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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 March 31, 2008
 Commission File Numbers:

    333-57285-01333-57285
 Mediacom LLC
Mediacom Capital Corporation*
 (Exact names of Registrants as specified in their charters)
 New York
    
    06-1433421New York
    
    06-1513997(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification Numbers)
 100 Crystal Run Road
Middletown, New York 10941  (Address of principal executive offices)
 (845) 695-2600  (Registrants telephone number)
  o þ
   o Large accelerated filers
    

o Accelerated filers
    

þ Non-accelerated filers
    
    o Smaller reporting company
  o þ




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##### 



MEDIACOM LLC AND SUBSIDIARIES
 FORM 10-Q
FOR THE PERIOD ENDED MARCH 31, 2008
 TABLE OF CONTENTS
 PagePART IItem 1. Financial Statements
    
    
    4Consolidated Balance Sheets (unaudited)
March 31, 2008 and December 31, 2007
    
    
    4Consolidated Statements of Operations (unaudited)
Three Months Ended March 31, 2008 and 2007
    
    
    5Consolidated Statements of Cash Flows (unaudited)
Three Months Ended March 31, 2008 and 2007
    
    
    6Notes to Consolidated Financial Statements (unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    18Item 4. Controls and Procedures
    
    
    18PART IIItem 1. Legal Proceedings
    
    
    19Item 1A. Risk Factors
    
    
    19Item 6. Exhibits
    
    
    19Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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Cautionary Statement Regarding Forward-Looking Statements
    3




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PART I
 
 ITEM 1. FINANCIAL STATEMENTS
 MEDIACOM LLC AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 March 31,
    
    
    December 31,2008
    
    
    2007ASSETSCURRENT ASSETSCash
    
    $
    9,661
    
    
    $
    9,585Accounts receivable, net of allowance for doubtful accounts of $668 and $900
    
    
    33,067
    
    
    
    34,415Prepaid expenses and other current assets
    
    
    8,609
    
    
    
    8,485Total current assets
    
    
    51,337
    
    
    
    52,485Preferred equity investment in affiliated company
    
    
    150,000
    
    
    
    150,000Investment in cable television systems:Property, plant and equipment, net of accumulated depreciation of $1,028,969 and $1,002,953
    
    
    685,860
    
    
    
    686,987Franchise rights
    
    
    550,764
    
    
    
    550,763Goodwill
    
    
    16,640
    
    
    
    16,642Subscriber lists, net of accumulated amortization of $137,807 and $137,745
    
    
    952
    
    
    
    1,013Total investment in cable television systems
    
    
    1,254,216
    
    
    
    1,255,405Other assets, net of accumulated amortization of $15,685 and $15,159
    
    
    8,622
    
    
    
    9,256Total assets
    
    $
    1,464,175
    
    
    $
    1,467,146LIABILITIES AND MEMBERS DEFICITCURRENT LIABILITIESAccounts payable, accrued expenses and other current liabilities
    
    $
    194,387
    
    
    $
    189,063Deferred revenue
    
    
    23,839
    
    
    
    22,879Current portion of long-term debt
    
    
    27,500
    
    
    
    26,500Total current liabilities
    
    
    245,726
    
    
    
    238,442Long-term debt, less current portion
    
    
    1,476,375
    
    
    
    1,479,000Other non-current liabilities
    
    
    15,105
    
    
    
    17,354Total liabilities
    
    
    1,737,206
    
    
    
    1,734,796Commitments and contingencies (Note 8)MEMBERS DEFICITCapital contributions
    
    
    438,521
    
    
    
    438,517Accumulated deficit
    
    
    (711,552
    )
    
    
    (706,167
    )Total members deficit
    
    
    (273,031
    )
    
    
    (267,650
    )Total liabilities and members deficit
    
    $
    1,464,175
    
    
    $
    1,467,146
 
  4




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MEDIACOM LLC AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months EndedMarch 31,2008
    
    
    2007Revenues
    
    $
    148,939
    
    
    $
    134,524Costs and expenses:Service costs (exclusive of depreciation and amortization)
    
    
    63,503
    
    
    
    58,061Selling, general and administrative expenses
    
    
    26,565
    
    
    
    25,371Management fee expense
    
    
    2,929
    
    
    
    2,521Depreciation and amortization
    
    
    29,069
    
    
    
    25,930Operating income
    
    
    26,873
    
    
    
    22,641Interest expense, net
    
    
    (26,702
    )
    
    
    (29,475
    )Loss on derivatives, net
    
    
    (8,898
    )
    
    
    (2,077
    )(Loss) gain on sale of cable systems, net
    
    
    (170
    )
    
    
    10,781Investment income from affiliate
    
    
    4,500
    
    
    
    4,500Other expense, net
    
    
    (984
    )
    
    
    (1,006
    )Net (loss) income
    
    $
    (5,381
    )
    
    $
    5,364
 
  5




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MEDIACOM LLC AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Three Months EndedMarch 31,2008
    
    
    2007OPERATING ACTIVITIES:Net (loss) income
    
    $
    (5,381
    )
    
    $
    5,364Adjustments to reconcile net (loss) income to net cash flows provided by operating activities:Depreciation and amortization
    
    
    29,069
    
    
    
    25,930Loss on derivatives, net
    
    
    8,898
    
    
    
    2,077Loss (gain) on sale of cable systems, net
    
    
    170
    
    
    
    (10,781
    )Amortization of deferred financing costs
    
    
    526
    
    
    
    514Share-based compensation
    
    
    136
    
    
    
    111Changes in assets and liabilities, net of effects from acquisitions:Accounts receivable, net
    
    
    1,178
    
    
    
    2,915Prepaid expenses and other assets
    
    
    (155
    )
    
    
    (3,054
    )Accounts payable, accrued expenses and other current liabilities
    
    
    3,768
    
    
    
    (15,191
    )Deferred revenue
    
    
    960
    
    
    
    528Other non-current liabilities
    
    
    (381
    )
    
    
    (386
    )Net cash flows provided by operating activities
    
    $
    38,788
    
    
    $
    8,027INVESTING ACTIVITIES:Capital expenditures
    
    
    (27,879
    )
    
    
    (22,611
    )Proceeds from sale of cable systems
    
    
    
    
    
    
    22,948Acquisition of cable system
    
    
    
    
    
    
    (7,274
    )Net cash flows used in investing activities
    
    $
    (27,879
    )
    
    $
    (6,937
    )FINANCING ACTIVITIES:New borrowings
    
    
    31,000
    
    
    
    36,000Repayment of debt
    
    
    (32,625
    )
    
    
    (39,856
    )Other financing activities  book overdrafts
    
    
    (9,208
    )
    
    
    1,382Net cash flows used in financing activities
    
    $
    (10,833
    )
    
    $
    (2,474
    )Net increase (decrease) in cash
    
    
    76
    
    
    
    (1,384
    )CASH, beginning of period
    
    
    9,585
    
    
    
    11,501CASH, end of period
    
    $
    9,661
    
    
    $
    10,117SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid during the period for interest, net of amounts capitalized
    
    $
    41,004
    
    
    $
    46,126
 
  6




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1. ORGANIZATION
  Fair Value
Measurements.
   Reclassifications
  2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 Fair Value Measurements.
  
    
    Level 1  Quoted market prices in active markets for identical assets or liabilities.
    
    Level 2  Observable market based inputs or unobservable inputs that are corroborated by
market data.
    
    Level 3  Unobservable inputs that are not corroborated by market data.
  7




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The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement No. 115.
 Business Combinations,
 Noncontrolling Interests in Consolidated Financial
Statements  an amendment of ARB No. 51.
 Disclosures about Derivative Instruments and Hedging
Activitiesan amendment of FASB Statement No. 133.
 3. PROPERTY, PLANT AND EQUIPMENT
  March 31,
    
    
    December 31,2008
    
    
    2007Cable systems, equipment and subscriber devices
    
    $
    1,641,018
    
    
    $
    1,618,089Vehicles
    
    
    33,403
    
    
    
    32,349Furniture, fixtures and office equipment
    
    
    22,523
    
    
    
    21,696Buildings and leasehold improvements
    
    
    16,357
    
    
    
    16,278Land and land improvements
    
    
    1,528
    
    
    
    1,5281,714,829
    
    
    
    1,689,940Accumulated depreciation
    
    
    (1,028,969
    )
    
    
    (1,002,953
    )Property, plant and equipment, net
    
    $
    685,860
    
    
    $
    686,987
  8




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4.
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
  March 31,
    
    
    December 31,2008
    
    
    2007Accrued programming costs
    
    $
    18,891
    
    
   $
    17,844Accrued taxes and fees
    
    
    13,879
    
    
    
    17,383Accrued interest
    
    
    13,690
    
    
    
    27,957Book
overdrafts (1)
    
    
    13,286
    
    
    
    22,497Liability under interest rate exchange agreements
    
    
    10,763
    
    
    
    Accrued payroll and benefits
    
    
    10,103
    
    
    
    9,369Accrued service costs
    
    
    9,297
    
    
    
    10,879Accrued property, plant and equipment
    
    
    6,527
    
    
    
    4,376Subscriber advance payments
    
    
    6,040
    
    
    
    5,962Accounts payable
    
    
    1,967
    
    
    
    8,579Accrued telecommunications costs
    
    
    
    
    
    
    6,726Other accrued expenses
    
    
    8,043
    
    
    
    8,668Accounts payable  affiliates
    
    
    81,901
    
    
    
    48,823Accounts payable, accrued expenses and other current liabilities
    
    $
    194,387
    
    
    $
    189,063
 (1)
    
    Book overdrafts represent outstanding checks in excess of funds on deposit at our
disbursement accounts. We transfer funds from our depository accounts to our disbursement
accounts upon daily notification of checks presented for payment. Changes in book overdrafts
are reported as part of cash flows from financing activities in our consolidated statement of
cash flows. 5. DEBT
  March 31,
    
    
    December 31,2008
    
    
    2007Bank credit facilities
    
    $
    878,875
    
    
    $
    880,50077/8% senior notes due 2011
    
    
    125,000
    
    
    
    125,00091/2% senior notes due 2013
    
    
    500,000
    
    
    
    500,000Capital lease obligations
    
    
    
    
    
    
    $
    1,503,875
    
    
    $
    1,505,500Less: Current
portion
    
    
    27,500
    
    
    
    26,500Total long-term debt
    
    $
    1,476,375
    
    
    $
    1,479,000
 Bank Credit Facilities
 ,
   9




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Interest Rate Exchange Agreements
    10




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6. MEMBERS DEFICIT
 Share-based Compensation
  Three Months EndedMarch 31,2008
    
    
    2007Share-based compensation expense by type of award:Employee stock options
    
    $
    21
    
    
    $
    25Employee stock purchase plan
    
    
    12
    
    
    
    13Restricted stock units
    
    
    103
    
    
    
    73Total share-based compensation expense
    
    $
    136
    
    
    $
    111
  Employee Stock Purchase Plan
  7. INVESTMENT IN AFFILIATED COMPANY
  8. COMMITMENTS AND CONTINGENCIES
 Legal Proceedings
 Gary Ogg and Janice Ogg v. Mediacom LLC
   11




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Overview
    Retransmission Consent
   Adjusted OIBDA
   12




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Actual Results of Operations
 Three Months Ended March 31, 2008 compared to Three Months Ended March 31, 2007
  Three Months EndedMarch 31,2008
    
    
    2007
    
    
    $ Change
    
    
    % ChangeRevenues
    
    $
    148,939
    
    
    $
    134,524
    
    
    $
    14,415
    
    
    
    10.7
    %Costs and expenses:Service costs (exclusive of depreciation
and amortization)
    
    
    63,503
    
    
    
    58,061
    
    
    
    5,442
    
    
    
    9.4
    %Selling, general and administrative expenses
    
    
    26,565
    
    
    
    25,371
    
    
    
    1,194
    
    
    
    4.7
    %Management fee expense
    
    
    2,929
    
    
    
    2,521
    
    
    
    408
    
    
    
    16.2
    %Depreciation and amortization
    
    
    29,069
    
    
    
    25,930
    
    
    
    3,139
    
    
    
    12.1
    %Operating income
    
    
    26,873
    
    
    
    22,641
    
    
    
    4,232
    
    
    
    18.7
    %Interest expense, net
    
    
    (26,702
    )
    
    
    (29,475
    )
    
    
    2,773
    
    
    
    (9.4
    %)Loss on derivatives, net
    
    
    (8,898
    )
    
    
    (2,077
    )
    
    
    (6,821
    )
    
    NM(Loss) gain on sale of cable systems
    
    
    (170
    )
    
    
    10,781
    
    
    
    (10,951
    )
    
    NMInvestment income from affiliate
    
    
    4,500
    
    
    
    4,500
    
    
    
    
    
    
    NMOther expense, net
    
    
    (984
    )
    
    
    (1,006
    )
    
    
    22
    
    
    
    (2.2
    %)Net (loss) income
    
    $
    (5,381
    )
    
    $
    5,364
    
    
    $
    (10,745
    )
    
    
    NMAdjusted OIBDA
    
    $
    56,078
    
    
    $
    48,682
    
    
    $
    7,396
    
    
    
    15.2
    %
  Three Months EndedMarch 31,2008
    
    
    2007
    
    
    $ Change
    
    
    % ChangeAdjusted OIBDA
    
    $
    56,078
    
    
    $
    48,682
    
    
    $
    7,396
    
    
    
    15.2
    %Non-cash, share-based compensation
    
    
    (136
    )
    
    
    (111
    )
    
    
    (25
    )
    
    
    22.5
    %Depreciation and amortization
    
    
    (29,069
    )
    
    
    (25,930
    )
    
    
    (3,139
    )
    
    
    12.1
    %Operating income
    
    $
    26,873
    
    
    $
    22,641
    
    
    $
    4,232
    
    
    
    18.7
    %
  13




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Revenues
  Three Months EndedMarch 31,2008
    
    
    2007
    
    
    $ Change
    
    
    % ChangeVideo
    
    $
    101,229
    
    
    $
    96,489
    
    
    
    4,740
    
    
    
    4.9
    %HSD
    
    
    34,708
    
    
    
    29,467
    
    
    
    5,241
    
    
    
    17.8
    %Phone
    
    
    8,434
    
    
    
    3,936
    
    
    
    4,498
    
    
    
    114.3
    %Advertising
    
    
    4,568
    
    
    
    4,632
    
    
    
    (64
    )
    
    
    (1.4
    %)Total Revenues
    
    $
    148,939
    
    
    $
    134,524
    
    
    
    14,415
    
    
    
    10.7
    %
 Three Months EndedMarch 31,
    
    
    Increase/2008
    
    
    2007
    
    
    (Decrease)
    
    
    % ChangeBasic subscribers
    
    
    604,000
    
    
    
    622,000
    
    
    
    (18,000
    )
    
    
    (2.9
    %)Digital customers
    
    
    253,000
    
    
    
    225,000
    
    
    
    28,000
    
    
    
    12.4
    %HSD customers
    
    
    314,000
    
    
    
    269,000
    
    
    
    45,000
    
    
    
    16.7
    %Phone customers
    
    
    90,000
    
    
    
    45,000
    
    
    
    45,000
    
    
    
    100.0
    %RGUs(1)
    
    
    1,261,000
    
    
    
    1,161,000
    
    
    
    100,000
    
    
    
    8.6
    %Average total monthly revenue per RGU(2)
    
    $
    39.97
    
    
    $
    38.89
    
    
    $
    1.08
    
    
    
    2.8
    %
 (1)
    
    RGUs represent the total of basic subscribers and digital, HSD and phone customers.(2)
    
    Represents average monthly revenues for the quarter divided by average RGUs for such period.      14




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Costs and Expenses
       Adjusted OIBDA
  Operating Income
   15




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Interest Expense, Net
  Loss on Derivatives, Net
  Gain on Sale of Cable Systems
  Investment Income from Affiliate
  Net (Loss) Income
  Liquidity and Capital Resources
 Overview
   Bank Credit Facilities
   16




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Interest Rate Exchange Agreements
   Senior Notes
  Covenant Compliance and Debt Ratings
  Operating Activities
   Investing Activities
   17




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Financing Activities
  Contractual Obligations and Commercial Commitments
  Critical Accounting Policies
  Inflation and Changing Prices
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
 Mediacom LLC
   Mediacom Capital Corporation
    18




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PART II
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 6. EXHIBITS
 ExhibitNumber
    
    Exhibit Description31.1
    
    
    Rule 15d-14(a) Certifications of Mediacom LLC31.2
    
    
    Rule 15d-14(a) Certifications of Mediacom Capital Corporation32.1
    
    
    Section 1350 Certifications of Mediacom LLC32.2
    
    
    Section 1350 Certifications of Mediacom Capital Corporation
  19




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SIGNATURES
  MEDIACOM LLC
 May 14, 2008
    By:
    /s/ Mark E. StephanMark E. StephanExecutive Vice President and
Chief Financial Officer  20




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##### Table of Contents



SIGNATURES
  MEDIACOM CAPITAL CORPORATIONMay 14, 2008
    By:
    /s/ Mark E. StephanMark E. StephanExecutive Vice President and
Chief Financial Officer  21




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EXHIBIT INDEX
 ExhibitNumber
    
    Exhibit Description31.1
    
    
    Rule 15d-14(a) Certifications of Mediacom LLC31.2
    
    
    Rule 15d-14(a) Certifications of Mediacom Capital Corporation32.1
    
    
    Section 1350 Certifications of Mediacom LLC32.2
    
    
    Section 1350 Certifications of Mediacom Capital Corporation
  22