Guarantor and Non-Guarantor Supplemental Financial Information

3 Months Ended

12 Months Ended

Mar. 31, 2016

Dec. 31, 2015

Text Block [Abstract]

Guarantor and Non-Guarantor Supplemental Financial Information

NOTE 15—GUARANTOR AND NON-GUARANTOR SUPPLEMENTAL FINANCIAL INFORMATION

The 2019 notes, 2020 notes and the 2022 notes were issued by APX. The 2019 notes, 2020 notes and the 2022 notes 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 condensed 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 March 31, 2016 and December 31, 2015 and for the three months ended March 31, 2016 and 2015. The unaudited condensed consolidating financial information reflects the investments of APX in the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries using the equity method of accounting.

Supplemental Condensed Consolidating Balance Sheet

March 31, 2016

(In thousands)

(unaudited)

	Parent			APX Group, Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets	$	—		$	3,640		$	130,490	$	5,307	$	(56,833	)	$	82,604
Property and equipment, net		—			—			54,946		223		—			55,169
Subscriber acquisition costs, net		—			—			760,052		68,242		—			828,294
Deferred financing costs, net		—			5,948			—		—		—			5,948
Investment in subsidiaries		—			2,088,923			—		—		(2,088,923	)		—
Intercompany receivable		—			—			18,732		—		(18,732	)		—
Intangible assets, net		—			—			492,419		39,638		—			532,057
Goodwill		—			—			809,678		26,420		—			836,098
Long-term investments and other assets		—			106			10,663		15		(106	)		10,678
Total Assets	$	—		$	2,098,617		$	2,276,980	$	139,845	$	(2,164,594	)	$	2,350,848
Liabilities and Stockholders’ (Deficit) Equity
Current liabilities	$	—		$	61,667		$	169,003	$	63,731	$	(56,833	)	$	237,568
Intercompany payable		—			—			—		18,732		(18,732	)		—
Notes payable and revolving credit facility, net of current portion		—			2,156,217			—		—		—			2,156,217
Capital lease obligations, net of current portion		—			—			9,825		2		—			9,827
Deferred revenue, net of current portion		—			—			43,058		4,183		—			47,241
Other long-term obligations		—			—			11,225		—		—			11,225
Accumulated losses of investee		119,267										(119,267	)		—
Deferred income tax liability		—			—			106		8,037		(106	)		8,037
Total (deficit) equity		(119,267	)		(119,267	)		2,043,763		45,160		(1,969,656	)		(119,267	)
Total liabilities and stockholders’ (deficit) equity	$	—		$	2,098,617		$	2,276,980	$	139,845	$	(2,164,594	)	$	2,350,848

Supplemental Condensed Consolidating Balance Sheet

December 31, 2015

(In thousands)

	Parent			APX Group, Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets	$	—		$	2,537		$	91,555	$	6,540	$	(53,066	)	$	47,566
Property and equipment, net		—			—			55,012		262		—			55,274
Subscriber acquisition costs, net		—			—			728,547		62,097		—			790,644
Deferred financing costs, net		—			6,456			—		—		—			6,456
Investment in subsidiaries		—			2,070,404			—		—		(2,070,404	)		—
Intercompany receivable		—			—			22,398		—		(22,398	)		—
Intangible assets, net		—			—			519,301		39,094		—			558,395
Goodwill		—			—			809,678		24,738		—			834,416
Long-term investments and other assets		—			106			10,880		13		(106	)		10,893
Total Assets	$	—		$	2,079,503		$	2,237,371	$	132,744	$	(2,145,974	)	$	2,303,644
Liabilities and Stockholders’ (Deficit) Equity
Current liabilities	$	—		$	18,384		$	143,896	$	59,304	$	(53,066	)	$	168,518
Intercompany payable		—			—			—		22,398		(22,398	)		—
Notes payable and revolving credit facility, net of current portion		—			2,138,112			—		—		—			2,138,112
Capital lease obligations, net of current portion		—			—			11,169		2		—			11,171
Deferred revenue, net of current portion		—			—			40,960		3,822		—			44,782
Accumulated Losses of Investee		76,993			—			—		—		(76,993	)		—
Other long-term obligations		—			—			10,530		—		—			10,530
Deferred income tax liability		—			—			106		7,524		(106	)		7,524
Total (deficit) equity		(76,993	)		(76,993	)		2,030,710		39,694		(1,993,411	)		(76,993	)
Total liabilities and stockholders’ (deficit) equity	$	—		$	2,079,503		$	2,237,371	$	132,744	$	(2,145,974	)	$	2,303,644

Supplemental Condensed Consolidating Statements of Operations and Comprehensive (Loss) Income

For the Three Months Ended March 31, 2016

(In thousands)

(unaudited)

	Parent			APX Group, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Revenues	$	—		$	—		$	165,941		$	8,987	$	(675	)	$	174,253
Costs and expenses		—			—			170,289			8,314		(675	)		177,928
(Loss) income from operations		—			—			(4,348	)		673		—			(3,675	)
Loss from subsidiaries		(45,093	)		(45	)		—			—		45,138			—
Other (expense) income, net		—			(45,048	)		1,664			3,086		—			(40,298	)
(Loss) income before income tax expenses		(45,093	)		(45,093	)		(2,684	)		3,759		45,138			(43,973	)
Income tax expense		—			—			64			1,056		—			1,120
Net (loss) income	$	(45,093	)	$	(45,093	)	$	(2,748	)	$	2,703	$	45,138		$	(45,093	)
Other comprehensive (loss) income, net of tax effects:
Net (loss) income	$	(45,093	)	$	(45,093	)	$	(2,748	)	$	2,703	$	45,138		$	(45,093	)
Foreign currency translation adjustment		—			2,761			—			2,761		(2,761	)		2,761
Total other comprehensive income		—			2,761			—			2,761		(2,761	)		2,761
Comprehensive (loss) income	$	(45,093	)	$	(42,332	)	$	(2,748	)	$	5,464	$	42,377		$	(42,332	)

Supplemental Condensed Consolidating Statements of Operations and Comprehensive (Loss) Income

For the Three Months Ended March 31, 2015

(In thousands)

(unaudited)

	Parent			APX Group, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	—		$	—		$	144,737		$	8,230		$	(770	)	$	152,197
Costs and expenses		—			—			154,900			7,766			(770	)		161,896
(Loss) income from operations		—			—			(10,163	)		464			—			(9,699	)
Loss from subsidiaries		(48,046	)		(10,092	)		—			—			58,138			—
Other expense, net		—			(37,954	)		(247	)		(16	)		—			(38,217	)
(Loss) income before income tax expenses		(48,046	)		(48,046	)		(10,410	)		448			58,138			(47,916	)
Income tax expense		—			—			40			90			—			130
Net (loss) income	$	(48,046	)	$	(48,046	)	$	(10,450	)	$	358		$	58,138		$	(48,046	)
Other comprehensive loss, net of tax effects:
Net (loss) income	$	(48,046	)	$	(48,046	)	$	(10,450	)	$	358		$	58,138		$	(48,046	)
Foreign currency translation adjustment		—			(10,578	)		(6,336	)		(4,242	)		10,578			(10,578	)
Total other comprehensive loss		—			(10,578	)		(6,336	)		(4,242	)		10,578			(10,578	)
Comprehensive loss	$	(48,046	)	$	(58,624	)	$	(16,786	)	$	(3,884	)	$	68,716		$	(58,624	)

Supplemental Condensed Consolidating Statements of Cash Flows

For the three Months Ended March 31, 2016

(In thousands)

(unaudited)

	Parent		APX Group, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net cash (used in) provided by operating activities	$	—	$	(196	)	$	(15,268	)	$	2,959		$	—		$	(12,505	)
Cash flows from investing activities:
Subscriber acquisition costs—company owned equipment		—		—			(63	)		—			—			(63	)
Capital expenditures		—		—			(3,070	)		—			—			(3,070	)
Proceeds from sale of assets		—		—			926			—			—			926
Investment in subsidiary		—		(14,615	)		—			—			14,615			—
Acquisition of intangible assets		—		—			(235	)		—			—			(235	)
Proceeds from insurance claims		—		—			—			—			—			—
Acquisition of other assets		—		—			—			—			—			—
Net cash used in investing activities		—		(14,615	)		(2,442	)		—			14,615			(2,442	)
Cash flows from financing activities:
Borrowings from revolving credit facility		—		21,000			—			—			—			21,000
Repayments on revolving credit facility		—		(5,000	)		—			—			—			(5,000	)
Intercompany receivable		—		—			3,667			—			(3,667	)		—
Intercompany payable		—		—			14,615			(3,667	)		(10,948	)		—
Repayments of capital lease obligations		—		—			(1,974	)		—			—			(1,974	)
Deferred financing costs		—		—			—			—			—			—
Net cash provided by (used in) financing activities		—		16,000			16,308			(3,667	)		(14,615	)		14,026
Effect of exchange rate changes on cash		—		—			—			(1,126	)		—			(1,126	)
Net increase (decrease) in cash		—		1,189			(1,402	)		(1,834	)		—			(2,047	)
Cash:
Beginning of period		—		2,299			(1,941	)		2,201			—			2,559
End of period	$	—	$	3,488		$	(3,343	)	$	367		$	—		$	512

Supplemental Condensed Consolidating Statements of Cash Flows

For the three Months Ended March 31, 2015

(In thousands)

(unaudited)

	Parent		APX Group, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	—	$	(268	)	$	9,884		$	6,716		$	—		$	16,332
Cash flows from investing activities:
Subscriber acquisition costs—company owned equipment		—		—			(6,815	)		(31	)		—			(6,846	)
Capital expenditures		—		—			(10,002	)		—			—			(10,002	)
Investment in subsidiary		—		(9,869	)		—			—			9,869			—
Acquisition of intangible assets		—		—			(736	)		—			—			(736	)
Proceeds from sale of assets		—		—			188			—			—			188
Proceeds from insurance claims		—		—			2,984			—			—			2,984
Acquisition of other assets		—		—			(81	)		14			—			(67	)
Net cash used in investing activities		—		(9,869	)		(14,462	)		(17	)		9,869			(14,479	)
Cash flows from financing activities:
Borrowings from revolving credit facility		—		22,500			—			—			—			22,500
Repayments on revolving credit facility		—		(10,000	)		—			—			—			(10,000	)
Intercompany receivable		—		—			(2,125	)		—			2,125			—
Intercompany payable		—		—			9,869			2,125			(11,994	)		—
Repayments of capital lease obligations		—		—			(2,279	)		(1	)		—			(2,280	)
Deferred financing costs		—		(4,233	)		—			—			—			(4,233	)
Net cash (used in) provided by financing activities		—		8,267			5,465			2,124			(9,869	)		5,987
Effect of exchange rate changes on cash		—		—			—			(601	)		—			(601	)
Net (decrease) increase in cash		—		(1,870	)		887			8,222			—			7,239
Cash:
Beginning of period		—		9,432			(2,233	)		3,608			—			10,807
End of period	$	—	$	7,562		$	(1,346	)	$	11,830		$	—		$	18,046

NOTE 19—GUARANTOR AND NON-GUARANTOR SUPPLEMENTAL FINANCIAL INFORMATION

The 2019 notes, 2020 notes and the 2022 notes were issued by APX. The 2019 notes, 2020 notes and the 2022 notes 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 and for the years ended December 31, 2015, 2014 and 2013. 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, 2015

(In thousands)

	Parent			APX Group, Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets	$	—		$	2,537		$	91,555	$	6,540	$	(53,066	)	$	47,566
Property and equipment, net		—			—			55,012		262		—			55,274
Subscriber acquisition costs, net		—			—			728,547		62,097		—			790,644
Deferred financing costs, net		—			6,456			—		—		—			6,456
Investment in subsidiaries		—			2,070,404			—		—		(2,070,404	)		—
Intercompany receivable		—			—			22,398		—		(22,398	)		—
Intangible assets, net		—			—			519,301		39,094		—			558,395
Goodwill		—			—			809,678		24,738		—			834,416
Long-term investments and other assets		—			106			10,880		13		(106	)		10,893
Total Assets	$	—		$	2,079,503		$	2,237,371	$	132,744	$	(2,145,974	)	$	2,303,644
Liabilities and Stockholders’ Equity
Current liabilities	$	—		$	18,384		$	143,896	$	59,304	$	(53,066	)	$	168,518
Intercompany payable		—			—			—		22,398		(22,398	)		—
Notes payable and revolving line of credit, net of current portion		—			2,138,112			—		—		—			2,138,112
Capital lease obligations, net of current portion		—			—			11,169		2		—			11,171
Deferred revenue, net of current portion		—			—			40,960		3,822		—			44,782
Accumulated losses of investee		76,993			—			—		—		(76,993	)		—
Other long-term obligations		—			—			10,530		—		—			10,530
Deferred income tax liability		—			—			106		7,524		(106	)		7,524
Total equity		(76,993	)		(76,993	)		2,030,710		39,694		(1,993,411	)		(76,993	)
Total liabilities and stockholders’ equity	$	—		$	2,079,503		$	2,237,371	$	132,744	$	(2,145,974	)	$	2,303,644

Condensed Consolidating Balance Sheet

December 31, 2014

(In thousands)

	Parent		APX Group, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets	$	—	$	9,435	$	109,996	$	6,626	$	(40,686	)	$	85,371
Property and equipment, net		—		—		62,271		519		—			62,790
Subscriber acquisition costs, net		—		—		500,916		47,157		—			548,073
Deferred financing costs, net		—		4,071		—		—		—			4,071
Investment in subsidiaries		224,486		2,057,857		—		—		(2,282,343	)		—
Intercompany receivable		—		—		34,000		—		(34,000	)		—
Intangible assets, net		—		—		645,558		57,668		—			703,226
Goodwill		—		—		811,947		29,575		—			841,522
Long-term investments and other assets		—		184		10,502		31		(184	)		10,533
Total Assets	$	224,486	$	2,071,547	$	2,175,190	$	141,576	$	(2,357,213	)	$	2,255,586
Liabilities and Stockholders’ Equity
Current liabilities	$	—	$	11,993	$	119,285	$	46,348	$	(40,686	)	$	136,940
Intercompany payable		—		—		—		34,000		(34,000	)		—
Notes payable and revolving line of credit, net of current portion		—		1,835,068		—		—		—			1,835,068
Capital lease obligations, net of current portion		—		—		10,646		9		—			10,655
Deferred revenue, net of current portion		—		—		29,438		3,066		—			32,504
Other long-term obligations		—		—		6,497		409		—			6,906
Deferred income tax liability		—		—		107		9,104		(184	)		9,027
Total equity		224,486		224,486		2,009,217		48,640		(2,282,343	)		224,486
Total liabilities and stockholders’ equity	$	224,486	$	2,071,547	$	2,175,190	$	141,576	$	(2,357,213	)	$	2,255,586

Condensed Consolidating Statements of Operations and Comprehensive Loss

For the Year Ended December 31, 2015

(In thousands)

	Parent			APX Group, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	—		$	—		$	622,507		$	34,022		$	(2,808	)	$	653,721
Costs and expenses		—			—			730,322			34,882			(2,808	)		762,396
Loss from operations		—			—			(107,815	)		(860	)		—			(108,675	)
Loss from subsidiaries		(279,107	)		(118,885	)		—			—			397,992			—
Other (expense) income, net		—			(160,222	)		(9,763	)		(96	)		—			(170,081	)
Loss before income tax expenses		(279,107	)		(279,107	)		(117,578	)		(956	)		397,992			(278,756	)
Income tax expense (benefit)		—			—			392			(41	)		—			351
Net loss	$	(279,107	)	$	(279,107	)	$	(117,970	)	$	(915	)	$	397,992		$	(279,107	)
Other comprehensive loss, net of tax effects:
Net loss	$	(279,107	)	$	(279,107	)	$	(117,970	)	$	(915	)	$	397,992		$	(279,107	)
Foreign currency translation adjustment		—			(13,293	)		2			(13,294	)		13,292			(13,293	)
Total other comprehensive loss		—			(13,293	)		2			(13,294	)		13,292			(13,293	)
Comprehensive loss	$	(279,107	)	$	(292,400	)	$	(117,968	)	$	(14,209	)	$	411,284		$	(292,400	)

Condensed Consolidating Statements of Operations and Comprehensive Loss

For the Year Ended December 31, 2014

(In thousands)

	Parent			APX Group, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	—		$	—		$	530,888		$	35,911		$	(3,122	)	$	563,677
Costs and expenses		—			—			623,124			37,544			(3,122	)		657,546
Loss from operations		—			—			(92,236	)		(1,633	)		—			(93,869	)
Loss from subsidiaries		(238,660	)		(93,850	)		—			—			332,510			—
Other income (expense), net		—			(145,917	)		1,676			(36	)		—			(144,277	)
Loss before income tax expenses		(238,660	)		(239,767	)		(90,560	)		(1,669	)		332,510			(238,146	)
Income tax expense (benefit)		—			(1,107	)		779			842			—			514
Net loss	$	(238,660	)	$	(238,660	)	$	(91,339	)	$	(2,511	)	$	332,510		$	(238,660	)
Other comprehensive loss, net of tax effects:
Net loss	$	(238,660	)	$	(238,660	)	$	(91,339	)	$	(2,511	)	$	332,510		$	(238,660	)
Foreign currency translation adjustment		—			(11,333	)		(6,895	)		(4,438	)		11,333			(11,333	)
Total other comprehensive loss		—			(11,333	)		(6,895	)		(4,438	)		11,333			(11,333	)
Comprehensive loss	$	(238,660	)	$	(249,993	)	$	(98,234	)	$	(6,949	)	$	343,843		$	(249,993	)

Condensed Consolidating Statements of Operations and Comprehensive Loss

For the year ended December 31, 2013

(In thousands)

	Parent			APX Group, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	—		$	—		$	476,168		$	27,790		$	(3,050	)	$	500,908
Costs and expenses		—			—			527,403			31,435			(3,050	)		555,788
(Loss) income from operations		—			—			(51,235	)		(3,645	)		—			(54,880	)
(Loss) income from subsidiaries		(124,513	)		(57,752	)		—			—			182,265			—
Other income (expense), net		—			(66,867	)		906			(80	)		—			(66,041	)
(Loss) income from continuing operations before income tax expense		(124,513	)		(124,619	)		(50,329	)		(3,725	)		182,265			(120,921	)
Income tax (benefit) expense		—			(106	)		4,853			(1,155	)		—			3,592
Net (loss) income	$	(124,513	)	$	(124,513	)	$	(55,182	)	$	(2,570	)	$	182,265		$	(124,513	)
Other comprehensive (loss) income, net of tax effects:
Net (loss) income before non-controlling interests	$	(124,513	)	$	(124,513	)	$	(55,182	)	$	(2,570	)	$	182,265		$	(124,513	)
Foreign currency translation adjustment		—			(8,558	)		(4,641	)		(3,917	)		8,558			(8,558	)
Comprehensive loss	$	(124,513	)	$	(133,071	)	$	(59,823	)	$	(6,487	)	$	190,823		$	(133,071	)

Condensed Consolidating Statements of Cash Flows

For the Year ended December 31, 2015

(In thousands)

	Parent		APX Group, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net cash used in operating activities	$	—	$	(1,052	)	$	(267,327	)	$	13,072		$	—		$	(255,307	)
Cash flows from investing activities:
Subscriber acquisition costs—company owned equipment		—		—			(23,641	)		(1,099	)		—			(24,740	)
Capital expenditures		—		—			(26,941	)		(41	)		—			(26,982	)
Proceeds from the sale of subsidiary		—		—			—			—			—			—
Proceeds from sale of capital assets		—		—			480			—			—			480
Investment in subsidiary		—		(296,895	)		—			—			296,895			—
Acquisition of intangible assets		—		—			(1,363	)		—			—			(1,363	)
Proceeds from insurance claims		—		—			2,984			—			—			2,984
Net cash used in acquisitions		—		—			—			—			—			—
Investment in marketable securities		—		—			—			—			—			—
Proceeds from marketable securities		—		—			—			—			—			—
Proceeds from note receivable		—		—			—			—			—			—
Change in restricted cash		—		—			14,214			—			—			14,214
Investment in convertible note		—		—			—			—			—			—
Other assets		—		—			(208	)		—			—			(208	)
Net cash used in investing activities		—		(296,895	)		(34,475	)		(1,140	)		296,895			(35,615	)
Cash flows from financing activities:
Proceeds from notes payable		—		296,250			—			—			—			296,250
Borrowings from revolving line of credit		—		271,000			—			—			—			271,000
Repayment of revolving line of credit				(271,000	)											(271,000	)
Intercompany receivable		—					11,601			—			(11,601	)		—
Intercompany payable		—		—			296,895			(11,601	)		(285,294	)		—
Proceeds from contract sales		—		—						—			—			—
Acquisition of contracts		—		—						—			—			—
Repayments of capital lease obligations		—		—			(6,402	)		(12	)		—			(6,414	)
Deferred financing costs		—		(5,436	)		—			—			—			(5,436	)
Capital contribution		—		—			—			—			—			—
Payment of dividends		—		—			—			—			—			—
Net cash provided by (used in) provided by financing activities		—		290,814			302,094			(11,613	)		(296,895	)		284,400
Effect of exchange rate changes on cash		—		—			—			(1,726	)		—			(1,726	)
Net increase (decrease) in cash		—		(7,133	)		292			(1,407	)		—			(8,248	)
Cash:
Beginning of period		—		9,432			(2,233	)		3,608			—			10,807
End of period	$	—	$	2,299		$	(1,941	)	$	2,201		$	—		$	2,559

Condensed Consolidating Statements of Cash Flows

For the Year ended December 31, 2014

(In thousands)

	Parent			APX Group, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	50,000		$	(894	)	$	(318,734	)	$	9,991		$	(50,000	)	$	(309,637	)
Cash flows from investing activities:
Subscriber acquisition costs—company owned equipment		—			—			(10,580	)		—			—			(10,580	)
Capital expenditures		—			—			(30,315	)		(185	)		—			(30,500	)
Proceeds from the sale of subsidiary		—			—			—			—			—			—
Proceeds from sale of capital assets		—			—			964			—			—			964
Investment in subsidiary		(32,300	)		(340,024	)		—			—			372,324			—
Acquisition of intangible assets		—			—			(9,649	)		—			—			(9,649	)
Net cash used in acquisitions		—			—			(18,500	)		—			—			(18,500	)
Investment in marketable securities		—			(60,000	)		—			—			—			(60,000	)
Proceeds from marketable securities		—			60,069			—			—			—			60,069
Proceeds from note receivable		—			—			22,699			—			—			22,699
Change in restricted cash		—			—			14,375			—			—			14,375
Investment in convertible note		—			—			(3,000	)		—			—			(3,000	)
Other assets		—			—			(2,153	)		(9	)		—			(2,162	)
Net cash used in investing activities		(32,300	)		(339,955	)		(36,159	)		(194	)		372,324			(36,284	)
Cash flows from financing activities:
Proceeds from notes payable		—			102,000			—			—			—			102,000
Borrowings from revolving line of credit		—			20,000			—			—			—			20,000
Intercompany receivable		—			—			10,658			—			(10,658	)		—
Intercompany payable		—			—			340,024			(10,658	)		(329,366	)		—
Proceeds from contract sales		—			—			2,261			—			—			2,261
Acquisition of contracts		—			—			(2,277	)		—			—			(2,277	)
Repayments of capital lease obligations		—			—			(6,297	)		(3	)		—			(6,300	)
Deferred financing costs		—			(2,927	)		—			—			—			(2,927	)
Capital contribution		32,300			32,300			—			—			(32,300	)		32,300
Payment of dividends		(50,000	)		(50,000	)		—			—			50,000			(50,000	)
Net cash (used in) provided by financing activities		(17,700	)		101,373			344,369			(10,661	)		(322,324	)		95,057
Effect of exchange rate changes on cash		—			—			—			(234	)		—			(234	)
Net increase in cash		—			(239,476	)		(10,524	)		(1,098	)		—			(251,098	)
Cash:
Beginning of period		—			248,908			8,291			4,706			—			261,905
End of period	$	—		$	9,432		$	(2,233	)	$	3,608		$	—		$	10,807

Condensed Consolidating Statements of Cash Flows

For the Year ended December 31, 2013

(In thousands)

	Parent			APX Group, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	60,000		$	(201	)	$	(227,146	)	$	8,471		$	(60,000	)	$	(218,876	)
Cash flows from investing activities:
Subscriber acquisition costs—company owned equipment		—			—			(342	)		—			—			(342	)
Capital expenditures		—			—			(8,917	)		(56	)		—			(8,973	)
Proceeds from the sale of subsidiary		—			144,750			—			—			—			144,750
Investment in subsidiary		—			(254,394	)		—			—			254,394			—
Proceeds from the sale of capital assets		—			—			306			—			—			306
Net cash used in acquisition		—			—			(4,272	)		—			—			(4,272	)
Change in restricted cash		—			—			(161	)		—			—			(161	)
Other assets		—			—			(9,648	)		3			—			(9,645	)
Net cash provided by (used in) investing activities		—			(109,644	)		(23,034	)		(53	)		254,394			121,663
Cash flows from financing activities:
Proceeds from notes payable		—			457,250			—			—			—			457,250
Intercompany receivable		—			—			7,096			—			(7,096	)		—
Intercompany payable		—			—			254,394			(7,096	)		(247,298	)		—
Borrowings from revolving line of credit		—			22,500			—			—			—			22,500
Repayments on revolving line of credit		—			(50,500	)		—			—			—			(50,500	)
Repayments of capital lease obligations		—			—			(7,207	)		—			—			(7,207	)
Deferred financing costs		—			(10,896	)		—			—			—			(10,896	)
Payment of dividends		(60,000	)		(60,000	)		—			—			60,000			(60,000	)
Net cash (used in) provided by financing activities		(60,000	)		358,354			254,283			(7,096	)		(194,394	)		351,147
Effect of exchange rate changes on cash		—			—			—			(119	)		—			(119	)
Net increase in cash		—			248,509			4,103			1,203			—			253,815
Cash:
Beginning of period		—			399			4,188			3,503			—			8,090
End of period	$	—		$	248,908		$	8,291		$	4,706		$	—		$	261,905