8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 2)

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): August 16, 2013

ASCENT CAPITAL GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-34176	26-2735737
(State or other jurisdiction of	(Commission	(I.R.S. Employer
incorporation or organization)	File Number)	Identification No.)

5251 DTC Parkway, Suite 1000

Greenwood Village, Colorado 80111

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (303) 628-5600

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

EXPLANATORY NOTE

This Form 8-K/A (Amendment No. 2) amends the Current Report on Form 8-K of Ascent Capital Group, Inc., filed August 21, 2013 (the “Original 8-K”) as amended by Amendment No. 1 filed on August 22, 2013.  The purpose of this Form 8-K/A is to amend and restate in its entirety Item 9.01 of the Original 8-K, to furnish certain supplemental financial information and to include new Exhibits 99.4 and 99.5.  Terms used but not defined in this Form 8-K/A have the meanings ascribed to them in the Original 8-K.

Item 2.02. Results of Operations and Financial Condition.

Item 7.01. Regulation FD Disclosure.

To supplement the historical and pro forma financial information that has been or is being provided in this Current Report on Form 8-K, Ascent has determined to furnish the additional financial information set forth in Exhibit 99.5 hereto.

The information furnished pursuant to this Item 2.02. Results of Operations and Financial Condition/Item 7.01. Regulation FD Disclosure (including Exhibit 99.5 hereto) is being furnished to the SEC in satisfaction of the public disclosure requirements of Regulation FD and shall not be deemed “filed” for any purpose.

Item 9.01. Financial Statements and Exhibits.

(a)           Financial Statements of Business Acquired.

The audited historical financial statements of Security Networks and its subsidiaries, including the notes thereto, as of and for the year ended December 31, 2012, were filed as Exhibit 99.2 to Ascent’s Amendment No. 1 to its Current Report on Form 8-K/A filed on July 11, 2013 with the SEC (and shall be deemed to be incorporated by reference herein).

The unaudited historical financial statements of Security Networks and its subsidiaries, including the notes thereto, as of and for the three and six months ended June 30, 2013 and 2012, were filed as Exhibit 99.3 to Ascent’s Amendment No. 1 to the Original 8-K (and shall be deemed to be incorporated by reference herein).

(c)           Pro forma financial information.

The pro forma financial information required to be furnished under Item 9.01(c) of Form 8-K, including the notes thereto, as of and for the six months ended June 30, 2013 and for the year ended December 31, 2012, are filed as Exhibit 99.4 to this Current Report on Form 8-K/A (Amendment No. 2).

(d)           Exhibits.

Exhibit No.	Description
23.1	Consent of CohnReznick LLP (incorporated by reference to Exhibit 23.1 to Ascent’s Amendment No. 1 to its Current Report on Form 8-K/A filed on July 11, 2013 with the SEC (“Amendment No. 1 to the Ascent 8-K/A”)).
99.1	Press release, dated August 16, 2013 of Ascent Capital Group, Inc.*
99.2	Audited historical financial statements of Security Networks and its subsidiaries, including the notes thereto, as of and for the year ended December 31, 2012 (incorporated by reference to Exhibit 99.2 to Amendment No. 1 to the Ascent 8-K/A).
99.3	Unaudited historical financial statements of Security Networks and its subsidiaries, including the notes thereto, as of and for the three and six months ended June 30, 2013 and 2012 (incorporated by reference to Exhibit 99.3 to Ascent’s Amendment No. 1 to its Current Report on Form 8-K/A filed on August 22, 2013).
99.4	Unaudited pro forma condensed consolidated financial statements for Ascent Capital Group, Inc. and subsidiaries as of and for the six months ended June 30, 2013 and for the year ended December 31, 2012, and notes thereto.
99.5	Supplemental Financial Information.

*Previously filed.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: September 19, 2013
	ASCENT CAPITAL GROUP, INC.
	By:	/s/ William E. Niles
		Name:	William E. Niles
		Title:	Executive Vice President, General Counsel and Secretary

3

EXHIBIT INDEX

Exhibit No.	Description
23.1	Consent of CohnReznick LLP (incorporated by reference to Exhibit 23.1 to Ascent’s Amendment No. 1 to its Current Report on Form 8-K/A filed on July 11, 2013 with the SEC (“Amendment No. 1 to the Ascent 8-K/A”)).
99.1	Press release, dated August 16, 2013 of Ascent Capital Group, Inc.*
99.2	Audited historical financial statements of Security Networks and its subsidiaries, including the notes thereto, as of and for the year ended December 31, 2012 (incorporated by reference to Exhibit 99.2 to Amendment No. 1 to the Ascent 8-K/A).
99.3	Unaudited historical financial statements of Security Networks and its subsidiaries, including the notes thereto, as of and for the three and six months ended June 30, 2013 and 2012 (incorporated by reference to Exhibit 99.3 to Ascent’s Amendment No. 1 to its Current Report on Form 8-K/A filed on August 22, 2013).
99.4	Unaudited pro forma condensed consolidated financial statements for Ascent Capital Group, Inc. and subsidiaries as of and for the six months ended June 30, 2013 and for the year ended December 31, 2012, and notes thereto.
99.5	Supplemental Financial Information.

* Previously filed.

4

EX-99.4

Exhibit 99.4

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited pro forma condensed consolidated financial statements have been prepared from the historical financial statements of Ascent Capital Group, Inc. (“Ascent” or the “Company”) and Security Networks, LLC (“Security Networks”) to give effect to the acquisition of Security Networks and certain affiliated entities (the “Acquisition”) by the Company’s wholly-owned operating subsidiary, Monitronics International, Inc. (“Monitronics”).  The unaudited pro forma condensed consolidated financial statements also give effect to the following financing transactions which were entered into to fund the Acquisition (these financing transactions, together with the Acquisition, are collectively referred to as the “Transactions”):

·Ascent’s July issuance of $103.5 million of 4% Senior Convertible Notes due 2020;

·Ascent’s July concurrent but separately negotiated hedge transactions (the “Bond Hedge Transactions) and warrant transactions (the “Warrant Transactions”) as described in more detail in Ascent’s Current Report on Form 8-K filed on July 17, 2013 with the Securities and Exchange Commission (the “July 17, 2013 8-K”);

·Monitronics’ July issuance of $150 million of additional 9.125% Senior Notes (“New Senior Notes”) due 2020 (in connection with the merger of Monitronics with Monitronics Escrow Corporation on August 16, 2013, as described in more detail in Ascent’s July 17, 2013 8-K); and

·Monitronics’ Incremental Term Loan of $225 million issued under Monitronics’ existing credit facility.

The unaudited pro forma condensed statements of operations for the fiscal year ended December 31, 2012 and for the six months ended June 30, 2013 give effect to the Transactions as if they were consummated on January 1, 2012.  The unaudited pro forma condensed balance sheet as of June 30, 2013 gives effect to the Transactions as if they were consummated on June 30, 2013.  The unaudited pro forma consolidated information has been derived from (i) the audited consolidated financial statements of each of Security Networks and the Company for the year ended December 31, 2012 and (ii) the unaudited consolidated financial statements of each of Security Networks and the Company as of and for the three and six months ended June 30, 2013 incorporated by reference herein.

The unaudited pro forma consolidated financial information has been presented for informational purposes only and does not purport to represent, and is not necessarily indicative of, what our financial position or results of operations would have been had the Transactions been completed as of January 1, 2012 and June 30, 2013, as applicable, and should not be taken as representative of our future consolidated financial position or results of operations.  This information is only a summary and should be read in conjunction with the accompanying notes to the unaudited pro forma condensed consolidated financial statements and our historical consolidated financial statements and related notes thereto and Security Networks’ historical consolidated financial statements and related notes thereto incorporated by reference herein .

The Acquisition will be accounted for as a business combination utilizing the purchase accounting method in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations.  The pro forma information presented below, including the purchase price and allocation of purchase price, is based on estimates of the fair values of assets acquired and liabilities assumed, available information as of the date of this report and management assumptions, and may be revised as additional information becomes available.  The final purchase price and purchase price allocation is dependent upon, among other things, the finalization of the asset and liability valuations by our independent appraisal firm.  Any post-closing adjustments may change the purchase price or the allocation of the purchase price, which could affect the fair value assigned to the assets and liabilities and could result in a change to the unaudited pro forma condensed consolidated financial information, including a change to goodwill.  The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2012 has been revised from the preliminary pro forma financial information included in previous filings due to changes in estimates associated with the allocation of purchase price.

The historical consolidated financial information has been adjusted to give effect to pro forma events that are (a) directly attributable to the Transactions, (b) factually supportable, and (c) with respect to the statements of income, expected to have a continuing impact on the combined results.

ASCENT CAPITAL GROUP, INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 2013
(Amounts in thousands)

	Ascent		Security Networks	Pro Forma Adjustments		Pro Forma Condensed Consolidated Ascent and Security Networks
Assets
Current assets:
Cash and cash equivalents	$	84,149	1,886	(24,799	)(1)	61,236
Restricted cash	2,640		—	—		2,640
Marketable Securities, at fair value	141,438		—	—		141,438
Trade Receivable, net of allowance for doubtful accounts	12,114		1,636	—		13,750
Parts inventory	—		477	—		477
Deferred income tax assets, net	3,780		—	—		3,780
Income taxes receivable	49		—	—		49
Prepaid and other current assets	12,595		704	250	(7)	13,549
Assets held for sale	6,119		—	—		6,119
Total current assets	262,884		4,703	(24,549	)	243,038
Property and equipment, net of accumulated depreciation	54,743		2,104	(700	)(2)	56,147
Subscriber accounts, net of accumulated amortization	1,020,664		239,651	68,049	(3)	1,328,364
Dealer network and other intangible assets, net of accumulated amortization	24,813		—	48,500	(3)	73,313
Goodwill	349,227		54,629	119,095	(4)	522,951
Other assets, net	25,410		8,457	705	(5)	34,572
Assets of discontinued operations	54		—	—		54
Total assets	$	1,737,795	309,544	211,100		2,258,439
Liabilities and Stockholder’s Equity
Current liabilities:
Accounts payable	$	5,398	1,645	3,528	(6)	10,571
Accrued payroll and related liabilities	3,372		513	—		3,885
Other accrued liabilities	28,217		4,107	5,173	(7)	37,497
Deferred revenue	9,704		3,778	(2,569	)(8)	10,913
Purchase holdbacks, including amounts due on acquired contracts — short-term	15,725		2,681	—		18,406
Current portion of long-term debt	6,905		—	—		6,905
Liabilities of discontinued operations	6,907		—	—		6,907
Total current liabilities	76,228		12,724	6,132		95,084
Long-term debt	1,119,201		237,972	200,068	(9)	1,557,241
Derivative financial instruments	2,663		—	—		2,663
Deferred income tax liability, net	8,346		—	—		8,346
Due on acquired contracts — long-term	—		6,552	—		6,552
Other liabilities	5,463		—	13,097	(6)	18,560
Total liabilities	1,211,901		257,248	219,297		1,688,446
Commitments and contingencies
Stockholder’s equity	525,894		52,296	(8,197	)(10)	569,993
Total liabilities and stockholder’s equity	$	1,737,795	309,544	211,100		2,258,439

See accompanying notes to the condensed consolidated financial statements.

ASCENT CAPITAL GROUP, INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Six Months Ended June 30, 2013
(Amounts in thousands)

	Ascent			Security Networks		Pro Forma Adjustments		Pro Forma Condensed Consolidated Ascent and Security Networks
Net Revenue	$	202,431		48,407		—		250,838
Operating expenses:
Cost of Services	30,796			7,747		—		38,543
Selling, general, and administrative	41,246			14,612		(1,493	)(6)	54,365
Amortization of subscriber accounts, dealer network and other intangible assets	90,313			15,013		11,327	(3)	116,653
Depreciation	4,055			621		(621	)(2)	4,055
Loss (gain) on sale of operating assets, net	(5,456		)	28		—		(5,428	)
	160,954			38,021		9,213		208,188
Operating income (loss)	41,477			10,386		(9,213	)	42,650
Other income (expense):
Interest income	1,907			—		—		1,907
Interest expense	(40,628		)	(10,010	)	(6,274	)(9)	(56,912	)
Other income (expense), net	1,458			—		—		1,458
	(37,263		)	(10,010	)	(6,274	)	(53,547	)
Income (loss) from continuing operations before income taxes	4,214			376		(15,487	)	(10,897	)
Income tax expense from continuing operations	(1,688		)	(161	)	—		(1,849	)
Net income (loss) from continuing operations	$	2,526		215		(15,487	)	(12,746	)
Basic earnings (loss) per share:
Continuing operations	$	0.18						(0.90	)
Weighted average shares — basic	13,890,801							14,144,134
Diluted earnings (loss) per share:
Continuing operations	$	0.17						(0.90	)(11)
Weighted average shares — diluted	14,646,379							14,144,134	(12)

See accompanying notes to the condensed consolidated financial statements.

ASCENT CAPITAL GROUP, INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2012

(Amounts in thousands)

	Ascent			Security Networks		Pro Forma Adjustments		Pro Forma Condensed Consolidated Ascent and Security Networks
Net Revenue	$	344,953		78,478		(2,569	)(8)	420,862
Operating expenses:
Cost of Services	49,791			12,262		—		62,053
Selling, general, and administrative	73,389			20,134		(1,829	)(6)	91,694
Amortization of subscriber accounts, dealer network, and other intangible assets	163,468			24,470		36,880	(3)	224,818
Depreciation	8,404			1,138		266	(2)	9,808
Loss (gain) on sale of operating assets, net	(8,670		)	—		—		(8,670	)
Loss on pension plan settlements	6,571			—		—		6,571
Impairment of assets held for sale	1,692			—		—		1,692
Contingent consideration expense	—			982		—		982
	294,645			58,986		35,317		388,948
Operating income (loss)	50,308			19,492		(37,886	)	31,914
Other income (expense):
Interest income	4,011			—		—		4,011
Interest expense	(71,390		)	(15,816	)	(16,486	)(9)	(103,692	)
Realized and unrealized loss on derivative instruments	(2,044		)	—		—		(2,044	)
Refinancing expense	(6,245		)	—		—		(6,245	)
Other income, net	3,696			—		—		3,696
	(71,972		)	(15,816	)	(16,486	)	(104,274	)
Income (loss) from continuing operations before income taxes	(21,664		)	3,676		(54,372	)	(72,360	)
Income tax expense from continuing operations	(2,591		)	(100	)	—		(2,691	)
Net income (loss) from continuing operations	$	(24,255	)	3,576		(54,372	)	(75,051	)
Basic and diluted earnings (loss) per share:
Continuing operations	$	(1.73	)					(5.26	)
Weighted average shares — basic and diluted	14,026,102							14,279,435	(12)

See accompanying notes to the condensed consolidated financial statements.

ASCENT CAPITAL GROUP, INC. AND SUBSIDIARIES
Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements

(1)Reflects net cash contributed to fund the Acquisition and other cash payments, including deferred financing and convertible note hedge costs, net of proceeds from the sale of warrants, and the repayment of $33.6 million of the revolving portion of the Monitronics’ Credit Facility outstanding as of June 30, 2013.

(2)Reflects fair value adjustments and pro forma depreciation expense adjustments for the acquisition of Security Networks’ property and equipment.

(3)Reflects fair value adjustments and pro forma amortization expense adjustments for the acquisition of Security Networks’ identifiable intangible assets, which are comprised of subscriber accounts, its dealer network and non-compete agreements.  Subscriber accounts are amortized using the 14-year 235% declining balance method.  Dealer network and non-compete agreements are amortized over their estimated remaining useful lives of 5 years on a straight-line basis.

(4)Reflects the elimination of Security Networks’ historical goodwill balance of $54.6 million and the origination of goodwill arising from Monitronics’ purchase of Security Networks.  Adjusted goodwill reflects the preliminary estimated excess of purchase price over the fair value of assets acquired and liabilities assumed.  The purchase price of Security Networks consisted of $482.9 million of cash and 253,333 shares of Ascent Series A common stock and has been allocated on a preliminary basis as follows (amounts in thousands):

Estimated fair value of assets acquired and liabilities assumed:
Subscriber accounts	$	307,700
Dealer network and other intangible assets	48,500
Property and equipment	1,404
Other assets acquired	4,953
Goodwill	173,724
Estimated fair value of liabilities assumed	(33,803		)
Fair value of consideration	$	502,478

(5)Reflects the additional deferred financing costs incurred on incremental debt obtained to finance the Acquisition, net of the elimination of Security Networks deferred financing costs not acquired and other fair value adjustments.

(6)Reflects fair value adjustments related to Security Networks revenue sharing program and elimination of historical revenue sharing expenses.

(7)Reflects accrued liabilities recognized in connection with the issuance the of the New Senior Notes and other purchase accounting adjustments, net of the elimination of Security Networks accrued interest that was paid off as of the closing date of the Acquisition.

(8)Represents purchase accounting adjustments related to Security Networks’ deferred revenues.

(9)Reflects incremental debt obtained to finance the Acquisition, net of the elimination of Security Networks debt not assumed.  The adjustments include consideration of FASB ASC Topic 470-20, Debt with Conversion and Other Options, which requires the liability and equity component of convertible debt instruments to be accounted for separately.  The statement of operations adjustments are to record pro forma interest expense on these incremental borrowings.  Pro forma interest expense adjustments were calculated based on the weighted effective interest rate on incremental debt in connection with the Acquisition, including amortization costs of debt discounts and deferred financing costs.

(10)Reflects the elimination of Security Networks historical stockholder’s equity, the recognition of the equity component of the convertible debt instrument, the net impact of entering into the convertible note hedge and warrant equity contracts, and the issuance of 253,333 shares of Ascent Series A common stock as consideration paid for the Acquisition.

(11)Pro forma diluted earnings per share for the six months ended June 30, 2013, is calculated the same as pro forma basic EPS since the pro forma results in a net loss, which would make potentially dilutive securities antidilutive.

(12)Pro forma basic and diluted weighted average shares reflects an adjustment for the issuance of 253,333 shares of Ascent Series A common stock as consideration paid for the Acquisition.

EX-99.5

Exhibit 99.5

Source: Company management Dollars in millions 2009 and 2010 Revenue and Adjusted EBITDA for Monitronics are as of the fiscal year ended June 30th; the Company changed to calendar year fiscal years in connection with its acquisition by Ascent in December 2010 Monitronics Revenue and Adjusted EBITDA for the years ended December 31, 2011 and December 31, 2010 exclude the negative impact of a $2.3 million and $3.0 million, respectively, fair value adjustment related to deferred revenue in relation to Ascent’s acquisition of Monitronics SN's Revenue and Adjusted EBITDA for each of the years ended Dec. 31, 2012, 2011, 2010 and 2009 and PF LQA Adjusted EBITDA for the 3 months ended June 30, 2013 have been derived entirely from the books and records of SN Security Networks Adjusted EBITDA for the year ended December 31, 2012 excludes approximately $982 thousand of contingent consideration earn out expense related to the 2010 acquisition of Security Networks by Oak Hill and its affiliates Security Networks’ Q2 2013 LQA PF Adjusted EBITDA includes a fair value adjustment of $3.2 million related to purchase accounting and excludes operational synergies of $4-6 million previously mentioned for illustrative purposes only. Operational synergies are not intended to reflect management’s projections or guidance Strong Historical Operational Profile Revenue CAGR: 14% / EBITDA CAGR: 16% (1) (1) (2) (2) Revenue CAGR: 38% Revenue CAGR: 17% (3) (4) (5) (2) (3) (1) (2) (3) (1) (3) (3) (5) (3) (4) (5) (3) (3) (3) (3) (5) $283 $345 $264 $314 $367 $423 $510 2009A 2010A 2011A 2012A PF LQA (6/30/13) $153 $190 $216 $236 $282 $234 $275 $314 $345 $409 2009A 2010A 2011A 2012A LQA (6/30/13) Revenue Adj. EBITDA $47 $63 $30 $39 $53 $78 $101 2009A 2010A 2011A 2012A PF LQA (6/30/13) $153 $190 $216 $236 $282 $234 $275 $314 $345 $409 2009A 2010A 2011A 2012A LQA (6/30/13)

Monitronics generally defines Adjusted EBITDA as net income (loss) before interest, taxes, depreciation and amortization (including the amortization of subscriber accounts) and realized and unrealized loss on derivative instruments, and other non-cash or non-recurring charges such as acquisition related professional fees, write off of deferred financing costs, and stock-based and other non-cash long-term incentive compensation. Adjusted EBITDA does not represent cash flow from operations as defined by generally accepted accounting principles, should not be construed as an alternative to net income or loss and is indicative neither of Monitronics’ operating performance nor of cash flows available to fund all of its cash needs. It is, however, a measurement Monitronics believes is useful to investors to evaluate its operating performance. Adjusted EBITDA is also a measure that Monitronics believes is customarily used by financial analysts to evaluate the financial performance of companies in the security alarm monitoring industry and is one of the financial measures, subject to adjustments, by which Monitronics’ covenants are calculated under the agreements governing its debt obligations. For purposes of this presentation, Monitronics has applied the same definitions of Adjusted EBITDA to the financial information of Security Networks. Adjusted EBITDA Definition

Source: Company filings. Does not include Security Networks Adjusted EBITDA Reconciliations Monitronics(1) Security Networks ($ in Thousands) For the Quarter Ended June 30, For the 12 Months Ended December 31, 2013 2012 2012 Actual Actual Actual Net Income (Loss) ($876) $1,234 $3,576 Amortization of subscriber accounts and dealer network 7,882 5,535 24,470 Depreciation 335 276 1,138 Stock-based compensation expense 99 99 388 Acquisition-related costs 2,330 - - Interest expense 5,129 3,785 15,816 Income tax expense 146 82 100 Contingent consideration earnout expense - - 982 Adjusted EBITDA $15,045 $11,011 $46,470 ($ in Thousands) For the Quarter Ended June 30, For the 12 Months Ended December 31, 2013 2012 2012 2011 Actual Actual Actual Actual Net Income (Loss) $592 ($3,753) ($16,030) ($6,010) Amortization of subscriber accounts and dealer network 45,998 39,349 163,468 159,619 Depreciation 1,721 1,320 5,286 4,704 Stock-based compensation expense 402 280 1,384 393 Acquisition-related costs 1,438 - - - Realized/unrealized loss on derivative instruments - - 2,044 10,601 Refinancing costs - 4 6,245 - Interest expense 19,466 19,347 71,328 42,655 Income tax expense 791 671 2,616 2,523 Adjusted EBITDA $70,408 $57,218 $236,341 $214,485