Company Quick10K Filing
ADT
Price6.16 EPS-1
Shares750 P/E-9
MCap4,620 P/FCF3
Net Debt9,690 EBIT-538
TEV14,311 TEV/EBIT-27
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-08-05
10-Q 2020-03-31 Filed 2020-05-07
10-K 2019-12-31 Filed 2020-03-10
10-Q 2019-09-30 Filed 2019-11-12
10-Q 2019-06-30 Filed 2019-08-06
10-Q 2019-03-31 Filed 2019-05-07
10-K 2018-12-31 Filed 2019-03-11
10-Q 2018-09-30 Filed 2018-11-08
10-Q 2018-06-30 Filed 2018-08-09
10-Q 2018-03-31 Filed 2018-05-09
10-K 2017-12-31 Filed 2018-03-15
8-K 2020-08-21 Officers
8-K 2020-08-20 Enter Agreement, Off-BS Arrangement, Regulation FD, Exhibits
8-K 2020-08-06 Other Events, Exhibits
8-K 2020-08-06 Regulation FD, Other Events, Exhibits
8-K 2020-08-05 Earnings, Regulation FD, Exhibits
8-K 2020-07-31 Enter Agreement, Earnings, Sale of Shares, Shareholder Vote, Regulation FD, Other Events, Exhibits
8-K 2020-07-22 Amend Bylaw, Code of Ethics, Exhibits
8-K 2020-05-29
8-K 2020-05-07
8-K 2020-04-09
8-K 2020-03-23
8-K 2020-03-13
8-K 2020-03-05
8-K 2020-01-28
8-K 2020-01-16
8-K 2020-01-16
8-K 2020-01-07
8-K 2019-11-12
8-K 2019-11-06
8-K 2019-11-05
8-K 2019-10-23
8-K 2019-10-11
8-K 2019-09-30
8-K 2019-09-23
8-K 2019-09-13
8-K 2019-09-12
8-K 2019-09-05
8-K 2019-09-04
8-K 2019-09-03
8-K 2019-08-06
8-K 2019-06-13
8-K 2019-06-03
8-K 2019-05-07
8-K 2019-04-11
8-K 2019-04-04
8-K 2019-04-01
8-K 2019-03-22
8-K 2019-03-21
8-K 2019-03-15
8-K 2019-03-12
8-K 2019-03-12
8-K 2019-03-11
8-K 2019-03-11
8-K 2019-02-15
8-K 2019-02-05
8-K 2019-02-01
8-K 2019-01-02
8-K 2018-12-03
8-K 2018-11-13
8-K 2018-11-09
8-K 2018-11-07
8-K 2018-10-24
8-K 2018-09-21
8-K 2018-09-12
8-K 2018-09-04
8-K 2018-08-08
8-K 2018-07-30
8-K 2018-07-25
8-K 2018-07-02
8-K 2018-05-09
8-K 2018-03-16
8-K 2018-03-15
8-K 2018-03-06
8-K 2018-02-21

ADT 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part II. Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Item 6. Exhibits.
EX-10.34 formofindemnification.htm
EX-31.1 adtincq2202010-qexhibi1.htm
EX-31.2 adtincq2202010-qexhibi2.htm
EX-32.1 adtincq2202010-qexhibi.htm
EX-32.2 adtincq2202010-qexhibi3.htm

ADT Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
2016128402016201720182020
Assets, Equity
1.41.10.70.40.0-0.32016201720182020
Rev, G Profit, Net Income
0.80.50.1-0.2-0.6-0.92016201720182020
Ops, Inv, Fin

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 FORM 10-Q
(Mark One)
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2020
OR
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from __________ to __________
Commission File Number: 001-38352
adt-20200630_g1.jpg
ADT Inc.
(Exact name of registrant as specified in its charter)
Delaware47-4116383
(State or other jurisdiction
of incorporation or organization)
(I.R.S. Employer
Identification No.)
1501 Yamato Road
Boca Raton, Florida 33431
(561) 988-3600
(Address of principal executive offices, including zip code, Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.01 per shareADTNew York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x   No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x  No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
The number of outstanding shares of the registrant’s common stock, $0.01 par value, was 760,784,454 (excluding 9,649,155 unvested shares of common stock) as of July 29, 2020.



TABLE OF CONTENTS
Page



PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
ADT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share data) 
June 30, 2020December 31, 2019
Assets
Current assets:
Cash and cash equivalents$45,473  $48,736  
Accounts receivable, net of allowance for credit losses of $59,041 and $44,337, respectively
258,901  287,243  
Inventories, net130,414  104,219  
Work-in-progress39,777  34,183  
Prepaid expenses and other current assets176,545  151,102  
Total current assets651,110  625,483  
Property and equipment, net333,686  328,731  
Subscriber system assets, net2,633,884  2,739,296  
Intangible assets, net6,234,528  6,669,645  
Goodwill5,219,361  4,959,658  
Deferred subscriber acquisition costs, net561,218  513,320  
Other assets324,453  247,519  
Total assets$15,958,240  $16,083,652  
Liabilities and stockholders' equity
Current liabilities:
Current maturities of long-term debt$63,029  $58,049  
Accounts payable213,148  241,954  
Deferred revenue347,764  342,359  
Accrued expenses and other current liabilities612,921  477,366  
Total current liabilities1,236,862  1,119,728  
Long-term debt9,685,322  9,634,226  
Deferred subscriber acquisition revenue701,129  673,625  
Deferred tax liabilities1,030,936  1,166,269  
Other liabilities509,876  305,435  
Total liabilities13,164,125  12,899,283  
Commitments and contingencies (See Note 12)
Stockholders' equity:
Preferred stock—authorized 250,000 shares of $0.01 par value; none issued and outstanding as of June 30, 2020 and December 31, 2019
    
Common stock—authorized 3,999,000,000 shares of $0.01 par value; issued and outstanding shares of 770,429,126 and 753,622,044 as of June 30, 2020 and December 31, 2019, respectively
7,704  7,536  
Additional paid-in capital6,139,135  5,977,402  
Accumulated deficit(3,206,845) (2,742,193) 
Accumulated other comprehensive loss(145,879) (58,376) 
Total stockholders' equity2,794,115  3,184,369  
Total liabilities and stockholders' equity$15,958,240  $16,083,652  
See Notes to Condensed Consolidated Financial Statements
1



ADT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)
For the Three Months EndedFor the Six Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Monitoring and related services$1,041,379  $1,085,422  $2,087,336  $2,155,837  
Installation and other290,008  198,322  613,803  370,967  
Total revenue1,331,387  1,283,744  2,701,139  2,526,804  
Cost of revenue (exclusive of depreciation and amortization shown separately below)376,347  338,089  784,333  664,047  
Selling, general and administrative expenses414,031  344,664  867,258  669,173  
Depreciation and intangible asset amortization477,869  500,864  966,893  996,742  
Merger, restructuring, integration, and other12,038  6,990  120,832  13,269  
Loss on sale of business680    757    
Operating income (loss) 50,422  93,137  (38,934) 183,573  
Interest expense, net(187,265) (154,641) (412,632) (313,546) 
Loss on extinguishment of debt  (66,911) (65,843) (88,472) 
Other income2,271  1,510  4,580  2,709  
Loss before income taxes(134,572) (126,905) (512,829) (215,736) 
Income tax benefit27,831  22,848  105,795  45,209  
Net loss$(106,741) $(104,057) $(407,034) $(170,527) 
Net loss per share:
Basic and diluted$(0.14) $(0.14) $(0.54) $(0.23) 
Weighted-average number of shares:
Basic and diluted760,597  749,575  759,845  752,895  
See Notes to Condensed Consolidated Financial Statements
2



ADT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
(in thousands)
For the Three Months EndedFor the Six Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Net loss$(106,741) $(104,057) $(407,034) $(170,527) 
Other comprehensive income (loss), net of tax:
Cash flow hedges8,565  (32,934) (87,498) (50,199) 
Foreign currency translation  10,646    20,051  
Defined benefit pension plans(12) (6) (5) (12) 
Total other comprehensive income (loss), net of tax 8,553  (22,294) (87,503) (30,160) 
Comprehensive loss$(98,188) $(126,351) $(494,537) $(200,687) 
See Notes to Condensed Consolidated Financial Statements
3



ADT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(in thousands)
For the Three Months Ended June 30, 2020For the Three Months Ended June 30, 2019
Number of Common SharesCommon StockAdditional
Paid-In
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Loss
Total
Stockholders'
Equity
Number of Common SharesCommon StockAdditional
Paid-In
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Loss
Total
Stockholders'
Equity
Balances at beginning of period770,148  $7,701  $6,114,409  $(3,072,852) $(154,432) $2,894,826  767,005  $7,670  $5,993,668  $(1,773,662) $(79,645) $4,148,031  
Net loss—  —  —  (106,741) —  (106,741) —  —  —  (104,057) —  (104,057) 
Other
    comprehensive
    income (loss),
    net of tax
—  —  —  —  8,553  8,553  —  —  —  —  (22,294) (22,294) 
Repurchases
    of common
    stock
(1)   (4)   —  (4) (20,610) (206) (127,808)   —  (128,014) 
Dividends,
    including
    dividends
    reinvested
    in common
    stock
1    4  (26,767) —  (26,763)       (26,368) —  (26,368) 
Share-based
    compensation
    expense
  —  24,828  —  —  24,828    —  22,540  —  —  22,540  
Other281  3  (102) (485) —  (584) (35)   176  (155) —  21  
Balances at end of period770,429  $7,704  $6,139,135  $(3,206,845) $(145,879) $2,794,115  746,360  $7,464  $5,888,576  $(1,904,242) $(101,939) $3,889,859  
See Notes to Condensed Consolidated Financial Statements









4



ADT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(in thousands)
For the Six Months Ended June 30, 2020For the Six Months Ended June 30, 2019
Number of Common SharesCommon StockAdditional
Paid-In
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Loss
Total
Stockholders'
Equity
Number of Common SharesCommon StockAdditional
Paid-In
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Loss
Total
Stockholders'
Equity
Balances at beginning of period753,622  $7,536  $5,977,402  $(2,742,193) $(58,376) $3,184,369  766,881  $7,669  $5,969,347  $(1,680,432) $(71,779) $4,224,805  
Adoption of
    accounting
    standard,
 net of tax
—  —  —  (2,157) —  (2,157) —  —  —    —    
Net loss—  —  —  (407,034) —  (407,034) —  —  —  (170,527) —  (170,527) 
Other
    comprehensive
    loss, net of
    tax
—  —  —  —  (87,503) (87,503) —  —  —  —  (30,160) (30,160) 
Issuance of
    common stock
16,279  163  113,678  —  —  113,841        —  —    
Repurchases
    of common
    stock
(1)   (4)   —  (4) (23,883) (239) (149,629)   —  (149,868) 
Dividends,
    including
    dividends
    reinvested
    in common
    stock
1    7  (53,884) —  (53,877) 3,407  34  22,407  (53,093) —  (30,652) 
Share-based
    compensation
    expense
  —  48,327  —  —  48,327    —  46,250  —  —  46,250  
Other528  5  (275) (1,577) (1,847) (45)   201  (190) —  11  
Balances at end of period770,429  $7,704  $6,139,135  $(3,206,845) $(145,879) $2,794,115  746,360  $7,464  $5,888,576  $(1,904,242) $(101,939) $3,889,859  
See Notes to Condensed Consolidated Financial Statements
5



ADT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
For the Six Months Ended
June 30, 2020June 30, 2019
Cash flows from operating activities:
Net loss$(407,034) $(170,527) 
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and intangible asset amortization966,893  996,742  
Amortization of deferred subscriber acquisition costs45,416  37,760  
Amortization of deferred subscriber acquisition revenue(59,017) (50,472) 
Share-based compensation expense48,327  46,250  
Deferred income taxes(115,422) (47,885) 
Provision for losses on receivables and inventory77,876  27,641  
Loss on extinguishment of debt65,843  88,472  
Loss on sale of business757    
Unrealized loss on interest rate swap contracts97,900  8,564  
Other non-cash items, net77,344  59,393  
Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions:
Deferred subscriber acquisition costs(94,865) (97,650) 
Deferred subscriber acquisition revenue70,039  134,877  
Other, net(145,050) (53,993) 
Net cash provided by operating activities629,007  979,172  
Cash flows from investing activities:
Dealer generated customer accounts and bulk account purchases(144,463) (333,846) 
Subscriber system asset expenditures(137,231) (293,973) 
Purchases of property and equipment(76,245) (84,461) 
Acquisition of businesses, net of cash acquired(179,372) (76,511) 
Sale of business, net of cash sold(2,448)   
Other investing, net4,185  1,152  
Net cash used in investing activities(535,574) (787,639) 
Cash flows from financing activities:
Proceeds from long-term borrowings1,640,000  1,956,393  
Proceeds from receivables facility19,852    
Repayment of long-term borrowings, including call premiums(1,673,607) (2,249,641) 
Repayment of receivables facility(423)   
Dividends on common stock(53,323) (30,407) 
Repurchases of common stock(4) (149,868) 
Deferred financing costs(15,616) (43,716) 
Other financing, net(12,906) 1,804  
Net cash used in financing activities(96,027) (515,435) 
Effect of currency translation on cash  792  
Net decrease in cash and cash equivalents and restricted cash and cash equivalents (2,594) (323,110) 
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period48,736  367,162  
Cash and cash equivalents and restricted cash and cash equivalents at end of period$46,142  $44,052  
Supplemental schedule of non-cash investing and financing activities:
Issuance of shares in lieu of cash dividend$7  $22,441  
Issuance of shares for acquisition of business$113,841  $  
See Notes to Condensed Consolidated Financial Statements
6


ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Description of Business and Summary of Significant Accounting Policies
Organization and Business
ADT Inc., together with its wholly-owned subsidiaries (collectively, the “Company”), is a leading provider of security, automation, and smart home solutions serving consumer and business customers in the United States (“U.S.”). ADT Inc. was incorporated in the State of Delaware in May 2015 as a holding company with no assets or liabilities. In July 2015, the Company acquired Protection One, Inc. and ASG Intermediate Holding Corp. (collectively, the “Formation Transactions”), which were instrumental in the commencement of the Company’s operations. In May 2016, the Company acquired The ADT Security Corporation (formerly named The ADT Corporation) (“The ADT Corporation”) (the “ADT Acquisition”). The Company primarily conducts business under the ADT brand name.
In January 2018, the Company completed an initial public offering (“IPO”) and its common stock began trading on the New York Stock Exchange under the symbol “ADT.”
The Company is majority-owned by Prime Security Services TopCo Parent, L.P. (“Ultimate Parent”). Ultimate Parent is majority-owned by Apollo Investment Fund VIII, L.P. and its related funds that are directly or indirectly managed by Apollo Global Management, Inc. (together with its subsidiaries and affiliates, “Apollo” or the “Sponsor”).
Basis of Presentation and Significant Accounting Policies
The preparation of the condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (“GAAP”) requires the Company to select accounting policies and make estimates that affect amounts reported in the condensed consolidated financial statements and the accompanying notes. The Company’s estimates are based on the relevant information available at the end of each period. Actual results could differ materially from these estimates under different assumptions or market conditions.
COVID-19 Pandemic
During March 2020, the World Health Organization declared the outbreak of a novel coronavirus as a pandemic (the “COVID-19 Pandemic”), which has become increasingly widespread in the U.S. Containment efforts and responses to the COVID-19 Pandemic have varied by individuals, businesses, and state and local municipalities, and in certain areas of the U.S., initial and precautionary measures helped mitigate the spread of the coronavirus. However, subsequent easing of such measures resulted in the re-emergence of the coronavirus. The COVID-19 Pandemic has had a notable adverse impact on general economic conditions, including but not limited to the temporary closures of many businesses, “shelter in place” and other governmental regulations, and reduced consumer spending due to significant unemployment and other effects attributable to the COVID-19 Pandemic. In order to continue to service customers, the Company has adjusted and is continuously evolving certain aspects of its operations to protect employees and customers, which includes (i) the temporary suspension of door-to-door sales as well as a small portion of dealer and direct sales channel activities, (ii) the implementation of health checklists for employees interacting with customers in-person, and (iii) the implementation of work from home actions, including the majority of the Company’s call center professionals.
The Company considered the emergence and pervasive economic impact of the COVID-19 Pandemic in its assessment of its financial position, results of operations, cash flows, and certain accounting estimates as of and for the three and six months ended June 30, 2020. Additional information on the impacted estimates is included in the respective footnotes that follow. Due to the evolving and uncertain nature of the COVID-19 Pandemic, it is possible that the effects of the COVID-19 Pandemic could materially impact the Company’s estimates and condensed consolidated financial statements in future reporting periods.
Basis of Presentation and Consolidation
The condensed consolidated financial statements included herein are unaudited, but in the opinion of management, such financial statements include all adjustments, consisting of normal recurring adjustments, necessary to summarize fairly the Company’s financial position, results of operations, and cash flows for the interim periods presented. The interim results reported in these condensed consolidated financial statements should not be taken as indicative of results that may be expected for future interim periods or the full year. For a more comprehensive understanding of the Company and its interim results, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated
7


financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Annual Report”), which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 10, 2020. The Company’s accounting policies used in the preparation of these condensed consolidated financial statements do not differ from those used for the annual consolidated financial statements, unless otherwise noted.
The Condensed Consolidated Balance Sheet as of December 31, 2019 included herein was derived from the audited consolidated financial statements as of that date but does not include all the footnote disclosures from the annual consolidated financial statements.
The condensed consolidated financial statements include the accounts of ADT Inc. and its wholly owned subsidiaries, and have been prepared in U.S. dollars in accordance with GAAP. All intercompany transactions have been eliminated. Certain prior period amounts have been reclassified to conform with the current period presentation.
The Company has a single operating and reportable segment based on the manner in which the Chief Executive Officer, who is the chief operating decision maker, evaluates performance and makes decisions about how to allocate resources.
Cash and Cash Equivalents and Restricted Cash and Cash Equivalents
All highly liquid investments with original maturities of three months or less from the time of purchase are considered to be cash equivalents. Restricted cash and cash equivalents are cash and cash equivalents that are restricted for a specific purpose and cannot be included in the general cash and cash equivalents account. Restricted cash and cash equivalents are reflected in prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets.
The following table provides a reconciliation of the amount of cash and cash equivalents and restricted cash and cash equivalents reported in the Condensed Consolidated Balance Sheets to the total of the same of such amounts shown in the Condensed Consolidated Statements of Cash Flows:
(in thousands)June 30, 2020December 31, 2019
Cash and cash equivalents$45,473  $48,736  
Restricted cash and cash equivalents in prepaid expenses and other current assets669    
Cash and cash equivalents and restricted cash and cash equivalents at end of period$46,142  $48,736  
Subscriber System Assets, net and Deferred Subscriber Acquisition Costs, net
The Company capitalizes certain costs associated with transactions in which the Company retains ownership of the security system as well as incremental selling expenses related to acquiring customers. These costs include equipment, installation costs, and other incremental costs and are recorded in subscriber system assets, net, and deferred subscriber acquisition costs, net, in the Condensed Consolidated Balance Sheets. These assets embody a probable future economic benefit as they contribute to the generation of future monitoring and related services revenue for the Company.
Subscriber system assets represent capitalized equipment and installation costs incurred in connection with transactions in which the Company retains ownership of the security system. Upon customer termination, the Company may retrieve such assets. Depreciation expense relating to subscriber system assets is included in depreciation and intangible asset amortization in the Condensed Consolidated Statements of Operations and was $126 million and $141 million for the three months ended June 30, 2020 and 2019, respectively, and $259 million and $281 million for the six months ended June 30, 2020 and 2019, respectively.
The gross carrying amount, accumulated depreciation, and net carrying amount of subscriber system assets as of June 30, 2020 and December 31, 2019 were as follows:
(in thousands)June 30, 2020December 31, 2019
Gross carrying amount$4,553,515  $4,597,908  
Accumulated depreciation(1,919,631) (1,858,612) 
Subscriber system assets, net$2,633,884  $2,739,296  
8


Deferred subscriber acquisition costs represent incremental selling expenses (primarily commissions) related to acquiring customers. Amortization expense relating to deferred subscriber acquisition costs included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations was $23 million and $20 million for the three months ended June 30, 2020 and 2019, respectively, and $45 million and $38 million for the six months ended June 30, 2020 and 2019, respectively.
Subscriber system assets and any related deferred subscriber acquisition costs resulting from customer acquisitions are accounted for on a pooled basis based on the month and year of acquisition. The Company depreciates and amortizes its pooled subscriber system assets and related deferred subscriber acquisition costs using an accelerated method over the estimated life of the customer relationship, which is 15 years.
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following as of June 30, 2020 and December 31, 2019:
(in thousands)June 30, 2020December 31, 2019
Accrued interest$136,369  $115,070  
Payroll-related accruals100,362  91,944  
Other accrued liabilities376,190  270,352  
Accrued expenses and other current liabilities$612,921  $477,366  
Radio Conversion Costs
In 2019, the providers of 3G and Code-Division Multiple Access (“CDMA”) cellular networks notified the Company that they will be retiring their 3G and CDMA networks during 2022. Accordingly, during 2019 the Company commenced a program to replace the 3G and CDMA cellular equipment used in many of its security systems. The Company estimates the range of net costs for this replacement program at $200 million to $325 million through 2022. The Company expects to incur approximately $