APX GROUP HOLDINGS, INC., 10-K filed on 3/6/2019
Annual Report
v3.10.0.1
Document and Entity Information - USD ($)
12 Months Ended
Dec. 31, 2018
Mar. 05, 2019
Jun. 29, 2018
Document And Entity Information [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Dec. 31, 2018    
Document Fiscal Year Focus 2018    
Document Fiscal Period Focus FY    
Trading Symbol ck0001584423    
Entity Registrant Name APX Group Holdings, Inc.    
Entity Central Index Key 0001584423    
Current Fiscal Year End Date --12-31    
Entity Well-known Seasoned Issuer No    
Entity Current Reporting Status No    
Entity Voluntary Filers Yes    
Entity Filer Category Non-accelerated Filer    
Entity Common Stock, Shares Outstanding   100  
Entity Public Float     $ 0
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Shell Company false    
v3.10.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Current Assets:    
Cash and cash equivalents $ 12,773 $ 3,872
Accounts and notes receivable, net 48,724 40,721
Inventories 50,552 115,222
Prepaid expenses and other current assets 11,449 16,150
Total current assets 123,498 175,965
Property, plant and equipment, net 73,401 78,081
Capitalized contract costs, net 1,115,775 0
Subscriber acquisition costs, net 0 1,308,558
Deferred financing costs, net 2,058 3,099
Intangible assets, net 255,085 377,451
Goodwill 834,855 836,970
Long-term notes receivables and other assets, net 119,819 88,723
Total assets 2,524,491 2,868,847
Current Liabilities:    
Accounts payable 66,646 107,347
Accrued payroll and commissions 65,479 57,752
Accrued expenses and other current liabilities 136,715 74,321
Deferred revenue 186,953 88,337
Current portion of capital lease obligations 7,743 10,614
Total current liabilities 463,536 338,371
Notes payable, net 2,961,947 2,760,297
Notes payable, net - related party 75,148 0
Revolving line of credit 0 60,000
Capital lease obligations, net of current portion 5,571 11,089
Deferred revenue, net of current portion 323,585 264,555
Other long-term obligations 90,209 79,020
Deferred income tax liabilities 1,096 9,041
Total liabilities 3,921,092 3,522,373
Commitments and contingencies (See Note 13)
Stockholders’ deficit:    
Common stock, $0.01 par value, 100 shares authorized; 100 shares issued and outstanding 0 0
Additional paid-in capital 736,333 732,346
Accumulated deficit (2,104,097) (1,358,571)
Accumulated other comprehensive loss (28,837) (27,301)
Total stockholders’ deficit (1,396,601) (653,526)
Total liabilities and stockholders’ deficit $ 2,524,491 $ 2,868,847
v3.10.0.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Dec. 31, 2018
Dec. 31, 2017
Statement of Financial Position [Abstract]    
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, outstanding (in shares) 100 100
Common stock, issued (in shares) 100 100
Common stock, authorized (in shares) 100 100
v3.10.0.1
Consolidated Statements of Operations - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Revenues:      
Revenues $ 1,050,441 $ 881,983 $ 757,907
Costs and expenses:      
Operating expenses (exclusive of depreciation and amortization shown separately below) 355,813 321,476 264,865
Selling expenses (exclusive of amortization of deferred commissions of $165,797, $84,152 and $64,007, respectively, which are included in depreciation and amortization shown separately below) 213,386 198,348 131,421
General and administrative expenses 204,536 188,397 143,168
Depreciation and amortization 514,082 329,255 288,542
Restructuring and asset impairment charges 4,683 0 1,013
Total costs and expenses 1,292,500 1,037,476 829,009
Loss from operations (242,059) (155,493) (71,102)
Other expenses (income):      
Interest expense 245,214 225,772 197,965
Interest income (425) (130) (432)
Other (income) loss, net (17,323) 27,986 7,255
Loss before income taxes (469,525) (409,121) (275,890)
Income tax (benefit) expense (1,611) 1,078 67
Net loss (467,914) (410,199) (275,957)
Recurring and other revenue      
Revenues:      
Revenues 1,050,441 843,420 724,478
Service and other sales revenue      
Revenues:      
Revenues 0 26,988 22,855
Activation fees      
Revenues:      
Revenues $ 0 $ 11,575 $ 10,574
v3.10.0.1
Consolidated Statements of Operations (Parenthetical) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Income Statement [Abstract]      
Amortization of deferred commissions $ 165,797 $ 84,152 $ 64,007
v3.10.0.1
Consolidated Statements of Comprehensive Loss - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Statement of Comprehensive Income [Abstract]      
Net loss $ (467,914) $ (410,199) $ (275,957)
Other comprehensive (loss) income, net of tax effects:      
Foreign currency translation adjustment (2,218) 3,155 2,482
Unrealized (loss) gain on marketable securities 0 (1,693) 1,011
Total other comprehensive (loss) income (2,218) 1,462 3,493
Comprehensive loss $ (470,132) $ (408,737) $ (272,464)
v3.10.0.1
Consolidated Statements of Changes in Equity (Deficit) - USD ($)
$ in Thousands
Total
Common Stock
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive loss
Beginning Balance at Dec. 31, 2015 $ (76,993) $ 0 $ 627,645 $ (672,382) $ (32,256)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net loss (275,957)     (275,957)  
Foreign currency translation adjustment 2,482       2,482
Unrealized (loss) gain on marketable securities 1,011       1,011
Stock-based compensation 3,868   3,868    
Capital contribution 100,407   100,407    
Ending Balance at Dec. 31, 2016 (245,182) 0 731,920 (948,339) (28,763)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net loss (410,199)     (410,199)  
Foreign currency translation adjustment 3,155       3,155
Unrealized (loss) gain on marketable securities (1,693)       (1,693)
Stock-based compensation 1,544   1,577 (33)  
Return of capital to Vivint Smart Home, Inc. (1,151)   (1,151)    
Ending Balance at Dec. 31, 2017 (653,526) 0 732,346 (1,358,571) (27,301)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net loss (467,914)     (467,914)  
Foreign currency translation adjustment (2,218)       (2,218)
Unrealized (loss) gain on marketable securities 0        
Stock-based compensation 2,416   2,416    
Capital contribution 4,700   4,700    
Return of capital to Vivint Smart Home, Inc. (3,129)   (3,129)    
Ending Balance at Dec. 31, 2018 $ (1,396,601) $ 0 $ 736,333 $ (2,104,095) $ (28,839)
v3.10.0.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Cash flows from operating activities:      
Net loss from operations $ (467,914) $ (410,199) $ (275,957)
Adjustments to reconcile net loss to net cash used in operating activities of operations:      
Amortization of capitalized contract costs 398,174 0 0
Amortization of subscriber acquisition costs 0 206,153 154,877
Amortization of customer relationships 84,174 94,863 108,178
Gain on fair value changes of equity securities (477) 0 0
Depreciation and amortization of property, plant and equipment and other intangible assets 31,734 28,239 25,488
Amortization of deferred financing costs and bond premiums and discounts 5,152 6,586 10,447
(Gain) loss on sale or disposal of assets (49,762) 458 (33)
Loss on early extinguishment of debt 14,571 23,062 10,085
Stock-based compensation 2,505 1,595 3,868
Provision for doubtful accounts 19,405 22,465 19,624
Deferred income taxes (2,149) 929 (478)
Restructuring and asset impairment charges 0 0 7,126
Changes in operating assets and liabilities, net of acquisitions:      
Accounts and notes receivable, net (34,008) (49,590) (24,338)
Inventories 64,442 (75,580) (11,827)
Prepaid expenses and other current assets 4,695 (5,975) (5,165)
Capitalized contract costs, net 499,252 0 0
Subscriber acquisition costs, net 0 (457,679) (419,509)
Long-term notes receivables and other assets, net (29,118) (74,801) 368
Accounts payable (27,045) 70,525 (2,978)
Accrued payroll and commissions, expenses and other current and long-term liabilities 91,469 62,208 12,702
Restructuring liability 0 (91) (2,797)
Deferred revenue 172,905 247,500 24,613
Net cash used in operating activities (220,499) (309,332) (365,706)
Cash flows from investing activities:      
Subscriber acquisition costs – company owned equipment 0 0 (5,243)
Capital expenditures (19,412) (20,391) (11,642)
Proceeds from the sale of intangible assets 53,693 0 0
Proceeds from the sale of capital assets 127 776 3,123
Acquisition of intangible assets (1,486) (1,745) (1,385)
Acquisition of other assets 0 (301) 0
Net cash provided by (used in) investing activities 32,922 (21,661) (15,147)
Cash flows from financing activities:      
Proceeds from notes payable 759,000 724,750 604,000
Proceeds from notes payable - related party 51,000 0 0
Repayments of notes payable (522,191) (450,000) (235,535)
Borrowings from revolving line of credit 201,000 196,895 57,000
Repayments on revolving line of credit (261,000) (136,895) (77,000)
Repayments of capital lease obligations (12,354) (10,007) (8,315)
Payments of other long-term obligations 0 (2,983) 0
Financing costs (11,317) (18,277) (9,036)
Deferred financing costs (9,302) (11,119) (9,241)
Return of capital (3,129) (1,151) 0
Proceeds from capital contributions 4,700 0 100,407
Net cash provided by financing activities 196,407 291,213 422,280
Effect of exchange rate changes on cash 71 132 (466)
Net increase (decrease) in cash and cash equivalents 8,901 (39,648) 40,961
Cash and cash equivalents:      
Beginning of period 3,872 43,520 2,559
End of period 12,773 3,872 43,520
Supplemental cash flow disclosures:      
Income tax paid 330 219 435
Interest paid 239,441 207,433 189,170
Supplemental non-cash investing and financing activities:      
Capital lease additions 4,569 14,633 8,411
Intangible asset acquisitions included within accounts payable, accrued expenses and other current liabilities and other long-term obligations 974 557 31,283
Capital expenditures included within accounts payable, accrued expenses and other current liabilities 128 2,531 2,345
Change in fair value of equity securities 0 1,314 1,011
Property acquired under build-to-suit agreements included within other long-term obligations $ 0 $ 2,300 $ 4,619
v3.10.0.1
Description of Business
12 Months Ended
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of Business
Description of Business
APX Group Holdings, Inc. (“Holdings” or “Parent”), and its wholly-owned subsidiaries, (collectively the “Company”), is one of the largest smart home companies in North America. The Company is engaged in the sale, installation, servicing and monitoring of smart home and security systems, primarily in the United States and Canada. Holdings is wholly-owned by Vivint Smart Home, Inc., which is majority owned by 313 Acquisition, LLC. Vivint Smart Home, Inc. and APX Group Holdings, Inc. have no operations.
v3.10.0.1
Significant Accounting Policies
12 Months Ended
Dec. 31, 2018
Accounting Policies [Abstract]  
Significant Accounting Policies
Significant Accounting Policies
Basis of Presentation
The Company has prepared the accompanying consolidated financial statements pursuant to generally accepted accounting principles in the United States (“GAAP”). Preparing financial statements requires the Company to make estimates and assumptions that affect the amounts that are reported in the consolidated financial statements and accompanying disclosures. Although these estimates are based on the Company’s best knowledge of current events and actions that the Company may undertake in the future, actual results may be different from the Company’s estimates. The results of operations presented herein are not necessarily indicative of the Company’s results for any future period.
Vivint Flex Pay
In January 2017, the Company announced the introduction of the Vivint Flex Pay plan (“Vivint Flex Pay”), which became the Company’s primary sales model beginning in March 2017. Under Vivint Flex Pay, customers pay separately for the products (including control panel, security peripheral equipment, smart home equipment, and related installation) (“Products”) and Vivint’s smart home and security services (“Services”). The customer has the following three options to pay for the Products: (1) qualified customers in the United States may finance the purchase of Products through a third-party financing provider (“Consumer Financing Program”) (2) customers not eligible for the Consumer Financing Program, but who qualify under the Company’s underwriting criteria, may enter into a retail installment contract (“RIC”) directly with Vivint, or (3) customers may purchase the Products at the outset of the service contract by check, automatic clearing house payments (“ACH”), credit or debit card.
Although customers pay separately for the Products and Services under the Vivint Flex Pay plan, the Company has determined that the shift in its sales model does not change the Company’s conclusion that the sale of Products and Services are one single performance obligation. As a result, all forms of transactions under Vivint Flex Pay create deferred revenue for the gross amount of Products sold. Gross deferred revenues are reduced by imputed interest on the RICs and the present value of expected payments due to the third-party financing provider under the Consumer Financing Program.
Under the Consumer Financing Program, qualified customers are eligible for installment loans provided by a third-party financing provider of up to $4,000 for either 42 or 60 months. The Company pays a monthly fee to the third-party financing provider based on the average daily outstanding balance of the installment loans. Additionally, the Company shares liability for credit losses depending on the credit quality of the customer. Because of the nature of these provisions under the Consumer Financing Program, the Company records a derivative liability at its fair value when the third-party financing provider originates installment loans to customers, which reduces the amount of estimated revenue recognized on the provision of the services. The derivative liability is reduced as payments are made from the Company to the third-party financing provider. Subsequent changes to the fair value of the derivative liability are realized through other loss/(income), net in the Consolidated Statement of Operations. (See Note 9).

Retail Installment Contract Receivables
For customers that enter into a RIC under the Vivint Flex Pay plan, the Company records a receivable for the amount financed. The RIC receivables are recorded at their present value, net of the imputed interest discount. At the time of installation, the Company records a long-term note receivable within long-term notes receivables and other assets, net on the consolidated balance sheets for the present value of the receivables that are expected to be collected beyond 12 months of the reporting date. The unbilled receivable amounts that are expected to be collected within 12 months of the reporting date are included as a short-term notes receivable within accounts and notes receivable, net on the consolidated balance sheets. The billed amounts of notes receivables are included in accounts receivable within accounts and notes receivable, net on the consolidated balance sheets.
The Company imputes the interest on the RIC receivable using a risk adjusted market interest rate and records it as an adjustment to deferred revenue and as an adjustment to the face amount of the related receivable. The imputed interest discount considers a number of factors, including collection experience, aging of the remaining RIC receivable portfolios, credit quality of the subscriber base and other qualitative considerations, including macro-economic factors. The imputed interest income is recognized over the term of the RIC contract as recurring and other revenue on the consolidated statement of operations.
When the Company determines that there are RIC receivables that have become uncollectible, it records an adjustment to the imputed interest discount and reduces the related note receivable balance. Account balances are written-off if collection efforts are unsuccessful and future collection is unlikely based on the length of time from the day accounts become past due. (See Note 4).
Revenue Recognition
The Company offers its customers smart home services combining Products, including a proprietary control panel, door and window sensors, door locks, security cameras and smoke alarms; installation; and a proprietary back-end cloud platform software and Services. These together create an integrated system that allows the Company’s customers to monitor, control and protect their home (“Smart Home Services”). The Company’s customers are buying this integrated system that provides them with these Smart Home Services. The number and type of Products purchased by a customer depends on their desired functionality. Because the Products and Services included in the customer’s contract are integrated and highly interdependent, and because they must work together to deliver the Smart Home Services, the Company has concluded that installed Products, related installation and Services contracted for by the customer are generally not distinct within the context of the contract and, therefore, constitute a single, combined performance obligation. Revenues for this single, combined performance obligation are recognized on a straight-line basis over the customer’s contract term. The Company has determined that certain contracts that do not require a long-term commitment for monitoring services by the customer contain a material right to renew the contract, because the customer does not have to purchase Products upon renewal. Proceeds allocated to the material right are recognized over the period benefit, which is generally three years.
The majority of the Company’s subscription contracts are between three and five years in length and are non-cancelable. These contracts with customers generally convert into month-to-month agreements at the end of the initial term, and some customer contracts are month-to-month from inception. Payment for recurring monitoring and other Smart Home Services is generally due in advance on a monthly basis.
Sales of Products and other one-time fees such as service fees or installation fees are invoiced to the customer at the time of sale. Revenues for wireless internet service provided by Vivint Wireless Inc. (“Wireless Internet” or “Wireless”) and any Products or Services that are considered separate performance obligations are recognized when those Products or Services are delivered. Taxes collected from customers and remitted to governmental authorities are not included in revenue. Payments received or amounts billed in advance of revenue recognition are reported as deferred revenue.
Deferred Revenue
The Company's deferred revenues primarily consist of amounts for sales (including upfront proceeds) of Smart Home Services. Deferred revenues are recognized over the term of the related performance obligation.
Accounts Receivable
Accounts receivable consists primarily of amounts due from customers for recurring monthly monitoring Services and the billed portion of RIC receivables. The accounts receivable are recorded at invoiced amounts and are non-interest bearing and are included within accounts and notes receivable, net on the consolidated balance sheets. Accounts receivable totaled $16.5 million and $24.3 million and December 31, 2018 and 2017, respectively net of the allowance for doubtful accounts of $5.6 million and $5.4 million at December 31, 2018 and 2017, respectively. The Company estimates this allowance based on historical collection experience and subscriber attrition rates. When the Company determines that there are accounts receivable that are uncollectible, they are charged off against the allowance for doubtful accounts. The provision for doubtful accounts is included in general and administrative expenses in the accompanying consolidated statements of operations and totaled $19.4 million and $22.5 million for the years ended December 31, 2018 and 2017, respectively.
The changes in the Company’s allowance for accounts receivable were as follows for the periods ended (in thousands):
 
 
Year ended December 31,
 
2018
 
2017
 
2016
Beginning balance
$
5,356

 
$
4,138

 
$
3,541

Provision for doubtful accounts
19,405

 
22,465

 
19,624

Write-offs and adjustments
(19,167
)
 
(21,247
)
 
(19,027
)
Balance at end of period
$
5,594

 
$
5,356

 
$
4,138


Restructuring and Asset Impairment Charges
Restructuring and asset impairment charges represent expenses incurred in relation to activities to exit or dispose of portions of the Company's business that do not qualify as discontinued operations. Liabilities associated with restructuring are measured at their fair value when the liability is incurred. Expenses for related termination benefits are recognized at the date the Company notifies the employee, unless the employee must provide future service, in which case the benefits are expensed ratably over the future service period. Liabilities related to termination of a contract are measured and recognized at fair value when the contract does not have any future economic benefit to the entity and the fair value of the liability is determined based on the present value of the remaining obligation. The Company expenses all other costs related to an exit or disposal activity as incurred (See Note 10).
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of APX Group Holdings, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Capitalized Contract Costs
Capitalized contract costs represent the costs directly related and incremental to the origination of new contracts, modification of existing contracts or to the fulfillment of the related customer contracts. These include commissions, other compensation and related costs incurred directly for the origination and installation of new or upgraded customer contracts, as well as the cost of Products installed in the customer home at the commencement or modification of the contract. These costs are deferred and amortized on a straight-line basis over the expected period of benefit that the Company has determined to be five years. Amortization of capitalized contract costs is included in “Depreciation and Amortization” on the consolidated statements of operations. These deferred costs are periodically reviewed for impairment. Contract costs not directly related and incremental to the origination of new contracts, modification of existing contracts or to the fulfillment of the related customer contracts are expensed as incurred. These costs include those associated with housing, marketing and recruiting, non-direct lead generation costs, certain portions of sales commissions and residuals, overhead and other costs considered not directly and specifically tied to the origination of a particular subscriber.
On the consolidated statement of cash flows, capitalized contract costs are classified as operating activities and reported as “Capitalized contract costs - deferred contract costs” as these assets represent deferred costs associated with customer contracts.
Cash and Cash Equivalents
Cash and cash equivalents consists of highly liquid investments with remaining maturities when purchased of three months or less.
Inventories
Inventories, which are comprised of smart home and security system equipment and parts are stated at the lower of cost or market with cost determined under the first-in, first-out (FIFO) method. The Company adjusts the inventory balance based on anticipated obsolescence, usage and historical write-offs.
Property, Plant and Equipment and Long-lived Assets
Property, plant and equipment are stated at cost and depreciated on the straight-line method over the estimated useful lives of the assets or the lease term for assets under capital leases, whichever is shorter. Intangible assets with definite lives are amortized over the remaining estimated economic life of the underlying technology or relationships, which ranges from 5 to 10 years. Definite-lived intangible assets are amortized on the straight-line method over the estimated useful life of the asset or in a pattern in which the economic benefits of the intangible asset are consumed. Amortization expense associated with leased assets is included with depreciation expense. Routine repairs and maintenance are charged to expense as incurred.
The Company reviews long-lived assets, including property, plant and equipment, capitalized contract costs, and definite-lived intangibles for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company considers whether or not indicators of impairment exist on a regular basis and as part of each quarterly and annual financial statement close process. Factors the Company considers in determining whether or not indicators of impairment exist include market factors and patterns of customer attrition. If indicators of impairment are identified, the Company estimates the fair value of the assets. An impairment loss is recognized if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value.
The Company conducts an indefinite-lived intangible impairment analysis annually as of October 1, and as necessary if changes in facts and circumstances indicate that the fair value of the Company’s indefinite-lived intangibles may be less than the carrying amount. When indicators of impairment do not exist and certain accounting criteria are met, the Company is able to evaluate indefinite-lived intangible impairment using a qualitative approach. When necessary, the Company’s quantitative impairment test consists of two steps. The first step requires that the Company compare the estimated fair value of its indefinite-lived intangibles to the carrying value. If the fair value is greater than the carrying value, the intangibles are not considered to be impaired and no further testing is required. If the fair value is less than the carrying value, an impairment loss in an amount equal to the difference is recorded.
During the years ended December 31, 2018, 2017 and 2016, no impairments to long-lived assets or intangibles were recorded.
The Company’s depreciation and amortization included in the consolidated statements of operations consisted of the following (in thousands):
 
Year ended December 31,
 
2018
 
2017
 
2016
Amortization of capitalized contract costs
$
398,174

 
$

 
$

Amortization of subscriber acquisition costs

 
206,153

 
154,877

Amortization of definite-lived intangibles
90,945

 
101,827

 
116,865

Depreciation of property, plant and equipment
24,963

 
21,275

 
16,800

Total depreciation and amortization
$
514,082

 
$
329,255

 
$
288,542



Wireless Spectrum Licenses
The Company had capitalized as an intangible asset wireless spectrum licenses that were acquired from third parties. The cost basis of the wireless spectrum asset includes the purchase price paid for the licenses at the time of acquisition, plus costs incurred to acquire the licenses. The asset and related liability were recorded at the net present value of future cash outflows using the Company's incremental borrowing rate at the time of acquisition.
 The Company determined that the wireless spectrum licenses met the definition of indefinite-lived intangible assets because the licenses were able to be renewed periodically for a nominal fee, provided that the Company continued to meet the service and geographic coverage provisions. In January 2018, the Company terminated the wireless spectrum licenses for cash consideration. See Note 8 for further discussion.
 Long-term Investments
The Company’s long-term investments are composed of equity securities in both privately held and public companies. As of December 31, 2018 and 2017, the Company's equity investments totaled $3.9 million and $3.4 million, respectively.
Management determines the appropriate fair value measurement of its investments at the time of purchase and reevaluates the fair value measurement at each balance sheet date. Equity securities, are classified as either short-term or long-term, based on the nature of each security and its availability for use in current operations. The Company’s equity securities are carried at fair value, with gains and losses, reported in other income or loss within the statement of operations
The Company's equity investments without readily determinable fair values as of both December 31, 2018 and 2017 totaled $0.7 million. The Company performs impairment analyzes of its cost based investments when events occur or circumstances change that would, more likely than not, reduce the fair value of the investment below its carrying value. When indicators of impairment do not exist, the Company evaluates impairment using a qualitative approach. Additionally, increases or decreases in the carrying amount resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer are adjusted through the statement of operations as needed. As of December 31, 2018, no indicators of impairment or changes in observable prices existed associated with investments without readily determinable fair values.
Deferred Financing Costs
Certain costs incurred in connection with obtaining debt financing are deferred and amortized utilizing the straight-line method, which approximates the effective-interest method, over the life of the related financing. Deferred financing costs associated with obtaining APX's revolving credit facility are amortized over the amended maturity dates discussed in Note 5. If such financing is paid off or replaced prior to maturity with debt instruments that have substantially different terms, the unamortized costs are charged to expense. Deferred financing costs included in the accompanying consolidated balance sheets within deferred financing costs, net at December 31, 2018 and 2017 were $2.1 million and $3.1 million, net of accumulated amortization of $9.6 million and $8.6 million, respectively. Deferred financing costs included in the accompanying consolidated balance sheets within notes payable, net at December 31, 2018 and 2017 were $32.4 million and $35.7 million, net of accumulated amortization of $54.6 million and $45.2 million, respectively. Amortization expense on deferred financing costs recognized and included in interest expense in the accompanying consolidated statements of operations totaled $10.4 million, $11.4 million and $11.6 million for the years ended December 31, 2018, 2017 and 2016, respectively.
Residual Income Plans
The Company has a program that allows certain third-party sales channel partners to receive additional compensation based on the performance of the underlying contracts they create (the “Channel Partner Plan”). In addition, in 2018, the Company introduced a new residual sales compensation plan (the “Residual Plan”). Under the Residual Plan, the Company's sales personnel (each, a “Plan Participant”) have the option to convert up to a specified portion of their earnings (as defined in the Residual Plan) into the right to receive monthly residual compensation payable over the life of the subscriber accounts sold by such Plan Participant.
For both the Channel Partner Plan and Residual Plan, the Company calculates the present value of the expected future residual payments and records a liability for this amount in the period the subscriber account is originated. These costs are recorded to capitalized contract costs. The Company monitors actual payments and customer attrition on a periodic basis and, when necessary, makes adjustments to the liability. The amount included in accrued payroll and commissions was $4.5 million and $3.3 million as of December 31, 2018 and 2017, respectively, and the amount included in other long-term obligations was $13.0 million and $18.5 million at December 31, 2018 and 2017, respectively, representing the present value of the estimated amounts owed to third-party sales channel partners.
Stock-Based Compensation
The Company measures compensation cost based on the grant-date fair value of the award and recognizes that cost over the requisite service period of the awards (See Note 12).
Advertising Expense
Advertising costs are expensed as incurred. Advertising costs were approximately $47.2 million, $42.5 million and $33.0 million for the years ended December 31, 2018, 2017 and 2016, respectively.
Income Taxes
The Company accounts for income taxes based on the asset and liability method. Under the asset and liability method, deferred tax assets and deferred tax liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets when it is determined that it is more likely than not that some portion, or all, of the deferred tax asset will not be realized.
The Company recognizes the effect of an uncertain income tax position on the income tax return at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company’s policy for recording interest and penalties is to record such items as a component of the provision for income taxes.
Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. The Company records the effect of a tax rate or law change on the Company’s deferred tax assets and liabilities in the period of enactment. Future tax rate or law changes could have a material effect on the Company’s results of operations, financial condition, or cash flows (See Note 11).
Contracts Sold
During the year ended December 31, 2016, the Company sold all of its New Zealand and Puerto Rico subscriber contracts and ceased operations in these geographical regions ("2016 Contract Sales"). As a result, during the year ended December 31, 2016 the Company recorded the impact of these transactions in restructuring and asset impairment (See Note 10).
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of receivables and cash. At times during the year, the Company maintains cash balances in excess of insured limits. The Company is not dependent on any single customer or geographic location. The loss of a customer would not adversely impact the Company’s operating results or financial position.
Concentrations of Supply Risk
As of December 31, 2018, approximately 80% of the Company’s installed panels were SkyControl panels and 19% were 2GIG Go!Control panels. During the three months ended March 31, 2018 the Company transitioned to a new panel supplier. The loss of the Company's panel supplier could potentially impact its operating results or financial position.
Fair Value Measurement
Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities subject to on-going fair value measurement are categorized and disclosed into one of three categories depending on observable or unobservable inputs employed in the measurement. These two types of inputs have created the following fair value hierarchy:
Level 1: Quoted prices in active markets that are accessible at the measurement date for assets and liabilities.
Level 2: Observable prices that are based on inputs not quoted in active markets, but corroborated by market data.
Level 3: Unobservable inputs are used when little or no market data is available.
This hierarchy requires the Company to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value. The Company recognizes transfers between levels of the hierarchy based on the fair values of the respective financial measurements at the end of the reporting period in which the transfer occurred. There were no transfers between levels of the fair value hierarchy during the years ended December 31, 2018 and 2017.
The carrying amounts of the Company’s accounts receivable, accounts payable and accrued and other liabilities approximate their fair values due to their short maturities.
Goodwill
The Company conducts a goodwill impairment analysis annually in the fourth fiscal quarter, as of October 1, and as necessary if changes in facts and circumstances indicate that the fair value of the Company’s reporting units may be less than their carrying amounts. When indicators of impairment do not exist and certain accounting criteria are met, the Company is able to evaluate goodwill impairment using a qualitative approach. When necessary, the Company’s quantitative goodwill impairment test consists of two steps. The first step requires that the Company compare the estimated fair value of its reporting units to the carrying value of the reporting unit’s net assets, including goodwill. If the fair value of the reporting unit is greater than the carrying value of its net assets, goodwill is not considered to be impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value of its net assets, the Company would be required to complete the second step of the test by analyzing the fair value of its goodwill. If the carrying value of the goodwill exceeds its fair value, an impairment charge is recorded. The Company’s reporting units are determined based on its current reporting structure, which as of December 31, 2018 consisted of two reporting units. The Company found that no indicators of goodwill impairment existed during the year ended December 31, 2018, thus a qualitative approach was used and it was determined that no impairment existed for goodwill.
During the years ended December 31, 2018, 2017 and 2016, no impairments to goodwill were recorded.
Foreign Currency Translation and Other Comprehensive Income
The functional currencies of Vivint Canada, Inc. and Vivint New Zealand, Ltd. are the Canadian and New Zealand dollars, respectively. Accordingly, assets and liabilities are translated from their respective functional currencies into U.S. dollars at period-end rates and revenue and expenses are translated at the weighted-average exchange rates for the period. Adjustments resulting from this translation process are classified as other comprehensive (loss) income and shown as a separate component of equity. During the year ended December 31, 2016, the Company completed the 2016 Contract Sales which included all contracts in the New Zealand, Ltd. entity. (See Note 10)
When intercompany foreign currency transactions between entities included in the consolidated financial statements are of a long term investment nature (i.e., those for which settlement is not planned or anticipated in the foreseeable future) foreign currency translation adjustments resulting from those transactions are included in stockholders’ (deficit) equity as accumulated other comprehensive loss or income. When intercompany transactions are deemed to be of a short term nature, translation adjustments are required to be included in the consolidated statement of operations. The Company has determined that settlement of Vivint Canada, Inc. and Vivint New Zealand, Ltd. intercompany balances are anticipated and therefore such balances are deemed to be of a short-term nature. Translation activity included in the statements of operations in other loss, net related to intercompany balances was a loss of $7.1 million for the year ended December 31, 2018, a gain of $4.9 million for the year ended December 31, 2017, and a gain of $2.1 million for the year ended December 31, 2016.
Letters of Credit
As of December 31, 2018 and 2017, the Company had $13.8 million and $9.5 million, respectively, of letters of credit issued in the ordinary course of business, all of which are undrawn.
Recent Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13, “Financial Instruments—Credit Losses (Topic 326),” which modifies the measurement of expected credit losses of certain financial instruments. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019 and must be applied using a modified-retrospective approach, with early adoption permitted. The Company is evaluating the adoption of ASU 2016-13 and plans to provide additional information about its expected impact at a future date.
In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” to increase transparency and comparability among organizations as it relates to lease assets and lease liabilities. The update requires that lease assets and lease liabilities be recognized on the balance sheet, and that key information about leasing arrangements be disclosed. Prior to this update, GAAP did not require operating leases to be recognized as lease assets and lease liabilities on the balance sheet. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In July 2018, the FASB issued ASU 2018-11 which provides companies the option to adopt using a modified retrospective approach or a prospective adoption approach.
The Company is continuing its evaluation of the impact of ASU 2016-02 on its accounting policies. The Company’s current operating lease portfolio is primarily comprised of network, real estate, and equipment leases. Upon adoption of this standard, the Company expects to record a right of use asset and liability related to all operating lease arrangements. The Company has assigned internal resources to perform the evaluation. Furthermore, the Company has made and will continue to make investments in systems to enable timely and accurate reporting under the new standard.
The Company expects the standard will have a material impact on the Company’s consolidated balance sheets but will not have a material impact on the consolidated statements of operations. The most significant impact will be the recognition of right of use assets and lease liabilities for operating leases. In connection with the adoption of the new lease accounting standard, the Company has completed scoping reviews and continues to make progress implementing new processes, systems, accounting policies and internal controls relevant to the standard. The Company will adopt this standard on January 1, 2019 using the prospective adoption approach and has elected to use the practical expedients allowed under the standard.
Recently Adopted Accounting Standards
ASU 2016-01
In January 2016, the FASB issued ASU 2016-01, "Financial Instruments-Overall (Subtopic 825-10)," which enhances the reporting model for financial instruments by addressing certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. Key provisions require equity investments (except those accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income (loss). In addition, the exit price notion must be used when measuring the fair value of financial instruments for disclosure purposes. The Company adopted ASU 2016-01 on January 1, 2018, with a cumulative-effect adjustment to increase accumulated deficit by $0.7 million for the net unrealized losses within accumulated other comprehensive income related to equity investments. During the year ended December 31, 2018, the Company recorded a net loss of $0.3 million, respectively, to other income associated with the change in fair value of equity investments.
ASU 2014-09
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605).” Under Topic 606, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, Topic 606 requires enhanced disclosures, including disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Topic 606 also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers, which requires the deferral of incremental costs of obtaining a contract with a customer. Collectively, the Company refers to Topic 606 and Subtopic 340-40 as the “new standard”.
The Company adopted the new standard as of January 1, 2018, utilizing the modified retrospective method of transition (the cumulative catch-up transition method). Adoption of the new standard resulted in changes to the accounting policies for revenue recognition, deferred revenue, and capitalized contract costs (formerly subscriber acquisition costs). The cumulative effect of applying the new standard to all contracts with customers that were not completed as of January 1, 2018 was recorded as an adjustment to accumulated deficit as of the adoption date. The comparative information has not been adjusted and continues to be reported under Topic 605. See Note 3 "Revenue and Capitalized Contract Costs" for additional information related to the impact of adopting this standard and a discussion of the Company's updated policies related to revenue recognition and accounting for costs to obtain and fulfill a customer contract.
v3.10.0.1
Revenue and Capitalized Contract Costs (Notes)
12 Months Ended
Dec. 31, 2018
Revenue from Contract with Customer [Abstract]  
Revenue and Capitalized Contract Costs
Revenue and Capitalized Contract Costs
Subscribers are typically invoiced for Smart Home Services monthly in advance or at the time the Company delivers the related Smart Home Services. The majority of subscribers pay at the time of invoice via credit card, debit card or ACH. The Company does not generally record any contract assets. The Company records deferred revenues when cash payments (or other consideration) are received or due in advance of performance of the Company's obligations, including amounts which are refundable.
The increase in the deferred revenue balance during the year ended December 31, 2018 was primarily driven by cash payments received or due in advance of satisfying the Company's performance obligations, offset by $144.1 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2017.
Transaction Price Allocated to the Remaining Performance Obligations
As of December 31, 2018, approximately $2.2 billion of revenue is expected to be recognized from remaining performance obligations for existing subscription contracts over the remaining contract term and excludes the effect of any cancellations. The Company expects to recognize approximately 62.5% of the revenue related to these remaining performance obligations over the next 24 months, with the remaining balance recognized over an additional 36 months.
Financial Statement Impact of Adopting Topic 606
The Company adopted Topic 606 using the modified retrospective method. The cumulative effect of applying the new standard to all contracts with subscribers that were not completed as of January 1, 2018 was recorded as an adjustment to accumulated deficit as of the adoption date. As a result of applying the modified retrospective method to adopt the new revenue guidance, the following cumulative catch-up adjustments were made to select consolidated balance sheet line items as of January 1, 2018 (in thousands):
Consolidated Balance Sheets
 
 
 
 
 
 
 
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

Deferred income tax liabilities
9,041

 
(5,641
)
 
3,400

Accumulated deficit
(1,358,571
)
 
(276,931
)
 
(1,635,502
)
The following tables compare the select reported consolidated balance sheets, statements of operations and cash flows line items to the amounts had the previous guidance been in effect (in thousands):
Consolidated Balance Sheets

 
 
 
December 31, 2018
 
As Reported
 
Balances Without Adoption of Topic 606
 
Effect of Change
Higher/(Lower)
Assets
 
 
 
 
 
Capitalized contract costs, net
$
1,115,775

 
$

 
$
1,115,775

Subscriber acquisition costs, net

 
1,518,188

 
(1,518,188
)
Liabilities and Stockholders' Deficit
 
 

 
 
Accrued expenses and other current liabilities
136,715

 
126,900

 
9,815

Deferred revenue
186,953

 
126,582

 
60,371

Deferred revenue, net of current portion
323,585

 
440,474

 
(116,889
)
Deferred income tax liabilities
1,096

 
8,682

 
(7,586
)
Accumulated deficit
(2,104,097
)
 
(1,754,426
)
 
(349,671
)
Accumulated other comprehensive loss
(28,837
)
 
(30,384
)
 
1,547

Consolidated Statements of Operations and Comprehensive Loss
 
 
 
Year ended December 31, 2018
 
As Reported
 
Balances Without Adoption of Topic 606
 
Effect of Change
Higher/(Lower)
Revenues:
 
 
 
 
 
Recurring and other revenue
$
1,050,441

 
$
950,661

 
$
99,780

Service and other sales revenue

 
46,177

 
(46,177
)
Activation fees

 
9,705

 
(9,705
)
Total revenues
1,050,441

 
1,006,543

 
43,898

Costs and expenses:
 
 

 
 
Operating expenses
355,813

 
385,672

 
(29,859
)
Depreciation and amortization
514,082

 
367,879

 
146,203

Loss from operations
(242,059
)
 
(169,613
)
 
(72,446
)
Income tax (benefit) expense
(1,611
)
 
806

 
(2,417
)
Net loss
(467,914
)
 
(397,885
)
 
(70,029
)
Other comprehensive loss, net of tax effects:
 
 

 
 
Foreign currency translation adjustment
(2,218
)
 
(3,765
)
 
1,547

Total other comprehensive (loss) income
(2,218
)
 
(3,765
)
 
1,547

Comprehensive loss
(470,132
)
 
(401,650
)
 
(68,482
)
Consolidated Statements of Cashflows

 
 
 
Year ended December 31, 2018
 
As Reported
 
Balances Without Adoption of Topic 606
 
Effect of Change
Higher/(Lower)
 
 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
 
Net loss
$
(467,914
)
 
$
(397,885
)
 
$
(70,029
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
 
Amortization of capitalized contract costs
398,174

 

 
398,174

Amortization of subscriber acquisition costs

 
251,971

 
(251,971
)
Changes in operating assets and liabilities:
 
 
 
 
 
Capitalized contract costs – deferred contract costs
(499,252
)
 

 
(499,252
)
Subscriber acquisition costs – deferred contract costs

 
(469,393
)
 
469,393

Accrued expenses and other current liabilities
91,469

 
93,886

 
(2,417
)
Deferred revenue
172,905

 
216,803

 
(43,898
)
Net cash used in operating activities
(220,499
)
 
(220,499
)
 


Timing of Revenue Recognition
The Company previously recognized certain service and other sales revenue when the Services were provided or when title to Products sold transferred to the subscriber. Revenue from the sale of Products that were not part of the service offering (i.e., those Products sold subsequent to the date of the initial installation) were also generally recognized upon delivery of Products. Under the new standard, the Company considers Products, related installation, and its proprietary back-end cloud platform software and services an integrated system that allows the Company’s subscribers to monitor, control and protect their homes. These Smart Home Services are accounted for as a single performance obligation that is recognized over the subscriber’s contract term. Accordingly, the Company now defers a larger portion of certain Smart Home Services revenue, as prior to the adoption of Topic 606 certain of this revenue was recognized at the time services were provided or upon delivery.
The Company previously amortized deferred revenues related to sales of Products and activation fees on subscriber contracts over the expected life of the customer, which was 15 years using a 240% declining balance method. Under the new standard, revenues related to sales of Products and activation fees are included in the transaction price allocated to the single Smart Home Service performance obligation and recognized straight-line over the subscriber’s contract term, which is generally three to five years.
Capitalized Contract Costs
Capitalized contract costs generally include commissions, other compensation and related costs incurred directly for the generation and installation of new or modified subscriber contracts, as well as the cost of Products installed in the subscriber's home at the commencement or modification of the contract. The Company previously deferred and amortized these costs for new subscriber contracts in the same manner as deferred revenue and generally expensed all costs associated with modified subscriber contracts. Under the new standard, the Company defers and amortizes these costs for new or modified subscriber contracts on a straight-line basis over the expected period of benefit of five years.
v3.10.0.1
Retail Installment Contract Receivables
12 Months Ended
Dec. 31, 2018
Receivables [Abstract]  
Retail Installment Contract Receivables
Retail Installment Contract Receivables
Certain subscribers have the option to purchase Products under a RIC, payable over either 42 or 60 months. Short-term RIC receivables are recorded in accounts and notes receivable, net and long-term RIC receivables are recorded in long-term notes receivables and other assets, net in the consolidated balance sheets.
The following table summarizes the installment receivables (in thousands):
 
December 31, 2018
 
December 31, 2017
RIC receivables, gross
$
175,250

 
$
131,024

Deferred interest
(34,163
)
 
(36,048
)
RIC receivables, net of deferred interest
$
141,087

 
$
94,976

 
 
 
 
Classified on the consolidated balance sheets as:
 
 
 
Accounts and notes receivable, net
$
32,185

 
$
16,469

Long-term notes receivables and other assets, net
108,902

 
78,507

RIC receivables, net
$
141,087

 
$
94,976


Activity in the deferred interest for the RIC receivables was as follows (in thousands):
 
For the Years Ended
 
December 31, 2018
 
December 31, 2017
Deferred interest, beginning of period
$
36,048

 
$

Write-offs, net of recoveries
(26,360
)
 
(6,055
)
Change in deferred interest on short-term and long-term RIC receivables
24,475

 
42,103

Deferred interest, end of period
$
34,163

 
$
36,048


During year ended December 31, 2018 and 2017, the amount of RIC imputed interest income recognized in recurring and other revenue was $14.9 million and $7.3 million, respectively.
v3.10.0.1
Long-Term Debt
12 Months Ended
Dec. 31, 2018
Debt Disclosure [Abstract]  
Long-Term Debt
Long-Term Debt
Notes Payable
2019 Notes
On November 16, 2012, APX issued $925.0 million aggregate principal amount of 6.375% senior secured notes due 2019 (the “2019 notes”) with a maturity date of December 1, 2019 which were secured on a first-priority lien basis by substantially all of the tangible and intangible assets whether now owned or hereafter acquired by the Company, subject to permitted liens and exceptions.
The Company repurchased $205.5 million, $300.0 million and $150.0 million aggregate principal amount of the outstanding 2019 notes in May 2016, February 2017, and August 2017, respectively. In September 2018, the Company redeemed in full the entire remaining $269.5 million outstanding aggregate principal amount of the 2019 notes.
2020 Notes
On November 16, 2012, APX issued $380.0 million aggregate principal amount of 8.75% senior notes due 2020 (the “2020 notes”) with a maturity date of December 1, 2020 which are secured on a first-priority lien basis by substantially all of the tangible and intangible assets whether now owned or hereafter acquired by the Company, subject to permitted liens and exceptions.
During 2013, APX completed two offerings of additional 2020 notes under the indenture dated November 16, 2012. On May 31, 2013, APX issued $200.0 million of 2020 notes at a price of 101.75% and on December 13, 2013, APX issued an additional $250.0 million of 2020 notes at a price of 101.50%.
During 2014, APX issued an additional $100.0 million of 2020 notes at a price of 102.00% .
In September 2018, the Company repurchased $250.7 million outstanding aggregate principal amount of the 2020 notes.
2022 Private Placement Notes
In October 2015, APX issued $300.0 million aggregate principal amount of 8.875% senior secured notes due 2022 (the “2022 private placement notes”), pursuant to a note purchase agreement dated as of October 19, 2015 in a private placement exempt from registration under the Securities Act. The 2022 private placement notes will mature on December 1, 2022, unless on September 1, 2020 (the 91st day prior to the maturity of the 2020 notes) more than an aggregate principal amount of $190.0 million of such 2020 notes remain outstanding or have not been refinanced as permitted under the note purchase agreement for the 2022 private placement notes, in which case the 2022 private placement notes will mature on September 1, 2020. The 2022 private placement notes are secured, on a pari passu basis, by the collateral securing obligations under the 2019 notes, the 2022 private placement notes, the 2022 notes (as defined below), and the 2023 notes (as defined below), and the revolving credit facilities and the Term Loan (as defined below), in each case, subject to certain exceptions and permitted liens.
In May 2016, the Company repurchased $29.5 million outstanding aggregate principal amount of the 2022 private placement notes.
2022 Notes
In May 2016, APX issued $500.0 million aggregate principal amount of 7.875% senior secured notes due 2022 (the “2022 notes”), pursuant to an indenture dated as of May 26, 2016 among APX, the guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral agent. The 2022 notes will mature on December 1, 2022, or on such earlier date when any outstanding pari passu lien indebtedness matures as a result of the operation of any “Springing Maturity” provision set forth in the agreements governing such pari passu lien indebtedness. The 2022 notes are secured, on a pari passu basis, by the collateral securing obligations under the 2019 notes and 2022 private placement notes, the revolving credit facilities and the Term Loan, in all cases, subject to certain exceptions and permitted liens. APX used a portion of the net proceeds from the issuance of the 2022 notes to repurchase approximately $235 million aggregate principal amount of the outstanding 2019 notes and 2022 private placement notes in privately negotiated transactions and repaid borrowings under the existing revolving credit facility.
In August 2016, APX issued an additional $100.0 million aggregate principal amount of the 2022 notes at a price of 104.00%.
In February 2017, APX issued an additional $300.0 million aggregate principal amount of the 2022 notes at a price of 108.25% (“February 2017 issuance”). A portion of the net proceeds from the offering of these 2022 notes were used to redeem $300.0 million aggregate principal amount of the existing 2019 notes and pay the related accrued interest and redemption premium, and to pay all fees and expenses related thereto and any remaining proceeds will be used for general corporate purposes.
2023 Notes
In August 2017, APX issued $400.0 million aggregate principal amount of the 7.625% senior notes due 2023 (the “2023 notes” and, together with the 2019 notes, the 2020 notes and the 2022 private placement notes, the “Notes”) (“August 2017 issuance”). The proceeds from the outstanding 2023 notes offering were used to redeem $150.0 million aggregate principal amount of the outstanding 2019 notes and pay the related accrued interest and redemption premium, and to pay all fees and expenses related thereto. Any remaining net proceeds have been or will be used for general corporate purposes, which may include the repayment of outstanding borrowings under the revolving credit facility.
All of the obligations under the credit agreement governing the revolving credit facility, the credit agreement governing the Term Loan (defined below) and the debt agreements governing the Existing Notes are guaranteed by APX Group Holdings, Inc. and each of APX Group, Inc.'s existing and future material wholly-owned U.S. restricted subsidiaries. However, such subsidiaries shall only be required to guarantee the obligations under the debt agreements governing the Existing Notes for so long as such entities guarantee the obligations under the revolving credit facility, the credit agreement governing the Term Loan or the Company's other indebtedness. Interest accrues at the rate of 8.75% per annum for the 2020 notes, 8.875% per annum for the 2022 private placement notes, 7.875% per annum for the 2022 notes and 7.625% per annum for the 2023 notes. Interest on the 2020 notes, 2022 private placement notes and 2022 notes is payable semiannually in arrears on each June 1 and December 1. Interest on the 2023 notes is payable semiannually in arrears on each March 1 and September 1. APX may redeem the Existing Notes at the prices and on the terms specified in the applicable indenture, note purchase agreement or credit agreement.
Term Loan
In September 2018, APX entered into a credit agreement (the “September 2018 issuance”) for total term loans of $810.0 million (the “Term Loan”). The Company is required to make quarterly amortization payments under the Term Loan in an amount equal to 0.25% of the aggregate principal amount of Term Loan outstanding on the closing date thereof. The remaining principal amount outstanding under the Term Loan will be due and payable in full on March 31, 2024, or earlier if certain springing maturity conditions apply. The net proceeds from the Term Loan were used in-part to redeem in full the entire $269.5 million outstanding aggregate principal amount of the 2019 Notes and pay the related accrued interest and redemption premium, to repurchase approximately $250.7 million aggregate principal amount of the outstanding 2020 Notes, to repay the outstanding borrowings under the revolving credit facility and to pay fees and expenses related to the Term Loan and the transactions described above.
Borrowings under the Term Loan bear interest at a rate per annum equal to an applicable margin plus, at the Company's option, either (1) the base rate determined by reference to the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate of Bank of America, N.A. and (c) the LIBOR rate determined by reference to the costs of funds for U.S. dollar deposits for an interest period of one month, plus 1.00% or (2) the LIBOR rate determined by reference to the London interbank offered rate for dollars for the interest period relevant to such borrowing. The applicable margin for base rate-based borrowings is 4.0% per annum and the applicable margin for LIBOR rate-based borrowings is 5.0% per annum. APX may prepay the Term Loan at the prices and on the terms specified in the credit agreement covering the Term Loan.
Debt Modifications and Extinguishments
In accordance with ASC 470-50 Debt – Modifications and Extinguishments, the Company performed analyses for the September 2018, August 2017 and February 2017 issuances to determine if the notes repurchased with the proceeds from those issuances were substantially different than the notes issued to determine the appropriate accounting treatment of associated issuance fees. As a result of these analyses, the Company recorded the following amounts of other expense and loss on extinguishment and deferred financing costs during the years ended December 31, 2018, 2017 and 2016 (in thousands):

 
Other expense and loss on extinguishment
 
Deferred financing costs
Issuance
Original premium extinguished
 
Previously deferred financing costs extinguished
 
New financing costs
 
Total other expense and loss on extinguishment
 
Previously deferred financing rolled over
 
New deferred financing costs
 
Total deferred financing costs
For the year ended December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
September 2018 issuance
$
(953
)
 
$
4,207

 
$
11,317

 
$
14,571

 
$

 
$
10,275

 
$
10,275

 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the year ended December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
August 2017 issuance
$

 
$
1,408

 
$
8,881

 
$
10,289

 
$
473

 
$
4,569

 
$
5,042

February 2017 issuance

 
3,259

 
9,491

 
12,750

 
1,476

 
6,076

 
7,552

Total
$

 
$
4,667

 
$
18,372

 
$
23,039

 
$
1,949

 
$
10,645

 
$
12,594

 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the year ended December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
May 2016 issuance
$
355

 
$
695

 
$
9,036

 
$
10,086

 
$
3,423

 
$
6,628

 
$
10,051



Deferred financing costs are amortized to interest expense over the life of the issued debt.    The following table presents deferred financing activity for the year ended December 31, 2018 and 2017 (in thousands):

 
Unamortized Deferred Financing Costs
 
Balance 12/31/2017
 
Additions
 
Refinances
 
Early Extinguishment
 
Amortized
 
Balance 12/31/2018
Revolving Credit Facility
$
3,099

 
$

 
$

 
$

 
$
(1,041
)
 
$
2,058

2019 Notes
2,877

 

 

 
(1,877
)
 
(1,000
)
 

2020 Notes
11,209

 

 

 
(2,330
)
 
(3,499
)
 
5,380

2022 Private Placement Notes
752

 

 

 

 
(150
)
 
602

2022 Notes
16,067

 

 

 

 
(3,268
)
 
12,799

2023 Notes
4,762

 

 

 

 
(840
)
 
3,922

Term Loan

 
10,275

 

 

 
(613
)
 
9,662

Total Deferred Financing Costs
$
38,766

 
$
10,275

 
$

 
$
(4,207
)
 
$
(10,411
)
 
$
34,423



 
Unamortized Deferred Financing Costs
 
Balance 12/31/2016
 
Additions
 
Refinances
 
Early Extinguishment
 
Amortized
 
Balance 12/31/2017
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



Revolving Credit Facility
On November 16, 2012, APX entered into a $200.0 million senior secured revolving credit facility, with a five year maturity. On March 6, 2015, APX amended and restated the credit agreement governing the revolving credit facility to provide for, among other things, (1) an increase in the aggregate commitments previously available to APX thereunder from $200.0 million to $289.4 million (“Revolving Commitments”) and (2) the extension of the maturity date with respect to certain of the previously available commitments. On August 10, 2017, APX further amended and restated the credit agreement governing the revolving credit facility to provide for, among other things, (1) an increase in the aggregate commitments previously available to the Company from $289.4 million to $324.3 million and (2) the extension of the maturity date with respect to certain of the previously available commitments.
Borrowings under the amended and restated revolving credit facility bear interest at a rate per annum equal to an applicable margin plus, at APX’s option, either (1) the base rate determined by reference to the highest of (a) the Federal Funds rate plus 0.50%, (b) the prime rate of Bank of America, N.A. and (c) the LIBOR rate determined by reference to the costs of funds for U.S. dollar deposits for an interest period of one month, plus 1.00% or (2) the LIBOR rate determined by reference to the London interbank offered rate for dollars for the interest period relevant to such borrowing. The applicable margin for base rate-based borrowings (1)(a) under the Series A Revolving Commitments of approximately $267.0 million and Series D Revolving Commitments of approximately $15.4 million is currently 2.0% per annum and (b) under the Series B Revolving Commitments of approximately $21.2 million is currently 3.0% and (2)(a) the applicable margin for LIBOR rate-based borrowings (a) under the Series A Revolving Commitments, Series C Revolving Commitments, and Series D Revolving Commitments is currently 3.0% per annum and (b) under the Series B Revolving Commitments is currently 4.0%. The applicable margin for borrowings under the revolving credit facility is subject to one step-down of 25 basis points based on APX meeting a consolidated first lien net leverage ratio test at the end of each fiscal quarter. In November 2017, previous commitments of $20.8 million under the Series C Revolving Commitments had expired. Outstanding borrowings under the amended and restated revolving credit facility are allocated on a pro-rata basis between each Series based on the total Revolving Commitments.
In addition to paying interest on outstanding principal under the revolving credit facility, APX is required to pay a quarterly commitment fee (which will be subject to one interest rate step-down of 12.5 basis points, based on APX meeting a consolidated first lien net leverage ratio test) to the lenders under the revolving credit facility in respect of the unutilized commitments thereunder. APX also pays customary letter of credit and agency fees.
APX is not required to make any scheduled amortization payments under the revolving credit facility. The principal amount outstanding under the revolving credit facility will be due and payable in full on March 31, 2021.
As of December 31, 2018 there was no outstanding borrowings under the revolving credit facility. As of December 31, 2017, there was $3.0 million outstanding borrowings under the revolving credit facility. As of December 31, 2018, the Company had $289.8 million of availability under the revolving credit facility (after giving effect to $13.8 million of outstanding letters of credit and no borrowings).
The Company’s debt at December 31, 2018 and 2017 consisted of the following (in thousands):
 
 
December 31, 2018
 
Outstanding
Principal
 
Unamortized
Premium
(Discount)
 
Unamortized Deferred Financing Costs (1)
 
Net Carrying
Amount
8.75% Senior Notes due 2020
$
679,299

 
$
2,230

 
$
(5,380
)
 
$
676,149

8.875% Senior Secured Notes Due 2022
270,000

 
(2,122
)
 
(602
)
 
267,276

7.875% Senior Secured Notes Due 2022
900,000

 
20,178

 
(12,799
)
 
907,379

7.625% Senior Notes Due 2023
400,000

 

 
(3,922
)
 
396,078

Term Loan - noncurrent
799,875

 

 
(9,662
)
 
790,213

Total Long-Term Debt
3,049,174

 
20,286

 
(32,365
)
 
3,037,095

Term Loan - current
8,100

 

 

 
8,100

Total Debt
$
3,057,274

 
$
20,286

 
$
(32,365
)
 
$
3,045,195

 
 
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 Notes Due 2023
400,000

 

 
(4,762
)
 
395,238

Total 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 consolidated balance sheets at December 31, 2018 and 2017 was $2.1 million and $3.1 million, respectively.
v3.10.0.1
Balance Sheet Components
12 Months Ended
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Balance Sheet Components
Balance Sheet Components
The following table presents material balance sheet component balances as of December 31, 2018 and December 31, 2017 (in thousands):
 
 
December 31,
 
2018
 
2017
Prepaid expenses and other current assets
 
 
 
Prepaid expenses
$
7,183

 
$
8,000

Deposits
904

 
1,596

Other
3,362

 
6,554

Total prepaid expenses and other current assets
$
11,449

 
$
16,150

Capitalized contract costs
 
Capitalized contract costs
$
2,361,795

 
$

Accumulated amortization
(1,246,020
)
 

Capitalized contract costs, net
$
1,115,775

 
$

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
$
143,065

 
$
114,556

RIC deferred interest
(34,164
)
 
(36,049
)
Security deposits
6,586

 
6,427

Investments
3,865

 
3,429

Other
467

 
360

Total long-term notes receivables and other assets, net
$
119,819

 
$
88,723

Accrued payroll and commissions
 
Accrued payroll
$
36,753

 
$
30,267

Accrued commissions
28,726

 
27,485

Total accrued payroll and commissions
$
65,479

 
$
57,752

Accrued expenses and other current liabilities
 
Accrued interest payable
$
28,885

 
$
28,737

Current portion of derivative liability
67,710

 
25,473

Service warranty accrual
8,813

 

Current portion of notes payable
8,100

 

Blackstone monitoring fee, a related party
4,793

 
933

Accrued taxes
5,351

 
4,585

Spectrum license obligation

 
3,861

Accrued payroll taxes and withholdings
5,097

 
3,185

Loss contingencies
3,131

 
2,156

Other
4,835

 
5,391

Total accrued expenses and other current liabilities
$
136,715

 
$
74,321

v3.10.0.1
Property Plant and Equipment
12 Months Ended
Dec. 31, 2018
Property, Plant and Equipment [Abstract]  
Property Plant and Equipment
Property Plant and Equipment
Property, plant and equipment consisted of the following (in thousands):
 
December 31,
 
Estimated
Useful Lives
 
2018
 
2017
 
Vehicles
$
45,050

 
$
42,008

 
3-5 years
Computer equipment and software
53,891

 
46,651

 
3-5 years
Leasehold improvements
26,401

 
20,783

 
2-15 years
Office furniture, fixtures and equipment
19,532

 
17,202

 
7 years
Build-to-suit lease building
8,247

 
8,268

 
10.5 years
Construction in process
2,975

 
4,299

 
 
Property, plant and equipment, gross
156,096

 
139,211

 
 
Accumulated depreciation and amortization
(82,695
)
 
(61,130
)
 
 
Property, plant and equipment, net
$
73,401

 
$
78,081

 
 

Property plant and equipment includes approximately $23.7 million and $26.2 million of assets under capital lease obligations, net of accumulated amortization of $22.2 million and $16.6 million at December 31, 2018 and 2017, respectively. Depreciation and amortization expense on all property plant and equipment was $25.0 million, $21.275 million and $16.8 million for the years ended December 31, 2018, 2017 and 2016, respectively. Amortization expense relates to assets under capital leases as included in depreciation and amortization expense.
In June 2016, the Company entered into a non-cancellable lease to occupy a new building constructed in Logan, UT as a location to further sales recruitment and training, as well as conduct research and development (the "Logan Facility"). Because of its involvement in certain aspects of the construction of the Logan Facility, per the terms of the lease, the Company was deemed the owner of the building for accounting purposes during the construction period. Accordingly, the Company recorded a build-to-suit lease asset and a corresponding build-to-suit lease liability during the construction period.
In April 2017, construction on the Logan Facility was completed and the Company commenced occupancy. In accordance with ASC 840-40 Sale-Leaseback Transactions, the building did not qualify for sale-leaseback treatment. As such, the Company retains the building asset and corresponding lease obligation on the balance sheet.
v3.10.0.1
Goodwill and Intangible Assets
12 Months Ended
Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets
Goodwill and Intangible Assets
Goodwill
The changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017, were as follows (in thousands):
 
 
 
Balance as of January 1, 2017
$
835,233

Effect of Foreign Currency Translation
1,737

Balance as of December 31, 2017
836,970

Effect of Foreign Currency Translation
(2,115
)
Balance as of December 31, 2018
$
834,855


Intangible assets, net
The following table presents intangible asset balances as of December 31, 2018 and 2017 (in thousands):

 
December 31, 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
$
964,100

 
$
(717,648
)
 
$
246,452

 
$
970,147

 
$
(637,780
)
 
$
332,367

 
10 years
2GIG 2.0 technology
17,000

 
(15,292
)
 
1,708

 
17,000

 
(13,274
)
 
3,726

 
8 years
Other technology
2,917

 
(1,667
)
 
1,250

 
2,917

 
(1,250
)
 
1,667

 
5 - 7 years
Space Monkey technology
7,100

 
(5,756
)
 
1,344

 
7,100

 
(4,066
)
 
3,034

 
6 years
Patents
12,123

 
(8,415
)
 
3,708

 
10,616

 
(5,835
)
 
4,781

 
5 years
Total definite-lived intangible assets:
1,003,240

 
(748,778
)
 
254,462

 
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
$
1,003,863

 
$
(748,778
)
 
$
255,085

 
$
1,039,656


$
(662,205
)
 
$
377,451

 
 


During the year ended December 31, 2016, Vivint Wireless entered into leasing agreements with Nextlink Wireless, LLC (“Nextlink”) for designated radio frequency spectrum in 40 mid-sized metropolitan markets. The lease term was for seven years, with an option to become the licensor of record with the Federal Communications Commission ("FCC") with respect to the applicable spectrum licenses at the end of this initial term for a nominal fee. The Company acquired $31.3 million of spectrum licenses, measured using the present value of the lease payments, and recorded an intangible asset and a corresponding liability within other long-term obligations. While licenses are issued for only a fixed time, such licenses are subject to renewal by the FCC.
On January 10, 2018, Vivint Wireless and Verizon consummated the transactions contemplated by a termination agreement to which the parties agreed, among other things, to terminate the spectrum leases between Vivint Wireless and Nextlink, a subsidiary of Verizon, in exchange for a cash payment by Verizon to Vivint Wireless. The calculation of the gain recorded included cash proceeds of $55.0 million, extinguishment of the spectrum license liability of $27.9 million, offset by the write-off of the spectrum license asset in the amount of $31.3 million and regulatory costs associated with the sale of $1.3 million for a total net gain on sale of $50.4 million which is included in other income, net in the consolidated statement of operations.
During the year ended December 31, 2018 and 2017, the Company added $1.7 million and $2.0 million of intangibles related to patents, respectively. Amortization expense related to intangible assets was approximately $90.9 million, $101.8 million and $116.9 million for the years ended December 31, 2018, 2017, and 2016, respectively.
As of December 31, 2018, the remaining weighted-average amortization period for definite-lived intangible assets was 3.9 years. Estimated future amortization expense of intangible assets, excluding approximately $0.3 million in patents currently in process, is as follows as of December 31, 2018 (in thousands):
 
 
 
2019
$
79,062

2020
67,807

2021
58,578

2022
48,674

2023
47

Thereafter
11

Total estimated amortization expense
$
254,179

v3.10.0.1
Financial Instruments
12 Months Ended
Dec. 31, 2018
Fair Value Disclosures [Abstract]  
Financial Instruments
Financial Instruments
Cash, Cash Equivalents and Equity Securities
Cash equivalents and equity securities with readily available determinable fair values (“Corporate Securities”) are classified as level 1 assets, as they have readily available market prices in an active market.
The following tables set forth the Company’s cash and cash equivalents and Corporate Securities’ adjusted cost, gross unrealized gains, gross unrealized losses, gross realized gains, gross realized losses and fair value by significant investment category recorded as cash and cash equivalents or long-term notes receivables and other assets, net as of December 31, 2018 and 2017 (in thousands):
 
December 31, 2018
 
Adjusted Cost
 
Unrealized Gains
 
Unrealized Losses
 
Fair Value
 
Cash and Cash Equivalents
 
Long-Term Notes Receivables and Other Assets, net
Cash
$
6,681

 
$

 
$

 
$
6,681

 
$
6,681

 
$

 
 
 
 
 
 
 
 
 
 
 
 
Level 1:
 
 
 
 
 
 
 
 
 
 
 
Money market funds
6,092

 

 

 
6,092

 
6,092

 

Corporate securities
3,485

 

 
(304
)
 
3,181

 

 
3,181

Subtotal
9,577

 

 
(304
)
 
9,273

 
6,092

 
3,181

 
 
 
 
 
 
 
 
 
 
 
 
Total
$
16,258

 
$

 
$
(304
)
 
$
15,954

 
$
12,773

 
$
3,181


 
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



The Corporate Securities represents the Company's investment of $3.0 million in publicly traded common stock of a nonaffiliated company (“investee”). During the years ended December 31, 2018, 2017 and 2016 the Company recorded an unrealized loss of $0.3 million, an unrealized loss of $1.3 million and an unrealized gain of $1.0 million, respectively associated with the change in fair value of the investee's stock. As of December 31, 2018 the Company had no accumulated other comprehensive income associated with unrealized gains and losses for the change in fair value of the investment as a result of the adoption of ASU 2016-01. The balance of accumulated other comprehensive income associated with unrealized gains and losses for the change in fair value totaled net losses of $0.3 million at December 31, 2017.
The carrying amounts of the Company’s accounts and notes receivable, accounts payable and accrued and other liabilities approximate their fair values.
Components of the Company's debt including the associated interest rates and related fair values (in thousands, except interest rates) are as follows:
 
Issuance
 
December 31, 2018
 
December 31, 2017
 
Stated Interest
Rate
 
Face Value
 
Estimated Fair Value
 
Face Value
 
Estimated Fair Value
 
2019 Notes
 
$

 
$

 
$
269,465

 
$
273,507

 
6.375
%
2020 Notes
 
679,299

 
643,568

 
930,000

 
952,134

 
8.75
%
2022 Notes Private Placement Notes
 
270,000

 
257,073

 
270,000

 
276,486

 
8.875
%
2022 Notes
 
900,000

 
855,000

 
900,000

 
966,420

 
7.875
%
2023 Notes
 
400,000

 
326,000

 
400,000

 
425,000

 
7.625
%
Term Loan
 
807,975

 
807,975

 

 

 
N/A

Total
 
$
3,057,274

 
$
2,889,616

 
$
2,769,465

 
$
2,893,547

 



The fair value of the 2019 notes, 2020 notes, 2022 private placement notes, 2022 notes and the 2023 notes are fixed-rate debt and are considered Level 2 measurements as the value was determined using observable market inputs, such as current interest rates as well as prices observable from less active markets. The Term Loan is floating-rate debt and approximates the carrying value as interest accrues at floating rates based on market rates.
Derivative Financial Instruments
Under the Consumer Financing Program, the Company pays a monthly fee to a third-party financing provider based on the average daily outstanding balance of the installment loans and shares the liability for credit losses, depending on the credit quality of the customer. Because of the nature of certain provisions under the Consumer Financing Program, the Company records a derivative liability that is not designated as a hedging instrument and is adjusted to fair value, measured using the present value of the estimated future payments. Changes to the fair value are recorded through other (income) loss, net in the Consolidated Statement of Operations. The following represent the contractual obligations with the third-party financing provider under the Consumer Financing Program that are components of the derivative:
The Company pays a monthly fee based on the average daily outstanding balance of the installment loans
The Company shares the liability for credit losses depending on the credit quality of the customer
The Company pays transactional fees associated with customer payment processing
The derivative is classified as a Level 3 instrument. The derivative positions are valued using a discounted cash flow model, with inputs consisting of available market data, such as market yield discount rates, as well as unobservable internally derived assumptions, such as collateral prepayment rates, collateral default rates and loss severity rates. These derivatives are priced quarterly using a credit valuation adjustment methodology. In summary, the fair value represents an estimate of the present value of the cash flows the Company will be obligated to pay to the third-party financing provider for each component of the derivative.
The following table summarizes the fair value and the notional amount of the Company’s outstanding derivative instrument as of December 31, 2018 and 2017 (in thousands):
 
December 31,
 
2018
 
2017
Consumer Financing Program Contractual Obligations:
 
 
 
Fair value
$
117,620

 
$
46,496

Notional amount
368,708

 
163,032

Classified on the consolidated balance sheets as:
 
 
 
Accrued expenses and other current liabilities
67,710

 
25,473

Other long-term obligations
49,910

 
21,023

Total Consumer Financing Program Contractual Obligation
$
117,620

 
$
46,496


Changes in Level 3 Fair Value Measurements
The following table summarizes the change in the fair value of the Level 3 outstanding derivative instrument for the years ended December 31, 2018 and 2017 (in thousands):
 
December 31,
 
2018
 
2017
Balance, beginning of period
$
46,496

 
$

Additions
93,095

 
44,913

Settlements
(34,587
)
 
(7,972
)
Losses included in earnings
12,616

 
9,555

Balance, end of period
$
117,620

 
$
46,496

v3.10.0.1
Restructuring and Asset Impairment Charges
12 Months Ended
Dec. 31, 2018
Restructuring and Related Activities [Abstract]  
Restructuring and Asset Impairment Charges
Restructuring and Asset Impairment Charges

Restructuring
During the year ended December 31, 2018, the Company announced a number of cost reduction initiatives that are expected to reduce certain of the Company’s General and Administrative, Customer Service, and Sales Support fixed costs. The Company completed the majority of these cost reduction initiatives in the second and third quarters of 2018, with the remainder by the end of 2018. In addition to resulting in meaningful cost reductions, the Company’s initiatives are expected to streamline operations, focus engineering and innovation and provide a better focus on driving customer satisfaction.
As part of these initiatives, the Company and Best Buy agreed in principle to end the co-branded Best Buy Smart Home by Vivint arrangement ("Best Buy Agreement"), which resulted in the elimination of in-store sales positions. In addition, the Company eliminated other general and administrative positions. These actions resulted in one-time cash employee severance and termination benefits expenses of $4.7 million during the year ended December 31, 2018. The Company formally terminated its relationship with Best Buy in December 2018 and agreed to pay a termination fee of $5.5 million. The difference between the termination fee and all previously recorded liabilities relating to the Company's Best Buy Agreement was recorded as a reduction to capitalized contract costs.
During the year ended December 31, 2016, the Company sold all of its New Zealand and Puerto Rico contracts and recorded the impact of these transactions in restructuring and asset impairment. The calculation of the net loss recorded related to the 2016 Contract Sales included the expensing of all unamortized deferred subscriber acquisition costs associated with these subscriber accounts in the amount of $7.6 million, the realization of outstanding amounts of accumulated other comprehensive loss associated with the New Zealand foreign currency translation process of $1.1 million upon the substantial sale of the subsidiary, offset by cash proceeds of $6.2 million for a total net loss on the 2016 Contract Sales of $2.6 million.
Restructuring and asset impairment charges were as follows (in thousands):
 
 
Year ended December 31,
 
2018
 
2017
 
2016
Wireless restructuring recoveries:
 
 
 
 
 
Asset recoveries
$

 
$

 
$
(710
)
Contract termination recoveries

 

 
(751
)
Employee severance and termination benefits recoveries

 

 
(77
)
Total wireless restructuring recoveries

 

 
(1,538
)
Loss on subscriber contract sales

 

 
2,551

Employee severance and termination benefits charges
4,683

 

 

Total restructuring and asset impairment charges
$
4,683

 
$

 
$
1,013


The following table presents accrued restructuring activity for the years ended December 31, 2018 and 2017.
 
Asset impairments
 
Contract
termination costs
 
Employee severance and
termination benefits
 
Total
Accrued restructuring balance as of December 31, 2015
$

 
$
3,954

 
$
321

 
$
4,275

Restructuring and impairment recoveries
(710
)
 
(751
)
 
(77
)
 
(1,538
)
Cash payments

 
(2,554
)
 
(244
)
 
(2,798
)
Non-cash settlements
710

 

 

 
710

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 expenses

 

 
4,683

 
4,683

Cash payments

 
(91
)
 
(4,341
)
 
(4,432
)
Accrued restructuring balance as of December 31, 2018
$

 
$
467

 
$
342

 
$
809


Accrued restructuring at December 31, 2018 is included in current liabilities within accrued expenses and other current liabilities of $0.4 million and in long-term liabilities within other long-term obligations of $0.4 million.
Contract termination costs represent ongoing contractual commitments related to the 2015 restructuring of the Company's Wireless Internet Business. Additional charges may be incurred in the future for facility-related or other restructuring activities as the Company continues to align resources to meet the needs of the business.
v3.10.0.1
Income Taxes
12 Months Ended
Dec. 31, 2018
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The Company files a consolidated federal income tax return with its wholly-owned subsidiaries.
The income tax (benefit) expense consisted of the following (in thousands):
 
 
Year ended December 31,
 
2018
 
2017
 
2016
Current income tax:
 
 
 
Federal
$

 
$

 
$

State
512

 
151

 
545

Foreign
(52
)
 
(24
)
 
95

Total
460

 
127

 
640

Deferred income tax:
 
 
 
Federal

 
(326
)
 

State

 
(53
)
 

Foreign
(2,071
)
 
1,330

 
(573
)
Total
(2,071
)
 
951

 
(573
)
Income tax (benefit) expense
$
(1,611
)
 
$
1,078

 
$
67


The following reconciles the tax expense computed at the statutory federal rate and the Company’s tax expense (in thousands):
 
 
Year ended December 31,
 
2018
 
2017
 
2016
Computed expected tax expense
$
(98,598
)
 
$
(139,100
)
 
$
(93,770
)
State income taxes, net of federal tax effect
404

 
65

 
360

Foreign income taxes
(690
)
 
(299
)
 
(949
)
Other reconciling items

 
(344
)
 
666

Permanent differences
4,406

 
2,008

 
1,688

Effect of Federal law change

 
166,876

 

Change in valuation allowance
92,867

 
(28,128
)
 
92,072

Income tax (benefit) expense
$
(1,611
)
 
$
1,078

 
$
67



The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities were as follows (in thousands) 
 
December 31,
 
2018
 
2017
Gross deferred tax assets:
 
Net operating loss carryforwards
$
591,244

 
$
591,619

Deferred subscriber income
113,103

 
72,389

Interest expense limitation
56,381

 

Accrued expenses and allowances
18,766

 
17,633

Purchased intangibles and deferred financing costs
17,788

 
15,191

Inventory reserves
4,688

 
6,662

Property and equipment

 
1,176

Research and development credits
41

 
41

Valuation allowance
(467,705
)
 
(304,509
)
Total
334,306

 
400,202

Gross deferred tax liabilities:
 
Deferred capitalized contract costs
(332,547
)
 
(408,610
)
Property and equipment
(2,242
)
 

Prepaid expenses
(613
)
 
(633
)
Total
(335,402
)
 
(409,243
)
Net deferred tax liabilities
$
(1,096
)
 
$
(9,041
)

The Company had net operating loss carryforwards as follows (in thousands):
 
 
December 31,
 
2018
 
2017
Net operating loss carryforwards:
 
 
 
Federal
$
2,405,380

 
$
2,355,153

States
1,656,333

 
1,715,004

Canada
19,753

 
27,326

Total
$
4,081,466

 
$
4,097,483


U.S. federal net operating loss carryforwards will begin to expire in 2026, if not used. State net operating loss carryforwards expire over different periods and some have already begun to expire. The Company had United States research and development credits of approximately $41,000 at December 31, 2018, and December 31, 2017, which begin to expire in 2030.
Canadian net operating loss carryforwards will begin to expire in 2029.
Realization of the Company’s federal and state net operating loss carryforwards and tax credits is dependent on generating sufficient taxable income prior to their expiration. Although a portion of these net operating loss carryforwards are subject to the provisions of Internal Revenue Code Section 382, the Company has not performed a formal study to determine the amount of any limitation. The use of the net operating loss carryforwards may have additional limitations resulting from future ownership changes or other factors under Section 382 of the Internal Revenue Code.
In December 2017, the SEC issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which provides guidance on accounting for the tax effects of Tax Reform. SAB 118 provides a measurement period that should not extend beyond one year from the enactment date for companies to complete the accounting relating to Tax Reform under ASC Topic 740. In accordance with SAB 118, to the extent that a company’s accounting for certain income tax effects of Tax Reform is incomplete, but it is able to determine a reasonable estimate, the company should report a provisional estimate in its financial statements. Where a reasonable estimate cannot be determined, a company should continue to apply ASC Topic 740 based on the provisions of the tax laws that were in effect immediately before the enactment of Tax Reform.
The SAB 118 period has closed and, based on its analysis of Tax Reform, the Company did not change its recorded provisional tax expense of $166.9 million for the year ended December 31, 2017, resulting from the remeasurement of its deferred tax balances due to the reduction in the U.S. corporate income tax rate from 35% to 21%. This expense was offset by a corresponding change in the valuation allowance, resulting in no change in net tax expense or benefit.
Additionally, the Company's analysis of the new requirement that certain income (i.e., GILTI) earned by foreign subsidiaries must be included currently in the gross income of the U.S. resulted in an inclusion amount of approximately $7.7 million in 2018. The Company has elected to treat taxes due on future inclusions in U.S. taxable income related to GILTI as a current-period expense when incurred.
At December 31, 2018 and 2017, the Company recorded a valuation allowance against its U.S. federal and state net deferred tax assets as it believes it is more likely than not that these benefits will not be realized. Significant judgment is required in determining the Company’s provision for income taxes, recording valuation allowances against net deferred tax assets and evaluating the Company’s uncertain tax positions. The Company has considered and weighed the available evidence, both positive and negative, to determine whether it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. Based on available information, management does not believe it is more likely than not that all of its deferred tax assets will be utilized. The Company recorded a valuation allowance for U.S. net deferred tax assets of approximately $467.7 million and $304.5 million at December 31, 2018 and 2017, respectively.

As of December 31, 2018, the Company's income tax returns for the tax years 2014 and later, remain subject to examination by the Internal Revenue Service and various state taxing authorities.
v3.10.0.1
Stock-Based Compensation and Equity
12 Months Ended
Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation and Equity
Stock-Based Compensation and Equity
313 Incentive Units
The Company’s indirect parent, 313 Acquisition LLC (“313”), which is wholly owned by the Investors, has authorized the award of profits interests, representing the right to share a portion of the value appreciation on the initial capital contributions to 313 (“Incentive Units”). As of December 31, 2018, a total of 85,362,836 Incentive Units had been awarded, and were outstanding, to current and former members of senior management and a board member, of which 42,169,456 were issued to the Company’s Chief Executive Officer and President. In June 2018, the Incentive Units and SARs (defined below) vesting terms were modified ("Modification"). Prior to the Modification, the Incentive Units were subject to time-based and performance-based vesting conditions, with (1) one-third subject to ratable time-based vesting over a five year period from the applicable vesting reference date and (2) two-thirds subject to the achievement of certain investment return thresholds by The Blackstone Group, L.P. and its affiliates (“Blackstone”). Pursuant to the Modification the Incentive Units are subject to time-based and performance-based vesting conditions, with (1) one-third subject to ratable time-based vesting over a five year period from the applicable vesting reference date, (2) one-third subject to the achievement of certain investment return thresholds by Blackstone and (3) one-third subject to ratable time-based vesting over a five year period from the applicable vesting reference date or June 2018 for those granted prior to the modification. The Company has not recorded any expense related to the performance-based portion of the awards, as the achievement of the vesting condition is not yet deemed probable. The fair value of stock-based awards is measured at the grant date, or the Modification date, and is recognized as expense over the employee’s requisite service period. The grant date fair value was determined using a Monte Carlo simulation valuation approach with the following assumptions: expected volatility varies from 55% to 125%; expected exercise term between 3.96 and 6.00 years; and risk-free rate between 0.61% and 2.61%.
A summary of the Incentive Unit activity for the years ended December 31, 2018 and 2017 is presented below:
 
 
Incentive Units
 
Weighted Average
Exercise Price
Per Share
 
Weighted Average
Remaining
Contractual
Life (Years)
 
Aggregate
Intrinsic Value
Outstanding, December 31, 2016
85,882,836

 
$
1.19

 
6.81
 
$

Forfeited
(70,000
)
 
1.30

 
 
 
 
Outstanding, December 31, 2017
85,812,836

 
1.19

 
5.81
 

Forfeited
(450,000
)
 
1.93

 
 
 
 
Outstanding, December 31, 2018
85,362,836

 
1.18

 
4.81
 

Unvested shares expected to vest after December 31, 2018
59,663,659

 
1.22

 
4.93
 

Exercisable at December 31, 2018
25,699,177

 
$
1.11

 
4.50
 
$


As of December 31, 2018, there was $10.7 million of unrecognized compensation expense related to outstanding Incentive Units, which will be recognized over a weighted-average period of 4.29 years. As of December 31, 2018 and 2017, the weighted average grant date fair value per share of the outstanding incentive units was $0.36 and $0.30, respectively.
Stock Appreciation Rights
The Company’s subsidiary, Vivint Group, Inc. (“Vivint Group”), has awarded Stock Appreciation Rights (“SARs”) to various levels of key employees and board members, pursuant to an omnibus incentive plan. The purpose of the SARs is to attract and retain personnel and provide an opportunity to acquire an equity interest of Vivint Group. Prior to the Modification in June 2018, the SARs were subject to time-based and performance-based vesting conditions, with (1) one-third subject to ratable time-based vesting over a five year period from the applicable vesting reference date and (2) two-thirds subject to the achievement of certain investment return thresholds by Blackstone. Pursuant to the Modification the Incentive Units are subject to time-based and performance-based vesting conditions, with (1) one-third subject to ratable time-based vesting over a five year period from the applicable vesting reference date, (2) one-third subject to the achievement of certain investment return thresholds by Blackstone and (3) one-third subject to ratable time-based vesting over a five year period from the applicable vesting reference date or June 2018 for those granted prior to the modification. The Company has not recorded any expense related to the performance-based portion of the awards, as the achievement of the vesting condition is not yet deemed probable. In connection with this plan, 38,011,879 SARs were outstanding as of December 31, 2018. In addition, 53,621,891 SARs have been set aside for funding incentive compensation pools pursuant to long-term sales and installation employee incentive plans established by the Company.
The fair value of the Vivint Group awards is measured at the grant date, or the Modification date, and is recognized as expense over the employee’s requisite service period. The fair value is determined using a Black-Scholes option valuation model with the following assumptions: expected volatility varies from 55% to 125%, expected dividends of 0%; expected exercise term between 6.00 and 6.50 years; and risk-free rates between 0.61% and 2.61%. Due to the lack of historical exercise data, the Company used the simplified method in determining the estimated exercise term, for all Vivint Group awards.

A summary of the Vivint Group SAR activity for the years ended December 31, 2018 and 2017 is presented below:
 
 
Stock Appreciation
Rights
 
Weighted Average
Exercise Price
Per Share
 
Weighted Average
Remaining
Contractual
Life (Years)
 
Aggregate
Intrinsic Value
Outstanding, December 31, 2016
21,993,158

 
$
0.96

 
8.23
 
$

Granted
13,250,640

 
1.74

 
 
 
 
Forfeited
(2,374,864
)
 
1.12

 
 
 
 
Exercised
(114,644
)
 
0.72

 
 
 
 
Outstanding, December 31, 2017
32,754,290

 
1.26

 
9.21
 

Granted
14,630,000

 
1.79

 
 
 
 
Forfeited
(9,255,137
)
 
1.31

 
 
 
 
Exercised
(117,274
)
 
0.89

 
 
 
 
Outstanding, December 31, 2018
38,011,879

 
1.46

 
8.07
 

Unvested shares expected to vest after December 31, 2018
33,813,668

 
1.51

 
8.28
 

Exercisable at December 31, 2018
4,198,211

 
$
1.02

 
6.30
 
$


As of December 31, 2018, there was $4.6 million of unrecognized compensation expense related to outstanding Vivint awards, which will be recognized over a weighted-average period of 4.40 years. As of December 31, 2018 and 2017, the weighted average grant date fair value per share of the outstanding SARs was $0.23 and $0.19, respectively.
The Company’s subsidiary, Vivint Wireless, has also awarded an immaterial amount of Wireless SARs to various employees. There were no Wireless SARs outstanding as of December 31, 2018 and the Company does not intend to issue any additional Wireless SARs.
Restricted Stock Units
In June 2018, the Company’s subsidiary, Vivint Group, awarded 360,000 Restricted Stock Units (“RSUs”) to certain board members, pursuant to an omnibus incentive plan. The purpose of the RSUs is to compensate board members for their board service and align their interests of those of the Company's shareholders. The RSUs are subject to a three year time-based ratable vesting period. All RSUs are expected to vest after December 31, 2018 and none are exercisable at December 31, 2018.
The fair value of the RSU awards is measured at the grant date, and is recognized as expense over the requisite service period. The fair value was determined using a Black-Scholes valuation model with the following assumptions: expected volatility of 95%, expected dividends of 0%; expected exercise term of 3 years; and a risk-free rate of 2.61%. As of December 31, 2018, there was $0.1 million of unrecognized compensation expense related to outstanding RSUs, which will be recognized over a period of 2.44 years. The grant date fair value per share of the outstanding SARs was $0.48.

Stock-based compensation expense in connection with all stock-based awards for the years ended December 31, 2018, 2017 and 2016 is allocated as follows (in thousands):
 
Year ended December 31,
 
2018
 
2017
 
2016
Operating expenses
$
129

 
$
65

 
$
68

Selling expenses
285

 
217

 
(127
)
General and administrative expenses
2,091

 
1,313

 
3,927

Total stock-based compensation
$
2,505

 
$
1,595

 
$
3,868



Total stock-based compensation increased in 2018, partially as a result of the Modification. Stock-based compensation expense presented in selling expenses was negative for the year ended December 31, 2016 due to a retrospective adjustment in the grant-date fair value of a series of stock-based awards. Stock-based compensation expense included in general and administrative expenses for the year ended December 31, 2016 included $2.2 million of compensation related to an equity repurchase by 313 from one of the Company's executives.

Capital Contribution

In April 2016, Parent completed the first installment of an issuance and sale to certain investors of a series of preferred stock and contributed the net proceeds from such issuance of $69.8 million to the Company as an equity contribution. In July 2016, Parent completed the final installment of the issuance and sale to certain investors of such series of preferred stock and, in August 2016, contributed the net proceeds from such issuance of $30.6 million to the Company as an equity contribution. Both issuances were private placements exempt from registration under the Securities Act.
During the year ended December 31, 2018, Parent contributed $4.7 million to the Company as a capital contribution. During the years ended December 31, 2018 and 2017, the Company returned capital to Parent of $3.1 million and $1.2 million, respectively.
v3.10.0.1
Commitments and Contingencies
12 Months Ended
Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
Commitments and Contingencies
Indemnification
Subject to certain limitations, the Company is obligated to indemnify its current and former directors, officers and employees with respect to certain litigation matters and investigations that arise in connection with their service to the Company. These obligations arise under the terms of its certificate of incorporation, its bylaws, applicable contracts, and Delaware and California law. The obligation to indemnify generally means that the Company is required to pay or reimburse these individuals’ reasonable legal expenses and possibly damages and other liabilities incurred in connection with these matters.
Legal
The Company is named from time to time as a party to lawsuits arising in the ordinary course of business related to its sales, marketing, and the provision of its services and equipment claims. Actions filed against the Company include commercial, intellectual property, customer, and labor and employment related claims, including complaints of alleged wrongful termination and potential class action lawsuits regarding alleged violations of federal and state wage and hour and other laws. In general, litigation can be expensive and disruptive to normal business operations. Moreover, the results of legal proceedings are difficult to predict and the costs incurred in litigation can be substantial. The Company believes the amounts provided in its financial statements are adequate in light of the probable and estimated liabilities. Factors that the Company considers in the determination of the likelihood of a loss and the estimate of the range of that loss in respect of legal matters include the merits of a particular matter, the nature of the matter, the length of time the matter has been pending, the procedural posture of the matter, how the Company intends to defend the matter, the likelihood of settling the matter and the anticipated range of a possible settlement. Because such matters are subject to many uncertainties, the ultimate outcomes are not predictable and there can be no assurances that the actual amounts required to satisfy alleged liabilities from the matters described above will not exceed the amounts reflected in the Company’s financial statements or that the matters will not have a material adverse effect on the Company’s results of operations, financial condition or cash flows.
The Company regularly reviews outstanding legal claims and actions to determine if reserves for expected negative outcomes of such claims and actions are necessary. The Company had reserves for all such matters of approximately $2.5 million and $2.2 million as of December 31, 2018 and 2017, respectively.
During the year ended December 31, 2017 the Company accrued $10.0 million related to the settlement of litigation with ADT Inc. included in accounts payable on the consolidated balance sheets. The Company paid the full amount in early 2018.
Operating Leases
The Company leases office and warehouse space, certain equipment, towers, wireless spectrum, software and an aircraft under operating leases with related and unrelated parties expiring in various years through 2028. The leases require the Company to pay additional rent for increases in operating expenses and real estate taxes and contain renewal options. Total rent expense for all operating leases for the years ended December 31, 2018, 2017 and 2016 was $16.5 million, $17.0 million and $16.0 million, respectively.
Capital Leases
The Company also enters into certain capital leases with expiration dates through May 2022. On an ongoing basis, the Company enters into vehicle lease agreements under a Fleet Lease Agreement. The lease agreements are typically 36 months leases for each vehicle and the average remaining life for the fleet is 19 months as of December 31, 2018. As of December 31, 2018 and 2017, the capital lease obligation balance was $13.3 million and $21.7 million, respectively.
Spectrum Licenses
During the year ended December 31, 2016, Vivint Wireless, Inc. (“Vivint Wireless”), an indirect wholly owned subsidiary of the Company, entered into leasing agreements with Nextlink Wireless, LLC (“Nextlink”) for designated radio frequency spectrum in 40 mid-sized metropolitan markets. In December 2017, Vivint Wireless entered into a Termination Agreement with Verizon Communications Inc. (“Verizon”) pursuant to which the parties agreed, among other things, to terminate certain spectrum leases, including the 40 aforementioned leasing agreements, between Vivint Wireless and Nextlink, a subsidiary of Verizon, in exchange for cash consideration. Subsequent to the year ended December 31, 2018, the Company consummated the transactions contemplated by the Termination Agreement with Verizon. See Note 18 for further discussion.

As of December 31, 2018, future minimum lease payments were as follows (in thousands):
 
 
Operating
 
Capital
 
Total
2019
$
16,709

 
$
8,193

 
$
24,902

2020
15,478

 
5,209

 
20,687

2021
14,926

 
363

 
15,289

2022
13,655

 
7

 
13,662

2023
13,701

 

 
13,701

Thereafter
28,824

 

 
28,824

Amounts representing interest

 
(459
)
 
(459
)
Total lease payments
$
103,293

 
$
13,313

 
$
116,606


In addition to the commitments mentioned above, the Company had other purchase obligations of $59.5 million as of December 31, 2018 that consisted of commitments related to software licenses, marketing activities, and other goods and services.
v3.10.0.1
Related Party Transactions
12 Months Ended
Dec. 31, 2018
Related Party Transactions [Abstract]  
Related Party Transactions
Related Party Transactions
Transactions with Vivint Solar
The Company and Vivint Solar, Inc. (“Solar”) have entered into agreements under which the Company provided certain ongoing administrative services to Solar through September 2017 and the Sales Dealer Agreement (as defined below). During the year ended December 31, 2018, 2017 and 2016 the Company charged $17.3 million, $2.8 million and $4.6 million, respectively of net expenses to Solar in connection with these agreements. The balance due from Solar in connection with these agreements and other expenses paid on Solar’s behalf was immaterial at both December 31, 2018 and 2017.
Also in connection with Solar’s initial public offering in 2014, the Company entered into a number of agreements with Solar related to services and other support that it has provided and will provide to Solar including:
 
A Master Intercompany Framework Agreement which established 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 defined their current areas of business and their competitors, and agreed not to directly or indirectly engage in the other’s business for three years;
A Transition Services Agreement pursuant to which the Company agreed to 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 Product Development and Supply Agreement pursuant to which one of Solar’s wholly owned subsidiaries would, for an initial term of three years, subject to automatic renewal for successive one-year periods unless either party elects otherwise, collaborate with the Company to develop certain monitoring and communications equipment that will be compatible with other equipment used in Solar’s energy systems and will replace equipment Solar currently procures from third parties;
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.
In 2016, the Company and Solar amended the Marketing and Customer Relations Agreement to update certain terms and conditions governing existing cross-marketing initiatives and to implement new cross-marketing initiatives including a pilot program with the purpose of exploring potential opportunities for each company to offer, sell and integrate the other company’s respective products and services with its standard product offering.
In 2017, the Company and Solar entered into a Sales Dealer Agreement (the “Sales Dealer Agreement”), pursuant to which each party will act as a non-exclusive dealer for the other party to market, promote and sell each other’s products. The agreement has an initial two-year term, which will be automatically renewed for successive one-year terms unless written notice of termination is provided by one of the parties to the other no less than 90 days prior to the end of the then current term. The products, territories and consideration that is payable by each party to the other will be determined in accordance with the agreement. The Sales Dealer Agreement governs and replaces substantially all of the activities that were previously undertaken under the Marketing and Customer Relations Agreement described above, including the pilot program. The Company and Solar also agreed to extend the term of the non-solicitation provisions under the existing Non-Competition Agreement to match the term of the Sales Dealer Agreement.
Other Related-party Transactions
The Company incurred additional expenses during the years ended December 31, 2018, 2017 and 2016 of approximately $2.7 million, $3.5 million, $4.2 million, respectively, for other related-party transactions including contributions to the charitable organization Vivint Gives Back, legal fees, and other services. Accrued expenses and other current liabilities at December 31, 2018 and 2017 included net payables associated with these related-party transactions of $0.2 million and $1.4 million, respectively.
On November 16, 2012, the Company was acquired by an investor group comprised of certain investment funds affiliated with Blackstone Capital Partners VI L.P., and certain co-investors and management investors through certain mergers and related reorganization transactions (collectively, the “Merger”).
In connection with the Merger, the Company engaged Blackstone Management Partners L.L.C. (“BMP”) to provide monitoring, advisory and consulting services on an ongoing basis. In consideration for these services, the Company agreed to pay an annual monitoring fee equal to the greater of (i) a minimum base fee of $2.7 million subject to adjustments if the Company engages in a business combination or disposition that is deemed significant and (ii) the amount of the monitoring fee paid in respect of the immediately preceding fiscal year, without regard to any post-fiscal year “true-up” adjustments as determined by the agreement. The Company incurred expenses for such services of approximately $4.1 million, $3.5 million and $3.7 million during the years ended December 31, 2018, 2017 and 2016, respectively. Accrued expenses and other current liabilities at December 31, 2018 and 2017 included a liability of $4.8 million and $0.9 million, respectively, to BMP in regards to the monitoring fee.
Under the support and services agreement, the Company also engaged BMP to arrange for Blackstone’s portfolio operations group to provide support services customarily provided by Blackstone’s portfolio operations group to Blackstone’s private equity portfolio companies of a type and amount determined by such portfolio services group to be warranted and appropriate. BMP will invoice the Company for such services based on the time spent by the relevant personnel providing such services during the applicable period but in no event shall the Company be obligated to pay more than $1.5 million during any calendar year. During the years ended December 31, 2018, 2017 and 2016 the Company incurred no costs associated with such services.
During the year ended December 31, 2018, Blackstone Advisory Partners L.P. (“BAP”), an affiliate of Blackstone, participated as one of the initial purchasers of the Term Loan in September 2018 and received fees at the time of closing of such issuances aggregating approximately $0.9 million.
During the year ended December 31, 2017, BAP participated as one of the initial purchasers of the 2022 notes in the February 2017 issuance and the 2023 notes in the August 2017 issuance and received fees at the time of closing of such issuances aggregating approximately $0.6 million.
During the year ended December 31, 2016, BAP participated as one of the initial purchasers of the 2022 notes in each of the May 2016 and August 2016 offerings and received fees at the time of closing of such issuances aggregating approximately $0.5 million.
In addition, GSO Capital Partners, an affiliate of Blackstone, is a participating lender in the Term Loan and as of December 31, 2018 had received in aggregate interest payments of approximately $0.9 million. As of December 31, 2018, GSO Capital Partners holds $75.1 million of outstanding aggregate principal of the Term Loan.
In September 2018, Vivint Smart Home, Inc. contributed $4.7 million to the Company as a capital contribution.

In April 2016, Parent completed the first installment of an issuance and sale to certain investors of a series of preferred stock and contributed the net proceeds from such issuance of $69.8 million to the Company as an equity contribution. In July 2016, Parent completed the final installment of the issuance and sale to certain investors of such series of preferred stock and, in August 2016, contributed the net proceeds from such issuance of $30.6 million to the Company as an equity contribution. Both issuances were private placements exempt from registration under the Securities Act.
The company incurred stock-based compensation expense of $2.2 million included in general and administrative expenses for the year ended December 31, 2016 related to an equity repurchase by 313 from one of the Company's executives.
Long-term notes receivables and other assets, includes amounts due for non-interest bearing advances made to employees that are expected to be repaid in excess of one year. Amounts due from employees as of both December 31, 2018 and 2017, amounted to approximately $0.3 million. As of December 31, 2018 and 2017, this amount was fully reserved.
Prepaid expenses and other current assets at December 31, 2018 and 2017 included a receivable for $1.8 million and $0.5 million, respectively, from certain members of management in regards to their personal use of the corporate jet.
From time to time, the Company does business with a number of other companies affiliated with Blackstone.
Transactions involving related parties cannot be presumed to be carried out at an arm’s-length basis.
v3.10.0.1
Segment Reporting and Business Concentrations
12 Months Ended
Dec. 31, 2018
Segment Reporting [Abstract]  
Segment Reporting and Business Concentrations
Segment Reporting and Business Concentrations

For the years ended December 31, 2018, 2017 and 2016, the Company conducted business through one operating segment, Vivint. Historically, the Company primarily operated in three geographic regions: United States, Canada and New Zealand. During the year ended December 31, 2016, the Company completed the 2016 Contract Sales and ceased operations in New Zealand. Historically, the Company's operations in New Zealand were considered immaterial and reported in conjunction with the United States. Revenues by geographic region were as follows (in thousands):

 
United States
 
Canada
 
Total
Revenue from external customers
 
 
 
 
 
Year ended December 31, 2018
$
977,877

 
$
72,564

 
$
1,050,441

Year ended December 31, 2017
$
816,026

 
$
65,957

 
$
881,983

Year ended December 31, 2016
$
700,471

 
$
57,436

 
$
757,907

v3.10.0.1
Employee Benefit Plan
12 Months Ended
Dec. 31, 2018
Postemployment Benefits [Abstract]  
Employee Benefit Plan
Employee Benefit Plan
The Company offers eligible employees the opportunity to defer a percentage of their earned income into company-sponsored 401(k) plans.
The Company offers eligible employees the opportunity to contribute a percentage of their earned income into company-sponsored 401(k) plans.
Beginning in January 2018, participants in the 401(k) plans are eligible for the Company's matching program. Under this new matching program, the Company matches an employee’s contributions to the 401(k) savings plan dollar-for-dollar up to 1% of such employee’s eligible earnings and $0.50 for every $1.00 for the next 5% of such employee’s eligible earnings. The maximum match available under the 401(k) plan is 3.5% of the employee’s eligible earnings. For employees who have been employed by the Company for less than two years, matching contributions vest on the second anniversary of their date of hire. The Company's matching contributions to employees who have been employed by the Company for two years or more are fully vested.
Matching contributions that were made to the plans during the year ended December 31, 2018 totaled $6.0 million. No matching contributions were made to the plans for the years ended December 31, 2017 and 2016.
v3.10.0.1
Guarantor and Non-Guarantor Supplemental Financial Information
12 Months Ended
Dec. 31, 2018
Guarantor And Non Guarantor Supplemental Financial Information [Abstract]  
Guarantor and Non-Guarantor Supplemental Financial Information
Guarantor and Non-Guarantor Supplemental Financial Information
The Notes were issued by APX and are fully and unconditionally guaranteed, jointly and severally by Holdings and each of APX’s existing and future material wholly-owned U.S. restricted subsidiaries. APX’s existing and future foreign subsidiaries are not expected to guarantee the Notes.
Presented below is the consolidating financial information of APX, subsidiaries of APX that are guarantors (the “Guarantor Subsidiaries”), and APX’s subsidiaries that are not guarantors (the “Non-Guarantor Subsidiaries”) as of December 31, 2018 and 2017 and for the years ended December 31, 2018, 2017 and 2016. The audited consolidating financial information reflects the investments of APX in the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries using the equity method of accounting.


Condensed Consolidating Balance Sheet
December 31, 2018
(In thousands)
 
 
Parent
 
APX
Group, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
 
 
Current assets
$

 
$
12,951

 
$
269,770

 
$
103,451

 
$
(262,674
)
 
$
123,498

Property and equipment, net

 

 
72,937

 
464

 

 
73,401

Capitalized contract costs, net

 

 
1,047,532

 
68,243

 

 
1,115,775

Deferred financing costs, net

 
2,058

 

 

 

 
2,058

Investment in subsidiaries

 
1,662,367

 

 

 
(1,662,367
)
 

Intercompany receivable

 

 
6,303

 

 
(6,303
)
 

Intangible assets, net

 

 
236,677

 
18,408

 

 
255,085

Goodwill

 

 
809,678

 
25,177

 

 
834,855

Long-term notes receivables and other assets, net

 
106

 
102,695

 
17,124

 
(106
)
 
119,819

Total Assets
$

 
$
1,677,482

 
$
2,545,592

 
$
232,867

 
$
(1,931,450
)
 
$
2,524,491

Liabilities and Stockholders’ (Deficit) Equity
 
 
 
 
 
 
 
 
 
 
 
Current liabilities
$

 
$
36,988

 
$
507,063

 
$
182,159

 
$
(262,674
)
 
$
463,536

Intercompany payable

 

 

 
6,303

 
(6,303
)
 

Notes payable and revolving line of credit, net of current portion

 
3,037,095

 

 

 

 
3,037,095

Capital lease obligations, net of current portion

 

 
5,570

 
1

 

 
5,571

Deferred revenue, net of current portion

 

 
306,653

 
16,932

 

 
323,585

Accumulated losses of investee
1,396,601

 


 


 


 
(1,396,601
)
 

Other long-term obligations

 

 
90,209

 

 

 
90,209

Deferred income tax liability

 

 
106

 
1,096

 
(106
)
 
1,096

Total (deficit) equity
(1,396,601
)
 
(1,396,601
)
 
1,635,991

 
26,376

 
(265,766
)
 
(1,396,601
)
Total liabilities and stockholders’ (deficit) equity
$

 
$
1,677,482

 
$
2,545,592

 
$
232,867

 
$
(1,931,450
)
 
$
2,524,491

















Condensed Consolidating Balance Sheet
December 31, 2017
(In thousands)
 
 
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 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, net

 
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 line of credit, 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
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



Condensed Consolidating Statements of Operations and Comprehensive Loss
For the Year ended December 31, 2018
(In thousands)
 
 
Parent
 
APX
Group, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Revenues
$

 
$

 
$
998,190

 
$
54,818

 
$
(2,567
)
 
$
1,050,441

Costs and expenses

 

 
1,240,570

 
54,497

 
(2,567
)
 
1,292,500

(Loss) income from operations

 

 
(242,380
)
 
321

 

 
(242,059
)
Loss from subsidiaries
(467,914
)
 
(211,665
)
 

 

 
679,579

 

Other expense (income), net

 
256,249

 
(35,936
)
 
7,153

 

 
227,466

Loss before income taxes
(467,914
)
 
(467,914
)
 
(206,444
)
 
(6,832
)
 
679,579

 
(469,525
)
Income tax expense (benefit)

 

 
512

 
(2,123
)
 

 
(1,611
)
Net loss
$
(467,914
)
 
$
(467,914
)
 
$
(206,956
)
 
$
(4,709
)
 
$
679,579

 
$
(467,914
)
Other comprehensive loss, net of tax effects:
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment
(2,218
)
 
(2,218
)
 

 
(2,218
)
 
4,436

 
(2,218
)
Total other comprehensive loss, net of tax effects
(2,218
)
 
(2,218
)
 

 
(2,218
)
 
4,436

 
(2,218
)
Comprehensive loss
$
(470,132
)
 
$
(470,132
)

$
(206,956
)
 
$
(6,927
)
 
$
684,015

 
$
(470,132
)


Condensed Consolidating Statements of Operations and Comprehensive Loss
For the Year ended December 31, 2017
(In thousands)
 
 
Parent
 
APX
Group, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Revenues
$

 
$

 
$
841,658

 
$
43,015

 
$
(2,690
)
 
$
881,983

Costs and expenses

 

 
997,247

 
42,919

 
(2,690
)
 
1,037,476

(Loss) income from operations

 

 
(155,589
)
 
96

 

 
(155,493
)
Loss from subsidiaries
(410,199
)
 
(165,497
)
 

 

 
575,696

 

Other expense (income), net

 
244,702

 
13,545

 
(4,619
)
 

 
253,628

(Loss) income before income taxes
(410,199
)
 
(410,199
)
 
(169,134
)
 
4,715

 
575,696

 
(409,121
)
Income tax expense (benefit)

 

 
(228
)
 
1,306

 

 
1,078

Net (loss) income
$
(410,199
)
 
$
(410,199
)
 
$
(168,906
)
 
$
3,409

 
$
575,696

 
$
(410,199
)
Other comprehensive income (loss), net of tax effects:
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment
3,155

 
3,155

 

 
3,155

 
(6,310
)
 
3,155

Unrealized gain on marketable securities
(1,693
)
 
(1,693
)
 
(1,693
)
 

 
3,386

 
(1,693
)
Total other comprehensive income (loss), net of tax effects
1,462

 
1,462

 
(1,693
)
 
3,155

 
(2,924
)
 
1,462

Comprehensive (loss) income
$
(408,737
)
 
$
(408,737
)
 
$
(170,599
)
 
$
6,564

 
$
572,772

 
$
(408,737
)


Condensed Consolidating Statements of Operations and Comprehensive Loss
For the Year ended December 31, 2016
(In thousands)
 
 
Parent
 
APX
Group, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Revenues
$

 
$

 
$
715,072

 
$
45,539

 
$
(2,704
)
 
$
757,907

Costs and expenses

 

 
787,138

 
44,575

 
(2,704
)
 
829,009

(Loss) income from operations

 

 
(72,066
)
 
964

 

 
(71,102
)
Loss from subsidiaries
(275,957
)
 
(69,637
)
 

 

 
345,594

 

Other expense (income), net

 
206,320

 
(1,207
)
 
(325
)
 

 
204,788

Loss before income taxes
(275,957
)
 
(275,957
)
 
(70,859
)
 
1,289

 
345,594

 
(275,890
)
Income tax expense (benefit)

 

 
545

 
(478
)
 

 
67

Net (loss) income
$
(275,957
)
 
$
(275,957
)
 
$
(71,404
)
 
$
1,767

 
$
345,594

 
$
(275,957
)
Other comprehensive income, net of tax effects:
 
 
 
 
 
 
 
 
 
 

Foreign currency translation adjustment
2,482

 
2,482

 

 
2,482

 
(4,964
)
 
2,482

Unrealized gain on marketable securities
1,011

 
1,011

 
1,011

 

 
(2,022
)
 
1,011

Total other comprehensive income, net of tax effects
3,493

 
3,493

 
1,011

 
2,482

 
(6,986
)
 
3,493

Comprehensive loss
$
(272,464
)
 
$
(272,464
)
 
$
(70,393
)
 
$
4,249

 
$
338,608

 
$
(272,464
)


Condensed Consolidating Statements of Cash Flows
For the Year ended December 31, 2018
(In thousands)
 
 
Parent
 
APX
Group, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by operating activities
$

 
$

 
$
(220,952
)
 
$
453

 
$

 
$
(220,499
)
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures

 

 
(19,409
)
 
(3
)
 

 
(19,412
)
Proceeds from sale of intangibles

 

 
53,693

 

 

 
53,693

Proceeds from sale of capital assets

 

 
127

 

 

 
127

Investment in subsidiary
(1,571
)
 
(201,292
)
 

 

 
202,863

 

Acquisition of intangible assets

 

 
(1,486
)
 

 

 
(1,486
)
Net cash (used in) provided by investing activities
(1,571
)
 
(201,292
)
 
32,925

 
(3
)
 
202,863

 
32,922

Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
Proceeds from notes payable

 
810,000

 

 

 

 
810,000

Repayment on notes payable

 
(522,191
)
 

 

 

 
(522,191
)
Borrowings from revolving line of credit

 
201,000

 

 

 

 
201,000

Repayment of revolving line of credit

 
(261,000
)
 

 

 

 
(261,000
)
Proceeds from capital contribution
4,700

 
4,700

 
204,421

 

 
(209,121
)
 
4,700

Repayments of capital lease obligations

 

 
(12,011
)
 
(343
)
 

 
(12,354
)
Financing costs

 
(11,317
)
 

 

 

 
(11,317
)
Deferred financing costs

 
(9,302
)
 

 

 

 
(9,302
)
Return of capital
(3,129
)
 
(3,129
)
 
(3,129
)
 

 
6,258

 
(3,129
)
Net cash provided by (used in) financing activities
1,571

 
208,761

 
189,281

 
(343
)
 
(202,863
)
 
196,407

Effect of exchange rate changes on cash

 

 

 
71

 

 
71

Net increase in cash

 
7,469

 
1,254

 
178

 

 
8,901

Cash:
 
 
 
 
 
 
 
 
 
 
 
Beginning of period

 
3,661

 
(572
)
 
783

 

 
3,872

End of period
$

 
$
11,130

 
$
682

 
$
961

 
$

 
$
12,773


Condensed Consolidating Statements of Cash Flows
For the Year ended December 31, 2017
(In thousands)
 
Parent
 
APX
Group, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by operating activities
$

 
$

 
$
(313,290
)
 
$
3,958

 
$

 
$
(309,332
)
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures

 

 
(20,391
)
 

 

 
(20,391
)
Proceeds from sale of capital assets

 

 
776

 

 

 
776

Investment in subsidiary
1,151

 
(325,222
)
 

 

 
324,071

 

Acquisition of intangible assets

 

 
(1,745
)
 

 

 
(1,745
)
Other assets

 

 
(301
)
 

 

 
(301
)
Net cash provided by (used in) investing activities
1,151

 
(325,222
)
 
(21,661
)
 

 
324,071

 
(21,661
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
Proceeds from notes payable

 
724,750

 

 

 

 
724,750

Repayment on notes payable

 
(450,000
)
 

 

 

 
(450,000
)
Borrowings from revolving line of credit

 
196,895

 

 

 

 
196,895

Repayment of revolving line of credit

 
(136,895
)
 

 

 

 
(136,895
)
Proceeds from capital contribution

 

 
326,373

 

 
(326,373
)
 

Payment of intercompany settlement

 

 
(2,983
)
 

 

 
(2,983
)
Intercompany receivable

 
 
 
3,621

 

 
(3,621
)
 

Intercompany payable

 

 

 
(3,621
)
 
3,621

 

Repayments of capital lease obligations

 

 
(9,667
)
 
(340
)
 

 
(10,007
)
Financing costs

 
(18,277
)
 

 

 

 
(18,277
)
Deferred financing costs

 
(11,119
)
 

 

 

 
(11,119
)
Return of capital
(1,151
)
 
(1,151
)
 
(1,151
)
 

 
2,302

 
(1,151
)
Net cash (used in) provided by financing activities
(1,151
)
 
304,203

 
316,193

 
(3,961
)
 
(324,071
)
 
291,213

Effect of exchange rate changes on cash

 

 

 
132

 

 
132

Net increase (decrease) in cash

 
(21,019
)
 
(18,758
)
 
129

 

 
(39,648
)
Cash:
 
 
 
 
 
 
 
 
 
 
 
Beginning of period

 
24,680

 
18,186

 
654

 

 
43,520

End of period
$

 
$
3,661

 
$
(572
)
 
$
783

 
$

 
$
3,872


Condensed Consolidating Statements of Cash Flows
For the Year ended December 31, 2016
(In thousands)
 
 
Parent
 
APX
Group, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by operating activities
$

 
$

 
$
(380,508
)
 
$
14,802

 
$

 
$
(365,706
)
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
Subscriber acquisition costs – company owned equipment

 

 
(5,243
)
 

 

 
(5,243
)
Capital expenditures

 

 
(11,642
)
 

 

 
(11,642
)
Proceeds from sale of capital assets

 

 
3,080

 
43

 

 
3,123

Investment in subsidiary
(100,407
)
 
(408,214
)
 

 

 
508,621

 

Acquisition of intangible assets

 

 
(1,385
)
 

 

 
(1,385
)
Net cash used in investing activities
(100,407
)
 
(408,214
)
 
(15,190
)
 
43

 
508,621

 
(15,147
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
Proceeds from notes payable

 
604,000

 

 

 

 
604,000

Repayment on notes payable

 
(235,535
)
 

 

 

 
(235,535
)
Borrowings from revolving line of credit

 
57,000

 

 

 

 
57,000

Repayment of revolving line of credit

 
(77,000
)
 

 

 

 
(77,000
)
Proceeds from capital contribution
100,407

 
100,407

 

 

 
(100,407
)
 
100,407

Payment of intercompany settlement

 

 
3,000

 
(3,000
)
 

 

Intercompany receivable

 

 
12,906

 

 
(12,906
)
 

Intercompany payable

 

 
408,214

 
(12,906
)
 
(395,308
)
 

Repayments of capital lease obligations

 

 
(8,295
)
 
(20
)
 

 
(8,315
)
Financing costs

 
(9,036
)
 

 

 

 
(9,036
)
Deferred financing costs

 
(9,241
)
 

 

 

 
(9,241
)
Net cash provided by (used in) financing activities
100,407

 
430,595

 
415,825

 
(15,926
)
 
(508,621
)
 
422,280

Effect of exchange rate changes on cash

 

 

 
(466
)
 

 
(466
)
Net increase (decrease) in cash

 
22,381

 
20,127

 
(1,547
)
 

 
40,961

Cash:
 
 
 
 
 
 
 
 
 
 
 
Beginning of period

 
2,299

 
(1,941
)
 
2,201

 

 
2,559

End of period
$

 
$
24,680

 
$
18,186

 
$
654

 
$

 
$
43,520

v3.10.0.1
Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2018
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation
The Company has prepared the accompanying consolidated financial statements pursuant to generally accepted accounting principles in the United States (“GAAP”). Preparing financial statements requires the Company to make estimates and assumptions that affect the amounts that are reported in the consolidated financial statements and accompanying disclosures. Although these estimates are based on the Company’s best knowledge of current events and actions that the Company may undertake in the future, actual results may be different from the Company’s estimates. The results of operations presented herein are not necessarily indicative of the Company’s results for any future period.
Revenue
Revenue Recognition
The Company offers its customers smart home services combining Products, including a proprietary control panel, door and window sensors, door locks, security cameras and smoke alarms; installation; and a proprietary back-end cloud platform software and Services. These together create an integrated system that allows the Company’s customers to monitor, control and protect their home (“Smart Home Services”). The Company’s customers are buying this integrated system that provides them with these Smart Home Services. The number and type of Products purchased by a customer depends on their desired functionality. Because the Products and Services included in the customer’s contract are integrated and highly interdependent, and because they must work together to deliver the Smart Home Services, the Company has concluded that installed Products, related installation and Services contracted for by the customer are generally not distinct within the context of the contract and, therefore, constitute a single, combined performance obligation. Revenues for this single, combined performance obligation are recognized on a straight-line basis over the customer’s contract term. The Company has determined that certain contracts that do not require a long-term commitment for monitoring services by the customer contain a material right to renew the contract, because the customer does not have to purchase Products upon renewal. Proceeds allocated to the material right are recognized over the period benefit, which is generally three years.
The majority of the Company’s subscription contracts are between three and five years in length and are non-cancelable. These contracts with customers generally convert into month-to-month agreements at the end of the initial term, and some customer contracts are month-to-month from inception. Payment for recurring monitoring and other Smart Home Services is generally due in advance on a monthly basis.
Sales of Products and other one-time fees such as service fees or installation fees are invoiced to the customer at the time of sale. Revenues for wireless internet service provided by Vivint Wireless Inc. (“Wireless Internet” or “Wireless”) and any Products or Services that are considered separate performance obligations are recognized when those Products or Services are delivered. Taxes collected from customers and remitted to governmental authorities are not included in revenue. Payments received or amounts billed in advance of revenue recognition are reported as deferred revenue.
Deferred Revenue
The Company's deferred revenues primarily consist of amounts for sales (including upfront proceeds) of Smart Home Services. Deferred revenues are recognized over the term of the related performance obligation.
Vivint Flex Pay
In January 2017, the Company announced the introduction of the Vivint Flex Pay plan (“Vivint Flex Pay”), which became the Company’s primary sales model beginning in March 2017. Under Vivint Flex Pay, customers pay separately for the products (including control panel, security peripheral equipment, smart home equipment, and related installation) (“Products”) and Vivint’s smart home and security services (“Services”). The customer has the following three options to pay for the Products: (1) qualified customers in the United States may finance the purchase of Products through a third-party financing provider (“Consumer Financing Program”) (2) customers not eligible for the Consumer Financing Program, but who qualify under the Company’s underwriting criteria, may enter into a retail installment contract (“RIC”) directly with Vivint, or (3) customers may purchase the Products at the outset of the service contract by check, automatic clearing house payments (“ACH”), credit or debit card.
Although customers pay separately for the Products and Services under the Vivint Flex Pay plan, the Company has determined that the shift in its sales model does not change the Company’s conclusion that the sale of Products and Services are one single performance obligation. As a result, all forms of transactions under Vivint Flex Pay create deferred revenue for the gross amount of Products sold. Gross deferred revenues are reduced by imputed interest on the RICs and the present value of expected payments due to the third-party financing provider under the Consumer Financing Program.
Under the Consumer Financing Program, qualified customers are eligible for installment loans provided by a third-party financing provider of up to $4,000 for either 42 or 60 months. The Company pays a monthly fee to the third-party financing provider based on the average daily outstanding balance of the installment loans. Additionally, the Company shares liability for credit losses depending on the credit quality of the customer. Because of the nature of these provisions under the Consumer Financing Program, the Company records a derivative liability at its fair value when the third-party financing provider originates installment loans to customers, which reduces the amount of estimated revenue recognized on the provision of the services. The derivative liability is reduced as payments are made from the Company to the third-party financing provider. Subsequent changes to the fair value of the derivative liability are realized through other loss/(income), net in the Consolidated Statement of Operations.
Retail Installment Contract Receivables
Retail Installment Contract Receivables
For customers that enter into a RIC under the Vivint Flex Pay plan, the Company records a receivable for the amount financed. The RIC receivables are recorded at their present value, net of the imputed interest discount. At the time of installation, the Company records a long-term note receivable within long-term notes receivables and other assets, net on the consolidated balance sheets for the present value of the receivables that are expected to be collected beyond 12 months of the reporting date. The unbilled receivable amounts that are expected to be collected within 12 months of the reporting date are included as a short-term notes receivable within accounts and notes receivable, net on the consolidated balance sheets. The billed amounts of notes receivables are included in accounts receivable within accounts and notes receivable, net on the consolidated balance sheets.
The Company imputes the interest on the RIC receivable using a risk adjusted market interest rate and records it as an adjustment to deferred revenue and as an adjustment to the face amount of the related receivable. The imputed interest discount considers a number of factors, including collection experience, aging of the remaining RIC receivable portfolios, credit quality of the subscriber base and other qualitative considerations, including macro-economic factors. The imputed interest income is recognized over the term of the RIC contract as recurring and other revenue on the consolidated statement of operations.
When the Company determines that there are RIC receivables that have become uncollectible, it records an adjustment to the imputed interest discount and reduces the related note receivable balance. Account balances are written-off if collection efforts are unsuccessful and future collection is unlikely based on the length of time from the day accounts become past due.
Accounts Receivable
Accounts Receivable
Accounts receivable consists primarily of amounts due from customers for recurring monthly monitoring Services and the billed portion of RIC receivables. The accounts receivable are recorded at invoiced amounts and are non-interest bearing and are included within accounts and notes receivable, net on the consolidated balance sheets. Accounts receivable totaled $16.5 million and $24.3 million and December 31, 2018 and 2017, respectively net of the allowance for doubtful accounts of $5.6 million and $5.4 million at December 31, 2018 and 2017, respectively. The Company estimates this allowance based on historical collection experience and subscriber attrition rates. When the Company determines that there are accounts receivable that are uncollectible, they are charged off against the allowance for doubtful accounts. The provision for doubtful accounts is included in general and administrative expenses in the accompanying consolidated statements of operations and totaled $19.4 million and $22.5 million for the years ended December 31, 2018 and 2017, respectively.
Restructuring and Asset Impairment Charges
Restructuring and Asset Impairment Charges
Restructuring and asset impairment charges represent expenses incurred in relation to activities to exit or dispose of portions of the Company's business that do not qualify as discontinued operations. Liabilities associated with restructuring are measured at their fair value when the liability is incurred. Expenses for related termination benefits are recognized at the date the Company notifies the employee, unless the employee must provide future service, in which case the benefits are expensed ratably over the future service period. Liabilities related to termination of a contract are measured and recognized at fair value when the contract does not have any future economic benefit to the entity and the fair value of the liability is determined based on the present value of the remaining obligation. The Company expenses all other costs related to an exit or disposal activity as incurred (See Note 10).
Principles of Consolidation
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of APX Group Holdings, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Capitalized Contract Costs
Capitalized Contract Costs
Capitalized contract costs represent the costs directly related and incremental to the origination of new contracts, modification of existing contracts or to the fulfillment of the related customer contracts. These include commissions, other compensation and related costs incurred directly for the origination and installation of new or upgraded customer contracts, as well as the cost of Products installed in the customer home at the commencement or modification of the contract. These costs are deferred and amortized on a straight-line basis over the expected period of benefit that the Company has determined to be five years. Amortization of capitalized contract costs is included in “Depreciation and Amortization” on the consolidated statements of operations. These deferred costs are periodically reviewed for impairment. Contract costs not directly related and incremental to the origination of new contracts, modification of existing contracts or to the fulfillment of the related customer contracts are expensed as incurred. These costs include those associated with housing, marketing and recruiting, non-direct lead generation costs, certain portions of sales commissions and residuals, overhead and other costs considered not directly and specifically tied to the origination of a particular subscriber.
On the consolidated statement of cash flows, capitalized contract costs are classified as operating activities and reported as “Capitalized contract costs - deferred contract costs” as these assets represent deferred costs associated with customer contracts.
Cash and Cash Equivalents
Cash and Cash Equivalents
Cash and cash equivalents consists of highly liquid investments with remaining maturities when purchased of three months or less.
Inventories
Inventories
Inventories, which are comprised of smart home and security system equipment and parts are stated at the lower of cost or market with cost determined under the first-in, first-out (FIFO) method. The Company adjusts the inventory balance based on anticipated obsolescence, usage and historical write-offs.
Property, Plant and Equipment and Long-lived Assets
Property, Plant and Equipment and Long-lived Assets
Property, plant and equipment are stated at cost and depreciated on the straight-line method over the estimated useful lives of the assets or the lease term for assets under capital leases, whichever is shorter. Intangible assets with definite lives are amortized over the remaining estimated economic life of the underlying technology or relationships, which ranges from 5 to 10 years. Definite-lived intangible assets are amortized on the straight-line method over the estimated useful life of the asset or in a pattern in which the economic benefits of the intangible asset are consumed. Amortization expense associated with leased assets is included with depreciation expense. Routine repairs and maintenance are charged to expense as incurred.
The Company reviews long-lived assets, including property, plant and equipment, capitalized contract costs, and definite-lived intangibles for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company considers whether or not indicators of impairment exist on a regular basis and as part of each quarterly and annual financial statement close process. Factors the Company considers in determining whether or not indicators of impairment exist include market factors and patterns of customer attrition. If indicators of impairment are identified, the Company estimates the fair value of the assets. An impairment loss is recognized if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value.
The Company conducts an indefinite-lived intangible impairment analysis annually as of October 1, and as necessary if changes in facts and circumstances indicate that the fair value of the Company’s indefinite-lived intangibles may be less than the carrying amount. When indicators of impairment do not exist and certain accounting criteria are met, the Company is able to evaluate indefinite-lived intangible impairment using a qualitative approach. When necessary, the Company’s quantitative impairment test consists of two steps. The first step requires that the Company compare the estimated fair value of its indefinite-lived intangibles to the carrying value. If the fair value is greater than the carrying value, the intangibles are not considered to be impaired and no further testing is required. If the fair value is less than the carrying value, an impairment loss in an amount equal to the difference is recorded.
Wireless Spectrum Licenses
Wireless Spectrum Licenses
The Company had capitalized as an intangible asset wireless spectrum licenses that were acquired from third parties. The cost basis of the wireless spectrum asset includes the purchase price paid for the licenses at the time of acquisition, plus costs incurred to acquire the licenses. The asset and related liability were recorded at the net present value of future cash outflows using the Company's incremental borrowing rate at the time of acquisition.
 The Company determined that the wireless spectrum licenses met the definition of indefinite-lived intangible assets because the licenses were able to be renewed periodically for a nominal fee, provided that the Company continued to meet the service and geographic coverage provisions. In January 2018, the Company terminated the wireless spectrum licenses for cash consideration.
Long-term Investments
Long-term Investments
The Company’s long-term investments are composed of equity securities in both privately held and public companies. As of December 31, 2018 and 2017, the Company's equity investments totaled $3.9 million and $3.4 million, respectively.
Management determines the appropriate fair value measurement of its investments at the time of purchase and reevaluates the fair value measurement at each balance sheet date. Equity securities, are classified as either short-term or long-term, based on the nature of each security and its availability for use in current operations. The Company’s equity securities are carried at fair value, with gains and losses, reported in other income or loss within the statement of operations
The Company's equity investments without readily determinable fair values as of both December 31, 2018 and 2017 totaled $0.7 million. The Company performs impairment analyzes of its cost based investments when events occur or circumstances change that would, more likely than not, reduce the fair value of the investment below its carrying value. When indicators of impairment do not exist, the Company evaluates impairment using a qualitative approach. Additionally, increases or decreases in the carrying amount resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer are adjusted through the statement of operations as needed. As of December 31, 2018, no indicators of impairment or changes in observable prices existed associated with investments without readily determinable fair values.
Deferred Financing Costs
Deferred Financing Costs
Certain costs incurred in connection with obtaining debt financing are deferred and amortized utilizing the straight-line method, which approximates the effective-interest method, over the life of the related financing. Deferred financing costs associated with obtaining APX's revolving credit facility are amortized over the amended maturity dates discussed in Note 5. If such financing is paid off or replaced prior to maturity with debt instruments that have substantially different terms, the unamortized costs are charged to expense. Deferred financing costs included in the accompanying consolidated balance sheets within deferred financing costs, net at December 31, 2018 and 2017 were $2.1 million and $3.1 million, net of accumulated amortization of $9.6 million and $8.6 million, respectively. Deferred financing costs included in the accompanying consolidated balance sheets within notes payable, net at December 31, 2018 and 2017 were $32.4 million and $35.7 million, net of accumulated amortization of $54.6 million and $45.2 million, respectively. Amortization expense on deferred financing costs recognized and included in interest expense in the accompanying consolidated statements of operations totaled $10.4 million, $11.4 million and $11.6 million for the years ended December 31, 2018, 2017 and 2016, respectively.
Residual Income Plan
Residual Income Plans
The Company has a program that allows certain third-party sales channel partners to receive additional compensation based on the performance of the underlying contracts they create (the “Channel Partner Plan”). In addition, in 2018, the Company introduced a new residual sales compensation plan (the “Residual Plan”). Under the Residual Plan, the Company's sales personnel (each, a “Plan Participant”) have the option to convert up to a specified portion of their earnings (as defined in the Residual Plan) into the right to receive monthly residual compensation payable over the life of the subscriber accounts sold by such Plan Participant.
For both the Channel Partner Plan and Residual Plan, the Company calculates the present value of the expected future residual payments and records a liability for this amount in the period the subscriber account is originated. These costs are recorded to capitalized contract costs. The Company monitors actual payments and customer attrition on a periodic basis and, when necessary, makes adjustments to the liability. The amount included in accrued payroll and commissions was $4.5 million and $3.3 million as of December 31, 2018 and 2017, respectively, and the amount included in other long-term obligations was $13.0 million and $18.5 million at December 31, 2018 and 2017, respectively, representing the present value of the estimated amounts owed to third-party sales channel partners.
Stock-Based Compensation
Stock-Based Compensation
The Company measures compensation cost based on the grant-date fair value of the award and recognizes that cost over the requisite service period of the awards (See Note 12).
Advertising Expense
Advertising Expense
Advertising costs are expensed as incurred.
Income Taxes
Income Taxes
The Company accounts for income taxes based on the asset and liability method. Under the asset and liability method, deferred tax assets and deferred tax liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets when it is determined that it is more likely than not that some portion, or all, of the deferred tax asset will not be realized.
The Company recognizes the effect of an uncertain income tax position on the income tax return at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company’s policy for recording interest and penalties is to record such items as a component of the provision for income taxes.
Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. The Company records the effect of a tax rate or law change on the Company’s deferred tax assets and liabilities in the period of enactment. Future tax rate or law changes could have a material effect on the Company’s results of operations, financial condition, or cash flows (See Note 11)
Contracts Sold
Contracts Sold
During the year ended December 31, 2016, the Company sold all of its New Zealand and Puerto Rico subscriber contracts and ceased operations in these geographical regions ("2016 Contract Sales"). As a result, during the year ended December 31, 2016 the Company recorded the impact of these transactions in restructuring and asset impairment (See Note 10).
Concentrations of Credit Risk
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of receivables and cash. At times during the year, the Company maintains cash balances in excess of insured limits. The Company is not dependent on any single customer or geographic location. The loss of a customer would not adversely impact the Company’s operating results or financial position.
Concentrations of Supply Risk
Concentrations of Supply Risk
As of December 31, 2018, approximately 80% of the Company’s installed panels were SkyControl panels and 19% were 2GIG Go!Control panels. During the three months ended March 31, 2018 the Company transitioned to a new panel supplier. The loss of the Company's panel supplier could potentially impact its operating results or financial position.
Fair Value Measurement
Fair Value Measurement
Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities subject to on-going fair value measurement are categorized and disclosed into one of three categories depending on observable or unobservable inputs employed in the measurement. These two types of inputs have created the following fair value hierarchy:
Level 1: Quoted prices in active markets that are accessible at the measurement date for assets and liabilities.
Level 2: Observable prices that are based on inputs not quoted in active markets, but corroborated by market data.
Level 3: Unobservable inputs are used when little or no market data is available.
This hierarchy requires the Company to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value. The Company recognizes transfers between levels of the hierarchy based on the fair values of the respective financial measurements at the end of the reporting period in which the transfer occurred. There were no transfers between levels of the fair value hierarchy during the years ended December 31, 2018 and 2017.
The carrying amounts of the Company’s accounts receivable, accounts payable and accrued and other liabilities approximate their fair values due to their short maturities.
Goodwill
Goodwill
The Company conducts a goodwill impairment analysis annually in the fourth fiscal quarter, as of October 1, and as necessary if changes in facts and circumstances indicate that the fair value of the Company’s reporting units may be less than their carrying amounts. When indicators of impairment do not exist and certain accounting criteria are met, the Company is able to evaluate goodwill impairment using a qualitative approach. When necessary, the Company’s quantitative goodwill impairment test consists of two steps. The first step requires that the Company compare the estimated fair value of its reporting units to the carrying value of the reporting unit’s net assets, including goodwill. If the fair value of the reporting unit is greater than the carrying value of its net assets, goodwill is not considered to be impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value of its net assets, the Company would be required to complete the second step of the test by analyzing the fair value of its goodwill. If the carrying value of the goodwill exceeds its fair value, an impairment charge is recorded. The Company’s reporting units are determined based on its current reporting structure, which as of December 31, 2018 consisted of two reporting units. The Company found that no indicators of goodwill impairment existed during the year ended December 31, 2018, thus a qualitative approach was used and it was determined that no impairment existed for goodwill.
Foreign Currency Translation and Other Comprehensive Income
Foreign Currency Translation and Other Comprehensive Income
The functional currencies of Vivint Canada, Inc. and Vivint New Zealand, Ltd. are the Canadian and New Zealand dollars, respectively. Accordingly, assets and liabilities are translated from their respective functional currencies into U.S. dollars at period-end rates and revenue and expenses are translated at the weighted-average exchange rates for the period. Adjustments resulting from this translation process are classified as other comprehensive (loss) income and shown as a separate component of equity. During the year ended December 31, 2016, the Company completed the 2016 Contract Sales which included all contracts in the New Zealand, Ltd. entity. (See Note 10)
When intercompany foreign currency transactions between entities included in the consolidated financial statements are of a long term investment nature (i.e., those for which settlement is not planned or anticipated in the foreseeable future) foreign currency translation adjustments resulting from those transactions are included in stockholders’ (deficit) equity as accumulated other comprehensive loss or income. When intercompany transactions are deemed to be of a short term nature, translation adjustments are required to be included in the consolidated statement of operations. The Company has determined that settlement of Vivint Canada, Inc. and Vivint New Zealand, Ltd. intercompany balances are anticipated and therefore such balances are deemed to be of a short-term nature. Translation activity included in the statements of operations in other loss, net related to intercompany balances was a loss of $7.1 million for the year ended December 31, 2018, a gain of $4.9 million for the year ended December 31, 2017, and a gain of $2.1 million for the year ended December 31, 2016.
Letters of Credit
Letters of Credit
As of December 31, 2018 and 2017, the Company had $13.8 million and $9.5 million, respectively, of letters of credit issued in the ordinary course of business, all of which are undrawn.
New Accounting Pronouncements
Recent Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13, “Financial Instruments—Credit Losses (Topic 326),” which modifies the measurement of expected credit losses of certain financial instruments. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019 and must be applied using a modified-retrospective approach, with early adoption permitted. The Company is evaluating the adoption of ASU 2016-13 and plans to provide additional information about its expected impact at a future date.
In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” to increase transparency and comparability among organizations as it relates to lease assets and lease liabilities. The update requires that lease assets and lease liabilities be recognized on the balance sheet, and that key information about leasing arrangements be disclosed. Prior to this update, GAAP did not require operating leases to be recognized as lease assets and lease liabilities on the balance sheet. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In July 2018, the FASB issued ASU 2018-11 which provides companies the option to adopt using a modified retrospective approach or a prospective adoption approach.
The Company is continuing its evaluation of the impact of ASU 2016-02 on its accounting policies. The Company’s current operating lease portfolio is primarily comprised of network, real estate, and equipment leases. Upon adoption of this standard, the Company expects to record a right of use asset and liability related to all operating lease arrangements. The Company has assigned internal resources to perform the evaluation. Furthermore, the Company has made and will continue to make investments in systems to enable timely and accurate reporting under the new standard.
The Company expects the standard will have a material impact on the Company’s consolidated balance sheets but will not have a material impact on the consolidated statements of operations. The most significant impact will be the recognition of right of use assets and lease liabilities for operating leases. In connection with the adoption of the new lease accounting standard, the Company has completed scoping reviews and continues to make progress implementing new processes, systems, accounting policies and internal controls relevant to the standard. The Company will adopt this standard on January 1, 2019 using the prospective adoption approach and has elected to use the practical expedients allowed under the standard.
Recently Adopted Accounting Standards
ASU 2016-01
In January 2016, the FASB issued ASU 2016-01, "Financial Instruments-Overall (Subtopic 825-10)," which enhances the reporting model for financial instruments by addressing certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. Key provisions require equity investments (except those accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income (loss). In addition, the exit price notion must be used when measuring the fair value of financial instruments for disclosure purposes. The Company adopted ASU 2016-01 on January 1, 2018, with a cumulative-effect adjustment to increase accumulated deficit by $0.7 million for the net unrealized losses within accumulated other comprehensive income related to equity investments. During the year ended December 31, 2018, the Company recorded a net loss of $0.3 million, respectively, to other income associated with the change in fair value of equity investments.
ASU 2014-09
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605).” Under Topic 606, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, Topic 606 requires enhanced disclosures, including disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Topic 606 also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers, which requires the deferral of incremental costs of obtaining a contract with a customer. Collectively, the Company refers to Topic 606 and Subtopic 340-40 as the “new standard”.
The Company adopted the new standard as of January 1, 2018, utilizing the modified retrospective method of transition (the cumulative catch-up transition method). Adoption of the new standard resulted in changes to the accounting policies for revenue recognition, deferred revenue, and capitalized contract costs (formerly subscriber acquisition costs). The cumulative effect of applying the new standard to all contracts with customers that were not completed as of January 1, 2018 was recorded as an adjustment to accumulated deficit as of the adoption date. The comparative information has not been adjusted and continues to be reported under Topic 605. See Note 3 "Revenue and Capitalized Contract Costs" for additional information related to the impact of adopting this standard and a discussion of the Company's updated policies related to revenue recognition and accounting for costs to obtain and fulfill a customer contract.
v3.10.0.1
Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2018
Accounting Policies [Abstract]  
Changes in Company's Allowance for Accounts Receivable
The changes in the Company’s allowance for accounts receivable were as follows for the periods ended (in thousands):
 
 
Year ended December 31,
 
2018
 
2017
 
2016
Beginning balance
$
5,356

 
$
4,138

 
$
3,541

Provision for doubtful accounts
19,405

 
22,465

 
19,624

Write-offs and adjustments
(19,167
)
 
(21,247
)
 
(19,027
)
Balance at end of period
$
5,594

 
$
5,356

 
$
4,138

The following table summarizes the installment receivables (in thousands):
 
December 31, 2018
 
December 31, 2017
RIC receivables, gross
$
175,250

 
$
131,024

Deferred interest
(34,163
)
 
(36,048
)
RIC receivables, net of deferred interest
$
141,087

 
$
94,976

 
 
 
 
Classified on the consolidated balance sheets as:
 
 
 
Accounts and notes receivable, net
$
32,185

 
$
16,469

Long-term notes receivables and other assets, net
108,902

 
78,507

RIC receivables, net
$
141,087

 
$
94,976

Schedule Of Depreciation And Amortization Expense
The Company’s depreciation and amortization included in the consolidated statements of operations consisted of the following (in thousands):
 
Year ended December 31,
 
2018
 
2017
 
2016
Amortization of capitalized contract costs
$
398,174

 
$

 
$

Amortization of subscriber acquisition costs

 
206,153

 
154,877

Amortization of definite-lived intangibles
90,945

 
101,827

 
116,865

Depreciation of property, plant and equipment
24,963

 
21,275

 
16,800

Total depreciation and amortization
$
514,082

 
$
329,255

 
$
288,542

v3.10.0.1
Revenue and Capitalized Contract Costs (Tables)
12 Months Ended
Dec. 31, 2018
Revenue from Contract with Customer [Abstract]  
Schedule of New Accounting Pronouncement
The Company adopted Topic 606 using the modified retrospective method. The cumulative effect of applying the new standard to all contracts with subscribers that were not completed as of January 1, 2018 was recorded as an adjustment to accumulated deficit as of the adoption date. As a result of applying the modified retrospective method to adopt the new revenue guidance, the following cumulative catch-up adjustments were made to select consolidated balance sheet line items as of January 1, 2018 (in thousands):
Consolidated Balance Sheets
 
 
 
 
 
 
 
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

Deferred income tax liabilities
9,041

 
(5,641
)
 
3,400

Accumulated deficit
(1,358,571
)
 
(276,931
)
 
(1,635,502
)
The following tables compare the select reported consolidated balance sheets, statements of operations and cash flows line items to the amounts had the previous guidance been in effect (in thousands):
Consolidated Balance Sheets

 
 
 
December 31, 2018
 
As Reported
 
Balances Without Adoption of Topic 606
 
Effect of Change
Higher/(Lower)
Assets
 
 
 
 
 
Capitalized contract costs, net
$
1,115,775

 
$

 
$
1,115,775

Subscriber acquisition costs, net

 
1,518,188

 
(1,518,188
)
Liabilities and Stockholders' Deficit
 
 

 
 
Accrued expenses and other current liabilities
136,715

 
126,900

 
9,815

Deferred revenue
186,953

 
126,582

 
60,371

Deferred revenue, net of current portion
323,585

 
440,474

 
(116,889
)
Deferred income tax liabilities
1,096

 
8,682

 
(7,586
)
Accumulated deficit
(2,104,097
)
 
(1,754,426
)
 
(349,671
)
Accumulated other comprehensive loss
(28,837
)
 
(30,384
)
 
1,547

Consolidated Statements of Operations and Comprehensive Loss
 
 
 
Year ended December 31, 2018
 
As Reported
 
Balances Without Adoption of Topic 606
 
Effect of Change
Higher/(Lower)
Revenues:
 
 
 
 
 
Recurring and other revenue
$
1,050,441

 
$
950,661

 
$
99,780

Service and other sales revenue

 
46,177

 
(46,177
)
Activation fees

 
9,705

 
(9,705
)
Total revenues
1,050,441

 
1,006,543

 
43,898

Costs and expenses:
 
 

 
 
Operating expenses
355,813

 
385,672

 
(29,859
)
Depreciation and amortization
514,082

 
367,879

 
146,203

Loss from operations
(242,059
)
 
(169,613
)
 
(72,446
)
Income tax (benefit) expense
(1,611
)
 
806

 
(2,417
)
Net loss
(467,914
)
 
(397,885
)
 
(70,029
)
Other comprehensive loss, net of tax effects:
 
 

 
 
Foreign currency translation adjustment
(2,218
)
 
(3,765
)
 
1,547

Total other comprehensive (loss) income
(2,218
)
 
(3,765
)
 
1,547

Comprehensive loss
(470,132
)
 
(401,650
)
 
(68,482
)
Consolidated Statements of Cashflows

 
 
 
Year ended December 31, 2018
 
As Reported
 
Balances Without Adoption of Topic 606
 
Effect of Change
Higher/(Lower)
 
 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
 
Net loss
$
(467,914
)
 
$
(397,885
)
 
$
(70,029
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
 
Amortization of capitalized contract costs
398,174

 

 
398,174

Amortization of subscriber acquisition costs

 
251,971

 
(251,971
)
Changes in operating assets and liabilities:
 
 
 
 
 
Capitalized contract costs – deferred contract costs
(499,252
)
 

 
(499,252
)
Subscriber acquisition costs – deferred contract costs

 
(469,393
)
 
469,393

Accrued expenses and other current liabilities
91,469

 
93,886

 
(2,417
)
Deferred revenue
172,905

 
216,803

 
(43,898
)
Net cash used in operating activities
(220,499
)
 
(220,499
)
 

v3.10.0.1
Retail Installment Contract Receivables (Tables)
12 Months Ended
Dec. 31, 2018
Receivables [Abstract]  
Changes in Company's Allowance for Accounts Receivable
The changes in the Company’s allowance for accounts receivable were as follows for the periods ended (in thousands):
 
 
Year ended December 31,
 
2018
 
2017
 
2016
Beginning balance
$
5,356

 
$
4,138

 
$
3,541

Provision for doubtful accounts
19,405

 
22,465

 
19,624

Write-offs and adjustments
(19,167
)
 
(21,247
)
 
(19,027
)
Balance at end of period
$
5,594

 
$
5,356

 
$
4,138

The following table summarizes the installment receivables (in thousands):
 
December 31, 2018
 
December 31, 2017
RIC receivables, gross
$
175,250

 
$
131,024

Deferred interest
(34,163
)
 
(36,048
)
RIC receivables, net of deferred interest
$
141,087

 
$
94,976

 
 
 
 
Classified on the consolidated balance sheets as:
 
 
 
Accounts and notes receivable, net
$
32,185

 
$
16,469

Long-term notes receivables and other assets, net
108,902

 
78,507

RIC receivables, net
$
141,087

 
$
94,976

Allowance for Credit Losses on Financing Receivables
Activity in the deferred interest for the RIC receivables was as follows (in thousands):
 
For the Years Ended
 
December 31, 2018
 
December 31, 2017
Deferred interest, beginning of period
$
36,048

 
$

Write-offs, net of recoveries
(26,360
)
 
(6,055
)
Change in deferred interest on short-term and long-term RIC receivables
24,475

 
42,103

Deferred interest, end of period
$
34,163

 
$
36,048

v3.10.0.1
Long-Term Debt (Tables)
12 Months Ended
Dec. 31, 2018
Debt Disclosure [Abstract]  
Schedule Of Other Expense And Loss On Extinguishment And Deferred Financing Costs
In accordance with ASC 470-50 Debt – Modifications and Extinguishments, the Company performed analyses for the September 2018, August 2017 and February 2017 issuances to determine if the notes repurchased with the proceeds from those issuances were substantially different than the notes issued to determine the appropriate accounting treatment of associated issuance fees. As a result of these analyses, the Company recorded the following amounts of other expense and loss on extinguishment and deferred financing costs during the years ended December 31, 2018, 2017 and 2016 (in thousands):

 
Other expense and loss on extinguishment
 
Deferred financing costs
Issuance
Original premium extinguished
 
Previously deferred financing costs extinguished
 
New financing costs
 
Total other expense and loss on extinguishment
 
Previously deferred financing rolled over
 
New deferred financing costs
 
Total deferred financing costs
For the year ended December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
September 2018 issuance
$
(953
)
 
$
4,207

 
$
11,317

 
$
14,571

 
$

 
$
10,275

 
$
10,275

 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the year ended December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
August 2017 issuance
$

 
$
1,408

 
$
8,881

 
$
10,289

 
$
473

 
$
4,569

 
$
5,042

February 2017 issuance

 
3,259

 
9,491

 
12,750

 
1,476

 
6,076

 
7,552

Total
$

 
$
4,667

 
$
18,372

 
$
23,039

 
$
1,949

 
$
10,645

 
$
12,594

 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the year ended December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
May 2016 issuance
$
355

 
$
695

 
$
9,036

 
$
10,086

 
$
3,423

 
$
6,628

 
$
10,051

Schedule of Deferred Financing Activity
The following table presents deferred financing activity for the year ended December 31, 2018 and 2017 (in thousands):

 
Unamortized Deferred Financing Costs
 
Balance 12/31/2017
 
Additions
 
Refinances
 
Early Extinguishment
 
Amortized
 
Balance 12/31/2018
Revolving Credit Facility
$
3,099

 
$

 
$

 
$

 
$
(1,041
)
 
$
2,058

2019 Notes
2,877

 

 

 
(1,877
)
 
(1,000
)
 

2020 Notes
11,209

 

 

 
(2,330
)
 
(3,499
)
 
5,380

2022 Private Placement Notes
752

 

 

 

 
(150
)
 
602

2022 Notes
16,067

 

 

 

 
(3,268
)
 
12,799

2023 Notes
4,762

 

 

 

 
(840
)
 
3,922

Term Loan

 
10,275

 

 

 
(613
)
 
9,662

Total Deferred Financing Costs
$
38,766

 
$
10,275

 
$

 
$
(4,207
)
 
$
(10,411
)
 
$
34,423



 
Unamortized Deferred Financing Costs
 
Balance 12/31/2016
 
Additions
 
Refinances
 
Early Extinguishment
 
Amortized
 
Balance 12/31/2017
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

Summary of Debt
The Company’s debt at December 31, 2018 and 2017 consisted of the following (in thousands):
 
 
December 31, 2018
 
Outstanding
Principal
 
Unamortized
Premium
(Discount)
 
Unamortized Deferred Financing Costs (1)
 
Net Carrying
Amount
8.75% Senior Notes due 2020
$
679,299

 
$
2,230

 
$
(5,380
)
 
$
676,149

8.875% Senior Secured Notes Due 2022
270,000

 
(2,122
)
 
(602
)
 
267,276

7.875% Senior Secured Notes Due 2022
900,000

 
20,178

 
(12,799
)
 
907,379

7.625% Senior Notes Due 2023
400,000

 

 
(3,922
)
 
396,078

Term Loan - noncurrent
799,875

 

 
(9,662
)
 
790,213

Total Long-Term Debt
3,049,174

 
20,286

 
(32,365
)
 
3,037,095

Term Loan - current
8,100

 

 

 
8,100

Total Debt
$
3,057,274

 
$
20,286

 
$
(32,365
)
 
$
3,045,195

 
 
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 Notes Due 2023
400,000

 

 
(4,762
)
 
395,238

Total 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 consolidated balance sheets at December 31, 2018 and 2017 was $2.1 million and $3.1 million, respectively.
v3.10.0.1
Balance Sheet Components (Tables)
12 Months Ended
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Balance Sheet Component Balances
The following table presents material balance sheet component balances as of December 31, 2018 and December 31, 2017 (in thousands):
 
 
December 31,
 
2018
 
2017
Prepaid expenses and other current assets
 
 
 
Prepaid expenses
$
7,183

 
$
8,000

Deposits
904

 
1,596

Other
3,362

 
6,554

Total prepaid expenses and other current assets
$
11,449

 
$
16,150

Capitalized contract costs
 
Capitalized contract costs
$
2,361,795

 
$

Accumulated amortization
(1,246,020
)
 

Capitalized contract costs, net
$
1,115,775

 
$

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
$
143,065

 
$
114,556

RIC deferred interest
(34,164
)
 
(36,049
)
Security deposits
6,586

 
6,427

Investments
3,865

 
3,429

Other
467

 
360

Total long-term notes receivables and other assets, net
$
119,819

 
$
88,723

Accrued payroll and commissions
 
Accrued payroll
$
36,753

 
$
30,267

Accrued commissions
28,726

 
27,485

Total accrued payroll and commissions
$
65,479

 
$
57,752

Accrued expenses and other current liabilities
 
Accrued interest payable
$
28,885

 
$
28,737

Current portion of derivative liability
67,710

 
25,473

Service warranty accrual
8,813

 

Current portion of notes payable
8,100

 

Blackstone monitoring fee, a related party
4,793

 
933

Accrued taxes
5,351

 
4,585

Spectrum license obligation

 
3,861

Accrued payroll taxes and withholdings
5,097

 
3,185

Loss contingencies
3,131

 
2,156

Other
4,835

 
5,391

Total accrued expenses and other current liabilities
$
136,715

 
$
74,321

v3.10.0.1
Property Plant and Equipment (Tables)
12 Months Ended
Dec. 31, 2018
Property, Plant and Equipment [Abstract]  
Components of Property and Equipment
Property, plant and equipment consisted of the following (in thousands):
 
December 31,
 
Estimated
Useful Lives
 
2018
 
2017
 
Vehicles
$
45,050

 
$
42,008

 
3-5 years
Computer equipment and software
53,891

 
46,651

 
3-5 years
Leasehold improvements
26,401

 
20,783

 
2-15 years
Office furniture, fixtures and equipment
19,532

 
17,202

 
7 years
Build-to-suit lease building
8,247

 
8,268

 
10.5 years
Construction in process
2,975

 
4,299

 
 
Property, plant and equipment, gross
156,096

 
139,211

 
 
Accumulated depreciation and amortization
(82,695
)
 
(61,130
)
 
 
Property, plant and equipment, net
$
73,401

 
$
78,081

 
 
v3.10.0.1
Goodwill and Intangible Assets (Tables)
12 Months Ended
Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Changes in Carrying Amount of Goodwill
The changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017, were as follows (in thousands):
 
 
 
Balance as of January 1, 2017
$
835,233

Effect of Foreign Currency Translation
1,737

Balance as of December 31, 2017
836,970

Effect of Foreign Currency Translation
(2,115
)
Balance as of December 31, 2018
$
834,855

Schedule of Intangible Asset Balances
The following table presents intangible asset balances as of December 31, 2018 and 2017 (in thousands):

 
December 31, 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
$
964,100

 
$
(717,648
)
 
$
246,452

 
$
970,147

 
$
(637,780
)
 
$
332,367

 
10 years
2GIG 2.0 technology
17,000

 
(15,292
)
 
1,708

 
17,000

 
(13,274
)
 
3,726

 
8 years
Other technology
2,917

 
(1,667
)
 
1,250

 
2,917

 
(1,250
)
 
1,667

 
5 - 7 years
Space Monkey technology
7,100

 
(5,756
)
 
1,344

 
7,100

 
(4,066
)
 
3,034

 
6 years
Patents
12,123

 
(8,415
)
 
3,708

 
10,616

 
(5,835
)
 
4,781

 
5 years
Total definite-lived intangible assets:
1,003,240

 
(748,778
)
 
254,462

 
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
$
1,003,863

 
$
(748,778
)
 
$
255,085

 
$
1,039,656


$
(662,205
)
 
$
377,451

 
 
Schedule of Estimated Future Amortization Expense of Intangible Assets Excluding Patents Currently in Process
Estimated future amortization expense of intangible assets, excluding approximately $0.3 million in patents currently in process, is as follows as of December 31, 2018 (in thousands):
 
 
 
2019
$
79,062

2020
67,807

2021
58,578

2022
48,674

2023
47

Thereafter
11

Total estimated amortization expense
$
254,179

v3.10.0.1
Financial Instruments (Tables)
12 Months Ended
Dec. 31, 2018
Fair Value Disclosures [Abstract]  
Financial Instruments at Fair Value Based on Valuation Approach Applied to Each Class of Security
The following tables set forth the Company’s cash and cash equivalents and Corporate Securities’ adjusted cost, gross unrealized gains, gross unrealized losses, gross realized gains, gross realized losses and fair value by significant investment category recorded as cash and cash equivalents or long-term notes receivables and other assets, net as of December 31, 2018 and 2017 (in thousands):
 
December 31, 2018
 
Adjusted Cost
 
Unrealized Gains
 
Unrealized Losses
 
Fair Value
 
Cash and Cash Equivalents
 
Long-Term Notes Receivables and Other Assets, net
Cash
$
6,681

 
$

 
$

 
$
6,681

 
$
6,681

 
$

 
 
 
 
 
 
 
 
 
 
 
 
Level 1:
 
 
 
 
 
 
 
 
 
 
 
Money market funds
6,092

 

 

 
6,092

 
6,092

 

Corporate securities
3,485

 

 
(304
)
 
3,181

 

 
3,181

Subtotal
9,577

 

 
(304
)
 
9,273

 
6,092

 
3,181

 
 
 
 
 
 
 
 
 
 
 
 
Total
$
16,258

 
$

 
$
(304
)
 
$
15,954

 
$
12,773

 
$
3,181


 
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

Components of Long-Term Debt Including Associated Interest Rates and Related Fair Values
Components of the Company's debt including the associated interest rates and related fair values (in thousands, except interest rates) are as follows:
 
Issuance
 
December 31, 2018
 
December 31, 2017
 
Stated Interest
Rate
 
Face Value
 
Estimated Fair Value
 
Face Value
 
Estimated Fair Value
 
2019 Notes
 
$

 
$

 
$
269,465

 
$
273,507

 
6.375
%
2020 Notes
 
679,299

 
643,568

 
930,000

 
952,134

 
8.75
%
2022 Notes Private Placement Notes
 
270,000

 
257,073

 
270,000

 
276,486

 
8.875
%
2022 Notes
 
900,000

 
855,000

 
900,000

 
966,420

 
7.875
%
2023 Notes
 
400,000

 
326,000

 
400,000

 
425,000

 
7.625
%
Term Loan
 
807,975

 
807,975

 

 

 
N/A

Total
 
$
3,057,274

 
$
2,889,616

 
$
2,769,465

 
$
2,893,547

 


Schedule of Derivative Liabilities at Fair Value
The following table summarizes the fair value and the notional amount of the Company’s outstanding derivative instrument as of December 31, 2018 and 2017 (in thousands):
 
December 31,
 
2018
 
2017
Consumer Financing Program Contractual Obligations:
 
 
 
Fair value
$
117,620

 
$
46,496

Notional amount
368,708

 
163,032

Classified on the consolidated balance sheets as:
 
 
 
Accrued expenses and other current liabilities
67,710

 
25,473

Other long-term obligations
49,910

 
21,023

Total Consumer Financing Program Contractual Obligation
$
117,620

 
$
46,496

Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation
The following table summarizes the change in the fair value of the Level 3 outstanding derivative instrument for the years ended December 31, 2018 and 2017 (in thousands):
 
December 31,
 
2018
 
2017
Balance, beginning of period
$
46,496

 
$

Additions
93,095

 
44,913

Settlements
(34,587
)
 
(7,972
)
Losses included in earnings
12,616

 
9,555

Balance, end of period
$
117,620

 
$
46,496

v3.10.0.1
Restructuring and Asset Impairment Charges (Tables)
12 Months Ended
Dec. 31, 2018
Restructuring and Related Activities [Abstract]  
Schedule of Restructuring and Asset Impairment Charges
Restructuring and asset impairment charges were as follows (in thousands):
 
 
Year ended December 31,
 
2018
 
2017
 
2016
Wireless restructuring recoveries:
 
 
 
 
 
Asset recoveries
$

 
$

 
$
(710
)
Contract termination recoveries

 

 
(751
)
Employee severance and termination benefits recoveries

 

 
(77
)
Total wireless restructuring recoveries

 

 
(1,538
)
Loss on subscriber contract sales

 

 
2,551

Employee severance and termination benefits charges
4,683

 

 

Total restructuring and asset impairment charges
$
4,683

 
$

 
$
1,013

Summary of Restructuring Activity
The following table presents accrued restructuring activity for the years ended December 31, 2018 and 2017.
 
Asset impairments
 
Contract
termination costs
 
Employee severance and
termination benefits
 
Total
Accrued restructuring balance as of December 31, 2015
$

 
$
3,954

 
$
321

 
$
4,275

Restructuring and impairment recoveries
(710
)
 
(751
)
 
(77
)
 
(1,538
)
Cash payments

 
(2,554
)
 
(244
)
 
(2,798
)
Non-cash settlements
710

 

 

 
710

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 expenses

 

 
4,683

 
4,683

Cash payments

 
(91
)
 
(4,341
)
 
(4,432
)
Accrued restructuring balance as of December 31, 2018
$

 
$
467

 
$
342

 
$
809

v3.10.0.1
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2018
Income Tax Disclosure [Abstract]  
Income Tax Provision
The income tax (benefit) expense consisted of the following (in thousands):
 
 
Year ended December 31,
 
2018
 
2017
 
2016
Current income tax:
 
 
 
Federal
$

 
$

 
$

State
512

 
151

 
545

Foreign
(52
)
 
(24
)
 
95

Total
460

 
127

 
640

Deferred income tax:
 
 
 
Federal

 
(326
)
 

State

 
(53
)
 

Foreign
(2,071
)
 
1,330

 
(573
)
Total
(2,071
)
 
951

 
(573
)
Income tax (benefit) expense
$
(1,611
)
 
$
1,078

 
$
67

Reconciliation of Tax Expense Computed at Statutory Federal Rate and Company's Tax Expense
The following reconciles the tax expense computed at the statutory federal rate and the Company’s tax expense (in thousands):
 
 
Year ended December 31,
 
2018
 
2017
 
2016
Computed expected tax expense
$
(98,598
)
 
$
(139,100
)
 
$
(93,770
)
State income taxes, net of federal tax effect
404

 
65

 
360

Foreign income taxes
(690
)
 
(299
)
 
(949
)
Other reconciling items

 
(344
)
 
666

Permanent differences
4,406

 
2,008

 
1,688

Effect of Federal law change

 
166,876

 

Change in valuation allowance
92,867

 
(28,128
)
 
92,072

Income tax (benefit) expense
$
(1,611
)
 
$
1,078

 
$
67

Significant Portions of Deferred Tax Assets and Liabilities
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities were as follows (in thousands) 
 
December 31,
 
2018
 
2017
Gross deferred tax assets:
 
Net operating loss carryforwards
$
591,244

 
$
591,619

Deferred subscriber income
113,103

 
72,389

Interest expense limitation
56,381

 

Accrued expenses and allowances
18,766

 
17,633

Purchased intangibles and deferred financing costs
17,788

 
15,191

Inventory reserves
4,688

 
6,662

Property and equipment

 
1,176

Research and development credits
41

 
41

Valuation allowance
(467,705
)
 
(304,509
)
Total
334,306

 
400,202

Gross deferred tax liabilities:
 
Deferred capitalized contract costs
(332,547
)
 
(408,610
)
Property and equipment
(2,242
)
 

Prepaid expenses
(613
)
 
(633
)
Total
(335,402
)
 
(409,243
)
Net deferred tax liabilities
$
(1,096
)
 
$
(9,041
)
Summary of Net Operating Loss Carryforwards
The Company had net operating loss carryforwards as follows (in thousands):
 
 
December 31,
 
2018
 
2017
Net operating loss carryforwards:
 
 
 
Federal
$
2,405,380

 
$
2,355,153

States
1,656,333

 
1,715,004

Canada
19,753

 
27,326

Total
$
4,081,466

 
$
4,097,483

v3.10.0.1
Stock-Based Compensation and Equity (Tables)
12 Months Ended
Dec. 31, 2018
Summary of Incentive Unit Activity
A summary of the Incentive Unit activity for the years ended December 31, 2018 and 2017 is presented below:
 
 
Incentive Units
 
Weighted Average
Exercise Price
Per Share
 
Weighted Average
Remaining
Contractual
Life (Years)
 
Aggregate
Intrinsic Value
Outstanding, December 31, 2016
85,882,836

 
$
1.19

 
6.81
 
$

Forfeited
(70,000
)
 
1.30

 
 
 
 
Outstanding, December 31, 2017
85,812,836

 
1.19

 
5.81
 

Forfeited
(450,000
)
 
1.93

 
 
 
 
Outstanding, December 31, 2018
85,362,836

 
1.18

 
4.81
 

Unvested shares expected to vest after December 31, 2018
59,663,659

 
1.22

 
4.93
 

Exercisable at December 31, 2018
25,699,177

 
$
1.11

 
4.50
 
$

Stock-Based Compensation Expense
Stock-based compensation expense in connection with all stock-based awards for the years ended December 31, 2018, 2017 and 2016 is allocated as follows (in thousands):
 
Year ended December 31,
 
2018
 
2017
 
2016
Operating expenses
$
129

 
$
65

 
$
68

Selling expenses
285

 
217

 
(127
)
General and administrative expenses
2,091

 
1,313

 
3,927

Total stock-based compensation
$
2,505

 
$
1,595

 
$
3,868

Vivint Stock Appreciation Rights  
Summary of the SAR Activity
A summary of the Vivint Group SAR activity for the years ended December 31, 2018 and 2017 is presented below:
 
 
Stock Appreciation
Rights
 
Weighted Average
Exercise Price
Per Share
 
Weighted Average
Remaining
Contractual
Life (Years)
 
Aggregate
Intrinsic Value
Outstanding, December 31, 2016
21,993,158

 
$
0.96

 
8.23
 
$

Granted
13,250,640

 
1.74

 
 
 
 
Forfeited
(2,374,864
)
 
1.12

 
 
 
 
Exercised
(114,644
)
 
0.72

 
 
 
 
Outstanding, December 31, 2017
32,754,290

 
1.26

 
9.21
 

Granted
14,630,000

 
1.79

 
 
 
 
Forfeited
(9,255,137
)
 
1.31

 
 
 
 
Exercised
(117,274
)
 
0.89

 
 
 
 
Outstanding, December 31, 2018
38,011,879

 
1.46

 
8.07
 

Unvested shares expected to vest after December 31, 2018
33,813,668

 
1.51

 
8.28
 

Exercisable at December 31, 2018
4,198,211

 
$
1.02

 
6.30
 
$

v3.10.0.1
Commitments and Contingencies (Tables)
12 Months Ended
Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]  
Future Minimum Lease Payments
As of December 31, 2018, future minimum lease payments were as follows (in thousands):
 
 
Operating
 
Capital
 
Total
2019
$
16,709

 
$
8,193

 
$
24,902

2020
15,478

 
5,209

 
20,687

2021
14,926

 
363

 
15,289

2022
13,655

 
7

 
13,662

2023
13,701

 

 
13,701

Thereafter
28,824

 

 
28,824

Amounts representing interest

 
(459
)
 
(459
)
Total lease payments
$
103,293

 
$
13,313

 
$
116,606

v3.10.0.1
Segment Reporting and Business Concentrations (Tables)
12 Months Ended
Dec. 31, 2018
Segment Reporting [Abstract]  
Revenues and Long-Lived Assets by Geographic Region
Revenues by geographic region were as follows (in thousands):

 
United States
 
Canada
 
Total
Revenue from external customers
 
 
 
 
 
Year ended December 31, 2018
$
977,877

 
$
72,564

 
$
1,050,441

Year ended December 31, 2017
$
816,026

 
$
65,957

 
$
881,983

Year ended December 31, 2016
$
700,471

 
$
57,436

 
$
757,907

v3.10.0.1
Guarantor and Non-Guarantor Supplemental Financial Information (Tables)
12 Months Ended
Dec. 31, 2018
Guarantor And Non Guarantor Supplemental Financial Information [Abstract]  
Condensed Consolidating Balance Sheet
Condensed Consolidating Balance Sheet
December 31, 2018
(In thousands)
 
 
Parent
 
APX
Group, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
 
 
Current assets
$

 
$
12,951

 
$
269,770

 
$
103,451

 
$
(262,674
)
 
$
123,498

Property and equipment, net

 

 
72,937

 
464

 

 
73,401

Capitalized contract costs, net

 

 
1,047,532

 
68,243

 

 
1,115,775

Deferred financing costs, net

 
2,058

 

 

 

 
2,058

Investment in subsidiaries

 
1,662,367

 

 

 
(1,662,367
)
 

Intercompany receivable

 

 
6,303

 

 
(6,303
)
 

Intangible assets, net

 

 
236,677

 
18,408

 

 
255,085

Goodwill

 

 
809,678

 
25,177

 

 
834,855

Long-term notes receivables and other assets, net

 
106

 
102,695

 
17,124

 
(106
)
 
119,819

Total Assets
$

 
$
1,677,482

 
$
2,545,592

 
$
232,867

 
$
(1,931,450
)
 
$
2,524,491

Liabilities and Stockholders’ (Deficit) Equity
 
 
 
 
 
 
 
 
 
 
 
Current liabilities
$

 
$
36,988

 
$
507,063

 
$
182,159

 
$
(262,674
)
 
$
463,536

Intercompany payable

 

 

 
6,303

 
(6,303
)
 

Notes payable and revolving line of credit, net of current portion

 
3,037,095

 

 

 

 
3,037,095

Capital lease obligations, net of current portion

 

 
5,570

 
1

 

 
5,571

Deferred revenue, net of current portion

 

 
306,653

 
16,932

 

 
323,585

Accumulated losses of investee
1,396,601

 


 


 


 
(1,396,601
)
 

Other long-term obligations

 

 
90,209

 

 

 
90,209

Deferred income tax liability

 

 
106

 
1,096

 
(106
)
 
1,096

Total (deficit) equity
(1,396,601
)
 
(1,396,601
)
 
1,635,991

 
26,376

 
(265,766
)
 
(1,396,601
)
Total liabilities and stockholders’ (deficit) equity
$

 
$
1,677,482

 
$
2,545,592

 
$
232,867

 
$
(1,931,450
)
 
$
2,524,491

















Condensed Consolidating Balance Sheet
December 31, 2017
(In thousands)
 
 
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 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, net

 
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 line of credit, 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
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

Condensed Consolidating Statements of Operations and Comprehensive Loss
Condensed Consolidating Statements of Operations and Comprehensive Loss
For the Year ended December 31, 2018
(In thousands)
 
 
Parent
 
APX
Group, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Revenues
$

 
$

 
$
998,190

 
$
54,818

 
$
(2,567
)
 
$
1,050,441

Costs and expenses

 

 
1,240,570

 
54,497

 
(2,567
)
 
1,292,500

(Loss) income from operations

 

 
(242,380
)
 
321

 

 
(242,059
)
Loss from subsidiaries
(467,914
)
 
(211,665
)
 

 

 
679,579

 

Other expense (income), net

 
256,249

 
(35,936
)
 
7,153

 

 
227,466

Loss before income taxes
(467,914
)
 
(467,914
)
 
(206,444
)
 
(6,832
)
 
679,579

 
(469,525
)
Income tax expense (benefit)

 

 
512

 
(2,123
)
 

 
(1,611
)
Net loss
$
(467,914
)
 
$
(467,914
)
 
$
(206,956
)
 
$
(4,709
)
 
$
679,579

 
$
(467,914
)
Other comprehensive loss, net of tax effects:
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment
(2,218
)
 
(2,218
)
 

 
(2,218
)
 
4,436

 
(2,218
)
Total other comprehensive loss, net of tax effects
(2,218
)
 
(2,218
)
 

 
(2,218
)
 
4,436

 
(2,218
)
Comprehensive loss
$
(470,132
)
 
$
(470,132
)

$
(206,956
)
 
$
(6,927
)
 
$
684,015

 
$
(470,132
)


Condensed Consolidating Statements of Operations and Comprehensive Loss
For the Year ended December 31, 2017
(In thousands)
 
 
Parent
 
APX
Group, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Revenues
$

 
$

 
$
841,658

 
$
43,015

 
$
(2,690
)
 
$
881,983

Costs and expenses

 

 
997,247

 
42,919

 
(2,690
)
 
1,037,476

(Loss) income from operations

 

 
(155,589
)
 
96

 

 
(155,493
)
Loss from subsidiaries
(410,199
)
 
(165,497
)
 

 

 
575,696

 

Other expense (income), net

 
244,702

 
13,545

 
(4,619
)
 

 
253,628

(Loss) income before income taxes
(410,199
)
 
(410,199
)
 
(169,134
)
 
4,715

 
575,696

 
(409,121
)
Income tax expense (benefit)

 

 
(228
)
 
1,306

 

 
1,078

Net (loss) income
$
(410,199
)
 
$
(410,199
)
 
$
(168,906
)
 
$
3,409

 
$
575,696

 
$
(410,199
)
Other comprehensive income (loss), net of tax effects:
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment
3,155

 
3,155

 

 
3,155

 
(6,310
)
 
3,155

Unrealized gain on marketable securities
(1,693
)
 
(1,693
)
 
(1,693
)
 

 
3,386

 
(1,693
)
Total other comprehensive income (loss), net of tax effects
1,462

 
1,462

 
(1,693
)
 
3,155

 
(2,924
)
 
1,462

Comprehensive (loss) income
$
(408,737
)
 
$
(408,737
)
 
$
(170,599
)
 
$
6,564

 
$
572,772

 
$
(408,737
)


Condensed Consolidating Statements of Operations and Comprehensive Loss
For the Year ended December 31, 2016
(In thousands)
 
 
Parent
 
APX
Group, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Revenues
$

 
$

 
$
715,072

 
$
45,539

 
$
(2,704
)
 
$
757,907

Costs and expenses

 

 
787,138

 
44,575

 
(2,704
)
 
829,009

(Loss) income from operations

 

 
(72,066
)
 
964

 

 
(71,102
)
Loss from subsidiaries
(275,957
)
 
(69,637
)
 

 

 
345,594

 

Other expense (income), net

 
206,320

 
(1,207
)
 
(325
)
 

 
204,788

Loss before income taxes
(275,957
)
 
(275,957
)
 
(70,859
)
 
1,289

 
345,594

 
(275,890
)
Income tax expense (benefit)

 

 
545

 
(478
)
 

 
67

Net (loss) income
$
(275,957
)
 
$
(275,957
)
 
$
(71,404
)
 
$
1,767

 
$
345,594

 
$
(275,957
)
Other comprehensive income, net of tax effects:
 
 
 
 
 
 
 
 
 
 

Foreign currency translation adjustment
2,482

 
2,482

 

 
2,482

 
(4,964
)
 
2,482

Unrealized gain on marketable securities
1,011

 
1,011

 
1,011

 

 
(2,022
)
 
1,011

Total other comprehensive income, net of tax effects
3,493

 
3,493

 
1,011

 
2,482

 
(6,986
)
 
3,493

Comprehensive loss
$
(272,464
)
 
$
(272,464
)
 
$
(70,393
)
 
$
4,249

 
$
338,608

 
$
(272,464
)
Condensed Consolidating Statements of Cash Flows
Condensed Consolidating Statements of Cash Flows
For the Year ended December 31, 2018
(In thousands)
 
 
Parent
 
APX
Group, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by operating activities
$

 
$

 
$
(220,952
)
 
$
453

 
$

 
$
(220,499
)
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures

 

 
(19,409
)
 
(3
)
 

 
(19,412
)
Proceeds from sale of intangibles

 

 
53,693

 

 

 
53,693

Proceeds from sale of capital assets

 

 
127

 

 

 
127

Investment in subsidiary
(1,571
)
 
(201,292
)
 

 

 
202,863

 

Acquisition of intangible assets

 

 
(1,486
)
 

 

 
(1,486
)
Net cash (used in) provided by investing activities
(1,571
)
 
(201,292
)
 
32,925

 
(3
)
 
202,863

 
32,922

Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
Proceeds from notes payable

 
810,000

 

 

 

 
810,000

Repayment on notes payable

 
(522,191
)
 

 

 

 
(522,191
)
Borrowings from revolving line of credit

 
201,000

 

 

 

 
201,000

Repayment of revolving line of credit

 
(261,000
)
 

 

 

 
(261,000
)
Proceeds from capital contribution
4,700

 
4,700

 
204,421

 

 
(209,121
)
 
4,700

Repayments of capital lease obligations

 

 
(12,011
)
 
(343
)
 

 
(12,354
)
Financing costs

 
(11,317
)
 

 

 

 
(11,317
)
Deferred financing costs

 
(9,302
)
 

 

 

 
(9,302
)
Return of capital
(3,129
)
 
(3,129
)
 
(3,129
)
 

 
6,258

 
(3,129
)
Net cash provided by (used in) financing activities
1,571

 
208,761

 
189,281

 
(343
)
 
(202,863
)
 
196,407

Effect of exchange rate changes on cash

 

 

 
71

 

 
71

Net increase in cash

 
7,469

 
1,254

 
178

 

 
8,901

Cash:
 
 
 
 
 
 
 
 
 
 
 
Beginning of period

 
3,661

 
(572
)
 
783

 

 
3,872

End of period
$

 
$
11,130

 
$
682

 
$
961

 
$

 
$
12,773


Condensed Consolidating Statements of Cash Flows
For the Year ended December 31, 2017
(In thousands)
 
Parent
 
APX
Group, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by operating activities
$

 
$

 
$
(313,290
)
 
$
3,958

 
$

 
$
(309,332
)
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures

 

 
(20,391
)
 

 

 
(20,391
)
Proceeds from sale of capital assets

 

 
776

 

 

 
776

Investment in subsidiary
1,151

 
(325,222
)
 

 

 
324,071

 

Acquisition of intangible assets

 

 
(1,745
)
 

 

 
(1,745
)
Other assets

 

 
(301
)
 

 

 
(301
)
Net cash provided by (used in) investing activities
1,151

 
(325,222
)
 
(21,661
)
 

 
324,071

 
(21,661
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
Proceeds from notes payable

 
724,750

 

 

 

 
724,750

Repayment on notes payable

 
(450,000
)
 

 

 

 
(450,000
)
Borrowings from revolving line of credit

 
196,895

 

 

 

 
196,895

Repayment of revolving line of credit

 
(136,895
)
 

 

 

 
(136,895
)
Proceeds from capital contribution

 

 
326,373

 

 
(326,373
)
 

Payment of intercompany settlement

 

 
(2,983
)
 

 

 
(2,983
)
Intercompany receivable

 
 
 
3,621

 

 
(3,621
)
 

Intercompany payable

 

 

 
(3,621
)
 
3,621

 

Repayments of capital lease obligations

 

 
(9,667
)
 
(340
)
 

 
(10,007
)
Financing costs

 
(18,277
)
 

 

 

 
(18,277
)
Deferred financing costs

 
(11,119
)
 

 

 

 
(11,119
)
Return of capital
(1,151
)
 
(1,151
)
 
(1,151
)
 

 
2,302

 
(1,151
)
Net cash (used in) provided by financing activities
(1,151
)
 
304,203

 
316,193

 
(3,961
)
 
(324,071
)
 
291,213

Effect of exchange rate changes on cash

 

 

 
132

 

 
132

Net increase (decrease) in cash

 
(21,019
)
 
(18,758
)
 
129

 

 
(39,648
)
Cash:
 
 
 
 
 
 
 
 
 
 
 
Beginning of period

 
24,680

 
18,186

 
654

 

 
43,520

End of period
$

 
$
3,661

 
$
(572
)
 
$
783

 
$

 
$
3,872


Condensed Consolidating Statements of Cash Flows
For the Year ended December 31, 2016
(In thousands)
 
 
Parent
 
APX
Group, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by operating activities
$

 
$

 
$
(380,508
)
 
$
14,802

 
$

 
$
(365,706
)
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
Subscriber acquisition costs – company owned equipment

 

 
(5,243
)
 

 

 
(5,243
)
Capital expenditures

 

 
(11,642
)
 

 

 
(11,642
)
Proceeds from sale of capital assets

 

 
3,080

 
43

 

 
3,123

Investment in subsidiary
(100,407
)
 
(408,214
)
 

 

 
508,621

 

Acquisition of intangible assets

 

 
(1,385
)
 

 

 
(1,385
)
Net cash used in investing activities
(100,407
)
 
(408,214
)
 
(15,190
)
 
43

 
508,621

 
(15,147
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
Proceeds from notes payable

 
604,000

 

 

 

 
604,000

Repayment on notes payable

 
(235,535
)
 

 

 

 
(235,535
)
Borrowings from revolving line of credit

 
57,000

 

 

 

 
57,000

Repayment of revolving line of credit

 
(77,000
)
 

 

 

 
(77,000
)
Proceeds from capital contribution
100,407

 
100,407

 

 

 
(100,407
)
 
100,407

Payment of intercompany settlement

 

 
3,000

 
(3,000
)
 

 

Intercompany receivable

 

 
12,906

 

 
(12,906
)
 

Intercompany payable

 

 
408,214

 
(12,906
)
 
(395,308
)
 

Repayments of capital lease obligations

 

 
(8,295
)
 
(20
)
 

 
(8,315
)
Financing costs

 
(9,036
)
 

 

 

 
(9,036
)
Deferred financing costs

 
(9,241
)
 

 

 

 
(9,241
)
Net cash provided by (used in) financing activities
100,407

 
430,595

 
415,825

 
(15,926
)
 
(508,621
)
 
422,280

Effect of exchange rate changes on cash

 

 

 
(466
)
 

 
(466
)
Net increase (decrease) in cash

 
22,381

 
20,127

 
(1,547
)
 

 
40,961

Cash:
 
 
 
 
 
 
 
 
 
 
 
Beginning of period

 
2,299

 
(1,941
)
 
2,201

 

 
2,559

End of period
$

 
$
24,680

 
$
18,186

 
$
654

 
$

 
$
43,520

v3.10.0.1
Significant Accounting Policies - Additional Information (Detail)
12 Months Ended
Dec. 31, 2018
USD ($)
payment
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
Jan. 01, 2018
USD ($)
Dec. 31, 2015
USD ($)
Basis Of Presentation And Significant Accounting Policies [Line Items]          
Accounts receivable $ 16,500,000 $ 24,300,000      
Allowance for doubtful accounts 5,594,000 5,356,000 $ 4,138,000   $ 3,541,000
Provision for doubtful accounts $ 19,405,000 22,465,000 19,624,000    
Capitalized contract cost, amortization period 5 years        
Intangible assets, impairment loss $ 0   0    
Long lived asset impairment 0 0 0    
Equity securities 3,900,000 3,400,000      
Equity securities without readily determinable fair value, amount 700,000 700,000      
Equity securities without readily determinable fair value, impairment loss 0        
Deferred financing cost, net 34,423,000 38,766,000 43,783,000    
Amortization of deferred financing costs and bond premiums and discounts 5,152,000 6,586,000 10,447,000    
Sales commission included in accrued payroll and commissions 4,500,000 3,300,000      
Other long-term obligations 13,000,000 18,500,000      
Advertising expenses incurred 47,200,000 42,500,000 33,000,000    
Goodwill, impairment loss 0 0 0    
Intercompany translation gains (losses) (7,100,000) 4,900,000 2,100,000    
Issued and unused letters of credit 13,800,000 9,500,000      
Other (income) loss, net $ (17,323,000) 27,986,000 7,255,000    
SkyControl Panels          
Basis Of Presentation And Significant Accounting Policies [Line Items]          
Percentage of installed panels 80.00%        
2GIG Sale          
Basis Of Presentation And Significant Accounting Policies [Line Items]          
Percentage of installed panels 19.00%        
Minimum          
Basis Of Presentation And Significant Accounting Policies [Line Items]          
Estimated useful life of intangible assets 5 years        
Maximum          
Basis Of Presentation And Significant Accounting Policies [Line Items]          
Estimated useful life of intangible assets 10 years        
Interest Expense          
Basis Of Presentation And Significant Accounting Policies [Line Items]          
Amortization of deferred financing costs and bond premiums and discounts $ 10,400,000 11,400,000 11,600,000    
Notes Payable          
Basis Of Presentation And Significant Accounting Policies [Line Items]          
Deferred financing cost, net 32,400,000 35,700,000      
Deferred financing cost, accumulated amortization 54,600,000 45,200,000      
Revolving Credit Facility          
Basis Of Presentation And Significant Accounting Policies [Line Items]          
Issued and unused letters of credit 289,800,000        
Revolving Credit Facility | Line of Credit          
Basis Of Presentation And Significant Accounting Policies [Line Items]          
Deferred financing cost, net 2,058,000 3,099,000 $ 4,420,000    
Deferred financing cost, accumulated amortization $ 9,600,000 $ 8,600,000      
Vivint Flex Pay          
Basis Of Presentation And Significant Accounting Policies [Line Items]          
Number of payment options | payment 3        
Installment loans available to qualified customers, maximum amount provided by third party $ 4,000        
Vivint Flex Pay | Minimum          
Basis Of Presentation And Significant Accounting Policies [Line Items]          
Installment loans available to qualified customers, term of loan 42 months        
Vivint Flex Pay | Maximum          
Basis Of Presentation And Significant Accounting Policies [Line Items]          
Installment loans available to qualified customers, term of loan 60 months        
ASU 2016-01 adoption          
Basis Of Presentation And Significant Accounting Policies [Line Items]          
New accounting pronouncement, cumulative effect of change on accumulated deficit       $ 700,000  
Other (income) loss, net $ 300,000        
v3.10.0.1
Significant Accounting Policies - Changes in Company's Allowance for Accounts Receivable (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Allowance for Doubtful Accounts Receivable [Roll Forward]      
Beginning balance $ 5,356 $ 4,138 $ 3,541
Provision for doubtful accounts 19,405 22,465 19,624
Write-offs and adjustments (19,167) (21,247) (19,027)
Balance at end of period $ 5,594 $ 5,356 $ 4,138
v3.10.0.1
Significant Accounting Policies - Depreciation and Amortization (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Property, Plant and Equipment [Line Items]      
Amortization of capitalized contract costs $ 398,174 $ 0 $ 0
Total depreciation and amortization 514,082 329,255 288,542
Depreciation of property, plant and equipment      
Property, Plant and Equipment [Line Items]      
Total depreciation and amortization 24,963 21,275 16,800
Amortization of subscriber acquisition costs      
Property, Plant and Equipment [Line Items]      
Total depreciation and amortization 0 206,153 154,877
Amortization of definite-lived intangibles      
Property, Plant and Equipment [Line Items]      
Total depreciation and amortization $ 90,945 $ 101,827 $ 116,865
v3.10.0.1
Revenue and Capitalized Contract Costs - Narrative (Details)
$ in Millions
12 Months Ended
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Revenue from Contract with Customer [Abstract]    
Revenue recognized that were included in deferred revenue   $ 144.1
Revenue expected to be recognized from remaining performance obligations for subscription contracts $ 2,200.0  
Expected life of customers 15 years  
Depreciation rate using declining balance method (percentage) 2.4  
v3.10.0.1
Revenue and Capitalized Contract Costs - Performance Obligation, Expected Timing (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01
Dec. 31, 2018
Revenue from Contract with Customer [Abstract]  
Percentage revenue of related to remaining performance obligation expected to recognized over the next 24 months 62.50%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Revenue, remaining performance obligation, expected timing of satisfaction, period 3 years
v3.10.0.1
Revenue and Capitalized Contract Costs - Impact of New Accounting Pronouncement on Balance Sheet (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Jan. 01, 2018
Dec. 31, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Capitalized contract costs, net $ 1,115,775 $ 1,020,408 $ 0
Subscriber acquisition costs, net 0 0 1,308,558
Long-term notes receivables and other assets, net 119,819 91,436 88,723
Accrued expenses and other current liabilities 136,715 84,650 74,321
Deferred revenue 186,953 128,205 88,337
Deferred revenue, net of current portion 323,585 211,493 264,555
Deferred income tax liabilities 1,096 3,400 9,041
Accumulated deficit (2,104,097) $ (1,635,502) (1,358,571)
Accumulated other comprehensive loss (28,837)   (27,301)
Restatement Adjustment | ASU 2014-09 adoption      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Capitalized contract costs, net     1,020,408
Subscriber acquisition costs, net     (1,308,558)
Long-term notes receivables and other assets, net     2,713
Accrued expenses and other current liabilities     10,329
Deferred revenue     39,868
Deferred revenue, net of current portion     (53,062)
Deferred income tax liabilities     (5,641)
Accumulated deficit     (276,931)
Previously Reported      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Capitalized contract costs, net     0
Subscriber acquisition costs, net     1,308,558
Long-term notes receivables and other assets, net     88,723
Accrued expenses and other current liabilities     74,321
Deferred revenue     88,337
Deferred revenue, net of current portion     264,555
Deferred income tax liabilities     9,041
Accumulated deficit     $ (1,358,571)
Calculated under Revenue Guidance in Effect before Topic 606      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Capitalized contract costs, net 0    
Subscriber acquisition costs, net 1,518,188    
Accrued expenses and other current liabilities 126,900    
Deferred revenue 126,582    
Deferred revenue, net of current portion 440,474    
Deferred income tax liabilities 8,682    
Accumulated deficit (1,754,426)    
Accumulated other comprehensive loss (30,384)    
Difference between Revenue Guidance in Effect before and after Topic 606 | ASU 2014-09 adoption      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Capitalized contract costs, net 1,115,775    
Subscriber acquisition costs, net (1,518,188)    
Accrued expenses and other current liabilities 9,815    
Deferred revenue 60,371    
Deferred revenue, net of current portion (116,889)    
Deferred income tax liabilities (7,586)    
Accumulated deficit (349,671)    
Accumulated other comprehensive loss $ 1,547    
v3.10.0.1
Revenue and Capitalized Contract Costs - Impact of New Accounting Pronouncement On Statement of Operations (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Revenues $ 1,050,441 $ 881,983 $ 757,907
Operating expenses (exclusive of depreciation and amortization shown separately below) 355,813 321,476 264,865
Depreciation and amortization 514,082 329,255 288,542
Loss from operations (242,059) (155,493) (71,102)
Income tax (benefit) expense (1,611) 1,078 67
Net loss (467,914) (410,199) (275,957)
Foreign currency translation adjustment (2,218) 3,155 2,482
Total other comprehensive (loss) income (2,218) 1,462 3,493
Comprehensive loss (470,132) (408,737) (272,464)
Recurring and other revenue      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Revenues 1,050,441 843,420 724,478
Service and other sales revenue      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Revenues 0 26,988 22,855
Activation fees      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Revenues 0 $ 11,575 $ 10,574
Calculated under Revenue Guidance in Effect before Topic 606      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Revenues 1,006,543    
Operating expenses (exclusive of depreciation and amortization shown separately below) 385,672    
Depreciation and amortization 367,879    
Loss from operations (169,613)    
Income tax (benefit) expense 806    
Net loss (397,885)    
Foreign currency translation adjustment (3,765)    
Total other comprehensive (loss) income (3,765)    
Comprehensive loss (401,650)    
Calculated under Revenue Guidance in Effect before Topic 606 | Recurring and other revenue      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Revenues 950,661    
Calculated under Revenue Guidance in Effect before Topic 606 | Service and other sales revenue      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Revenues 46,177    
Calculated under Revenue Guidance in Effect before Topic 606 | Activation fees      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Revenues 9,705    
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Revenues 43,898    
Operating expenses (exclusive of depreciation and amortization shown separately below) (29,859)    
Depreciation and amortization 146,203    
Loss from operations (72,446)    
Income tax (benefit) expense (2,417)    
Net loss (70,029)    
Foreign currency translation adjustment 1,547    
Total other comprehensive (loss) income 1,547    
Comprehensive loss (68,482)    
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | Recurring and other revenue      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Revenues 99,780    
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | Service and other sales revenue      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Revenues (46,177)    
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | Activation fees      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Revenues $ (9,705)    
v3.10.0.1
Revenue and Capitalized Contract Costs - Impact of New Accounting Pronouncement On Statement of Cash Flows (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]      
Net loss $ (467,914) $ (410,199) $ (275,957)
Amortization of capitalized contract costs 398,174 0 0
Amortization of subscriber acquisition costs 0 206,153 154,877
Capitalized contract costs – deferred contract costs (499,252) 0 0
Subscriber acquisition costs – deferred contract costs 0 (457,679) (419,509)
Accrued expenses and other current liabilities 91,469 62,208 12,702
Deferred revenue 172,905 247,500 24,613
Net cash used in operating activities (220,499) $ (309,332) $ (365,706)
Calculated under Revenue Guidance in Effect before Topic 606      
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]      
Net loss (397,885)    
Amortization of capitalized contract costs 0    
Amortization of subscriber acquisition costs 251,971    
Capitalized contract costs – deferred contract costs 0    
Subscriber acquisition costs – deferred contract costs (469,393)    
Accrued expenses and other current liabilities 93,886    
Deferred revenue 216,803    
Net cash used in operating activities (220,499)    
Difference between Revenue Guidance in Effect before and after Topic 606 | ASU 2014-09 adoption      
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]      
Net loss (70,029)    
Amortization of capitalized contract costs 398,174    
Amortization of subscriber acquisition costs (251,971)    
Capitalized contract costs – deferred contract costs (499,252)    
Subscriber acquisition costs – deferred contract costs 469,393    
Accrued expenses and other current liabilities (2,417)    
Deferred revenue (43,898)    
Net cash used in operating activities $ 0    
v3.10.0.1
Retail Installment Contract Receivables - Installment Receivables (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Deferred interest $ (34,164) $ (36,049)
Retail Installment Contracts    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
RIC receivables, gross 175,250 131,024
Deferred interest (34,163) (36,048)
RIC receivables, net of deferred interest 141,087 94,976
Classified on the consolidated balance sheets as:    
Accounts and notes receivable, net 32,185 16,469
Long-term notes receivables and other assets, net 108,902 78,507
RIC receivables, net 141,087 94,976
Interest income $ 14,900 $ 7,300
Vivint Flex Pay | Minimum    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Installment loans available to qualified customers, term of loan 42 months  
Vivint Flex Pay | Maximum    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Installment loans available to qualified customers, term of loan 60 months  
v3.10.0.1
Retail Installment Contract Receivables - Allowance for Credit Losses (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Financing Receivable, Allowance for Credit Losses [Line Items]      
Change in deferred interest on short-term and long-term RIC receivables $ 172,905 $ 247,500 $ 24,613
Retail Installment Contracts      
Financing Receivable, Allowance for Credit Losses [Line Items]      
Deferred interest, beginning of period 36,048 0  
Write-offs, net of recoveries (26,360) (6,055)  
Change in deferred interest on short-term and long-term RIC receivables 24,475 42,103  
Deferred interest, end of period $ 34,163 $ 36,048 $ 0
v3.10.0.1
Long-Term Debt - Additional Information (Detail)
1 Months Ended 12 Months Ended
Sep. 30, 2018
USD ($)
Aug. 31, 2017
USD ($)
Dec. 31, 2013
USD ($)
Offerings
May 31, 2013
USD ($)
Dec. 31, 2018
USD ($)
Dec. 31, 2014
USD ($)
Feb. 28, 2017
USD ($)
Aug. 31, 2016
USD ($)
May 31, 2016
USD ($)
Oct. 31, 2015
USD ($)
Nov. 16, 2012
USD ($)
Senior Notes                      
Debt Instrument [Line Items]                      
Debt instrument interest rate         7.625%            
Senior Notes | 6.375% Senior Secured Notes Due 2019                      
Debt Instrument [Line Items]                      
Principal amount                     $ 925,000,000
Debt instrument interest rate         6.375%           6.375%
Repurchased face amount $ 269,500,000.0 $ 150,000,000.0         $ 300,000,000.0   $ 205,500,000.0    
Senior Notes | 8.75% Senior Notes Due 2020                      
Debt Instrument [Line Items]                      
Principal amount     $ 250,000,000.0 $ 200,000,000.0   $ 100,000,000.0         $ 380,000,000.0
Debt instrument interest rate         8.75%           8.75%
Repurchased face amount 250,700,000.0                    
Debt instrument, redemption price, percentage     101.50% 101.75%   102.00%          
Number of offerings | Offerings     2                
Senior Notes | 8.875% Senior Secured Notes Due 2022                      
Debt Instrument [Line Items]                      
Principal amount                   $ 300,000,000.0  
Debt instrument interest rate         8.875%         8.875%  
Repurchased face amount 250,700,000.0               29,500,000.0    
Principal amount outstanding threshold for accelerated maturity         $ 190,000,000.0            
Senior Notes | 7.875% Senior Secured Notes Due 2022                      
Debt Instrument [Line Items]                      
Principal amount                 $ 500,000,000.0    
Debt instrument interest rate         7.875%       7.875%    
Senior Notes | 2019 Senior Notes And 2022 Private Placement Notes                      
Debt Instrument [Line Items]                      
Repurchased face amount                 $ 235,000,000    
Senior Notes | 7.875 Senior Notes Due August 2022                      
Debt Instrument [Line Items]                      
Principal amount               $ 100,000,000.0      
Debt instrument interest rate               104.00%      
Issuance price, percentage             108.25%        
Senior Notes | 6.375% Senior Notes Due 2019                      
Debt Instrument [Line Items]                      
Repurchased face amount             $ 300,000,000.0        
Repayments of long-term debt   150,000,000                  
Senior Notes | 7.625% Senior Notes Due 2023                      
Debt Instrument [Line Items]                      
Principal amount   $ 400,000,000.0                  
Debt instrument interest rate   7.625%     7.625%            
Senior Notes | 8.75% Senior Notes Due 2020                      
Debt Instrument [Line Items]                      
Debt instrument interest rate         8.75%            
Term Loan | September 2018 Issuance                      
Debt Instrument [Line Items]                      
Maximum borrowing capacity $ 810,000,000                    
Debt instrument, redemption price, percentage of principal amount redeemed 0.25%                    
February 2017 Issuance of 7.875% Notes Due 2022 | Senior Notes | 7.875 Senior Notes Due August 2022                      
Debt Instrument [Line Items]                      
Principal amount             $ 300,000,000.0        
Federal Funds Effective Swap Rate | Term Loan                      
Debt Instrument [Line Items]                      
Variable Interest rate percentage         0.50%            
LIBOR Referenced To US Dollar Deposits | LIBOR | Term Loan                      
Debt Instrument [Line Items]                      
Variable Interest rate percentage         1.00%            
LIBOR Referenced To LIBOR For Dollars In Period Of Borrowing | LIBOR | Term Loan                      
Debt Instrument [Line Items]                      
Variable Interest rate percentage         5.00%            
LIBOR Referenced To LIBOR For Dollars In Period Of Borrowing | Base Rate | Term Loan                      
Debt Instrument [Line Items]                      
Variable Interest rate percentage         4.00%            
v3.10.0.1
Long-Term Debt - Other Expense and Loss on Extinguishment (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Debt Instrument [Line Items]      
Previously deferred financing costs extinguished $ 4,207 $ 4,667  
New financing costs (9,302) (11,119) $ (9,241)
Senior Notes      
Debt Instrument [Line Items]      
Original premium extinguished   0  
Previously deferred financing costs extinguished   4,667  
New financing costs   18,372  
Total other expense and loss on extinguishment   23,039  
Previously deferred financing rolled over   1,949  
New deferred financing costs   10,645  
Total deferred financing costs   12,594  
Senior Notes | 7.875% Senior Secured Notes Due 2022      
Debt Instrument [Line Items]      
Previously deferred financing costs extinguished 0 0  
September 2018 Issuance | Senior Notes | 6.375% Senior Notes Due 2019      
Debt Instrument [Line Items]      
Original premium extinguished (953)    
Previously deferred financing costs extinguished 4,207    
New financing costs 11,317    
Total other expense and loss on extinguishment 14,571    
Previously deferred financing rolled over 0    
New deferred financing costs 10,275    
Total deferred financing costs $ 10,275    
August 2017 Issuance of 7.625 Notes Due 2023 | Senior Notes | 6.375% Senior Notes Due 2019      
Debt Instrument [Line Items]      
Original premium extinguished   0  
Previously deferred financing costs extinguished   1,408  
New financing costs   8,881  
Total other expense and loss on extinguishment   10,289  
Previously deferred financing rolled over   473  
New deferred financing costs   4,569  
Total deferred financing costs   5,042  
February 2017 Issuance of 7.875% Notes Due 2022 | Senior Notes | 6.375% Senior Notes Due 2019      
Debt Instrument [Line Items]      
Original premium extinguished   0  
Previously deferred financing costs extinguished   3,259  
New financing costs   9,491  
Total other expense and loss on extinguishment   12,750  
Previously deferred financing rolled over   1,476  
New deferred financing costs   6,076  
Total deferred financing costs   $ 7,552  
May 2016 Issuance of 7.875% Senior Secured Notes Due 2022 | Senior Notes | 7.875% Senior Secured Notes Due 2022      
Debt Instrument [Line Items]      
Original premium extinguished     355
Previously deferred financing costs extinguished     695
New financing costs     9,036
Total other expense and loss on extinguishment     10,086
Previously deferred financing rolled over     3,423
New deferred financing costs     6,628
Total deferred financing costs     $ 10,051
v3.10.0.1
Long-Term Debt - Deferred Financing Activity (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Deferred Financing Activity [Roll Forward]    
Balance 12/31/2017 $ 38,766 $ 43,783
Additions 10,275 11,044
Refinances 0 0
Early Extinguishment (4,207) (4,667)
Amortized (10,411) (11,394)
Balance 12/31/2018 34,423 38,766
Senior Notes    
Deferred Financing Activity [Roll Forward]    
Early Extinguishment   (4,667)
Senior Notes | 6.375% Senior Secured Notes Due 2019    
Deferred Financing Activity [Roll Forward]    
Balance 12/31/2017 2,877 11,693
Additions 0 0
Refinances 0 (1,949)
Early Extinguishment (1,877) (4,667)
Amortized (1,000) (2,200)
Balance 12/31/2018 0 2,877
Senior Notes | 8.75% Senior Notes Due 2020    
Deferred Financing Activity [Roll Forward]    
Balance 12/31/2017 11,209 15,053
Additions 0 0
Refinances 0 0
Early Extinguishment (2,330) 0
Amortized (3,499) (3,844)
Balance 12/31/2018 5,380 11,209
Senior Notes | 8.875% Senior Secured Notes Due 2022    
Deferred Financing Activity [Roll Forward]    
Balance 12/31/2017 752 903
Additions 0 0
Refinances 0 0
Early Extinguishment 0 0
Amortized (150) (151)
Balance 12/31/2018 602 752
Senior Notes | 7.875% Senior Secured Notes Due 2022    
Deferred Financing Activity [Roll Forward]    
Balance 12/31/2017 16,067 11,714
Additions 0 6,076
Refinances 0 1,476
Early Extinguishment 0 0
Amortized (3,268) (3,199)
Balance 12/31/2018 12,799 16,067
Senior Notes | 7.625% Senior Notes Due 2023    
Deferred Financing Activity [Roll Forward]    
Balance 12/31/2017 4,762 0
Additions 0 4,569
Refinances 0 473
Early Extinguishment 0 0
Amortized (840) (280)
Balance 12/31/2018 3,922 4,762
Term Loan | September 2018 Issuance    
Deferred Financing Activity [Roll Forward]    
Balance 12/31/2017 0  
Additions 10,275  
Refinances 0  
Early Extinguishment 0  
Amortized (613)  
Balance 12/31/2018 9,662 0
Revolving Credit Facility | Line of Credit    
Deferred Financing Activity [Roll Forward]    
Balance 12/31/2017 3,099 4,420
Additions 0 399
Refinances 0 0
Early Extinguishment 0 0
Amortized (1,041) (1,720)
Balance 12/31/2018 $ 2,058 $ 3,099
v3.10.0.1
Long-Term Debt - Revolving Credit Facility (Details) - USD ($)
12 Months Ended
Nov. 16, 2012
Dec. 31, 2018
Dec. 31, 2017
Aug. 10, 2017
Mar. 06, 2015
Debt Instrument [Line Items]          
Issued and unused letters of credit   $ 13,800,000 $ 9,500,000    
Revolving Credit Facility          
Debt Instrument [Line Items]          
Maximum borrowing capacity $ 200,000,000.0     $ 324,300,000 $ 289,400,000.0
Debt instrument, term 5 years        
Step down margin percentage   0.25%      
Commitment fee, step down percentage   0.125%      
Outstanding borrowings   $ 0 $ 3,000,000    
Issued and unused letters of credit   $ 289,800,000      
Revolving Credit Facility | Federal Funds Effective Swap Rate          
Debt Instrument [Line Items]          
Variable Interest rate percentage   0.50%      
Revolving Credit Facility | LIBOR          
Debt Instrument [Line Items]          
Variable Interest rate percentage   1.00%      
Revolving Credit Facility | Series A- Revolving Commitments          
Debt Instrument [Line Items]          
Maximum borrowing capacity   $ 267,000,000      
Revolving Credit Facility | Series A- Revolving Commitments | LIBOR          
Debt Instrument [Line Items]          
Variable Interest rate percentage   3.00%      
Revolving Credit Facility | Series A- Revolving Commitments | Base Rate          
Debt Instrument [Line Items]          
Variable Interest rate percentage   2.00%      
Revolving Credit Facility | Series B- Revolving Commitments          
Debt Instrument [Line Items]          
Maximum borrowing capacity   $ 21,200,000      
Revolving Credit Facility | Series B- Revolving Commitments | LIBOR          
Debt Instrument [Line Items]          
Variable Interest rate percentage   4.00%      
Revolving Credit Facility | Series B- Revolving Commitments | Base Rate          
Debt Instrument [Line Items]          
Variable Interest rate percentage   3.00%      
Revolving Credit Facility | Series D- Revolving Commitments          
Debt Instrument [Line Items]          
Maximum borrowing capacity   $ 15,400,000      
Revolving Credit Facility | Series C- Revolving Commitments          
Debt Instrument [Line Items]          
Maximum borrowing capacity   $ 20,800,000      
v3.10.0.1
Long-Term Debt - Summary of Debt (Detail) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Aug. 31, 2017
May 31, 2016
Oct. 31, 2015
Nov. 16, 2012
Debt Instrument [Line Items]            
Outstanding Principal, excluding current maturities $ 3,049,174          
Outstanding Principal, including current maturities 3,057,274 $ 2,829,465        
Unamortized Premium (Discount) 20,286 26,499        
Unamortized Deferred Financing Costs (32,365) (35,667)        
Net Carrying Amount 3,037,095 2,820,297        
Net Carrying Amount $ 3,045,195 2,820,297        
Senior Notes            
Debt Instrument [Line Items]            
Debt instrument interest rate 7.625%          
Senior Notes | 8.75% Senior Notes due 2020            
Debt Instrument [Line Items]            
Outstanding Principal, excluding current maturities $ 679,299          
Outstanding Principal, including current maturities   930,000        
Unamortized Premium (Discount) 2,230 4,465        
Unamortized Deferred Financing Costs (5,380) (11,209)        
Net Carrying Amount $ 676,149          
Net Carrying Amount   923,256        
Debt instrument interest rate 8.75%         8.75%
Senior Notes | 8.875% Senior Secured Notes Due 2022            
Debt Instrument [Line Items]            
Outstanding Principal, excluding current maturities $ 270,000          
Outstanding Principal, including current maturities   270,000        
Unamortized Premium (Discount) (2,122) (2,559)        
Unamortized Deferred Financing Costs (602) (752)        
Net Carrying Amount $ 267,276          
Net Carrying Amount   266,689        
Debt instrument interest rate 8.875%       8.875%  
Senior Notes | 7.875% Senior Secured Notes Due 2022            
Debt Instrument [Line Items]            
Outstanding Principal, excluding current maturities $ 900,000          
Outstanding Principal, including current maturities   900,000        
Unamortized Premium (Discount) 20,178 24,593        
Unamortized Deferred Financing Costs (12,799) (16,067)        
Net Carrying Amount $ 907,379          
Net Carrying Amount   908,526        
Debt instrument interest rate 7.875%     7.875%    
Senior Notes | 7.625% Senior Notes Due 2023            
Debt Instrument [Line Items]            
Outstanding Principal, excluding current maturities $ 400,000          
Outstanding Principal, including current maturities   400,000        
Unamortized Premium (Discount) 0 0        
Unamortized Deferred Financing Costs (3,922) (4,762)        
Net Carrying Amount $ 396,078          
Net Carrying Amount   395,238        
Debt instrument interest rate 7.625%   7.625%      
Senior Notes | 6.375% Senior Secured Notes due 2019            
Debt Instrument [Line Items]            
Outstanding Principal, including current maturities   269,465        
Unamortized Premium (Discount)   0        
Unamortized Deferred Financing Costs   (2,877)        
Net Carrying Amount   266,588        
Debt instrument interest rate 6.375%         6.375%
Term Loan | September 2018 Issuance            
Debt Instrument [Line Items]            
Outstanding Principal, excluding current maturities $ 799,875          
Unamortized Premium (Discount) 0          
Unamortized Deferred Financing Costs (9,662)          
Net Carrying Amount 790,213          
Term Loan - current 8,100          
Revolving Credit Facility            
Debt Instrument [Line Items]            
Deferred financing costs, net $ 2,100 3,100        
Revolving Credit Facility | Series D Revolving Credit Facility due 2019            
Debt Instrument [Line Items]            
Outstanding Principal, including current maturities   3,000        
Unamortized Premium (Discount)   0        
Unamortized Deferred Financing Costs   0        
Net Carrying Amount   3,000        
Revolving Credit Facility | Series A, B Revolving Credit Facilities due 2021            
Debt Instrument [Line Items]            
Outstanding Principal, including current maturities   57,000        
Unamortized Premium (Discount)   0        
Unamortized Deferred Financing Costs   0        
Net Carrying Amount   $ 57,000        
v3.10.0.1
Balance Sheet Components - Schedule of Balance Sheet Component Balances (Detail) - USD ($)
$ in Thousands
Dec. 31, 2018
Jan. 01, 2018
Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]      
Prepaid expenses $ 7,183   $ 8,000
Deposits 904   1,596
Other 3,362   6,554
Total prepaid expenses and other current assets 11,449   16,150
Capitalized contract costs      
Capitalized contract costs 2,361,795   0
Accumulated amortization (1,246,020)   0
Capitalized contract costs, net 1,115,775 $ 1,020,408 0
Subscriber acquisition costs      
Subscriber acquisition costs 0   1,837,388
Accumulated amortization 0   (528,830)
Subscriber acquisition costs, net 0 0 1,308,558
Long-term notes receivables and other assets      
RIC receivables, gross 143,065   114,556
RIC deferred interest (34,164)   (36,049)
Security deposits 6,586   6,427
Investments 3,865   3,429
Other 467   360
Total long-term notes receivables and other assets, net 119,819 91,436 88,723
Accrued payroll and commissions      
Accrued payroll 36,753   30,267
Accrued commissions 28,726   27,485
Total accrued payroll and commissions 65,479   57,752
Accrued expenses and other current liabilities      
Accrued interest payable 28,885   28,737
Current portion of derivative liability 67,710   25,473
Service warranty accrual 8,813   0
Current portion of notes payable 8,100   0
Blackstone monitoring fee, a related party 4,793   933
Accrued taxes 5,351   4,585
Spectrum license obligation 0   3,861
Accrued payroll taxes and withholdings 5,097   3,185
Loss contingencies 3,131   2,156
Other 4,835   5,391
Total accrued expenses and other current liabilities $ 136,715 $ 84,650 $ 74,321
v3.10.0.1
Property Plant and Equipment - Components of Property and Equipment (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Property, Plant and Equipment [Line Items]    
Property, plant and equipment, gross $ 156,096 $ 139,211
Accumulated depreciation and amortization (82,695) (61,130)
Property, plant and equipment, net 73,401 78,081
Vehicles    
Property, Plant and Equipment [Line Items]    
Property, plant and equipment, gross $ 45,050 42,008
Vehicles | Minimum    
Property, Plant and Equipment [Line Items]    
Estimated Useful Lives 3 years  
Vehicles | Maximum    
Property, Plant and Equipment [Line Items]    
Estimated Useful Lives 5 years  
Computer equipment and software    
Property, Plant and Equipment [Line Items]    
Property, plant and equipment, gross $ 53,891 46,651
Computer equipment and software | Minimum    
Property, Plant and Equipment [Line Items]    
Estimated Useful Lives 3 years  
Computer equipment and software | Maximum    
Property, Plant and Equipment [Line Items]    
Estimated Useful Lives 5 years  
Leasehold improvements    
Property, Plant and Equipment [Line Items]    
Property, plant and equipment, gross $ 26,401 20,783
Leasehold improvements | Minimum    
Property, Plant and Equipment [Line Items]    
Estimated Useful Lives 2 years  
Leasehold improvements | Maximum    
Property, Plant and Equipment [Line Items]    
Estimated Useful Lives 15 years  
Office furniture, fixtures and equipment    
Property, Plant and Equipment [Line Items]    
Property, plant and equipment, gross $ 19,532 17,202
Estimated Useful Lives 7 years  
Build-to-suit lease building    
Property, Plant and Equipment [Line Items]    
Property, plant and equipment, gross $ 8,247 8,268
Estimated Useful Lives 10 years 6 months  
Construction in process    
Property, Plant and Equipment [Line Items]    
Property, plant and equipment, gross $ 2,975 $ 4,299
v3.10.0.1
Property Plant and Equipment - Additional Information (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Property, Plant and Equipment [Line Items]      
Property, plant and equipment, gross $ 156,096 $ 139,211  
Accumulated amortization 82,695 61,130  
Depreciation and amortization expense 25,000 21,275 $ 16,800
Assets Under Capital Lease Obligations      
Property, Plant and Equipment [Line Items]      
Property, plant and equipment, gross 23,700 26,200  
Accumulated amortization $ 22,200 $ 16,600  
v3.10.0.1
Goodwill and Intangible Assets - Changes in Carrying Amount of Goodwill (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Goodwill [Roll Forward]    
Goodwill beginning balance $ 836,970 $ 835,233
Effect of Foreign Currency Translation (2,115) 1,737
Goodwill ending balance $ 834,855 $ 836,970
v3.10.0.1
Goodwill and Intangible Assets - Additional Information (Detail)
$ in Thousands
12 Months Ended
Jan. 10, 2018
USD ($)
Dec. 31, 2018
USD ($)
market
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
market
Finite-Lived Intangible Assets [Line Items]        
Proceeds from the sale of intangible assets   $ 53,693 $ 0 $ 0
Amortization expense related to intangible assets   $ 90,900 101,800 $ 116,900
Definite-lived intangible assets, remaining amortization period   3 years 10 months 10 days    
Finite-lived patents, gross   $ 300    
Spectrum licenses        
Finite-Lived Intangible Assets [Line Items]        
Number of mid-sized metropolitan markets | market   40   40
Lease agreements term       7 years
Indefinite-lived Intangible Assets Acquired       $ 31,300
Patents        
Finite-Lived Intangible Assets [Line Items]        
Acquisition of intangible assets   $ 1,700 $ 2,000  
Spectrum Leases | Verizon | Spectrum licenses        
Finite-Lived Intangible Assets [Line Items]        
Proceeds from the sale of intangible assets $ 55,000      
Extinguishment of debt, amount (27,900)      
Indefinite-lived intangible assets, written off related to sale of business unit 31,300      
Indefinite-lived intangible assets, regulatory costs 1,300      
Net gain (loss) on disposal $ 50,400      
v3.10.0.1
Goodwill and Intangible Assets - Schedule of Intangible Asset Balances (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]    
Definite-lived intangible assets, gross $ 1,003,240 $ 1,007,780
Accumulated amortization (748,778) (662,205)
Definite-lived intangible assets, net 254,462 345,575
Indefinite-lived intangible assets 623 31,876
Total intangible assets, gross 1,003,863 1,039,656
Total intangible assets, net $ 255,085 377,451
Minimum    
Finite-Lived Intangible Assets [Line Items]    
Estimated useful lives of intangible asset 5 years  
Maximum    
Finite-Lived Intangible Assets [Line Items]    
Estimated useful lives of intangible asset 10 years  
Spectrum licenses    
Finite-Lived Intangible Assets [Line Items]    
Indefinite-lived intangible assets $ 0 31,253
IP addresses    
Finite-Lived Intangible Assets [Line Items]    
Indefinite-lived intangible assets 564 564
Domain names    
Finite-Lived Intangible Assets [Line Items]    
Indefinite-lived intangible assets 59 59
Customer contracts    
Finite-Lived Intangible Assets [Line Items]    
Definite-lived intangible assets, gross 964,100 970,147
Accumulated amortization (717,648) (637,780)
Definite-lived intangible assets, net $ 246,452 332,367
Estimated useful lives of intangible asset 10 years  
2GIG 2.0 technology    
Finite-Lived Intangible Assets [Line Items]    
Definite-lived intangible assets, gross $ 17,000 17,000
Accumulated amortization (15,292) (13,274)
Definite-lived intangible assets, net $ 1,708 3,726
Estimated useful lives of intangible asset 8 years  
Other technology    
Finite-Lived Intangible Assets [Line Items]    
Definite-lived intangible assets, gross $ 2,917 2,917
Accumulated amortization (1,667) (1,250)
Definite-lived intangible assets, net $ 1,250 1,667
Other technology | Minimum    
Finite-Lived Intangible Assets [Line Items]    
Estimated useful lives of intangible asset 5 years  
Other technology | Maximum    
Finite-Lived Intangible Assets [Line Items]    
Estimated useful lives of intangible asset 7 years  
Space Monkey technology    
Finite-Lived Intangible Assets [Line Items]    
Definite-lived intangible assets, gross $ 7,100 7,100
Accumulated amortization (5,756) (4,066)
Definite-lived intangible assets, net $ 1,344 3,034
Estimated useful lives of intangible asset 6 years  
Patents    
Finite-Lived Intangible Assets [Line Items]    
Definite-lived intangible assets, gross $ 12,123 10,616
Accumulated amortization (8,415) (5,835)
Definite-lived intangible assets, net $ 3,708 $ 4,781
Estimated useful lives of intangible asset 5 years  
v3.10.0.1
Goodwill and Intangible Assets - Schedule of Estimated Future Amortization Expense of Intangible Assets Excluding Patents Currently in Process (Detail)
$ in Thousands
Dec. 31, 2018
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
2019 $ 79,062
2020 67,807
2021 58,578
2022 48,674
2023 47
Thereafter 11
Total estimated amortization expense $ 254,179
v3.10.0.1
Financial Instruments - Additional Information (Detail) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Available-for-sale securities, gross unrealized gain (loss) $ (0.3) $ (1.3) $ 1.0
Available-for-sale securities adjustment, net of tax   $ (0.3)  
Convertible Debt Securities | Privately Held Company      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Investments $ 3.0    
v3.10.0.1
Financial Instruments - Financial Instruments at Fair Value Based on Valuation Approach Applied to Each Class of Security (Detail) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash $ 6,681 $ 3,866
Adjusted Cost 16,258 7,890
Unrealized Gains 0 0
Unrealized Losses (304) (1,315)
Fair Value 15,954 6,575
Cash and Cash Equivalents 12,773 3,872
Long-Term Notes Receivables and Other Assets, net 3,181 2,703
Level 1:    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Adjusted Cost 9,577 4,024
Unrealized Gains 0 0
Unrealized Losses (304) (1,315)
Fair Value 9,273 2,709
Cash and Cash Equivalents 6,092 6
Long-Term Notes Receivables and Other Assets, net 3,181 2,703
Money Market Funds | Level 1:    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Adjusted Cost 6,092 6
Unrealized Gains 0 0
Unrealized Losses 0 0
Fair Value 6,092 6
Cash and Cash Equivalents 6,092 6
Long-Term Notes Receivables and Other Assets, net 0 0
Corporate Debt Securities | Level 1:    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Adjusted Cost 3,485 4,018
Unrealized Gains 0 0
Unrealized Losses (304) (1,315)
Fair Value 3,181 2,703
Cash and Cash Equivalents 0 0
Long-Term Notes Receivables and Other Assets, net $ 3,181 $ 2,703
v3.10.0.1
Financial Instruments - Components of Long-Term Debt Including Associated Interest Rates and Related Fair Values (Detail) - USD ($)
Dec. 31, 2018
Dec. 31, 2017
Aug. 31, 2017
May 31, 2016
Oct. 31, 2015
Nov. 16, 2012
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]            
Face Value $ 3,045,195,000 $ 2,820,297,000        
Senior Notes            
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]            
Stated Interest Rate 7.625%          
Senior Notes | 6.375% Senior Secured Notes Due 2019            
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]            
Face Value   266,588,000        
Stated Interest Rate 6.375%         6.375%
Senior Notes | 8.75% Senior Notes Due 2020            
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]            
Face Value   923,256,000        
Stated Interest Rate 8.75%         8.75%
Senior Notes | 8.875% Senior Secured Notes Due 2022            
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]            
Face Value   266,689,000        
Stated Interest Rate 8.875%       8.875%  
Senior Notes | 7.875% Senior Secured Notes Due 2022            
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]            
Face Value   908,526,000        
Stated Interest Rate 7.875%     7.875%    
Senior Notes | 7.625% Senior Notes Due 2023            
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]            
Face Value   395,238,000        
Stated Interest Rate 7.625%   7.625%      
Fair Value, Inputs, Level 2            
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]            
Face Value $ 3,057,274,000 2,769,465,000        
Estimated Fair Value 2,889,616,000 2,893,547,000        
Fair Value, Inputs, Level 2 | Senior Notes | 6.375% Senior Secured Notes Due 2019            
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]            
Face Value 0 269,465,000        
Estimated Fair Value 0 273,507,000        
Fair Value, Inputs, Level 2 | Senior Notes | 8.75% Senior Notes Due 2020            
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]            
Face Value 679,299,000 930,000,000        
Estimated Fair Value 643,568,000 952,134,000        
Fair Value, Inputs, Level 2 | Senior Notes | 8.875% Senior Secured Notes Due 2022            
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]            
Face Value 270,000,000 270,000,000        
Estimated Fair Value 257,073,000 276,486,000        
Fair Value, Inputs, Level 2 | Senior Notes | 7.875% Senior Secured Notes Due 2022            
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]            
Face Value 900,000,000 900,000,000        
Estimated Fair Value 855,000,000 966,420,000        
Fair Value, Inputs, Level 2 | Senior Notes | 7.625% Senior Notes Due 2023            
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]            
Face Value 400,000,000 400,000,000        
Estimated Fair Value 326,000,000 425,000,000        
Fair Value, Inputs, Level 2 | Term Loan            
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]            
Face Value 807,975,000 0        
Estimated Fair Value $ 807,975,000 $ 0        
v3.10.0.1
Financial Instruments - Derivative Instruments (Details) - Fair Value, Inputs, Level 2 - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Derivatives, Fair Value [Line Items]    
Derivative liability, fair value, gross $ 117,620 $ 46,496
Derivative, notional amount 368,708 163,032
Accrued expenses and other current liabilities    
Derivatives, Fair Value [Line Items]    
Derivative liability, fair value, gross 67,710 25,473
Other long-term obligations    
Derivatives, Fair Value [Line Items]    
Derivative liability, fair value, gross $ 49,910 $ 21,023
v3.10.0.1
Financial Instruments - Level 3 (Details) - Fair Value, Inputs, Level 3 - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]    
Balance, beginning of period $ 46,496 $ 0
Additions 93,095 44,913
Settlements (34,587) (7,972)
Losses included in earnings 12,616 9,555
Balance, end of period $ 117,620 $ 46,496
v3.10.0.1
Restructuring and Asset Impairment Charges - Additional Information (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Restructuring Cost and Reserve [Line Items]      
Cash-based restructuring charges $ 4,683    
Loss on contract termination 5,500    
Wireless restructuring costs 400    
Restructuring reserve, noncurrent 400    
Employee severance and termination benefits      
Restructuring Cost and Reserve [Line Items]      
Cash-based restructuring charges $ 4,683 $ 0 $ 0
Subscriber Contracts In New Zealand And Puerto Rico      
Restructuring Cost and Reserve [Line Items]      
Amortization of subscriber acquisition costs     7,600
Loss on translation adjustment     1,100
Proceeds from sale of contracts     6,200
Net loss on disposal     $ 2,600
v3.10.0.1
Restructuring and Asset Impairment Charges - Summary of Charges (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Restructuring Cost and Reserve [Line Items]      
Restructuring, settlement and impairment provisions $ 4,683 $ 0 $ 1,013
Restructuring expenses 4,683    
Wireless Restructuring      
Restructuring Cost and Reserve [Line Items]      
Restructuring, settlement and impairment provisions 0 0 (1,538)
Subscriber Contracts      
Restructuring Cost and Reserve [Line Items]      
Restructuring, settlement and impairment provisions 0 0 2,551
Other Restructuring | Wireless Restructuring      
Restructuring Cost and Reserve [Line Items]      
Restructuring, settlement and impairment provisions 0 0 (710)
Contract termination costs      
Restructuring Cost and Reserve [Line Items]      
Restructuring expenses 0    
Contract termination costs | Wireless Restructuring      
Restructuring Cost and Reserve [Line Items]      
Restructuring, settlement and impairment provisions 0 0 (751)
Employee severance and termination benefits      
Restructuring Cost and Reserve [Line Items]      
Restructuring expenses 4,683 0 0
Employee severance and termination benefits | Wireless Restructuring      
Restructuring Cost and Reserve [Line Items]      
Restructuring, settlement and impairment provisions $ 0 $ 0 $ (77)
v3.10.0.1
Restructuring and Asset Impairment Charges - Summary of Restructuring Activity (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Restructuring Reserve [Roll Forward]      
Accrued restructuring, beginning balance $ 558 $ 649 $ 4,275
Restructuring and impairment recoveries     (1,538)
Cash payments (4,432) (91) (2,798)
Non-cash settlements     710
Restructuring expenses 4,683    
Accrued restructuring, ending balance 809 558 649
Asset impairments      
Restructuring Reserve [Roll Forward]      
Accrued restructuring, beginning balance 0 0 0
Restructuring and impairment recoveries     (710)
Cash payments 0 0 0
Non-cash settlements     710
Restructuring expenses 0    
Accrued restructuring, ending balance 0 0 0
Contract termination costs      
Restructuring Reserve [Roll Forward]      
Accrued restructuring, beginning balance 558 649 3,954
Restructuring and impairment recoveries     (751)
Cash payments (91) (91) (2,554)
Non-cash settlements     0
Restructuring expenses 0    
Accrued restructuring, ending balance 467 558 649
Employee severance and termination benefits      
Restructuring Reserve [Roll Forward]      
Accrued restructuring, beginning balance 0 0 321
Restructuring and impairment recoveries     (77)
Cash payments (4,341) 0 (244)
Non-cash settlements     0
Restructuring expenses 4,683 0 0
Accrued restructuring, ending balance $ 342 $ 0 $ 0
v3.10.0.1
Income Taxes - Income Tax Provision (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Current income tax:      
Federal $ 0 $ 0 $ 0
State 512 151 545
Foreign (52) (24) 95
Total 460 127 640
Deferred income tax:      
Federal 0 (326) 0
State 0 (53) 0
Foreign (2,071) 1,330 (573)
Total (2,071) 951 (573)
Income tax (benefit) expense $ (1,611) $ 1,078 $ 67
v3.10.0.1
Income Taxes - Reconciliation of Tax Expense Computed at Statutory Federal Rate and Company's Tax Expense (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Income Tax Disclosure [Abstract]      
Computed expected tax expense $ (98,598) $ (139,100) $ (93,770)
State income taxes, net of federal tax effect 404 65 360
Foreign income taxes (690) (299) (949)
Other reconciling items 0 (344) 666
Permanent differences 4,406 2,008 1,688
Effect of Federal law change 0 166,876 0
Change in valuation allowance 92,867 (28,128) 92,072
Income tax (benefit) expense $ (1,611) $ 1,078 $ 67
v3.10.0.1
Income Taxes - Significant Portions of Deferred Tax Assets and Liabilities (Detail) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Gross deferred tax assets:    
Net operating loss carryforwards $ 591,244 $ 591,619
Deferred subscriber income 113,103 72,389
Interest expense limitation 56,381 0
Accrued expenses and allowances 18,766 17,633
Purchased intangibles and deferred financing costs 17,788 15,191
Inventory reserves 4,688 6,662
Property and equipment 0 1,176
Research and development credits 41 41
Valuation allowance (467,705) (304,509)
Deferred tax assets, net of valuation allowance 334,306 400,202
Gross deferred tax liabilities:    
Deferred capitalized contract costs (332,547) (408,610)
Property and equipment (2,242) 0
Prepaid expenses (613) (633)
Deferred tax liabilities, net (335,402) (409,243)
Net deferred tax liabilities $ (1,096) $ (9,041)
v3.10.0.1
Income Taxes - Summary of Net Operating Loss Carryforwards (Detail) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Operating Loss Carryforwards [Line Items]    
Net operating loss carry forwards $ 4,081,466 $ 4,097,483
Internal Revenue Service (IRS) | Federal    
Operating Loss Carryforwards [Line Items]    
Net operating loss carry forwards 2,405,380 2,355,153
Internal Revenue Service (IRS) | States    
Operating Loss Carryforwards [Line Items]    
Net operating loss carry forwards 1,656,333 1,715,004
Canada Revenue Agency | Foreign Tax Authority    
Operating Loss Carryforwards [Line Items]    
Net operating loss carry forwards $ 19,753 $ 27,326
v3.10.0.1
Income Taxes - Additional Information (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Income Taxes And Tax Related [Line Items]    
Tax Cuts And Jobs Act Of 2017, incomplete accounting, change in tax rate, deferred tax asset, provisional income tax expense   $ 166,900
Tax Cuts and Job Acts of 2017, additional gross income subject to taxation $ 7,700  
Valuation allowance 467,705 304,509
Federal    
Income Taxes And Tax Related [Line Items]    
Research and development credits $ 41 $ 41
v3.10.0.1
Stock-Based Compensation and Equity - Additional Information (Detail) - USD ($)
$ / shares in Units, $ in Thousands
1 Months Ended 12 Months Ended
Jun. 30, 2018
Aug. 31, 2016
Apr. 30, 2016
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Share-based compensation arrangement by share-based payment award, restricted stock units, number of shares exercisable       0    
Compensation expense related to outstanding Incentive Units, recognized over a weighted-average period       4 years 3 months 13 days    
Share-based compensation       $ 2,505 $ 1,595 $ 3,868
Proceeds from contributed capital   $ 30,600 $ 69,800 4,700 0 100,407
Capital contributions from parent       4,700 0 $ 100,407
Capital contributions returned to parent       3,100 $ 1,200  
Incentive Units            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Unrecognized compensation expense       $ 10,700    
Stock Appreciation Rights (SARs)            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Shares reserved for issuance       53,621,891    
Restricted Stock Units (RSUs)            
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    
Incentive units issued as share-based compensation awards (shares) 360,000          
Expected volatility 95.00%          
Expected exercise term 3 years          
Risk-free rate 2.61%          
Unrecognized compensation expense       $ 100    
Expected dividends 0.00%          
Restricted stock units, recognition period       2 years 5 months 10 days    
Restricted stock units, fair value at grant date (usd per share) $ 0.48          
313 Acquisition LLC | Incentive Units Performance Based Awards | Share-based Compensation Award, Tranche One            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Share based compensation, award vesting rights, percentage       66.67%    
313 Acquisition LLC | Incentive Units Time Based Awards            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Share-based compensation arrangement by share-based payment award, award vesting period       5 years    
313 Acquisition LLC | Incentive Units Time Based Awards | Share-based Compensation Award, Tranche One            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Share based compensation, award vesting rights, percentage       33.33%    
Incentive units issued as share-based compensation awards (shares)       85,362,836    
313 Acquisition LLC | Incentive Units Time Based Awards | Chief Executive Officer and President            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Incentive units issued as share-based compensation awards (shares)       42,169,456    
313 Acquisition LLC | Incentive Units            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Share-based compensation arrangement by share-based payment award, fair value assumptions, minimum expected volatility rate       55.00%    
Share-based compensation arrangement by share-based payment award, fair value assumptions, maximum expected volatility rate       125.00%    
Share-based compensation arrangement by share-based payment award, fair value assumptions, minimum risk free interest rate       0.61%    
Weighted average grant date fair value of the outstanding units (in dollars per share)       $ 0.36 $ 0.30  
Share-based compensation arrangement by share-based payment award, fair value assumptions, maximum risk free interest rate       2.61%    
313 Acquisition LLC | Incentive Units | Minimum            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Expected exercise term       3 years 11 months 15 days    
313 Acquisition LLC | Incentive Units | Maximum            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Expected exercise term       6 years    
Vivint | Stock Appreciation Rights Time Based Awards | Share-based Compensation Award, Tranche One            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Share based compensation, award vesting rights, percentage       33.33%    
Vivint | Stock Appreciation Rights Performance Based Awards | Share-based Compensation Award, Tranche One            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Share based compensation, award vesting rights, percentage       66.67%    
Vivint | Stock Appreciation Rights (SARs)            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Share-based compensation arrangement by share-based payment award, fair value assumptions, minimum expected volatility rate       55.00%    
Share-based compensation arrangement by share-based payment award, fair value assumptions, maximum expected volatility rate       125.00%    
Share-based compensation arrangement by share-based payment award, fair value assumptions, minimum risk free interest rate       0.61%    
Unrecognized compensation expense       $ 4,600    
Compensation expense related to outstanding Incentive Units, recognized over a weighted-average period       4 years 4 months 23 days    
Weighted average grant date fair value of the outstanding units (in dollars per share)       $ 0.23 $ 0.19  
Incentive units issued as share-based compensation awards, outstanding (shares)       38,011,879    
Expected dividends       0.00%    
Share-based compensation arrangement by share-based payment award, fair value assumptions, maximum risk free interest rate       2.61%    
Vivint | Stock Appreciation Rights (SARs) | Minimum            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Expected exercise term       6 years    
Vivint | Stock Appreciation Rights (SARs) | Maximum            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Expected exercise term       6 years 6 months    
Vivint Wireless | Stock Appreciation Rights (SARs)            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Incentive units issued as share-based compensation awards, outstanding (shares)       0    
v3.10.0.1
Stock-Based Compensation and Equity - Summary of Incentive Unit Activity (Detail) - 313 Acquisition LLC - Incentive Units - USD ($)
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]      
Outstanding, Beginning Balance (shares) 85,812,836.000 85,882,836  
Forfeited (shares) (450,000) (70,000)  
Outstanding, Ending Balance (shares) 85,362,836.000 85,812,836.000 85,882,836
Unvested shares expected to vest (shares) 59,663,659    
Exercisable (shares) 25,699,177    
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]      
Weighted average exercise price per share, outstanding, beginning balance (in dollars per share) $ 1.19 $ 1.19  
Weighted average exercise price per share, forfeited (in dollars per share) 1.93 1.30  
Weighted average exercise price per share, outstanding, ending balance (in dollars per share) 1.18 $ 1.19 $ 1.19
Weighted average exercise price per share, unvested shares expected to vest (in dollars per share) 1.22    
Weighted average exercise price per share, Exercisable (in dollars per share) $ 1.11    
Outstanding, weighted average remaining contractual life 4 years 9 months 23 days 5 years 9 months 23 days 6 years 9 months 23 days
Unvested shares expected to vest, weighted average remaining contractual life 4 years 10 months 36 days    
Exercisable at end of period, weighted average remaining contractual life 4 years 6 months    
Outstanding, aggregate intrinsic value $ 0 $ 0 $ 0
Unvested shares expected to vest, aggregate intrinsic value 0    
Exercisable, aggregate intrinsic value $ 0    
v3.10.0.1
Stock-Based Compensation and Equity - Summary of the SAR Activity (Detail) - Vivint - Stock Appreciation Rights (SARs) - USD ($)
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]      
Outstanding, Beginning Balance (shares) 32,754,290.00 21,993,158  
Granted (shares) 14,630,000 13,250,640  
Forfeited (shares) (9,255,137) (2,374,864)  
Exercised (shares) (117,274) (114,644)  
Outstanding, Ending Balance (shares) 38,011,879.000 32,754,290.00 21,993,158
Unvested shares expected to vest (shares) 33,813,668    
Exercisable (shares) 4,198,211    
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]      
Weighted average exercise price per share, outstanding, beginning balance (in dollars per share) $ 1.26 $ 0.96  
Weighted average exercise price per share, granted (in dollars per share) 1.79 1.74  
Weighted average exercise price per share, forfeited (in dollars per share) 1.31 1.12  
Weighted average exercise price per share, exercised (in dollars per share) 0.89 0.72  
Weighted average exercise price per share, outstanding, ending balance (in dollars per share) 1.46 $ 1.26 $ 0.96
Weighted average exercise price per share, unvested shares expected to vest (in dollars per share) 1.51    
Weighted average exercise price per share, Exercisable (in dollars per share) $ 1.02    
Outstanding, weighted average remaining contractual life 8 years 24 days 9 years 2 months 16 days 8 years 2 months 22 days
Unvested shares expected to vest, weighted average remaining contractual life 8 years 2 months 40 days    
Exercisable at end of period, weighted average remaining contractual life 6 years 2 months 50 days    
Outstanding, aggregate intrinsic value $ 0 $ 0 $ 0
Unvested shares expected to vest, aggregate intrinsic value 0    
Exercisable, aggregate intrinsic value $ 0    
v3.10.0.1
Stock-Based Compensation and Equity - Stock-Based Compensation Expense (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Total stock-based compensation $ 2,505 $ 1,595 $ 3,868
Operating expenses      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Total stock-based compensation 129 65 68
Selling expenses      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Total stock-based compensation 285 217 (127)
General and administrative expenses      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Total stock-based compensation $ 2,091 $ 1,313 3,927
Executive Officer | General and administrative expenses      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Total stock-based compensation     $ 2,200
v3.10.0.1
Commitments and Contingencies - Additional Information (Detail)
$ in Millions
12 Months Ended
Dec. 31, 2018
USD ($)
market
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
market
Commitments And Contingencies [Line Items]      
Loss contingency accrual $ 2.5 $ 2.2  
Operating leases, rent expense 16.5 17.0 $ 16.0
Capital lease obligation 13.3 $ 21.7  
Software Licenses, Marketing Activities, and Other Goods and Services      
Commitments And Contingencies [Line Items]      
Other off-balance sheet obligations $ 59.5    
Vehicles      
Commitments And Contingencies [Line Items]      
Lease agreements term 36 months    
Average remaining life for fleet 19 months    
Spectrum licenses      
Commitments And Contingencies [Line Items]      
Lease agreements term     7 years
Number of mid-sized metropolitan markets | market 40   40
Settled Litigation | Company vs. ADT Inc.      
Commitments And Contingencies [Line Items]      
Litigation settlement, amount $ 10.0    
v3.10.0.1
Commitments and Contingencies - Future Minimum Lease Payments (Detail)
$ in Thousands
Dec. 31, 2018
USD ($)
Operating  
2019 $ 16,709
2020 15,478
2021 14,926
2022 13,655
2023 13,701
Thereafter 28,824
Amounts representing interest 0
Total lease payments 103,293
Capital  
2019 8,193
2020 5,209
2021 363
2022 7
2023 0
Thereafter 0
Amounts representing interest (459)
Total lease payments 13,313
Total  
2019 24,902
2020 20,687
2021 15,289
2022 13,662
2023 13,701
Thereafter 28,824
Amounts representing interest (459)
Total lease payments $ 116,606
v3.10.0.1
Related Party Transactions (Detail) - USD ($)
1 Months Ended 12 Months Ended 73 Months Ended
Sep. 30, 2018
Aug. 31, 2016
Apr. 30, 2016
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2018
Jan. 01, 2018
Related Party Transaction [Line Items]                
Additional expenses incurred for other related-party transactions       $ 2,700,000 $ 3,500,000 $ 4,200,000    
Accrued expenses and other current liabilities       136,715,000 74,321,000   $ 136,715,000 $ 84,650,000
Prepaid expenses and other current assets       1,800,000 500,000   1,800,000  
Monitoring fees       4,793,000 933,000   4,793,000  
Deferred financing cost, net       34,423,000 38,766,000 43,783,000 34,423,000  
Long-term debt       3,045,195,000 2,820,297,000   3,045,195,000  
Financing costs       11,317,000 18,277,000 9,036,000    
Proceeds from contributed capital   $ 30,600,000 $ 69,800,000 4,700,000 0 100,407,000    
Share-based compensation       $ 2,505,000 1,595,000 3,868,000    
Expected repayment period       1 year        
Amounts due from employees       $ 300,000 300,000   300,000  
Vivint                
Related Party Transaction [Line Items]                
Accrued expenses and other current liabilities       200,000 1,400,000   200,000  
General and administrative expenses                
Related Party Transaction [Line Items]                
Share-based compensation       2,091,000 1,313,000 3,927,000    
General and administrative expenses | Executive Officer                
Related Party Transaction [Line Items]                
Share-based compensation           2,200,000    
7.875% Senior Secured Notes Due 2022 | Senior Notes                
Related Party Transaction [Line Items]                
Deferred financing cost, net       12,799,000 16,067,000 11,714,000 12,799,000  
Long-term debt         908,526,000      
7.875% Senior Secured Notes Due 2022 | Senior Notes | Blackstone Advisory Partners L.P.                
Related Party Transaction [Line Items]                
Deferred financing cost, net           500,000    
Solar | Affiliated Entity                
Related Party Transaction [Line Items]                
Sublease and other administrative expenses       $ 17,300,000 2,800,000 4,600,000    
Non-competition agreement, term       3 years        
Product development and supply agreement term       3 years        
Product development and supply agreement renewal term       1 year        
Blackstone Management Partners L.L.C. | Affiliated Entity                
Related Party Transaction [Line Items]                
Prepaid expenses and other current assets       $ 4,100,000 3,500,000 3,700,000 4,100,000  
Blackstone Management Partners L.L.C. | Affiliated Entity | Minimum                
Related Party Transaction [Line Items]                
Annual monitoring base fee, minimum       2,700,000        
Blackstone Advisory Partners L.P.                
Related Party Transaction [Line Items]                
Aggregate interest payments to related party             900,000  
Blackstone Advisory Partners L.P. | Affiliated Entity                
Related Party Transaction [Line Items]                
Deferred financing cost, net       900,000     900,000  
Blackstone Advisory Partners L.P. | 7.875% Senior Secured Notes Due 2022 | Senior Notes | Affiliated Entity                
Related Party Transaction [Line Items]                
Financing costs         $ 600,000      
Sales Dealer Agreement | Solar | Affiliated Entity                
Related Party Transaction [Line Items]                
Agreement period, term         2 years      
Agreement period, renewal term         1 year      
Agreement period, termination notice period         90 days      
Blackstone Management Partners LLC Support And Services Agreement | Blackstone Management Partners L.L.C. | Affiliated Entity                
Related Party Transaction [Line Items]                
Fee paid for support services by BMP to Company       1,500,000     1,500,000  
Expenses from transactions with related party       0 $ 0 $ 0    
Affiliated Entity | Blackstone Advisory Partners L.P.                
Related Party Transaction [Line Items]                
Long-term debt       $ 75,100,000     $ 75,100,000  
Affiliated Entity | Vivint Smart Home, Inc.                
Related Party Transaction [Line Items]                
Proceeds from contributed capital $ 4,700,000              
v3.10.0.1
Segment Reporting and Business Concentrations - Additional Information (Detail)
12 Months Ended
Dec. 31, 2018
Segment
Country
Dec. 31, 2017
Segment
Dec. 31, 2016
Segment
Segment Reporting [Abstract]      
Number of operating segments | Segment 1 1 1
Number of geographic region company has historically operated in | Country 3    
v3.10.0.1
Segment Reporting and Business Concentrations - Revenues and Long-Lived Assets by Geographic Region (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Segment Reporting Information [Line Items]      
Revenues from external customers $ 1,050,441 $ 881,983 $ 757,907
United States      
Segment Reporting Information [Line Items]      
Revenues from external customers 977,877 816,026 700,471
Canada      
Segment Reporting Information [Line Items]      
Revenues from external customers $ 72,564 $ 65,957 $ 57,436
v3.10.0.1
Employee Benefit Plan (Detail) - USD ($)
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Postemployment Benefits [Abstract]      
Employer matching contribution, percent of employees' gross pay 1.00%    
Employer matching contribution, amount for every employees' dollar contributed $ 0.50    
Employer matching contribution, percent of employees' gross pay for 50% matching for every dollar contributed 5.00%    
Maximum annual contributions per employee, percent 3.50%    
Award vesting service period 2 years    
Matching contributions to the plan $ 6,000,000 $ 0 $ 0
v3.10.0.1
Guarantor and Non-Guarantor Supplemental Financial Information - Condensed Consolidating Balance Sheet (Detail) - USD ($)
$ in Thousands
Dec. 31, 2018
Jan. 01, 2018
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
ASSETS          
Current assets $ 123,498   $ 175,965    
Property, plant and equipment, net 73,401   78,081    
Subscriber acquisition costs, net 0 $ 0 1,308,558    
Capitalized contract costs, net 1,115,775   0    
Deferred financing costs, net 2,058   3,099    
Investment in subsidiaries 0   0    
Intercompany receivable 0   0    
Intangible assets, net 255,085   377,451    
Goodwill 834,855   836,970 $ 835,233  
Long-term notes receivables and other assets, net 119,819 91,436 88,723    
Total assets 2,524,491   2,868,847    
Liabilities and Stockholders’ (Deficit) Equity          
Current liabilities 463,536   338,371    
Intercompany payable 0   0    
Notes payable and revolving line of credit, net of current portion 3,037,095   2,820,297    
Capital lease obligations, net of current portion 5,571   11,089    
Deferred revenue, net of current portion 323,585 211,493 264,555    
Accumulated losses of investee 0   0    
Other long-term obligations 90,209   79,020    
Deferred income tax liability 1,096 $ 3,400 9,041    
Total (deficit) equity (1,396,601)   (653,526) $ (245,182) $ (76,993)
Total liabilities and stockholders’ deficit 2,524,491   2,868,847    
Eliminations          
ASSETS          
Current assets (262,674)   (162,413)    
Property, plant and equipment, net 0   0    
Subscriber acquisition costs, net     0    
Capitalized contract costs, net 0        
Deferred financing costs, net 0   0    
Investment in subsidiaries (1,662,367)   (2,188,221)    
Intercompany receivable (6,303)   (6,303)    
Intangible assets, net 0   0    
Goodwill 0   0    
Long-term notes receivables and other assets, net (106)   (106)    
Total assets (1,931,450)   (2,357,043)    
Liabilities and Stockholders’ (Deficit) Equity          
Current liabilities (262,674)   (162,413)    
Intercompany payable (6,303)   (6,303)    
Notes payable and revolving line of credit, net of current portion 0   0    
Capital lease obligations, net of current portion 0   0    
Deferred revenue, net of current portion 0   0    
Accumulated losses of investee (1,396,601)   (653,526)    
Other long-term obligations 0   0    
Deferred income tax liability (106)   (106)    
Total (deficit) equity (265,766)   (1,534,695)    
Total liabilities and stockholders’ deficit (1,931,450)   (2,357,043)    
Parent | Reportable Legal Entities          
ASSETS          
Current assets 0   0    
Property, plant and equipment, net 0   0    
Subscriber acquisition costs, net     0    
Capitalized contract costs, net 0        
Deferred financing costs, net 0   0    
Investment in subsidiaries 0   0    
Intercompany receivable 0   0    
Intangible assets, net 0   0    
Goodwill 0   0    
Long-term notes receivables and other assets, net 0   0    
Total assets 0   0    
Liabilities and Stockholders’ (Deficit) Equity          
Current liabilities 0   0    
Intercompany payable 0   0    
Notes payable and revolving line of credit, net of current portion 0   0    
Capital lease obligations, net of current portion 0   0    
Deferred revenue, net of current portion 0   0    
Accumulated losses of investee 1,396,601   653,526    
Other long-term obligations 0   0    
Deferred income tax liability 0   0    
Total (deficit) equity (1,396,601)   (653,526)    
Total liabilities and stockholders’ deficit 0   0    
Guarantor Subsidiaries | Reportable Legal Entities          
ASSETS          
Current assets 269,770   284,293    
Property, plant and equipment, net 72,937   77,345    
Subscriber acquisition costs, net     1,214,678    
Capitalized contract costs, net 1,047,532        
Deferred financing costs, net 0   0    
Investment in subsidiaries 0   0    
Intercompany receivable 6,303   6,303    
Intangible assets, net 236,677   350,710    
Goodwill 809,678   809,678    
Long-term notes receivables and other assets, net 102,695   78,173    
Total assets 2,545,592   2,821,180    
Liabilities and Stockholders’ (Deficit) Equity          
Current liabilities 507,063   343,398    
Intercompany payable 0   0    
Notes payable and revolving line of credit, net of current portion 0   0    
Capital lease obligations, net of current portion 5,570   10,791    
Deferred revenue, net of current portion 306,653   248,643    
Accumulated losses of investee      
Other long-term obligations 90,209   79,020    
Deferred income tax liability 106   106    
Total (deficit) equity 1,635,991   2,139,222    
Total liabilities and stockholders’ deficit 2,545,592   2,821,180    
Non-Guarantor Subsidiaries | Reportable Legal Entities          
ASSETS          
Current assets 103,451   49,935    
Property, plant and equipment, net 464   736    
Subscriber acquisition costs, net     93,880    
Capitalized contract costs, net 68,243        
Deferred financing costs, net 0   0    
Investment in subsidiaries 0   0    
Intercompany receivable 0   0    
Intangible assets, net 18,408   26,741    
Goodwill 25,177   27,292    
Long-term notes receivables and other assets, net 17,124   10,550    
Total assets 232,867   209,134    
Liabilities and Stockholders’ (Deficit) Equity          
Current liabilities 182,159   128,581    
Intercompany payable 6,303   6,303    
Notes payable and revolving line of credit, net of current portion 0   0    
Capital lease obligations, net of current portion 1   298    
Deferred revenue, net of current portion 16,932   15,912    
Accumulated losses of investee      
Other long-term obligations 0   0    
Deferred income tax liability 1,096   9,041    
Total (deficit) equity 26,376   48,999    
Total liabilities and stockholders’ deficit 232,867   209,134    
APX Group, Inc. | Reportable Legal Entities          
ASSETS          
Current assets 12,951   4,150    
Property, plant and equipment, net 0   0    
Subscriber acquisition costs, net     0    
Capitalized contract costs, net 0        
Deferred financing costs, net 2,058   3,099    
Investment in subsidiaries 1,662,367   2,188,221    
Intercompany receivable 0   0    
Intangible assets, net 0   0    
Goodwill 0   0    
Long-term notes receivables and other assets, net 106   106    
Total assets 1,677,482   2,195,576    
Liabilities and Stockholders’ (Deficit) Equity          
Current liabilities 36,988   28,805    
Intercompany payable 0   0    
Notes payable and revolving line of credit, net of current portion 3,037,095   2,820,297    
Capital lease obligations, net of current portion 0   0    
Deferred revenue, net of current portion 0   0    
Accumulated losses of investee      
Other long-term obligations 0   0    
Deferred income tax liability 0   0    
Total (deficit) equity (1,396,601)   (653,526)    
Total liabilities and stockholders’ deficit $ 1,677,482   $ 2,195,576    
v3.10.0.1
Guarantor and Non-Guarantor Supplemental Financial Information - Condensed Consolidating Statements of Operations and Comprehensive Loss (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Condensed Income Statements, Captions [Line Items]      
Revenues $ 1,050,441 $ 881,983 $ 757,907
Costs and expenses 1,292,500 1,037,476 829,009
Loss from operations (242,059) (155,493) (71,102)
Loss from subsidiaries 0 0 0
Other expense (income), net 227,466 253,628 204,788
Loss before income taxes (469,525) (409,121) (275,890)
Income tax expense (benefit) (1,611) 1,078 67
Net loss (467,914) (410,199) (275,957)
Other comprehensive loss, net of tax effects:      
Net loss (467,914) (410,199) (275,957)
Foreign currency translation adjustment (2,218) 3,155 2,482
Unrealized (loss) gain on marketable securities 0 (1,693) 1,011
Total other comprehensive (loss) income (2,218) 1,462 3,493
Comprehensive loss (470,132) (408,737) (272,464)
Eliminations      
Condensed Income Statements, Captions [Line Items]      
Revenues (2,567) (2,690) (2,704)
Costs and expenses (2,567) (2,690) (2,704)
Loss from operations 0 0 0
Loss from subsidiaries 679,579 575,696 345,594
Other expense (income), net 0 0 0
Loss before income taxes 679,579 575,696 345,594
Income tax expense (benefit) 0 0 0
Net loss 679,579 575,696 345,594
Other comprehensive loss, net of tax effects:      
Net loss 679,579 575,696 345,594
Foreign currency translation adjustment 4,436 (6,310) (4,964)
Unrealized (loss) gain on marketable securities   3,386 (2,022)
Total other comprehensive (loss) income 4,436 (2,924) (6,986)
Comprehensive loss 684,015 572,772 338,608
Parent | Reportable Legal Entities      
Condensed Income Statements, Captions [Line Items]      
Revenues 0 0 0
Costs and expenses 0 0 0
Loss from operations 0 0 0
Loss from subsidiaries (467,914) (410,199) (275,957)
Other expense (income), net 0 0 0
Loss before income taxes (467,914) (410,199) (275,957)
Income tax expense (benefit) 0 0 0
Net loss (467,914) (410,199) (275,957)
Other comprehensive loss, net of tax effects:      
Net loss (467,914) (410,199) (275,957)
Foreign currency translation adjustment (2,218) 3,155 2,482
Unrealized (loss) gain on marketable securities   (1,693) 1,011
Total other comprehensive (loss) income (2,218) 1,462 3,493
Comprehensive loss (470,132) (408,737) (272,464)
Guarantor Subsidiaries | Reportable Legal Entities      
Condensed Income Statements, Captions [Line Items]      
Revenues 998,190 841,658 715,072
Costs and expenses 1,240,570 997,247 787,138
Loss from operations (242,380) (155,589) (72,066)
Loss from subsidiaries 0 0 0
Other expense (income), net (35,936) 13,545 (1,207)
Loss before income taxes (206,444) (169,134) (70,859)
Income tax expense (benefit) 512 (228) 545
Net loss (206,956) (168,906) (71,404)
Other comprehensive loss, net of tax effects:      
Net loss (206,956) (168,906) (71,404)
Foreign currency translation adjustment 0 0 0
Unrealized (loss) gain on marketable securities   (1,693) 1,011
Total other comprehensive (loss) income 0 (1,693) 1,011
Comprehensive loss (206,956) (170,599) (70,393)
Non-Guarantor Subsidiaries | Reportable Legal Entities      
Condensed Income Statements, Captions [Line Items]      
Revenues 54,818 43,015 45,539
Costs and expenses 54,497 42,919 44,575
Loss from operations 321 96 964
Loss from subsidiaries 0 0 0
Other expense (income), net 7,153 (4,619) (325)
Loss before income taxes (6,832) 4,715 1,289
Income tax expense (benefit) (2,123) 1,306 (478)
Net loss (4,709) 3,409 1,767
Other comprehensive loss, net of tax effects:      
Net loss (4,709) 3,409 1,767
Foreign currency translation adjustment (2,218) 3,155 2,482
Unrealized (loss) gain on marketable securities   0 0
Total other comprehensive (loss) income (2,218) 3,155 2,482
Comprehensive loss (6,927) 6,564 4,249
APX Group, Inc. | Reportable Legal Entities      
Condensed Income Statements, Captions [Line Items]      
Revenues 0 0 0
Costs and expenses 0 0 0
Loss from operations 0 0 0
Loss from subsidiaries (211,665) (165,497) (69,637)
Other expense (income), net 256,249 244,702 206,320
Loss before income taxes (467,914) (410,199) (275,957)
Income tax expense (benefit) 0 0 0
Net loss (467,914) (410,199) (275,957)
Other comprehensive loss, net of tax effects:      
Net loss (467,914) (410,199) (275,957)
Foreign currency translation adjustment (2,218) 3,155 2,482
Unrealized (loss) gain on marketable securities   (1,693) 1,011
Total other comprehensive (loss) income (2,218) 1,462 3,493
Comprehensive loss $ (470,132) $ (408,737) $ (272,464)
v3.10.0.1
Guarantor and Non-Guarantor Supplemental Financial Information - Condensed Consolidating Statements of Cash Flows (Detail) - USD ($)
$ in Thousands
1 Months Ended 12 Months Ended
Aug. 31, 2016
Apr. 30, 2016
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Cash flows from operating activities:          
Net cash (used in) provided by operating activities     $ (220,499) $ (309,332) $ (365,706)
Cash flows from investing activities:          
Subscriber acquisition costs – company owned equipment     0 0 (5,243)
Capital expenditures     (19,412) (20,391) (11,642)
Proceeds from sale of intangibles     53,693 0 0
Proceeds from sale of capital assets     127 776 3,123
Investment in subsidiary     0 0 0
Acquisition of intangible assets     (1,486) (1,745) (1,385)
Other assets       (301)  
Net cash provided by (used in) investing activities     32,922 (21,661) (15,147)
Cash flows from financing activities:          
Proceeds from notes payable     810,000 724,750 604,000
Repayments of notes payable     (522,191) (450,000) (235,535)
Borrowings from revolving line of credit     201,000 196,895 57,000
Repayment of revolving line of credit     (261,000) (136,895) (77,000)
Proceeds from capital contribution $ 30,600 $ 69,800 4,700 0 100,407
Payment of intercompany settlement       (2,983) 0
Intercompany receivable       0 0
Intercompany payable       0 0
Repayments of capital lease obligations     (12,354) (10,007) (8,315)
Financing costs     (11,317) (18,277) (9,036)
Deferred financing costs     (9,302) (11,119) (9,241)
Return of capital     (3,129) (1,151)  
Net cash provided by financing activities     196,407 291,213 422,280
Effect of exchange rate changes on cash     71 132 (466)
Net increase (decrease) in cash and cash equivalents     8,901 (39,648) 40,961
Cash and cash equivalents:          
Beginning of period     3,872 43,520 2,559
End of period     12,773 3,872 43,520
Reportable Legal Entities          
Cash flows from financing activities:          
Repayments of notes payable         0
Financing costs         0
Eliminations          
Cash flows from operating activities:          
Net cash (used in) provided by operating activities     0 0 0
Cash flows from investing activities:          
Subscriber acquisition costs – company owned equipment         0
Capital expenditures     0 0 0
Proceeds from sale of intangibles     0    
Proceeds from sale of capital assets     0 0 0
Investment in subsidiary     202,863 324,071 508,621
Acquisition of intangible assets     0 0 0
Other assets       0  
Net cash provided by (used in) investing activities     202,863 324,071 508,621
Cash flows from financing activities:          
Proceeds from notes payable     0 0 0
Repayments of notes payable     0 0 0
Borrowings from revolving line of credit     0 0 0
Repayment of revolving line of credit     0 0 0
Proceeds from capital contribution     (209,121) (326,373) (100,407)
Payment of intercompany settlement       0 0
Intercompany receivable       (3,621) (12,906)
Intercompany payable       3,621 (395,308)
Repayments of capital lease obligations     0 0 0
Financing costs     0 0 0
Deferred financing costs     0 0 0
Return of capital     6,258 2,302  
Net cash provided by financing activities     (202,863) (324,071) (508,621)
Effect of exchange rate changes on cash     0 0 0
Net increase (decrease) in cash and cash equivalents     0 0 0
Cash and cash equivalents:          
Beginning of period     0 0 0
End of period     0 0 0
Parent | Reportable Legal Entities          
Cash flows from operating activities:          
Net cash (used in) provided by operating activities     0 0 0
Cash flows from investing activities:          
Subscriber acquisition costs – company owned equipment         0
Capital expenditures     0 0 0
Proceeds from sale of intangibles     0    
Proceeds from sale of capital assets     0 0 0
Investment in subsidiary     (1,571) 1,151 (100,407)
Acquisition of intangible assets     0 0 0
Other assets       0  
Net cash provided by (used in) investing activities     (1,571) 1,151 (100,407)
Cash flows from financing activities:          
Proceeds from notes payable     0 0 0
Repayments of notes payable     0 0  
Borrowings from revolving line of credit     0 0 0
Repayment of revolving line of credit     0 0 0
Proceeds from capital contribution     4,700 0 100,407
Payment of intercompany settlement       0 0
Intercompany receivable       0 0
Intercompany payable       0 0
Repayments of capital lease obligations     0 0 0
Financing costs     0 0  
Deferred financing costs     0 0 0
Return of capital     (3,129) (1,151)  
Net cash provided by financing activities     1,571 (1,151) 100,407
Effect of exchange rate changes on cash     0 0 0
Net increase (decrease) in cash and cash equivalents     0 0 0
Cash and cash equivalents:          
Beginning of period     0 0 0
End of period     0 0 0
Guarantor Subsidiaries | Reportable Legal Entities          
Cash flows from operating activities:          
Net cash (used in) provided by operating activities     (220,952) (313,290) (380,508)
Cash flows from investing activities:          
Subscriber acquisition costs – company owned equipment         (5,243)
Capital expenditures     (19,409) (20,391) (11,642)
Proceeds from sale of intangibles     53,693    
Proceeds from sale of capital assets     127 776 3,080
Investment in subsidiary     0 0 0
Acquisition of intangible assets     (1,486) (1,745) (1,385)
Other assets       (301)  
Net cash provided by (used in) investing activities     32,925 (21,661) (15,190)
Cash flows from financing activities:          
Proceeds from notes payable     0 0 0
Repayments of notes payable     0 0  
Borrowings from revolving line of credit     0 0 0
Repayment of revolving line of credit     0 0 0
Proceeds from capital contribution     204,421 326,373 0
Payment of intercompany settlement       (2,983) 3,000
Intercompany receivable       3,621 12,906
Intercompany payable       0 408,214
Repayments of capital lease obligations     (12,011) (9,667) (8,295)
Financing costs     0 0  
Deferred financing costs     0 0 0
Return of capital     (3,129) (1,151)  
Net cash provided by financing activities     189,281 316,193 415,825
Effect of exchange rate changes on cash     0 0 0
Net increase (decrease) in cash and cash equivalents     1,254 (18,758) 20,127
Cash and cash equivalents:          
Beginning of period     (572) 18,186 (1,941)
End of period     682 (572) 18,186
Non-Guarantor Subsidiaries | Reportable Legal Entities          
Cash flows from operating activities:          
Net cash (used in) provided by operating activities     453 3,958 14,802
Cash flows from investing activities:          
Subscriber acquisition costs – company owned equipment         0
Capital expenditures     (3) 0 0
Proceeds from sale of intangibles     0    
Proceeds from sale of capital assets     0 0 43
Investment in subsidiary     0 0 0
Acquisition of intangible assets     0 0 0
Other assets       0  
Net cash provided by (used in) investing activities     (3) 0 43
Cash flows from financing activities:          
Proceeds from notes payable     0 0 0
Repayments of notes payable     0 0  
Borrowings from revolving line of credit     0 0 0
Repayment of revolving line of credit     0 0 0
Proceeds from capital contribution     0 0 0
Payment of intercompany settlement       0 (3,000)
Intercompany receivable       0 0
Intercompany payable       (3,621) (12,906)
Repayments of capital lease obligations     (343) (340) (20)
Financing costs     0 0  
Deferred financing costs     0 0 0
Return of capital     0 0  
Net cash provided by financing activities     (343) (3,961) (15,926)
Effect of exchange rate changes on cash     71 132 (466)
Net increase (decrease) in cash and cash equivalents     178 129 (1,547)
Cash and cash equivalents:          
Beginning of period     783 654 2,201
End of period     961 783 654
APX Group, Inc. | Reportable Legal Entities          
Cash flows from operating activities:          
Net cash (used in) provided by operating activities     0 0 0
Cash flows from investing activities:          
Subscriber acquisition costs – company owned equipment         0
Capital expenditures     0 0 0
Proceeds from sale of intangibles     0    
Proceeds from sale of capital assets     0 0 0
Investment in subsidiary     (201,292) (325,222) (408,214)
Acquisition of intangible assets     0 0 0
Other assets       0  
Net cash provided by (used in) investing activities     (201,292) (325,222) (408,214)
Cash flows from financing activities:          
Proceeds from notes payable     810,000 724,750 604,000
Repayments of notes payable     (522,191) (450,000) (235,535)
Borrowings from revolving line of credit     201,000 196,895 57,000
Repayment of revolving line of credit     (261,000) (136,895) (77,000)
Proceeds from capital contribution     4,700 0 100,407
Payment of intercompany settlement       0 0
Intercompany receivable         0
Intercompany payable       0 0
Repayments of capital lease obligations     0 0 0
Financing costs     (11,317) (18,277) (9,036)
Deferred financing costs     (9,302) (11,119) (9,241)
Return of capital     (3,129) (1,151)  
Net cash provided by financing activities     208,761 304,203 430,595
Effect of exchange rate changes on cash     0 0 0
Net increase (decrease) in cash and cash equivalents     7,469 (21,019) 22,381
Cash and cash equivalents:          
Beginning of period     3,661 24,680 2,299
End of period     $ 11,130 $ 3,661 $ 24,680
v3.10.0.1
Label Element Value
Accounting Standards Update 2016-01 [Member] | AOCI Attributable to Parent [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption $ 680,000
Accounting Standards Update 2016-01 [Member] | Retained Earnings [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption (680,000)
Accounting Standards Update 2014-09 [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption (276,930,000)
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption $ (276,930,000)