
|
(40,147
|
)
|
|
(195,922
|
)
|
|
(87,137
|
)
|
||||
Other expenses
|
76,391
|
|
|
66,616
|
|
|
154,968
|
|
|
185,348
|
|
||||
Loss before taxes
|
(120,449
|
)
|
|
(106,763
|
)
|
|
(350,890
|
)
|
|
(272,485
|
)
|
||||
Income tax (benefit) expense
|
(223
|
)
|
|
1,157
|
|
|
(1,562
|
)
|
|
2,308
|
|
||||
Net loss
|
$
|
(120,226
|
)
|
|
$
|
(107,920
|
)
|
|
$
|
(349,328
|
)
|
|
$
|
(274,793
|
)
|
|
As of September 30,
|
||||||
|
2018
|
|
2017
|
||||
Total Subscribers (in thousands)
|
1,450.2
|
|
|
1,270.5
|
|
||
Total MSR (in thousands)
|
$
|
75,482
|
|
|
$
|
71,235
|
|
AMSRU
|
$
|
52.05
|
|
|
$
|
56.07
|
|
Net subscriber acquisition costs per new subscriber
|
$
|
1,308
|
|
|
$
|
1,560
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||
|
As Reported
|
|
As Adjusted (1)
|
|
|
|
As Reported
|
|
As Adjusted (1)
|
|
|
||||||||||||
Total MR (in thousands)
|
$
|
90,778
|
|
|
$
|
87,082
|
|
|
$
|
76,219
|
|
|
$
|
85,989
|
|
|
$
|
82,584
|
|
|
$
|
71,793
|
|
AMRU
|
$
|
63.12
|
|
|
$
|
60.55
|
|
|
$
|
60.52
|
|
|
$
|
62.87
|
|
|
$
|
60.38
|
|
|
$
|
59.89
|
|
Net service cost per subscriber
|
$
|
16.38
|
|
|
N/A
|
|
$
|
15.04
|
|
|
$
|
16.70
|
|
|
N/A
|
|
$
|
15.47
|
|
||||
Net service margin
|
69
|
%
|
|
N/A
|
|
73
|
%
|
|
69
|
%
|
|
N/A
|
|
73
|
%
|
|
Three Months Ended September 30, 2018
|
|
Three Months Ended September 30, 2017
|
|
% Change
|
||||||||||||||||
|
As Reported
|
|
Topic 606 Adjustments
|
|
As Adjusted (1)
|
|
|
As Reported
|
|
As Adjusted
|
|||||||||||
Recurring and other revenue
|
$
|
272,335
|
|
|
$
|
(28,602
|
)
|
|
$
|
243,733
|
|
|
$
|
219,111
|
|
|
24
|
%
|
|
11
|
%
|
Service and other sales revenue
|
—
|
|
|
15,200
|
|
|
15,200
|
|
|
6,764
|
|
|
NM
|
|
|
125
|
%
|
||||
Activation fees
|
—
|
|
|
2,314
|
|
|
2,314
|
|
|
2,783
|
|
|
NM
|
|
|
(17
|
)%
|
||||
Total revenues
|
$
|
272,335
|
|
|
$
|
(11,088
|
)
|
|
$
|
261,247
|
|
|
$
|
228,658
|
|
|
19
|
%
|
|
14
|
%
|
|
(1)
|
As adjusted excludes the impact of adopting Topic 606. See Note
2
"Revenue and Capitalized Contract Costs" in the accompanying notes to the consolidated financial statements for additional information related to the impact of adopting this standard and a discussion of our updated policies related to revenue recognition and accounting for costs to obtain and fulfill a customer contract.
|
|
Three Months Ended September 30, 2018
|
|
Three Months Ended September 30, 2017
|
|
% Change
|
||||||||||||||||
|
As Reported
|
|
Topic 606 Adjustments
|
|
As Adjusted (1)
|
|
|
As Reported
|
|
As Adjusted
|
|||||||||||
Operating expenses
|
$
|
92,703
|
|
|
$
|
10,496
|
|
|
$
|
103,199
|
|
|
$
|
81,108
|
|
|
14
|
%
|
|
27
|
%
|
Selling expenses
|
41,970
|
|
|
—
|
|
|
41,970
|
|
|
53,821
|
|
|
(22
|
)%
|
|
(22
|
)%
|
||||
General and administrative
|
50,542
|
|
|
—
|
|
|
50,542
|
|
|
49,416
|
|
|
2
|
%
|
|
2
|
%
|
||||
Depreciation and amortization
|
130,636
|
|
|
(36,127
|
)
|
|
94,509
|
|
|
84,460
|
|
|
55
|
%
|
|
12
|
%
|
||||
Restructuring expenses
|
542
|
|
|
—
|
|
|
542
|
|
|
—
|
|
|
NM
|
|
|
NM
|
|
||||
Total costs and expenses
|
$
|
316,393
|
|
|
$
|
(25,631
|
)
|
|
$
|
290,762
|
|
|
$
|
268,805
|
|
|
18
|
%
|
|
8
|
%
|
|
(1)
|
As adjusted excludes the impact of adopting Topic 606. See Note
2
"Revenue and Capitalized Contract Costs" in the accompanying notes to the consolidated financial statements for additional information related to the impact of adopting this standard and a discussion of our updated policies related to revenue recognition and accounting for costs to obtain and fulfill a customer contract.
|
|
Three Months Ended September 30,
|
|
|
|||||||
|
2018
|
|
2017
|
|
% Change
|
|||||
Interest expense
|
$
|
61,881
|
|
|
$
|
58,005
|
|
|
7
|
%
|
Other loss, net
|
14,510
|
|
|
8,611
|
|
|
69
|
%
|
||
Total other expenses, net
|
$
|
76,391
|
|
|
$
|
66,616
|
|
|
15
|
%
|
|
Three Months Ended September 30,
|
|
|
||||||
|
2018
|
|
2017
|
|
% Change
|
||||
Income tax (benefit) expense
|
$
|
(223
|
)
|
|
$
|
1,157
|
|
|
NM
|
|
Nine Months Ended September 30, 2018
|
|
Nine Months Ended September 30, 2017
|
|
% Change
|
||||||||||||||||
|
As Reported
|
|
Topic 606 Adjustments
|
|
As Adjusted (1)
|
|
|
As Reported
|
|
As Adjusted
|
|||||||||||
Recurring and other revenue
|
$
|
773,899
|
|
|
$
|
(70,092
|
)
|
|
$
|
703,807
|
|
|
$
|
618,752
|
|
|
25
|
%
|
|
14
|
%
|
Service and other sales revenue
|
—
|
|
|
31,998
|
|
|
31,998
|
|
|
18,513
|
|
|
NM
|
|
|
73
|
%
|
||||
Activation fees
|
—
|
|
|
7,455
|
|
|
7,455
|
|
|
8,872
|
|
|
NM
|
|
|
(16
|
)%
|
||||
Total revenues
|
$
|
773,899
|
|
|
$
|
(30,639
|
)
|
|
$
|
743,260
|
|
|
$
|
646,137
|
|
|
20
|
%
|
|
15
|
%
|
|
(1)
|
As adjusted excludes the impact of adopting Topic 606. See Note
2
"Revenue and Capitalized Contract Costs" in the accompanying notes to the consolidated financial statements for additional information related to the impact of adopting this standard and a discussion of our updated policies related to revenue recognition and accounting for costs to obtain and fulfill a customer contract.
|
|
Nine Months Ended September 30, 2018
|
|
Nine Months Ended September 30, 2017
|
|
% Change
|
||||||||||||||||
|
As Reported
|
|
Topic 606 Adjustments
|
|
As Adjusted (1)
|
|
|
As Reported
|
|
As Adjusted
|
|||||||||||
Operating expenses
|
$
|
265,784
|
|
|
$
|
20,430
|
|
|
$
|
286,214
|
|
|
$
|
229,776
|
|
|
16
|
%
|
|
25
|
%
|
Selling expenses
|
166,872
|
|
|
—
|
|
|
166,872
|
|
|
134,894
|
|
|
24
|
%
|
|
24
|
%
|
||||
General and administrative
|
150,715
|
|
|
—
|
|
|
150,715
|
|
|
127,179
|
|
|
19
|
%
|
|
19
|
%
|
||||
Depreciation and amortization
|
381,767
|
|
|
(109,448
|
)
|
|
272,319
|
|
|
241,425
|
|
|
58
|
%
|
|
13
|
%
|
||||
Restructuring expenses
|
4,683
|
|
|
—
|
|
|
4,683
|
|
|
—
|
|
|
NM
|
|
|
NM
|
|
||||
Total costs and expenses
|
$
|
969,821
|
|
|
$
|
(89,018
|
)
|
|
$
|
880,803
|
|
|
$
|
791,785
|
|
|
22
|
%
|
|
11
|
%
|
|
(1)
|
As adjusted excludes the impact of adopting Topic 606. See Note
2
"Revenue and Capitalized Contract Costs" in the accompanying notes to the consolidated financial statements for additional information related to the impact of adopting this standard and a discussion of our updated policies related to revenue recognition and accounting for costs to obtain and fulfill a customer contract.
|
|
Nine Months Ended September 30,
|
|
|
|||||||
|
2018
|
|
2017
|
|
% Change
|
|||||
Interest expense
|
$
|
180,998
|
|
|
$
|
166,644
|
|
|
9
|
%
|
Interest income
|
(31
|
)
|
|
(104
|
)
|
|
NM
|
|
||
Other (income) loss, net
|
(25,999
|
)
|
|
18,808
|
|
|
NM
|
|
||
Total other expenses, net
|
$
|
154,968
|
|
|
$
|
185,348
|
|
|
(16
|
)%
|
|
Nine Months Ended September 30,
|
|
|
||||||
|
2018
|
|
2017
|
|
% Change
|
||||
Income tax (benefit) expense
|
$
|
(1,562
|
)
|
|
$
|
2,308
|
|
|
NM
|
|
Nine Months Ended September 30,
|
|
|
|||||||
|
2018
|
|
2017
|
|
% Change
|
|||||
Net cash used in operating activities
|
$
|
(130,023
|
)
|
|
$
|
(149,268
|
)
|
|
NM
|
|
Net cash provided by (used in) investing activities
|
37,455
|
|
|
(15,780
|
)
|
|
NM
|
|
||
Net cash provided by financing activities
|
201,664
|
|
|
237,023
|
|
|
(15
|
)%
|
•
|
a
$49.9 million
net gain primarily associated with the sale of our spectrum intangible assets,
|
•
|
$387.4 million
in non-cash amortization, depreciation, and stock-based compensation
|
•
|
a provision for doubtful accounts of
$14.3 million
,
|
•
|
a
$14.6 million
loss on early extinguishment of debt, and
|
•
|
a
$1.4 million
unrealized
gain
on equity securities.
|
•
|
a
$439.7 million
increase
in capitalized contract costs (formerly subscriber acquisition costs),
|
•
|
a
$31.8 million
decrease
in accounts payable due primarily to decreased inventory purchases,
|
•
|
a
$30.2 million
increase
in other assets primarily due to increase in notes receivables associated with RICs,
|
•
|
a
$26.8 million
increase
in accounts receivable driven primarily by the recognition of billed RICs under Vivint Flex Pay and the growth in the number of our Total Subscribers, and
|
•
|
a
$1.3 million
increase
in prepaid expenses and other current assets.
|
•
|
a
$169.0 million
increase
in accrued expenses and other liabilities due primarily to increases in the derivative liability associated with the Consumer Financing Program introduced in early 2017, and an increase in accrued commissions during the
nine
months ended
September 30, 2018
,
|
•
|
a
$173.3 million
increase
in deferred revenue due to the increased subscriber base and the generation of deferred revenues associated with the sale of Products under the Vivint Flex Pay plan, offset by a reduction in deferred revenue of
$30.6 million
associated with accelerated revenue recognition from the implementation of Topic 606, and
|
•
|
a
$42.1 million
decrease
in inventories partially from decreased Products on hand to support our retail sales channel at the end of 2017.
|
•
|
$247.9 million in non-cash amortization, depreciation, and stock-based compensation,
|
•
|
a $23.0 million loss on early extinguishment of debt
|
•
|
a provision for doubtful accounts of $14.7 million,
|
•
|
a $367.3 million increase in subscriber acquisition costs,
|
•
|
a $68.1 million increase in other assets primarily due to increase in notes receivables associated with RIC,
|
•
|
a $59.5 million increase in inventories partially to support our retail sales channel,
|
•
|
a $35.6 million increase in accounts receivable driven primarily by the recognition of billed RICs under Vivint Flex Pay, and
|
•
|
a $9.8 million increase in prepaid expenses and other current assets
|
•
|
a $205.1 million increase in deferred revenue due to the increased subscriber base and the generation of deferred revenues associated with Product sales under the Vivint Flex Pay plan,
|
•
|
a $132.7 million increase in accrued expenses and other liabilities due primarily to increases in accrued interest on our long term debt, the derivative liability associated with the new Consumer Financing Program introduced in early 2017 and an increase in accrued taxes, and
|
•
|
a $42.4 million increase in accounts payable due primarily to increases in inventory purchases.
|
•
|
incur or guarantee additional debt or issue disqualified stock or preferred stock;
|
•
|
pay dividends and make other distributions on, or redeem or repurchase, capital stock;
|
•
|
make certain investments;
|
•
|
incur certain liens;
|
•
|
enter into transactions with affiliates;
|
•
|
merge or consolidate;
|
•
|
enter into agreements that restrict the ability of restricted subsidiaries to make dividends or other payments to APX Group, Inc.;
|
•
|
designate restricted subsidiaries as unrestricted subsidiaries;
|
•
|
amend, prepay, redeem or purchase certain subordinated debt; and
|
•
|
transfer or sell certain assets.
|
|
Three Months Ended
September 30, 2018 |
|
Nine Months Ended
September 30, 2018 |
|
Twelve months ended September 30, 2018
|
||||||
Net loss
|
$
|
(120,226
|
)
|
|
$
|
(349,328
|
)
|
|
$
|
(484,734
|
)
|
Interest expense, net
|
61,881
|
|
|
180,967
|
|
|
240,069
|
|
|||
Other expense, net
|
14,510
|
|
|
24,390
|
|
|
33,568
|
|
|||
Gain on sale of spectrum (1)
|
—
|
|
|
(50,389
|
)
|
|
(50,389
|
)
|
|||
Income tax expense (benefit)
|
(223
|
)
|
|
(1,562
|
)
|
|
(2,792
|
)
|
|||
Restructuring expenses (2)
|
542
|
|
|
4,683
|
|
|
4,683
|
|
|||
Depreciation and amortization (3)
|
29,136
|
|
|
86,965
|
|
|
118,575
|
|
|||
Amortization of capitalized contract costs
|
101,500
|
|
|
294,802
|
|
|
351,022
|
|
|||
Non-capitalized contract costs (4)
|
59,554
|
|
|
213,483
|
|
|
296,411
|
|
|||
Non-cash compensation (5)
|
871
|
|
|
1,286
|
|
|
1,543
|
|
|||
Other adjustments (6)
|
15,004
|
|
|
46,831
|
|
|
70,026
|
|
|||
Adjustment for a change in accounting principle (Topic 606) (7)
|
(21,584
|
)
|
|
(51,069
|
)
|
|
(51,069
|
)
|
|||
Adjusted EBITDA
|
$
|
140,965
|
|
|
$
|
401,059
|
|
|
$
|
526,913
|
|
(1)
|
Gain on sale of spectrum intangible assets during the three months ended March 31, 2018. (See Note
7
to the accompanying unaudited condensed consolidated financial statements).
|
(2)
|
Restructuring employee severance and termination benefits expenses. (See Note
14
to the accompanying unaudited condensed consolidated financial statements)
|
(3)
|
Excludes loan amortization costs that are included in interest expense.
|
(4)
|
Reflects subscriber acquisition costs that are expensed as incurred because they are not directly related to the acquisition of specific subscribers. Certain other industry participants purchase subscribers through subscriber contract purchases, and as a result, may capitalize the full cost to purchase these subscriber contracts, as compared to our organic generation of new subscribers, which requires us to expense a portion of our subscriber acquisition costs under GAAP. (See Note
1
to the accompanying unaudited condensed consolidated financial statements)
|
(5)
|
Reflects non-cash compensation costs related to employee and director stock and stock option plans. Excludes non-cash compensation costs included in non-capitalized subscriber acquisition costs.
|
|
Three Months Ended
September 30, 2018 |
|
Nine Months Ended
September 30, 2018 |
|
Twelve months ended September 30, 2018
|
||||||
Product development (a)
|
$
|
4,400
|
|
|
$
|
15,913
|
|
|
$
|
24,197
|
|
Litigation settlement (b)
|
—
|
|
|
—
|
|
|
10,012
|
|
|||
Certain legal and professional fees (c)
|
1,886
|
|
|
7,608
|
|
|
10,567
|
|
|||
Hiring, retention and termination payments (d)
|
4,292
|
|
|
7,153
|
|
|
7,314
|
|
|||
Projected run-rate restructuring cost savings (e)
|
—
|
|
|
5,756
|
|
|
5,756
|
|
|||
Monitoring fee (f)
|
1,068
|
|
|
3,184
|
|
|
3,151
|
|
|||
Purchase accounting deferred revenue fair value adjustment (g)
|
273
|
|
|
1,184
|
|
|
1,822
|
|
|||
All other adjustments (h)
|
3,085
|
|
|
6,033
|
|
|
7,207
|
|
|||
Total other adjustments
|
$
|
15,004
|
|
|
$
|
46,831
|
|
|
$
|
70,026
|
|
(a)
|
Costs related to the development of control panels, including associated software, peripheral devices and Wireless Internet Technology.
|
(b)
|
ADT litigation settlement.
|
(c)
|
Legal and related professional fees associated with strategic initiatives and financing transactions.
|
(d)
|
Expenses associated with retention bonus, relocation and severance payments to management.
|
(e)
|
Projected run-rate savings related to June 2018 reduction-in-force.
|
(f)
|
BMP monitoring fee (See Note
12
to the accompanying unaudited condensed consolidated financial statements).
|
(g)
|
Add back revenue reduction directly related to purchase accounting deferred revenue adjustments.
|
(h)
|
Other adjustments primarily reflect costs associated with payments to third parties related to various strategic and financing activities, including the monthly financing fee paid under the Consumer Financing Plan, and costs to implement Sarbanes-Oxley Section 404.
|
(7)
|
The adjustments to eliminate the impact of the Company's adoption of Topic 606, are as follows (in thousands):
|
|
Three Months Ended
September 30, 2018 |
|
Nine Months Ended
September 30, 2018 |
|
Twelve months ended September 30, 2018
|
||||||
Net loss
|
$
|
14,543
|
|
|
$
|
58,379
|
|
|
$
|
58,379
|
|
Amortization of capitalized contract costs
|
(101,498
|
)
|
|
(294,802
|
)
|
|
(294,802
|
)
|
|||
Amortization of subscriber acquisition costs
|
65,371
|
|
|
185,354
|
|
|
185,354
|
|
|||
Topic 606 adjustments
|
$
|
(21,584
|
)
|
|
$
|
(51,069
|
)
|
|
$
|
(51,069
|
)
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
|
|
|
|
Incorporated by Reference
|
||||||||
Exhibit
Number
|
|
Exhibit Title
|
|
Form
|
|
File No.
|
|
Exhibit
No.
|
|
Filing Date
|
|
Provided
Herewith
|
10.1
|
|
|
8-K
|
|
333-191132-02
|
|
10,100
|
|
September 6, 2018
|
|
|
|
10.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
10.3
|
|
|
|
|
|
|
|
|
|
|
X
|
|
10.4
|
|
|
|
|
|
|
|
|
|
|
X
|
|
10.5
|
|
|
|
|
|
|
|
|
|
|
X
|
|
10.6
|
|
|
|
|
|
|
|
|
|
|
X
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
32.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
32.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APX Group Holdings Inc.
|
||
|
|
|
|
|
|||
Date:
|
November 1, 2018
|
|
|
|
By:
|
|
/s/ Todd Pedersen
|
|
|
|
|
|
|
|
Todd Pedersen
|
|
|
|
|
|
|
|
Chief Executive Officer and Director
(Principal Executive Officer)
|
|
|
|
|
|
|||
Date:
|
November 1, 2018
|
|
|
|
By:
|
|
/s/ Mark Davies
|
|
|
|
|
|
|
|
Mark Davies
|
|
|
|
|
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
/s/ Todd Pedersen
|
Todd Pedersen
|
Chief Executive Officer and Director
(Principal Executive Officer)
|
|
/s/ Mark Davies
|
Mark Davies
|
Chief Financial Officer
(Principal Financial Officer)
|
•
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
•
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.
|
|
/s/ Todd Pedersen
|
Todd Pedersen
|
Chief Executive Officer and Director
(Principal Executive Officer)
|
•
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
•
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.
|
|
/s/ Mark Davies
|
Mark Davies
|
Chief Financial Officer
(Principal Financial Officer)
|