10-Q 1 ck0001713952-20220930.htm 10-Q ck0001713952-20220930
FALSE2022Q312/310001713952P3YP3YP3Yhttp://fasb.org/us-gaap/2022#PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortizationhttp://fasb.org/us-gaap/2022#PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization00017139522022-01-012022-09-3000017139522022-11-07xbrli:shares00017139522022-09-30iso4217:USD00017139522021-12-31iso4217:USDxbrli:shares00017139522022-07-012022-09-3000017139522021-07-012021-09-3000017139522021-01-012021-09-300001713952us-gaap:CommonStockMember2022-06-300001713952us-gaap:AdditionalPaidInCapitalMember2022-06-300001713952us-gaap:RetainedEarningsMember2022-06-300001713952us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-3000017139522022-06-300001713952us-gaap:CommonStockMember2022-07-012022-09-300001713952us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001713952us-gaap:RetainedEarningsMember2022-07-012022-09-300001713952us-gaap:CommonStockMember2022-09-300001713952us-gaap:AdditionalPaidInCapitalMember2022-09-300001713952us-gaap:RetainedEarningsMember2022-09-300001713952us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001713952us-gaap:CommonStockMember2021-06-300001713952us-gaap:AdditionalPaidInCapitalMember2021-06-300001713952us-gaap:RetainedEarningsMember2021-06-300001713952us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-3000017139522021-06-300001713952us-gaap:CommonStockMember2021-07-012021-09-300001713952us-gaap:RetainedEarningsMember2021-07-012021-09-300001713952us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300001713952us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001713952us-gaap:CommonStockMember2021-09-300001713952us-gaap:AdditionalPaidInCapitalMember2021-09-300001713952us-gaap:RetainedEarningsMember2021-09-300001713952us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-3000017139522021-09-300001713952us-gaap:CommonStockMember2021-12-310001713952us-gaap:AdditionalPaidInCapitalMember2021-12-310001713952us-gaap:RetainedEarningsMember2021-12-310001713952us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001713952us-gaap:CommonStockMember2022-01-012022-09-300001713952us-gaap:AdditionalPaidInCapitalMember2022-01-012022-09-300001713952us-gaap:RetainedEarningsMember2022-01-012022-09-300001713952us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300001713952us-gaap:CommonStockMember2020-12-310001713952us-gaap:AdditionalPaidInCapitalMember2020-12-310001713952us-gaap:RetainedEarningsMember2020-12-310001713952us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-3100017139522020-12-310001713952us-gaap:CommonStockMember2021-01-012021-09-300001713952us-gaap:AdditionalPaidInCapitalMember2021-01-012021-09-300001713952us-gaap:RetainedEarningsMember2021-01-012021-09-300001713952us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-09-300001713952ck0001713952:VivintFlexPayMember2022-09-30ck0001713952:payment_option0001713952ck0001713952:VivintFlexPayMembersrt:MinimumMember2022-09-300001713952ck0001713952:VivintFlexPayMembersrt:MaximumMember2022-09-30xbrli:pure0001713952ck0001713952:VivintFlexPayMembersrt:MinimumMember2022-01-012022-09-300001713952ck0001713952:VivintFlexPayMembersrt:MaximumMember2022-01-012022-09-300001713952srt:MinimumMember2022-09-300001713952srt:MaximumMember2022-09-300001713952srt:MinimumMemberck0001713952:SubscriberContractsMember2022-01-012022-09-300001713952srt:MaximumMemberck0001713952:SubscriberContractsMember2022-01-012022-09-300001713952ck0001713952:CapitalizedContractCostsMember2022-07-012022-09-300001713952ck0001713952:CapitalizedContractCostsMember2021-07-012021-09-300001713952ck0001713952:CapitalizedContractCostsMember2022-01-012022-09-300001713952ck0001713952:CapitalizedContractCostsMember2021-01-012021-09-300001713952us-gaap:FiniteLivedIntangibleAssetsMember2022-07-012022-09-300001713952us-gaap:FiniteLivedIntangibleAssetsMember2021-07-012021-09-300001713952us-gaap:FiniteLivedIntangibleAssetsMember2022-01-012022-09-300001713952us-gaap:FiniteLivedIntangibleAssetsMember2021-01-012021-09-300001713952us-gaap:PropertyPlantAndEquipmentMember2022-07-012022-09-300001713952us-gaap:PropertyPlantAndEquipmentMember2021-07-012021-09-300001713952us-gaap:PropertyPlantAndEquipmentMember2022-01-012022-09-300001713952us-gaap:PropertyPlantAndEquipmentMember2021-01-012021-09-300001713952us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2022-09-300001713952us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2021-12-310001713952ck0001713952:NotesPayableMember2022-09-300001713952ck0001713952:NotesPayableMember2021-12-310001713952us-gaap:InterestExpenseMember2022-07-012022-09-300001713952us-gaap:InterestExpenseMember2021-07-012021-09-300001713952us-gaap:InterestExpenseMember2022-01-012022-09-300001713952us-gaap:InterestExpenseMember2021-01-012021-09-300001713952ck0001713952:VivintSkyControlPanelsMember2022-01-012022-09-300001713952ck0001713952:TwoGigSaleMember2022-01-012022-09-30ck0001713952:reporting_unit0001713952us-gaap:LineOfCreditMemberus-gaap:LetterOfCreditMember2022-09-300001713952us-gaap:LineOfCreditMemberus-gaap:LetterOfCreditMember2021-12-3100017139522022-10-012022-09-3000017139522024-10-012022-09-300001713952ck0001713952:A6750SeniorSecuredNoesDue2027Memberus-gaap:SeniorNotesMember2022-09-300001713952ck0001713952:A5750SeniorSecuredNotesDue2029Memberus-gaap:SeniorNotesMember2022-09-300001713952ck0001713952:September2018IssuanceMemberck0001713952:TermLoanMember2022-09-300001713952ck0001713952:A6750SeniorSecuredNoesDue2027Memberus-gaap:SeniorNotesMember2021-12-310001713952ck0001713952:A5750SeniorSecuredNotesDue2029Memberus-gaap:SeniorNotesMember2021-12-310001713952ck0001713952:September2018IssuanceMemberck0001713952:TermLoanMember2021-12-310001713952us-gaap:RevolvingCreditFacilityMember2022-09-300001713952us-gaap:RevolvingCreditFacilityMember2021-12-310001713952ck0001713952:September2018IssuanceMemberus-gaap:RevolvingCreditFacilityMemberck0001713952:TermLoanMember2021-07-310001713952ck0001713952:September2018IssuanceMemberck0001713952:TermLoanMember2022-09-300001713952ck0001713952:September2018IssuanceMemberck0001713952:TermLoanMember2022-01-012022-09-300001713952us-gaap:RevolvingCreditFacilityMember2022-01-012022-09-30ck0001713952:step-down0001713952us-gaap:FederalFundsEffectiveSwapRateMemberck0001713952:CreditAgreementMember2022-01-012022-09-300001713952ck0001713952:CreditAgreementMemberus-gaap:LondonInterbankOfferedRateLIBORMember2022-01-012022-09-300001713952ck0001713952:LIBORPlus1Membersrt:MaximumMemberck0001713952:CreditAgreementMember2022-01-012022-09-300001713952ck0001713952:LIBORPlus1Membersrt:MinimumMemberck0001713952:CreditAgreementMember2022-01-012022-09-300001713952srt:MaximumMemberck0001713952:LIBORReferencedToApplicablePageForLIBORRateForTheInterestPeriodRelevantToSuchBorrowingsMemberck0001713952:CreditAgreementMember2022-01-012022-09-300001713952srt:MinimumMemberck0001713952:LIBORReferencedToApplicablePageForLIBORRateForTheInterestPeriodRelevantToSuchBorrowingsMemberck0001713952:CreditAgreementMember2022-01-012022-09-300001713952us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2022-01-012022-09-300001713952ck0001713952:A6750SeniorSecuredNoesDue2027Memberus-gaap:SeniorNotesMember2022-01-012022-09-300001713952us-gaap:SeniorNotesMemberck0001713952:A5750SeniorNotesDue2029Member2021-12-310001713952us-gaap:SeniorNotesMemberck0001713952:A5750SeniorNotesDue2029Member2022-01-012022-09-300001713952us-gaap:SeniorNotesMemberck0001713952:A5750SeniorNotesDue2029Member2022-09-300001713952ck0001713952:September2018IssuanceMemberck0001713952:TermLoanMember2021-12-310001713952us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2020-12-310001713952us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2021-01-012021-09-300001713952us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2021-09-300001713952ck0001713952:A7.875PercentSeniorSecuredNotesDue2022Memberus-gaap:SeniorNotesMember2020-12-310001713952ck0001713952:A7.875PercentSeniorSecuredNotesDue2022Memberus-gaap:SeniorNotesMember2021-01-012021-09-300001713952ck0001713952:A7.875PercentSeniorSecuredNotesDue2022Memberus-gaap:SeniorNotesMember2021-09-300001713952us-gaap:SeniorNotesMemberck0001713952:A7.625PercentSeniorNotesDue2023Member2020-12-310001713952us-gaap:SeniorNotesMemberck0001713952:A7.625PercentSeniorNotesDue2023Member2021-01-012021-09-300001713952us-gaap:SeniorNotesMemberck0001713952:A7.625PercentSeniorNotesDue2023Member2021-09-300001713952us-gaap:SeniorNotesMemberck0001713952:A8.500SeniorSecuredNotesDue2024Member2020-12-310001713952us-gaap:SeniorNotesMemberck0001713952:A8.500SeniorSecuredNotesDue2024Member2021-01-012021-09-300001713952us-gaap:SeniorNotesMemberck0001713952:A8.500SeniorSecuredNotesDue2024Member2021-09-300001713952ck0001713952:A6750SeniorSecuredNoesDue2027Memberus-gaap:SeniorNotesMember2020-12-310001713952ck0001713952:A6750SeniorSecuredNoesDue2027Memberus-gaap:SeniorNotesMember2021-01-012021-09-300001713952ck0001713952:A6750SeniorSecuredNoesDue2027Memberus-gaap:SeniorNotesMember2021-09-300001713952us-gaap:SeniorNotesMemberck0001713952:A5750SeniorNotesDue2029Member2020-12-310001713952us-gaap:SeniorNotesMemberck0001713952:A5750SeniorNotesDue2029Member2021-01-012021-09-300001713952us-gaap:SeniorNotesMemberck0001713952:A5750SeniorNotesDue2029Member2021-09-300001713952ck0001713952:September2018IssuanceMemberck0001713952:TermLoanMember2020-12-310001713952ck0001713952:September2018IssuanceMemberck0001713952:TermLoanMember2021-01-012021-09-300001713952ck0001713952:September2018IssuanceMemberck0001713952:TermLoanMember2021-09-300001713952ck0001713952:RetailInstallmentContractsMember2022-01-012022-09-300001713952ck0001713952:RetailInstallmentContractsMember2022-09-300001713952ck0001713952:RetailInstallmentContractsMember2021-12-310001713952ck0001713952:RetailInstallmentContractsMember2020-12-310001713952ck0001713952:RetailInstallmentContractsMember2021-01-012021-09-300001713952ck0001713952:RetailInstallmentContractsMember2021-09-300001713952ck0001713952:RetailInstallmentContractsMember2022-07-012022-09-300001713952ck0001713952:RetailInstallmentContractsMember2021-07-012021-09-300001713952us-gaap:VehiclesMember2022-09-300001713952us-gaap:VehiclesMember2021-12-310001713952srt:MinimumMemberus-gaap:VehiclesMember2022-01-012022-09-300001713952srt:MaximumMemberus-gaap:VehiclesMember2022-01-012022-09-300001713952ck0001713952:ComputerEquipmentAndSoftwareMember2022-09-300001713952ck0001713952:ComputerEquipmentAndSoftwareMember2021-12-310001713952srt:MinimumMemberck0001713952:ComputerEquipmentAndSoftwareMember2022-01-012022-09-300001713952srt:MaximumMemberck0001713952:ComputerEquipmentAndSoftwareMember2022-01-012022-09-300001713952us-gaap:LeaseholdImprovementsMember2022-09-300001713952us-gaap:LeaseholdImprovementsMember2021-12-310001713952srt:MinimumMemberus-gaap:LeaseholdImprovementsMember2022-01-012022-09-300001713952srt:MaximumMemberus-gaap:LeaseholdImprovementsMember2022-01-012022-09-300001713952us-gaap:FurnitureAndFixturesMember2022-09-300001713952us-gaap:FurnitureAndFixturesMember2021-12-310001713952srt:MinimumMemberus-gaap:FurnitureAndFixturesMember2022-01-012022-09-300001713952srt:MaximumMemberus-gaap:FurnitureAndFixturesMember2022-01-012022-09-300001713952us-gaap:ConstructionInProgressMember2022-09-300001713952us-gaap:ConstructionInProgressMember2021-12-310001713952ck0001713952:InternalUseSoftwareMember2022-01-012022-09-300001713952us-gaap:CustomerContractsMember2022-09-300001713952us-gaap:CustomerContractsMember2021-12-310001713952us-gaap:CustomerContractsMember2022-01-012022-09-300001713952ck0001713952:TwoGigTwoPointZerotechnologyMember2022-09-300001713952ck0001713952:TwoGigTwoPointZerotechnologyMember2021-12-310001713952ck0001713952:TwoGigTwoPointZerotechnologyMember2022-01-012022-09-300001713952ck0001713952:CmsAndOtherTechnologyMember2022-09-300001713952ck0001713952:CmsAndOtherTechnologyMember2021-12-310001713952srt:MinimumMemberck0001713952:CmsAndOtherTechnologyMember2022-01-012022-09-300001713952srt:MaximumMemberck0001713952:CmsAndOtherTechnologyMember2022-01-012022-09-300001713952ck0001713952:SpaceMonkeyTechnologyMember2022-09-300001713952ck0001713952:SpaceMonkeyTechnologyMember2021-12-310001713952ck0001713952:SpaceMonkeyTechnologyMember2022-01-012022-09-300001713952us-gaap:PatentsMember2022-09-300001713952us-gaap:PatentsMember2021-12-310001713952us-gaap:PatentsMember2022-01-012022-09-300001713952ck0001713952:InternetDomainNameMember2022-09-300001713952ck0001713952:InternetDomainNameMember2021-12-310001713952ck0001713952:A6750SeniorSecuredNoesDue2027Memberus-gaap:FairValueInputsLevel2Memberus-gaap:SeniorNotesMember2022-09-300001713952ck0001713952:A6750SeniorSecuredNoesDue2027Memberus-gaap:FairValueInputsLevel2Memberus-gaap:SeniorNotesMember2021-12-310001713952ck0001713952:A5750SeniorSecuredNotesDue2029Memberus-gaap:FairValueInputsLevel2Memberus-gaap:SeniorNotesMember2022-09-300001713952ck0001713952:A5750SeniorSecuredNotesDue2029Memberus-gaap:FairValueInputsLevel2Memberus-gaap:SeniorNotesMember2021-12-310001713952us-gaap:FairValueInputsLevel2Memberck0001713952:TermLoanMember2022-09-300001713952us-gaap:FairValueInputsLevel2Memberck0001713952:TermLoanMember2021-12-310001713952us-gaap:FairValueInputsLevel2Member2022-09-300001713952us-gaap:FairValueInputsLevel2Member2021-12-310001713952us-gaap:FairValueInputsLevel2Memberck0001713952:AccruedExpensesAndOtherCurrentLiabilitiesMember2022-09-300001713952us-gaap:FairValueInputsLevel2Memberck0001713952:AccruedExpensesAndOtherCurrentLiabilitiesMember2021-12-310001713952us-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:FairValueInputsLevel2Member2022-09-300001713952us-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:FairValueInputsLevel2Member2021-12-310001713952us-gaap:FairValueInputsLevel3Member2021-12-310001713952us-gaap:FairValueInputsLevel3Member2020-12-310001713952us-gaap:FairValueInputsLevel3Member2022-01-012022-09-300001713952us-gaap:FairValueInputsLevel3Member2021-01-012021-09-300001713952us-gaap:FairValueInputsLevel3Member2022-09-300001713952us-gaap:FairValueInputsLevel3Member2021-09-300001713952ck0001713952:PrivatePlacementWarrantsMember2021-12-310001713952ck0001713952:PrivatePlacementWarrantsMember2022-01-012022-09-300001713952ck0001713952:PrivatePlacementWarrantsMember2022-09-300001713952ck0001713952:PublicWarrantsMember2020-12-310001713952ck0001713952:PrivatePlacementWarrantsMember2020-12-310001713952ck0001713952:PublicWarrantsMember2021-01-012021-09-300001713952ck0001713952:PrivatePlacementWarrantsMember2021-01-012021-09-300001713952ck0001713952:PublicWarrantsMember2021-09-300001713952ck0001713952:PrivatePlacementWarrantsMember2021-09-300001713952us-gaap:WarrantMemberck0001713952:PrivatePlacementWarrantsMember2022-09-300001713952us-gaap:WarrantMemberck0001713952:PrivatePlacementWarrantsMember2021-09-300001713952us-gaap:MeasurementInputExercisePriceMemberus-gaap:WarrantMemberck0001713952:PrivatePlacementWarrantsMember2022-09-300001713952us-gaap:MeasurementInputExercisePriceMemberus-gaap:WarrantMemberck0001713952:PrivatePlacementWarrantsMember2021-09-300001713952us-gaap:WarrantMemberus-gaap:MeasurementInputSharePriceMemberck0001713952:PrivatePlacementWarrantsMember2022-09-300001713952us-gaap:WarrantMemberus-gaap:MeasurementInputSharePriceMemberck0001713952:PrivatePlacementWarrantsMember2021-09-300001713952us-gaap:WarrantMemberus-gaap:MeasurementInputExpectedTermMemberck0001713952:PrivatePlacementWarrantsMember2022-09-300001713952us-gaap:WarrantMemberus-gaap:MeasurementInputExpectedTermMemberck0001713952:PrivatePlacementWarrantsMember2021-09-300001713952us-gaap:WarrantMemberus-gaap:MeasurementInputPriceVolatilityMemberck0001713952:PrivatePlacementWarrantsMember2022-09-300001713952us-gaap:WarrantMemberus-gaap:MeasurementInputPriceVolatilityMemberck0001713952:PrivatePlacementWarrantsMember2021-09-300001713952us-gaap:WarrantMemberus-gaap:MeasurementInputRiskFreeInterestRateMemberck0001713952:PrivatePlacementWarrantsMember2022-09-300001713952us-gaap:WarrantMemberus-gaap:MeasurementInputRiskFreeInterestRateMemberck0001713952:PrivatePlacementWarrantsMember2021-09-300001713952us-gaap:MeasurementInputExpectedDividendRateMemberus-gaap:WarrantMemberck0001713952:PrivatePlacementWarrantsMember2022-09-300001713952us-gaap:MeasurementInputExpectedDividendRateMemberus-gaap:WarrantMemberck0001713952:PrivatePlacementWarrantsMember2021-09-300001713952ck0001713952:TrackingUnitsMember2022-09-300001713952ck0001713952:LongTermIncentivePlanMember2021-01-012021-01-310001713952ck0001713952:EarnoutSharesMemberck0001713952:LongTermIncentivePlanMember2021-01-012021-01-310001713952ck0001713952:LongTermIncentivePlanMember2022-09-300001713952us-gaap:RestrictedStockUnitsRSUMemberck0001713952:A2020OmnibusIncentivePlanMember2022-07-012022-09-300001713952us-gaap:RestrictedStockUnitsRSUMemberck0001713952:A2020OmnibusIncentivePlanMember2022-01-012022-09-30ck0001713952:anniversary0001713952us-gaap:RestrictedStockUnitsRSUMemberck0001713952:A2020OmnibusIncentivePlanMember2022-09-300001713952us-gaap:PerformanceSharesMember2022-01-012022-09-300001713952us-gaap:PerformanceSharesMember2022-07-012022-09-300001713952srt:MinimumMemberus-gaap:PerformanceSharesMember2022-07-012022-09-300001713952srt:MinimumMemberus-gaap:PerformanceSharesMember2022-01-012022-09-300001713952srt:MaximumMemberus-gaap:PerformanceSharesMember2022-07-012022-09-300001713952srt:MaximumMemberus-gaap:PerformanceSharesMember2022-01-012022-09-300001713952us-gaap:PerformanceSharesMember2022-09-300001713952us-gaap:OperatingExpenseMember2022-07-012022-09-300001713952us-gaap:OperatingExpenseMember2021-07-012021-09-300001713952us-gaap:OperatingExpenseMember2022-01-012022-09-300001713952us-gaap:OperatingExpenseMember2021-01-012021-09-300001713952us-gaap:SellingAndMarketingExpenseMember2022-07-012022-09-300001713952us-gaap:SellingAndMarketingExpenseMember2021-07-012021-09-300001713952us-gaap:SellingAndMarketingExpenseMember2022-01-012022-09-300001713952us-gaap:SellingAndMarketingExpenseMember2021-01-012021-09-300001713952us-gaap:GeneralAndAdministrativeExpenseMember2022-07-012022-09-300001713952us-gaap:GeneralAndAdministrativeExpenseMember2021-07-012021-09-300001713952us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-09-300001713952us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-09-300001713952us-gaap:CommonClassAMember2022-09-30ck0001713952:vote0001713952us-gaap:CommonClassAMember2022-01-012022-09-300001713952us-gaap:CommonClassAMember2021-01-012021-09-300001713952ck0001713952:DOJFIRREAInvestigationMember2021-01-012021-01-310001713952ck0001713952:FTCInvestigationMember2021-05-032021-05-030001713952ck0001713952:FTCInvestigationMember2022-01-012022-09-300001713952srt:MinimumMember2022-01-012022-09-300001713952srt:MaximumMember2022-01-012022-09-300001713952ck0001713952:VivintGivesBackMember2022-09-300001713952ck0001713952:VivintGivesBackMember2021-12-310001713952srt:AffiliatedEntityMembersrt:MinimumMemberck0001713952:BlackstoneManagementPartnersLlcMember2022-01-012022-09-300001713952srt:AffiliatedEntityMemberck0001713952:BlackstoneManagementPartnersLlcMember2022-01-012022-09-300001713952srt:AffiliatedEntityMemberck0001713952:BlackstoneManagementPartnersLlcMember2021-01-012021-09-300001713952srt:AffiliatedEntityMemberck0001713952:BlackstoneManagementPartnersLlcMemberck0001713952:BlackstoneManagementPartnersLLCSupportAndServicesAgreementMember2022-09-300001713952srt:AffiliatedEntityMemberck0001713952:BlackstoneManagementPartnersLlcMemberck0001713952:BlackstoneManagementPartnersLLCSupportAndServicesAgreementMember2021-01-012021-09-300001713952srt:AffiliatedEntityMemberck0001713952:BlackstoneManagementPartnersLlcMemberck0001713952:BlackstoneManagementPartnersLLCSupportAndServicesAgreementMember2022-01-012022-09-300001713952ck0001713952:BlackstoneManagementPartnersLlcMember2020-01-170001713952srt:AffiliatedEntityMemberck0001713952:BlackstoneAdvisoryPartnersL.P.Memberck0001713952:A6750SeniorSecuredNoesDue2027Memberus-gaap:SeniorNotesMember2021-07-310001713952srt:AffiliatedEntityMemberck0001713952:BlackstoneAdvisoryPartnersL.P.Memberck0001713952:TermLoanMember2021-07-310001713952srt:AffiliatedEntityMemberck0001713952:BlackstoneAdvisoryPartnersL.P.Memberck0001713952:TermLoanMember2022-09-300001713952srt:AffiliatedEntityMemberck0001713952:BlackstoneAdvisoryPartnersL.P.Memberck0001713952:TermLoanMember2021-12-310001713952srt:AffiliatedEntityMemberck0001713952:BlackstoneAdvisoryPartnersL.P.Memberck0001713952:TermLoanMemberck0001713952:A5750SeniorNotesDue2029Member2021-12-310001713952srt:AffiliatedEntityMemberck0001713952:A6750SeniorSecuredNoesDue2027Memberck0001713952:FortressInvestmentGroupMemberck0001713952:TermLoanMember2021-07-310001713952srt:AffiliatedEntityMemberck0001713952:FortressInvestmentGroupMemberck0001713952:TermLoanMemberck0001713952:A5750SeniorNotesDue2029Member2021-07-310001713952srt:AffiliatedEntityMemberck0001713952:A6750SeniorSecuredNoesDue2027Memberck0001713952:FortressInvestmentGroupMemberus-gaap:SeniorNotesMember2022-09-300001713952srt:AffiliatedEntityMemberck0001713952:FortressInvestmentGroupMemberck0001713952:A6750SeniorSecuredNoesDue2029Memberus-gaap:SeniorNotesMember2022-09-300001713952srt:AffiliatedEntityMemberck0001713952:FortressInvestmentGroupMemberck0001713952:TermLoanMember2022-09-300001713952srt:AffiliatedEntityMemberck0001713952:A6750SeniorSecuredNoesDue2027Memberck0001713952:FortressInvestmentGroupMemberus-gaap:SeniorNotesMember2021-12-310001713952srt:AffiliatedEntityMemberck0001713952:FortressInvestmentGroupMemberck0001713952:TermLoanMember2021-12-31ck0001713952:segmentck0001713952:region0001713952country:US2022-07-012022-09-300001713952country:CA2022-07-012022-09-300001713952country:US2021-07-012021-09-300001713952country:CA2021-07-012021-09-300001713952country:US2022-01-012022-09-300001713952country:CA2022-01-012022-09-300001713952country:US2021-01-012021-09-300001713952country:CA2021-01-012021-09-300001713952ck0001713952:CanadaBusinessMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2022-06-08ck0001713952:business0001713952ck0001713952:CanadaBusinessMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2022-06-082022-06-080001713952us-gaap:StockAppreciationRightsSARSMemberck0001713952:RolloverAwardsMember2022-01-012022-09-300001713952us-gaap:StockAppreciationRightsSARSMemberck0001713952:RolloverAwardsMember2021-01-012021-09-300001713952us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300001713952us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-09-300001713952us-gaap:PerformanceSharesMember2022-01-012022-09-300001713952us-gaap:PerformanceSharesMember2021-01-012021-09-300001713952ck0001713952:PrivatePlacementWarrantsMember2022-01-012022-09-300001713952ck0001713952:PrivatePlacementWarrantsMember2021-01-012021-09-300001713952ck0001713952:SharesReservedForFutureIssuanceMember2022-01-012022-09-300001713952ck0001713952:SharesReservedForFutureIssuanceMember2021-01-012021-09-30
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________________________________________
FORM 10-Q
 _______________________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
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 001-38246
__________________________________________________________ 
Vivint Smart Home, Inc.
(Exact name of Registrant as specified in its charter)
__________________________________________________________ 
Delaware 98-1380306
(State or Other Jurisdiction of
Incorporation or Organization)
 (I.R.S. Employer
Identification No.)
4931 North 300 West
Provo, UT 84604
(Address of Principal Executive Offices and zip code)

(801) 377-9111
(Registrant’s Telephone Number, Including Area Code)
__________________________________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading
Symbol(s)
Name of each exchange on which registered
Class A common stock, par value $0.0001 per shareVVNTNew 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  ý    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 such files).    Yes  ý    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 an emerging growth company. See the 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 x  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  ý
As of November 7, 2022, there were 213,382,168 shares of Class A common stock outstanding.

1


Vivint Smart Home, Inc.
FORM 10-Q
TABLE OF CONTENTS
 
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

2

BASIS OF PRESENTATION AND GLOSSARY
As used in this Quarterly Report on Form 10-Q, unless otherwise noted or the context otherwise requires:
references to “Vivint,” “we,” “us,” “our” and “the Company” are to Vivint Smart Home, Inc. and its consolidated subsidiaries; and
the terms “subscriber” and “customer” are used interchangeably.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes forward-looking statements regarding, among other things, our plans, strategies and prospects, both business and financial. These statements are based on the beliefs and assumptions of our management. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning our possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates” or “intends” or similar expressions.
Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements which speak only as of the date hereof. You should understand that the following important factors, in addition to those discussed in “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the Securities and Exchange Commission (the “SEC”) on March 1, 2022 (the “Form 10-K”), as such factors may be updated in our periodic reports filed with the SEC, and contained elsewhere in this Quarterly Report, could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements:
 
the duration and scope of the evolving COVID-19 pandemic;
the impact of the COVID-19 pandemic on our liquidity and capital resources, including the impact of the pandemic on our customers and timing of payments, the sufficiency of credit facilities, and the Company’s compliance with lender covenants;
the ineffectiveness of steps we take to reduce operating costs;
risks of the smart home and security industry, including risks of and publicity surrounding the sales, subscriber origination and retention process;
the highly competitive nature of the smart home and security industry and product introductions and promotional activity by our competitors;
litigation, complaints, product liability claims and/or adverse publicity;
the impact of changes in consumer spending patterns, consumer preferences, local, regional, and national economic conditions, crime, geopolitical tensions, weather, and demographic trends;
the impact of changes to prevailing economic conditions, including increasing interest rates, rising inflation and the expiration of federal, state and local economic stimulus programs;
adverse publicity and product liability claims;
increases and/or decreases in utility and other energy costs, increased costs related to utility or governmental requirements;
cost increases or shortages in smart home and security technology products or components including disruptions in our supply chains;
the introduction of unsuccessful new Smart Home Services;
privacy and data protection laws, privacy or data breaches, or the loss of data;
the impact to our business, results of operations, financial condition, regulatory compliance and customer experience of the Vivint Flex Pay plan (as described in Note 1 - Basis of Presentation in the unaudited condensed consolidated financial statements);
risks related to our exposure to variable rates of interest with respect to our revolving credit facility and term loan facility;
our inability to maintain effective internal control over financial reporting; and
our inability to attract and retain employees due to labor shortages.
3

In addition, the origination and installation of new subscribers will depend on various factors, including, but not limited to, market availability, subscriber interest, the availability of suitable components, the negotiation of acceptable contract terms with subscribers, local permitting, licensing and regulatory compliance, and our ability to manage anticipated expansion and to hire, train and retain personnel, the financial viability of subscribers and general economic conditions.
These and other factors that could cause actual results to differ from those implied by the forward-looking statements in this Quarterly Report are more fully described in the “Risk Factors” section of the Form 10-K, as such risk factors may be updated from time to time in our periodic filings with the SEC, and are accessible on the SEC’s website at www.sec.gov. The risks described in the “Risk Factors” section referenced above are not exhaustive. Certain sections of this Quarterly Report describe additional factors that could adversely affect our business, financial condition or results of operations. New risk factors emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.

4

WEBSITE AND SOCIAL MEDIA DISCLOSURE
We use our website (www.vivint.com), our company blogs (vivint.com/resources, innovation.vivint.com), corporate Twitter and Facebook accounts (@VivintHome), our corporate Instagram account (@Vivint) and our corporate LinkedIn account as channels of distribution of company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about the Company when you enroll your e-mail address by visiting the “Email Alerts” section of our website at www.investors.vivint.com. The contents of our website and social media channels are not, however, a part of this report.
5

PART I. FINANCIAL INFORMATION
 
ITEM 1.UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Vivint Smart Home, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (unaudited)
(in thousands, except share and per-share amounts)
September 30, 2022December 31, 2021
ASSETS
Current Assets:
Cash and cash equivalents$303,741 $208,509 
Accounts and notes receivable, net53,441 63,671 
Inventories76,921 51,251 
Prepaid expenses and other current assets27,658 19,385 
Total current assets461,761 342,816 
Property, plant and equipment, net60,683 55,448 
Capitalized contract costs, net1,530,257 1,405,442 
Deferred financing costs, net1,746 2,088 
Intangible assets, net10,603 51,928 
Goodwill817,502 837,153 
Operating lease right-of-use assets39,493 46,000 
Long-term notes receivables and other non-current assets, net36,937 44,753 
Total assets$2,958,982 $2,785,628 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable$121,133 $96,317 
Accrued payroll and commissions144,813 83,347 
Accrued expenses and other current liabilities194,692 236,250 
Deferred revenue500,609 429,900 
Current portion of notes payable, net13,500 13,500 
Current portion of operating lease liabilities12,822 12,033 
Current portion of finance lease liabilities2,550 2,854 
Total current liabilities990,119 874,201 
Notes payable, net2,247,556 2,347,765 
Notes payable, net - related party445,053 351,080 
Finance lease liabilities, net of current portion5,281 1,416 
Deferred revenue, net of current portion884,002 778,214 
Operating lease liabilities, net of current portion33,463 41,713 
Warrant derivative liabilities14,121 24,564 
Other long-term obligations78,783 106,135 
Deferred income tax liabilities792 640 
Total liabilities4,699,170 4,525,728 
Commitments and contingencies (See Note 11)
Stockholders’ deficit:
Class A Common stock, $0.0001 par value, 3,000,000,000 shares authorized; 213,382,168 and 208,734,193 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively
21 21 
Preferred stock, $0.0001 par value, 300,000,000 shares authorized; none issued and outstanding as of September 30, 2022 and December 31, 2021, respectively
  
Additional paid-in capital1,748,752 1,703,815 
Accumulated deficit(3,488,961)(3,417,038)
Accumulated other comprehensive loss (26,898)
Total stockholders’ deficit(1,740,188)(1,740,100)
Total liabilities and stockholders’ deficit$2,958,982 $2,785,628 
See accompanying notes to unaudited condensed consolidated financial statements
6

Vivint Smart Home, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (unaudited)
(in thousands, except share and per share amounts)
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Revenues:
Recurring and other revenue$439,370 $386,710 $1,239,400 $1,083,174 
Costs and expenses:
Operating expenses (exclusive of depreciation and amortization shown separately below)102,318 99,082 298,571 286,353 
Selling expenses (exclusive of amortization of deferred commissions of $56,572; $53,792; $165,079; $158,796, respectively, which are included in depreciation and amortization shown separately below)
98,389 96,072 268,073 300,480 
General and administrative expenses61,091 64,972 171,575 189,267 
Depreciation and amortization156,426 151,332 468,445 447,863 
Total costs and expenses418,224 411,458 1,206,664 1,223,963 
Income (Loss) from operations21,146 (24,748)32,736 (140,789)
Other expenses (income):
Interest expense43,510 47,120 119,904 146,981 
Interest income(175)(126)(455)(280)
Change in fair value of warrant derivative liabilities7,891 (15,313)(10,443)(50,638)
Other expense (income), net9,375 37,329 (5,134)14,736 
Loss before income taxes(39,455)(93,758)(71,136)(251,588)
Income tax expense (benefit)1,551 (1,014)787 500 
Net loss$(41,006)$(92,744)$(71,923)$(252,088)
Net loss attributable per share to common stockholders:
Basic$(0.19)$(0.44)$(0.34)$(1.21)
Diluted$(0.19)$(0.52)$(0.34)$(1.45)
Weighted-average shares used in computing net loss attributable per share to common stockholders:
Basic213,042,292 208,759,485 212,173,966 208,090,903 
Diluted213,042,292 208,988,137 212,173,966 209,174,284 
See accompanying notes to unaudited condensed consolidated financial statements

7

Vivint Smart Home, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Loss (unaudited)
(in thousands)
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Net loss$(41,006)$(92,744)$(71,923)$(252,088)
Other comprehensive income, net of tax effects:
Foreign currency translation adjustment (1,062)879 (138)
Total other comprehensive income (1,062)879 (138)
Comprehensive loss$(41,006)$(93,806)$(71,044)$(252,226)
See accompanying notes to unaudited condensed consolidated financial statements

8

Vivint Smart Home, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Equity (Deficit) (unaudited)
(In thousands, except shares)
Three Months Ended September 30, 2022
Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive LossTotal Stockholders' Deficit
SharesAmount
Balance, beginning of period212,764,752$21 $1,732,287 $(3,447,955)$ $(1,715,647)
Tax withholdings related to net share settlement of equity awards(266,867)— (1,760)— — (1,760)
Issuance of common stock upon exercise or vesting of equity awards884,283— — — —  
Net Loss— — (41,006)— (41,006)
Stock-based compensation— 18,225 — — 18,225 
Balance, end of period213,382,168$21 $1,748,752 $(3,488,961)$ $(1,740,188)

Three Months Ended September 30, 2021
Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive LossTotal Stockholders' Deficit
SharesAmount
Balance, beginning of period208,707,992$21 $1,651,951 $(3,270,830)$(25,885)$(1,644,743)
Issuance of earnout shares20,458— — — — — 
Net Loss— — (92,744)— (92,744)
Foreign currency translation adjustment— — — (1,062)(1,062)
Stock-based compensation— 29,050 — — 29,050 
Balance, end of period208,728,450$21 $1,681,001 $(3,363,574)$(26,947)$(1,709,499)


9

Nine Months Ended September 30, 2022
Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive LossTotal Stockholders' Deficit
SharesAmount
Balance, beginning of period208,734,193$21 $1,703,815 $(3,417,038)$(26,898)$(1,740,100)
Tax withholdings related to net share settlement of equity awards(1,939,446)— (13,916)— — (13,916)
Issuance of common stock upon exercise or vesting of equity awards6,587,421— — — —  
Net Loss— — (71,923)— (71,923)
Foreign currency translation adjustment— — — 879 879 
Reclassification out of Other Comprehensive Income, Canada Business Sale— — — 26,019 26,019 
Stock-based compensation— 58,853 — — 58,853 
Balance, end of period213,382,168$21 $1,748,752 $(3,488,961)$ $(1,740,188)

Nine Months Ended September 30, 2021
Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive LossTotal Stockholders' Deficit
SharesAmount
Balance, beginning of period202,216,341$20 $1,548,786 $(3,111,486)$(26,809)$(1,589,489)
Issuance of earnout shares1,239,818— — — — — 
Tax withholdings related to net share settlement of equity awards(1,675,319)— (29,367)— — (29,367)
Forfeited shares(17,198)— — — — — 
Warrants exercised825,016— 19,743 — — 19,743 
Issuance of common stock upon exercise or vesting of equity awards6,139,7921 — — — 1 
Net Loss— — (252,088)— (252,088)
Foreign currency translation adjustment— — — (138)(138)
Stock-based compensation— 141,839 — — 141,839 
Balance, end of period208,728,450$21 $1,681,001 $(3,363,574)$(26,947)$(1,709,499)
10

Vivint Smart Home, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
(in thousands)
 Nine Months Ended September 30,
 20222021
Cash flows from operating activities:
Net loss$(71,923)$(252,088)
Adjustments to reconcile net loss to net cash provided by operating activities:
Amortization of capitalized contract costs415,102 390,533 
Amortization of customer relationships38,483 43,607 
Depreciation and amortization of property, plant and equipment and other intangible assets14,860 13,723 
Amortization of deferred financing costs and bond premiums and discounts4,230 3,218 
Gain on sale of Canada Business(25,051) 
(Gain) loss on sale or disposal of assets(1,716)309 
Gain on changes in fair value of warrant derivative liabilities(10,443)(50,638)
Loss on early extinguishment of debt 30,210 
Stock-based compensation58,853 141,839 
Provision for doubtful accounts26,727 21,589 
Deferred income taxes(3,275)(4,528)
Changes in operating assets and liabilities:
Accounts and notes receivable, net(30,472)(28,542)
Inventories(26,566)(6,851)
Prepaid expenses and other current assets(8,290)(12,341)
Capitalized contract costs, net(564,210)(504,885)
Long-term notes receivables and other non-current assets, net11,283 14,488 
Right-of-use assets6,486 7,680 
Accounts payable26,401 40,061 
Accrued payroll and commissions, accrued expenses, and other current and long-term liabilities4,894 43,109 
Current and long-term operating lease liabilities(7,441)(8,548)
Deferred revenue191,646 260,185 
Net cash provided by operating activities49,578 142,130 
Cash flows from investing activities:
Capital expenditures(15,317)(10,199)
Proceeds from the sale of intangible assets 162 
Proceeds associated with sales and disposal of other assets2,250  
Proceeds from the sale of Canada Business, net of cash sold86,052  
Acquisition of intangible assets(317) 
Net cash provided by (used in) investing activities72,668 (10,037)
Cash flows from financing activities:
Proceeds from notes payable 1,758,000 
Proceeds from notes payable - related party 392,000 
Repayment of notes payable(10,125)(1,893,575)
Repayment of notes payable - related party (351,300)
Taxes paid related to net share settlements of stock-based compensation awards(13,863)(29,372)
Proceeds from Mosaic recapitalization 10,819 
Repayments of finance lease obligations(2,795)(2,549)
Financing costs (26,260)
Deferred financing costs (23,474)
Net cash used in financing activities(26,783)(165,711)
Effect of exchange rate changes on cash and cash equivalents(231)(29)
Net increase (decrease) in cash and cash equivalents95,232 (33,647)
Cash and cash equivalents:
Beginning of period208,509 313,799 
End of period$303,741 $280,152 
Supplemental non-cash investing and financing activities:
Finance lease additions$7,601 $1,394 
Reclassification of warrant derivative liability for exercised warrants$ $8,942 
Capital expenditures included within accounts payable$2,246 $4,130 
See accompanying notes to unaudited condensed consolidated financial statements
11

Vivint Smart Home, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
1. Basis of Presentation and Significant Accounting Policies
Unaudited Interim Financial Statements
The accompanying interim unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared by the Company without audit. The accompanying condensed consolidated financial statements include the accounts of Vivint Smart Home, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The information as of December 31, 2021 included in the unaudited condensed consolidated balance sheets was derived from the Company’s audited consolidated financial statements at that date but does not include all information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments (all of which are considered of a normal recurring nature) considered necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods and dates presented. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.
Preparing financial statements requires the Company to make estimates and assumptions that affect the amounts that are reported in the condensed 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.
These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and related notes as set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the Securities and Exchange Commission (“SEC”) on March 1, 2022, which is available on the SEC’s website at www.sec.gov.
Basis of Presentation
The unaudited condensed consolidated financial statements of the Company are presented for Vivint Smart Home, Inc. and its wholly-owned subsidiaries. The Company has prepared the accompanying unaudited condensed consolidated financial statements pursuant to GAAP. Preparing financial statements requires the Company to make estimates and assumptions that affect the amounts that are reported in the condensed 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. In June 2022, the Company sold Vivint Canada, Inc. (its "Canada Business"). The Company’s financial position and results of operations include its Canada Business through June 8, 2022. See Note 15 Segment Reporting and Business Concentrations, for additional information.
Vivint Flex Pay
The Vivint Flex Pay plan (“Vivint Flex Pay”) became the Company’s primary equipment financing 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 ways to pay for the Products: (1) qualified customers in the United States may finance the purchase of Products through third-party financing providers (“Consumer Financing Program” or “CFP”), (2) the Company generally offers to a limited number of customers not eligible for the CFP, but who qualify under the Company's underwriting criteria, the option to 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 or by obtaining short-term financing (generally, no more than six-month installment terms) through the Company.
Although customers pay separately for Products and Services under the Vivint Flex Pay plan, the Company has determined 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. For RICs, gross deferred revenues are
12

reduced by imputed interest and estimated write-offs. For Products financed through the CFP, gross deferred revenues are reduced by (i) any fees the third-party financing provider (“Financing Provider”) is contractually entitled to receive at the time of loan origination, and (ii) the present value of expected future payments due to Financing Providers.
Under the CFP, qualified customers are eligible for financing offerings (“Loans”) originated by Financing Providers of between $150 and $6,000. The terms of most Loans are determined based on the customer's credit quality. The annual percentage rates on these Loans is either 0% or 9.99%, depending on the customer's credit quality, and the Loans are issued on either an installment or revolving basis with repayment terms ranging from 6- to 60-months.
For certain Financing Provider Loans:
the Company pays a monthly fee based on either the average daily outstanding balance of the installment loans, or the number of outstanding Loans.
The Company incurs fees at the time of the loan origination and receives proceeds that are net of these fees.
The Company also shares liability for credit losses, with the Company being responsible for between 2.6% and 100% of lost principal balances.
The Company is responsible for reimbursing certain Financing Providers for merchant transaction fees and other fees associated with the Loans.
Because of the nature of these provisions, the Company records a derivative liability at its fair value when the Financing Provider originates 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 by the Company to the Financing Provider. Subsequent changes to the fair value of the derivative liability are realized through other expenses (income), net in the unaudited condensed consolidated statement of operations. (see Note 8 “Financial Instruments” for additional information).     
For certain other Loans, the Company receives net proceeds (net of fees and expected losses) for which the Company has no further obligation to the Financing Provider. The Company records these net proceeds to deferred revenue.
Retail Installment Contract Receivables
For subscribers that enter into a RIC to finance the purchase of Products, the Company records a receivable for the amount financed. Gross RIC receivables are reduced for (i) expected write-offs of uncollectible balances over the term of the RIC and (ii) a present value discount of the expected cash flows using a risk adjusted market interest rate. Therefore, the RIC receivables equal the present value of the expected cash flows to be received by the Company over the term of the RIC, evaluated on a pool basis. RICs are pooled based on customer credit quality, contract length and geography. At the time of installation, the Company records a long-term note receivable within long-term notes receivables and other assets, net on the unaudited condensed 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 unaudited condensed consolidated balance sheets. The billed amounts of notes receivables are included in accounts receivable within accounts and notes receivable, net on the unaudited condensed consolidated balance sheets.
The Company imputes the interest on the RIC receivable using a risk adjusted market interest rate and records it as a reduction to deferred revenue and as an adjustment to the face amount of the related receivable. The risk adjusted interest rate considers a number of factors, including credit quality of the subscriber base and other qualitative considerations such as macro-economic factors. The imputed interest income is recognized over the term of the RIC contract as recurring and other revenue on the unaudited condensed consolidated statements of operations.
When the Company determines that there are RIC receivables that have become uncollectible, it records an adjustment to the allowance and reduces the related note receivable balance. On a regular basis, the Company also assesses the expected remaining cash flows based on historical RIC write-off trends, current market conditions and both Company and third-party forecast data. If the Company determines there is a change in expected remaining cash flows, the total amount of this change for all RICs is recorded in the current period to the provision for credit losses, which is included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations. 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).
Accounts Receivable
13

Accounts receivable consists primarily of amounts due from subscribers for recurring monthly monitoring Services, amounts due from third-party financing providers and the billed portion of RIC receivables. The accounts receivable are recorded at invoiced amounts, are non-interest bearing and are included within accounts and notes receivable, net on the unaudited condensed consolidated balance sheets. Accounts receivable totaled $30.1 million and $26.4 million at September 30, 2022 and December 31, 2021, respectively, net of the allowance for doubtful accounts of $14.8 million and $13.3 million at September 30, 2022 and December 31, 2021, respectively. The Company estimates this allowance based on historical collection experience, subscriber attrition rates, current market conditions and both Company and third-party forecast data. 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 unaudited condensed consolidated statements of operations.
The changes in the Company’s allowance for accounts receivable were as follows for the periods ended (in thousands): 
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Beginning balance$13,293 $9,621 $13,271 $9,911 
Provision for doubtful accounts11,786 8,605 26,727 21,589 
Write-offs and adjustments(10,232)(6,028)(25,151)(19,302)
Balance at end of period$14,847 $12,198 $14,847 $12,198 
Revenue Recognition
The Company offers its customers smart home services combining Products, including a proprietary control panel, door and window sensors, door locks, 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, which is the period in which the parties to the contract have enforceable rights and obligations. 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 of benefit, which is generally three years.
The majority of the Company’s subscription contracts are between three and five years in length and are generally 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 Smart Home Services is generally due in advance on a monthly basis.
Sales of Products and other one-time fees such as service or installation fees are invoiced to the customer at the time of sale. Revenues for 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, which is generally three to five years.
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 subscriber contracts. These include commissions, other
14

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. The Company calculates amortization by accumulating all deferred contract costs into separate portfolios based on the initial month of service and amortizes those deferred contract costs on a straight-line basis over the expected period of benefit that the Company has determined to be five years, consistent with the pattern in which the Company provides services to its customers. The Company believes this pattern of amortization appropriately reduces the carrying value of the capitalized contract costs over time to reflect the decline in the value of the assets as the remaining period of benefit for each monthly portfolio of contracts decreases. The period of benefit of five years is longer than some contract terms because of anticipated contract renewals. The Company applies this period of benefit to its entire portfolio of contracts. The Company updates its estimate of the period of benefit periodically and whenever events or circumstances indicate that the period of benefit could change significantly. Such changes, if any, are accounted for prospectively as a change in estimate. No such changes were made for the nine months ended September 30, 2022 and 2021. Amortization of capitalized contract costs is included in “Depreciation and Amortization” on the consolidated statements of operations.
The carrying amount of the capitalized contract costs is periodically reviewed for impairment. In performing this review, the Company begins by analyzing for impairment indicators. If impairment indicators exist, the Company considers whether the carrying amount of the capitalized contract costs will be recovered. In estimating the amount of consideration the Company expects to receive in the future related to capitalized contract costs, the Company considers factors such as attrition rates, economic factors, and industry developments, among other factors. If it is determined that capitalized contract costs are impaired, an impairment loss is recognized for the amount by which the carrying amount of the capitalized contract costs and the anticipated costs that relate directly to providing the future services exceed the consideration that has been received and that is expected to be received in the future. During the three and nine months ended September 30, 2022 and 2021, no impairment losses were recorded.
Contract costs not directly related and incremental to the origination of new contracts, modification of existing contracts or to the fulfillment of the related subscriber contracts are expensed as incurred. These costs include those associated with housing, marketing, advertising, 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 unaudited condensed 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 subscriber contracts.
The Company’s depreciation and amortization included in the unaudited condensed consolidated statements of operations consisted of the following (in thousands):
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Amortization of capitalized contract costs$139,971 $132,453 $415,102 $390,533 
Amortization of definite-lived intangibles12,525 14,984 39,391 45,038 
Depreciation and amortization of property, plant and equipment3,930 3,895 13,952 12,292 
Total depreciation and amortization$156,426 $151,332 $468,445 $447,863 
Inventories
Inventories, which are comprised of smart home and security system equipment and parts are stated at the lower of cost or net realizable value with cost determined under the first-in, first-out (“FIFO”) method. Inventories sold to customers as part of a smart home and security system are generally capitalized as contract costs. The Company adjusts the inventory balance based on anticipated obsolescence, usage and historical write-offs.
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 Group, Inc.’s (“APX”) revolving credit facility are amortized over the amended maturity dates discussed in Note 3 “Long-Term Debt.” Deferred financing costs associated with the revolving credit facility reported in the accompanying unaudited condensed consolidated balance sheets within deferred financing costs, net at September 30, 2022 and
15

December 31, 2021 were $1.7 million and $2.1 million, net of accumulated amortization of $11.8 million and $11.5 million, respectively. Deferred financing costs included in the accompanying unaudited condensed consolidated balance sheets within notes payable, net at September 30, 2022 and December 31, 2021 were $30.4 million and $34.3 million, net of accumulated amortization of $81.3 million and $77.4 million, respectively. Amortization expense on deferred financing costs recognized and included in interest expense in the accompanying unaudited condensed consolidated statements of operations, totaled $1.4 million and $1.6 million for the three months ended September 30, 2022 and 2021, respectively and $4.2 million and $5.4 million for the nine months ended September 30, 2022 and 2021, respectively (See Note 3 “Long-Term Debt” for additional detail).
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”). The Company also had a residual sales compensation plan (the “Residual Plan”) during 2018 and 2019 under which the Company's sales personnel (each, a “Plan Participant”) receive compensation based on the performance of certain underlying contracts they created in those years.
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 current portion of the liability included in accrued payroll and commissions was $4.4 million and $4.3 million at September 30, 2022 and December 31, 2021, respectively, and the noncurrent portion included in other long-term obligations was $22.1 million and $23.2 million at September 30, 2022 and December 31, 2021, respectively.
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 10 “Stock-Based Compensation and Equity” for additional details).
Advertising Expense
Advertising costs are expensed as incurred. Advertising costs were $19.9 million and $25.7 million for the three months ended September 30, 2022 and 2021, respectively and $54.6 million and $69.1 million for the nine months ended September 30, 2022 and 2021, respectively.
Research and Development
Research and development costs consist primarily of employee compensation and related expenses, product development expenses, third-party development support costs, facility costs as well as allocated overhead costs and are included in general and administrative expense. The Company incurred $16.5 million and $13.2 million for the three months ended September 30, 2022 and 2021, respectively and $47.5 million and $39.0 million during the nine months ended September 30, 2022 and 2021, 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.
16

Future tax rate or law changes could have a material effect on the Company’s results of operations, financial condition, or cash flows.
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 September 30, 2022, approximately 96% of the Company’s installed panels were the Company's proprietary SkyControl or Smart Hub panels and 4% were 2GIG Go!Control panels. The loss of the Company's SkyControl or Smart Hub panel suppliers 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 nine months ended September 30, 2022 and 2021.
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 tests goodwill at the reporting unit level for impairment annually as of October 1 and on an interim basis when events occur or circumstances exist that indicate the carrying value may no longer be recoverable. If impairment indicators exist, the Company compares the fair value of our reporting units with the carrying amount, including goodwill. The Company recognizes an impairment charge for the amount by which the reporting unit’s carrying amount exceeds its fair value. The Company’s reporting units are determined based on its current reporting structure, which as of September 30, 2022 consisted of one reporting unit. As of September 30, 2022, there were no changes in facts and circumstances since the most recent annual impairment analysis to indicate impairment existed.
Letters of Credit
As of both September 30, 2022 and December 31, 2021, the Company had $11.1 million and $14.0 million of letters of credit issued in the ordinary course of business, all of which are undrawn.
Derivative Warrant Liabilities
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is assessed as part of this evaluation.
17

The Company accounts for its private placement warrants as derivative warrant liabilities in accordance with ASC 815-40. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are re-measured at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statement of operations.
18

2. Revenue and Capitalized Contract Costs
Customers are typically invoiced for Smart Home Services in advance or at the time the Company delivers the related Smart Home Services. The majority of customers pay at the time of invoice via credit card, debit card or ACH. Deferred revenue relates to the advance consideration received from customers, which precedes the Company’s satisfaction of the associated performance obligation. The Company’s deferred revenues primarily result from customer payments received in advance for recurring monthly monitoring and other Smart Home Services, or other one-time fees, because these performance obligations are satisfied over time.     
The Company also provides its customers with service warranties associated with product replacement and related services. As of September 30, 2022 and December 31, 2021, the Company had warranty service reserves of $6.7 million and $6.0 million, respectively, which are included in accrued expenses and other current liabilities on the condensed consolidated balance sheets.
During the nine months ended September 30, 2022 and 2021, the Company recognized revenues of $340.5 million and $254.7 million, respectively, that were included in the deferred revenue balance as of December 31, 2021 and 2020, respectively.    
Transaction Price Allocated to the Remaining Performance Obligations
As of September 30, 2022, approximately $3.8 billion of revenue is expected to be recognized from remaining performance obligations for subscription contracts. The Company expects to recognize approximately 62% of the revenue related to these remaining performance obligations over the next 24 months, with the remaining balance recognized over an additional 36 months.
Timing of Revenue Recognition
The Company considers Products, related installation, and its proprietary back-end cloud platform software and services an integrated system that allows the Company’s customers to monitor, control and protect their homes. These Smart Home Services are accounted for as a single performance obligation that is recognized over the customer’s contract term, which is generally three to five years.
Capitalized Contract Costs
Capitalized contract costs generally include commissions, other compensation and related costs paid directly for the generation and installation of new or modified customer contracts, as well as the cost of Products installed in the customer home at the commencement or modification of the contract. 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.
19

3. Long-Term Debt
The Company’s debt at September 30, 2022 and December 31, 2021 consisted of the following (in thousands): 
September 30, 2022
Outstanding
Principal
Unamortized Deferred Financing Costs (1)Net Carrying
Amount
Long-Term Debt:
6.750% Senior Secured Notes Due 2027
$600,000 $(4,133)$595,867 
5.750% Senior Notes Due 2029
800,000 (10,051)789,949 
Senior Secured Term Loan - noncurrent1,323,000 (16,207)1,306,793 
Total Long-Term Debt2,723,000 (30,391)2,692,609 
Senior Secured Term Loan - current13,500 — 13,500 
Total Debt$2,736,500 $(30,391)$2,706,109 

December 31, 2021
Outstanding
Principal
Unamortized Deferred Financing Costs (1)Net Carrying
Amount
Long-Term Debt:
6.750% Senior Secured Notes Due 2027
$600,000 $(4,835)$595,165 
5.750% Senior Notes Due 2029
800,000 (11,154)788,846 
Senior Secured Term Loan - noncurrent1,333,125 (18,291)1,314,834 
Total Long-Term Debt2,733,125 (34,280)2,698,845 
Senior Secured Term Loan - current13,500 — 13,500 
Total Debt$2,746,625 $(34,280)$2,712,345 
 
(1)Unamortized deferred financing costs related to the revolving credit facilities included in deferred financing costs, net on the condensed consolidated balance sheets at September 30, 2022 and December 31, 2021 were $1.7 million and $2.1 million, respectively.

2027 Notes    
As of September 30, 2022, the Company's wholly-owned subsidiary, APX, had $600.0 million outstanding aggregate principal amount of 6.75% senior secured notes due 2027 (the “2027 notes”). The 2027 notes are secured, on a pari passu basis, by the collateral securing obligations under the existing senior secured notes, the Revolving Credit Facility and the Term Loan Facility (as defined below), in each case, subject to certain exceptions and permitted liens. Interest accrues at the rate of 6.75% per annum for the 2027 notes. Interest on the 2027 notes is payable semiannually in arrears on February 15 and August 15 each year. APX may redeem the Notes at the prices and on the terms specified in the applicable indenture.
2029 Notes    
As of September 30, 2022, APX had $800.0 million outstanding aggregate principal amount of 5.75% senior notes due 2029 (the “2029 notes” and, together with the 2027 notes the “Notes”). The 2029 notes will mature on July 15, 2029. Interest accrues at the rate of 5.75% per annum for the 2029 notes. Interest on the 2029 notes is payable semiannually in arrears on January 15 and July 15 each year. APX may redeem the Notes at the prices and on the terms specified in the applicable indenture.
Senior Secured Credit Facilities
The Company's senior secured credit facilities provides for (i) a term loan facility (the "Term Loan Facility", and the loans thereunder, the "Term Loans") and (ii) a revolving credit facility with commitments in an aggregate principal amount of $370.0 million (the "Revolving Credit Facility", and the loans thereunder, the "Revolving Loans").
20

As of September 30, 2022, APX had outstanding term loans under the Term Loan Facility in an aggregate principal amount of $1,336.5 million. APX is required to make quarterly amortization payments under the Term Loan Facility in an amount equal to 0.25% of the aggregate principal amount of the Term Loans outstanding on the closing date thereof. The remaining outstanding principal amount of the Term Loans will be due and payable in full on July 9, 2028. APX may prepay the Term Loans on the terms specified in the Credit Agreement. No amortization payments are required under the Revolving Credit Facility
In addition to paying interest on outstanding principal under the Revolving Credit Facility, APX is required to pay a quarterly commitment fee of 50 basis points (which will be subject to two interest rate step-downs of 12.5 basis points, based on APX meeting consolidated first lien net leverage ratio tests) 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. The revolving credit commitments outstanding under the Revolving Credit Facility will be due and payable in full on July 9, 2026.
Borrowings under the amended and restated Term Loan Facility and Revolving Credit Facility bear interest, at APX’s option, at a rate per annum equal to either (a)(i) a base rate determined by reference to the highest of (1) the “Prime Rate” in the United States as published in The Wall Street Journal, (2) the federal funds effective rate plus 0.50% and (3) the LIBO rate for a one month interest period plus 1.00%, plus (ii) between 2.50% and 2.00%, depending on the first lien net leverage ratio of the applicable fiscal quarter or (b)(i) a LIBO rate determined by reference to the applicable page for the LIBO rate for the interest period relevant to such borrowing plus (ii) between 3.50% and 3.00%, depending on the first lien net leverage ratio of the applicable fiscal quarter, subject in each case to an agreed interest rate floor.
There were no outstanding borrowings under the Revolving Credit Facility as of September 30, 2022 and December 31, 2021. As of September 30, 2022, the Company had $358.9 million of availability under the Revolving Credit Facility (after giving effect to $11.1 million of letters of credit outstanding and no borrowings).
Deferred Financing Costs
Deferred financing costs are amortized to interest expense over the life of the issued debt. The following table presents deferred financing activity for the nine months ended September 30, 2022 and 2021 (in thousands):
Unamortized Deferred Financing Costs
Balance December 31, 2021AdditionsEarly Extinguishment AmortizedBalance September 30, 2022
Revolving Credit Facility$2,088 $ $ $(342)$1,746 
2027 Notes4,835   (702)4,133 
2029 Notes11,154   (1,103)10,051 
Term Loan18,291   (2,084)16,207