##### Table of Contents



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, 2006
 Commission File Numbers:
    
    333-57285-01333-57285
 Mediacom LLC
Mediacom Capital Corporation*
 (Exact names of Registrants as specified in their charters)
 New York 
New York(State or other jurisdiction of 
incorporation or organization)
    
    06-1433421
06-1513997(I.R.S. Employer
Identification Numbers)
 100 Crystal Run Road
Middletown, New York 10941  (Address of principal executive offices)
 (845) 695-2600  (Registrants telephone number)
  þ o
  o Large accelerated filers
    
    o Accelerated filers
    
    þ Non-accelerated filers
  o þ




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##### 



MEDIACOM LLC AND SUBSIDIARIES
 FORM 10-Q
FOR THE PERIOD ENDED SEPTEMBER 30, 2006
 TABLE OF CONTENTS
 PagePART IItem 1.
    
    Financial StatementsConsolidated Balance Sheets (unaudited) September 30, 2006 and December 31, 2005
    
    
    4Consolidated Statements of Operations (unaudited) Three and Nine Months Ended September 30, 2006 and 2005
    
    
    5Consolidated Statements of Cash Flows (unaudited) Nine Months Ended September 30, 2006 and 2005
    
    
    6Notes to Consolidated Financial Statements (unaudited)
    
    
    7Item 2.
    
    Management's Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    26Item 4.
    
    Controls and Procedures
    
    
    26PART IIItem 1.
    
    Legal Proceedings
    
    
    27Item 1A.
    
    Risk Factors
    
    
    27Item 6.
    
    Exhibits
    
    
    27Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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Cautionary Statement Regarding Forward-Looking Statements
    3




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##### Table of Contents



PART I
 
 ITEM 1. FINANCIAL STATEMENTS
 
 MEDIACOM LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2006
    
    
    2005ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    9,421
    
    
    $
    6,466Accounts receivable, net of allowance for doubtful accounts of $940 and $1,235, respectively
    
    
    30,862
    
    
    
    27,617Prepaid expenses and other current assets
    
    
    2,493
    
    
    
    6,064Total current assets
    
    
    42,776
    
    
    
    40,147Preferred equity investment in affiliated company
    
    
    150,000
    
    
    
    150,000Investment in cable television systems:Property, plant and equipment, net of accumulated depreciation of $885,076 and $815,387,
respectively
    
    
    708,611
    
    
    
    711,804Franchise rights, net of accumulated amortization of $102,195
    
    
    552,610
    
    
    
    552,610Goodwill
    
    
    16,800
    
    
    
    16,800Subscriber lists, net of accumulated amortization of $138,524 and $138,504, respectively
    
    
    29
    
    
    
    49Total investment in cable television systems
    
    
    1,278,050
    
    
    
    1,281,263Other assets, net of accumulated amortization of $12,388 and $12,759, respectively
    
    
    15,075
    
    
    
    20,600Total assets
    
    $
    1,485,901
    
    
    $
    1,492,010LIABILITIES AND MEMBERS DEFICITCURRENT LIABILITIESAccrued liabilities
    
    $
    132,729
    
    
    $
    117,411Deferred revenue
    
    
    20,837
    
    
    
    18,600Current portion of long-term debt
    
    
    5,253
    
    
    
    6,412Total current liabilities
    
    
    158,819
    
    
    
    142,423Long-term debt, less current portion
    
    
    1,559,339
    
    
    
    1,462,369Other non-current liabilities
    
    
    12,451
    
    
    
    10,819Total liabilities
    
    
    1,730,609
    
    
    
    1,615,611Commitments and contingencies (Note 9)MEMBERS DEFICITCapital contributions
    
    
    440,521
    
    
    
    548,521Accumulated deficit
    
    
    (685,229
    )
    
    
    (672,122
    )Total members deficit
    
    
    (244,708
    )
    
    
    (123,601
    )Total liabilities and members deficit
    
    $
    1,485,901
    
    
    $
    1,492,010
 
  4




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MEDIACOM LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenues
    
    $
    134,276
    
    
    $
    122,274
    
    
    $
    393,449
    
    
    $
    362,810Costs and expenses:Service costs (exclusive of depreciation and amortization of
$26,490, $25,445, $77,921, and $74,232, respectively,
shown separately below)
    
    
    55,999
    
    
    
    51,258
    
    
    
    164,706
    
    
    
    148,628Selling, general and administrative expenses
    
    
    26,372
    
    
    
    23,905
    
    
    
    73,659
    
    
    
    69,900Management fee expense
    
    
    2,397
    
    
    
    2,464
    
    
    
    6,978
    
    
    
    7,374Depreciation and amortization
    
    
    26,490
    
    
    
    25,445
    
    
    
    77,921
    
    
    
    74,232Operating income
    
    
    23,018
    
    
    
    19,202
    
    
    
    70,185
    
    
    
    62,676Interest expense, net
    
    
    (29,259
    )
    
    
    (25,427
    )
    
    
    (82,477
    )
    
    
    (75,573
    )Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    (4,624
    )
    
    
    (4,742
    )(Loss) gain on derivatives, net
    
    
    (7,459
    )
    
    
    2,936
    
    
    
    (6,498
    )
    
    
    5,297Gain on sale of assets and investments, net
    
    
    
    
    
    
    1,446
    
    
    
    
    
    
    
    2,628Investment income from affiliate
    
    
    4,500
    
    
    
    4,500
    
    
    
    13,500
    
    
    
    13,500Other expense
    
    
    (939
    )
    
    
    (1,045
    )
    
    
    (3,193
    )
    
    
    (3,717
    )Net (loss) income
    
    $
    (10,139
    )
    
    $
    1,612
    
    
    $
    (13,107
    )
    
    $
    69
 
  5




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MEDIACOM LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine Months EndedSeptember2006
    
    
    2005CASH FLOWS FROM OPERATING ACTIVITIES:Net (loss) income
    
    $
    (13,107
    )
    
    $
    69Adjustments to reconcile net (loss) income to net cash provided by
operating activities:Depreciation and amortization
    
    
    77,921
    
    
    
    74,232Loss (gain) on derivatives, net
    
    
    6,498
    
    
    
    (5,297
    )Gain on sale of assets and investments, net
    
    
    
    
    
    
    (2,628
    )Loss on early extinguishment of debt
    
    
    2,999
    
    
    
    4,742Amortization of original issue discounts and deferred financing costs
    
    
    1,881
    
    
    
    2,313Share-based compensation
    
    
    293
    
    
    
    84Changes in assets and liabilities, net of effects from acquisitions:Accounts receivable, net
    
    
    (3,245
    )
    
    
    854Prepaid expenses and other assets
    
    
    784
    
    
    
    10,813Accrued liabilities
    
    
    15,318
    
    
    
    (12,089
    )Deferred revenue
    
    
    2,237
    
    
    
    710Other non-current liabilities
    
    
    (1,705
    )
    
    
    (2,607
    )Net cash flows provided by operating activities
    
    
    89,874
    
    
    
    71,196CASH FLOWS FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (74,707
    )
    
    
    (89,840
    )Proceeds from sale of assets and investments
    
    
    
    
    
    
    4,616Net cash flows used in investing activities
    
    
    (74,707
    )
    
    
    (85,224
    )CASH FLOWS FROM FINANCING ACTIVITIES:New borrowings
    
    
    811,000
    
    
    
    493,000Repayment of debt
    
    
    (715,189
    )
    
    
    (284,626
    )Capital distribution
    
    
    (108,000
    )
    
    
    Redemption of senior notes
    
    
    
    
    
    
    (200,000
    )Other financing activities  book overdrafts
    
    
    (23
    )
    
    
    (50
    )Net cash flows (used in) provided by financing activities
    
    
    (12,212
    )
    
    
    8,324Net increase (decrease) in cash and cash equivalents
    
    
    2,955
    
    
    
    (5,704
    )CASH AND CASH EQUIVALENTS, beginning of period
    
    
    6,466
    
    
    
    12,131CASH AND CASH EQUIVALENTS, end of period
    
    $
    9,421
    
    
    $
    6,427SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid during the period for interest, net of amounts capitalized
    
    $
    90,798
    
    
    $
    94,008
 
  6




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MEDIACOM LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. ORGANIZATION
  Share-Based Payment
   Allowance for Doubtful Accounts
   Reclassifications
  2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 Accounting for Certain Hybrid Financial
Instruments, Amendment of FASB Statement No. 133 and 140 Accounting for Derivative Instruments and Hedging Activities Accounting for Transfers and
  7




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MEDIACOM LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Servicing of Financial Assets and Extinguishments of Liabilities
 Accounting for Servicing of Financial Assets  an
Amendment of FASB Statement No 140
  3. PROPERTY, PLANT AND EQUIPMENT
  September 30,
    
    
    December 31,2006
    
    
    2005Cable systems, equipment and subscriber devices
    
    $
    1,525,445
    
    
    $
    1,462,189Vehicles
    
    
    30,529
    
    
    
    30,040Furniture, fixtures and office equipment
    
    
    19,888
    
    
    
    17,595Buildings and leasehold improvements
    
    
    16,122
    
    
    
    15,877Land and land improvements
    
    
    1,704
    
    
    
    1,4901,593,688
    
    
    
    1,527,191Accumulated depreciation
    
    
    (885,077
    )
    
    
    (815,387
    )Property, plant and equipment, net
    
    $
    708,611
    
    
    $
    711,804
  8




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##### Table of Contents



MEDIACOM LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 4. ACCRUED LIABILITIES
  September 30,
    
    
    December 31,2006
    
    
    2005Accrued interest
    
    $
    23,369
    
    
    $
    31,022Accrued programming costs
    
    
    19,202
    
    
    
    20,320Accrued taxes and fees
    
    
    12,206
    
    
    
    14,572Accrued payroll and benefits
    
    
    11,690
    
    
    
    8,762Accrued service costs
    
    
    8,013
    
    
    
    6,214Accrued property, plant and equipment
    
    
    6,970
    
    
    
    7,851Accrued telecommunications costs
    
    
    6,431
    
    
    
    4,432Subscriber advance payments
    
    
    5,809
    
    
    
    5,189Other accrued expenses
    
    
    39,039
    
    
    
    19,049$
    132,729
    
    
    $
    117,411
 5. DEBT
  September 30,
    
    
    December 31,2006
    
    
    2005Bank credit facilities
    
    $
    939,000
    
    
    $
    842,5007?% senior notes due 2011
    
    
    125,000
    
    
    
    125,00091/2% senior notes due 2013
    
    
    500,000
    
    
    
    500,000Capital lease obligations
    
    
    592
    
    
    
    1,2811,564,592
    
    
    
    1,468,781Less: Current portion
    
    
    5,253
    
    
    
    6,412Total long-term debt
    
    $
    1,559,339
    
    
    $
    1,462,369
 Bank Credit Facilities
   ,
  9




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MEDIACOM LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Interest Rate Exchange Agreements
   6. MEMBERS EQUITY
   7. SHARE-BASED COMPENSATION
 Accounting for Stock-Based Compensation Accounting for Stock
Issued to Employees
   10




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MEDIACOM LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Impact of the Adoption of SFAS No. 123(R)
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2006Share-based compensation expense by type of award:Employee stock options
    
    $
    24
    
    
    $
    94Employee stock purchase plan
    
    
    26
    
    
    
    51Restricted stock units
    
    
    53
    
    
    
    148Total share-based compensation expense
    
    $
    103
    
    
    $
    293
   11




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##### Table of Contents



MEDIACOM LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Pro forma Information for Periods Prior to the Adoption of SFAS No. 123(R)
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2005Net income as reported
    
    $
    1,612
    
    
    $
    69Add:
    
    Total stock-based compensation expense
included in net income as reported above
    
    
    35
    
    
    
    84Deduct:
    
    Total stock-based compensation expense determined
under fair value based method for all awards
    
    
    (217
    )
    
    
    (654
    )Pro forma net income
    
    $
    1,430
    
    
    $
    (501
    )
 Valuation Assumptions
  Employee Stock Option Plans
    
    
    Employee Stock Purchase PlansNine Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Expected volatility
    
    
    56.0
    %
    
    
    45.0
    %
    
    
    33.0
    %
    
    
    45.0
    %Risk free interest rate
    
    
    4.8
    %
    
    
    3.9
    %
    
    
    4.7
    %
    
    
    4.0
    %Expected option life
(in years)
    
    
    4.0
    
    
    
    6.0
    
    
    
    0.5
    
    
    
    0.5Forfeiture rate
    
    
    14.0
    %
    
    
    14.0
    %
    
    
    
    
    
    
    
   12




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##### Table of Contents



MEDIACOM LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Stock Option Plan
   Weighted AverageRemainingContractualWeighted Average
    
    
    TermShares
    
    
    Exercise Price
    
    
    (in years)Outstanding at January 1, 2006
    
    
    1,146,270
    
    
    $
    17.69Granted
    
    
    15,000
    
    
    
    5.66Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (83,022
    )
    
    
    18.48Expired
    
    
    
    
    
    
    Outstanding at September 30,
2006
    
    
    1,078,248
    
    
    $
    17.39
    
    
    
    3.9Exercisable at September 30,
2006
    
    
    1,030,334
    
    
    $
    17.90
    
    
    
    3.8
   Options Outstanding
    
    
    Options ExercisableWeighted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AverageRange of
    
    Number of
    
    
    Remaining
    
    
    Weighted
    
    
    Aggregate
    
    
    Number of
    
    
    Remaining
    
    
    Weighted
    
    
    AggregateExercise
    
    Shares
    
    
    Contractual
    
    
    Average
    
    
    Intrinsic Value
    
    
    Shares
    
    
    Contractual
    
    
    Average
    
    
    Intrinsic ValuePrices
    
    Outstanding
    
    
    Life
    
    
    Exercise Price
    
    
    (in thousands)
    
    
    Outstanding
    
    
    Life
    
    
    Exercise Price
    
    
    (in thousands)$5.00 - $12.00
    
    
    116,070
    
    
    
    6.0
    
    
    $
    7.72
    
    
    $
    24
    
    
    
    68,156
    
    
    
    6.3
    
    
    $
    8.45
    
    
    $
    4$12.01 - $18.00
    
    
    252,970
    
    
    
    4.4
    
    
    
    17.33
    
    
    
    
    
    
    
    252,970
    
    
    
    4.4
    
    
    
    17.33
    
    
    
    $18.01 - $22.00
    
    
    709,208
    
    
    
    3.6
    
    
    
    19.01
    
    
    
    
    
    
    
    709,208
    
    
    
    3.6
    
    
    
    19.01
    
    
    
    1,078,248
    
    
    
    3.9
    
    
    $
    17.39
    
    
    $
    24
    
    
    
    1,030,334
    
    
    
    3.8
    
    
    $
    17.90
    
    
    $
    4
   13




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MEDIACOM LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Restricted Stock Units
   WeightedNumber of Non-Vested
    
    
    Average GrantShare Unit Awards
    
    
    Date Fair ValueUnvested Awards at January 1, 2006
    
    
    100,500
    
    
    $
    5.49Granted
    
    
    60,100
    
    
    
    5.72Awards Vested
    
    
    (6,275
    )
    
    
    5.69Foreited
    
    
    (1,400
    )
    
    
    5.70Unvested Awards at September 30,
2006
    
    
    152,925
    
    
    $
    5.57
 Employee Stock Purchase Plan
  8. INVESTMENT IN AFFILIATED COMPANY
   14




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MEDIACOM LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 9. COMMITMENTS AND CONTINGENCIES
 Legal Proceedings
 Gary Ogg and Janice
Ogg v. Mediacom, LLC
   15




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ITEM 2.
 MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Overview
     Retransmission Consent
    16




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##### Table of Contents



Actual Results of Operations
 Three Months Ended September 30, 2006 compared to Three Months Ended September 30, 2005
  Three Months EndedSeptember 30,2006
    
    
    2005
    
    
    $ Change
    
    
    % ChangeRevenues
    
    $
    134,276
    
    
    $
    122,274
    
    
    $
    12,002
    
    
    
    9.8
    %Costs and expenses:Service costs
    
    
    55,999
    
    
    
    51,258
    
    
    
    4,741
    
    
    
    9.2
    %Selling, general and administrative expenses
    
    
    26,372
    
    
    
    23,905
    
    
    
    2,467
    
    
    
    10.3
    %Management fee expense
    
    
    2,397
    
    
    
    2,464
    
    
    
    (67
    )
    
    
    (2.7
    %)Depreciation and amortization
    
    
    26,490
    
    
    
    25,445
    
    
    
    1,045
    
    
    
    4.1
    %Operating income
    
    
    23,018
    
    
    
    19,202
    
    
    
    3,816
    
    
    
    19.9
    %Interest expense, net
    
    
    (29,259
    )
    
    
    (25,427
    )
    
    
    (3,832
    )
    
    
    15.1
    %(Loss) gain on derivatives, net
    
    
    (7,459
    )
    
    
    2,936
    
    
    
    (10,395
    )
    
    
    NMGain on sale of assets and investments, net
    
    
    
    
    
    
    1,446
    
    
    
    (1,446
    )
    
    
    NMInvestment income from affiliate
    
    
    4,500
    
    
    
    4,500
    
    
    
    
    
    
    
    Other expense
    
    
    (939
    )
    
    
    (1,045
    )
    
    
    106
    
    
    
    (10.1
    %)Net (loss) income
    
    $
    (10,139
    )
    
    $
    1,612
    
    
    $
    (11,751
    )
    
    
    NM
  Three Months EndedSeptember 30,2006
    
    
    2005
    
    
    $ Change
    
    
    % ChangeAdjusted OIBDA
    
    $
    54,111
    
    
    $
    49,182
    
    
    $
    4,929
    
    
    
    10.0
    %Non-cash, share-based
compensation charges
    
    
    (103
    )
    
    
    (35
    )
    
    
    (68
    )
    
    
    NMInvestment income from affiliate
    
    
    (4,500
    )
    
    
    (4,500
    )
    
    
    
    
    
    
    NMDepreciation and amortization
    
    
    (26,490
    )
    
    
    (25,445
    )
    
    
    (1,045
    )
    
    
    4.1
    %Operating income
    
    $
    23,018
    
    
    $
    19,202
    
    
    $
    3,816
    
    
    
    19.9
    %
  17




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##### Table of Contents



Revenues
  Three Months EndedSeptember 30,2006
    
    
    2005
    
    
    $ Change
    
    
    % ChangeVideo
    
    $
    100,104
    
    
    $
    95,812
    
    
    $
    4,292
    
    
    
    4.5
    %Data
    
    
    27,225
    
    
    
    22,298
    
    
    
    4,927
    
    
    
    22.1
    %Phone
    
    
    2,064
    
    
    
    50
    
    
    
    2,014
    
    
    
    NMAdvertising
    
    
    4,883
    
    
    
    4,114
    
    
    
    769
    
    
    
    18.7
    %$
    134,276
    
    
    $
    122,274
    
    
    $
    12,002
    
    
    
    9.8
    %
 Three Months EndedSeptember 30,
    
    
    Increase2006
    
    
    2005
    
    
    (Decrease)
    
    
    % ChangeBasic subscribers
    
    
    636,000
    
    
    
    655,000
    
    
    
    (19,000
    )
    
    
    (2.9
    %)Data customers
    
    
    243,000
    
    
    
    200,000
    
    
    
    43,000
    
    
    
    21.5
    %Phone customers
    
    
    23,000
    
    
    
    1,000
    
    
    
    22,000
    
    
    
    NMAverage monthly video revenue per basic subscriber
(1)
    
    $
    52.14
    
    
    $
    48.21
    
    
    $
    3.93
    
    
    
    8.2
    %Average monthly data revenue per data customer(2)
    
    $
    38.29
    
    
    $
    37.92
    
    
    $
    0.37
    
    
    
    1.0
    %
 
 (1)
    
    Average monthly video revenue per basic subscriber is calculated based on
monthly video revenue divided by the average number of basic subscribers for the quarter.(2)
    
    Average monthly data revenue per data customer is calculated based on monthly data
revenue divided by the average number of data customers for the quarter.     18




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##### Table of Contents



Costs and Expenses
        Adjusted OIBDA
  Operating Income
  Interest Expense, Net
   19




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##### Table of Contents



Gain (Loss) on Derivatives, Net
  Investment Income from Affiliate
  Net (Loss) Income
  Nine Months Ended September 30, 2006 compared to Nine Months Ended September 30, 2005
  Nine Months EndedSeptember 30,2006
    
    
    2005
    
    
    $ Change
    
    
    % ChangeRevenues
    
    $
    393,449
    
    
    $
    362,810
    
    
    $
    30,639
    
    
    
    8.4
    %Costs and expenses:Service costs
    
    
    164,706
    
    
    
    148,628
    
    
    
    16,078
    
    
    
    10.8
    %Selling, general and administrative
expenses
    
    
    73,659
    
    
    
    69,900
    
    
    
    3,759
    
    
    
    5.4
    %Management fee expense
    
    
    6,978
    
    
    
    7,374
    
    
    
    (396
    )
    
    
    (5.4
    %)Depreciation and amortization
    
    
    77,921
    
    
    
    74,232
    
    
    
    3,689
    
    
    
    5.0
    %Operating income
    
    
    70,185
    
    
    
    62,676
    
    
    
    7,509
    
    
    
    12.0
    %Interest expense, net
    
    
    (82,477
    )
    
    
    (75,573
    )
    
    
    (6,904
    )
    
    
    9.1
    %Loss on early extinguishment of debt
    
    
    (4,624
    )
    
    
    (4,742
    )
    
    
    118
    
    
    
    NM(Loss) gain on derivatives, net
    
    
    (6,498
    )
    
    
    5,297
    
    
    
    (11,795
    )
    
    
    NMGain on sale of assets and investments, net
    
    
    
    
    
    
    2,628
    
    
    
    (2,628
    )
    
    
    NMInvestment income from affiliate
    
    
    13,500
    
    
    
    13,500
    
    
    
    
    
    
    
    Other expense
    
    
    (3,193
    )
    
    
    (3,717
    )
    
    
    524
    
    
    
    (14.1
    %)Net (loss) income
    
    $
    (13,107
    )
    
    $
    69
    
    
    $
    (13,176
    )
    
    
    NM
  20




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##### Table of Contents



Nine Months EndedSeptember 30,2006
    
    
    2005
    
    
    $ Change
    
    
    % ChangeAdjusted OIBDA
    
    $
    134,899
    
    
    $
    123,492
    
    
    $
    11,407
    
    
    
    9.2
    %Non-cash, share-based compensation charges
    
    
    (293
    )
    
    
    (84
    )
    
    
    (209
    )
    
    
    NMInvestment income from affiliate
    
    
    13,500
    
    
    
    13,500
    
    
    
    0
    
    
    
    NMDepreciation and amortization
    
    
    (77,921
    )
    
    
    (74,232
    )
    
    
    (3,689
    )
    
    
    5.0
    %Operating income
    
    $
    70,185
    
    
    $
    62,676
    
    
    $
    7,509
    
    
    
    12.0
    %
 Revenues
  Nine Months EndedSeptember 30,2006
    
    
    2005
    
    
    $ Change
    
    
    % ChangeVideo
    
    $
    297,574
    
    
    $
    288,908
    
    
    $
    8,666
    
    
    
    3.0
    %Data
    
    
    77,534
    
    
    
    63,447
    
    
    
    14,087
    
    
    
    22.2
    %Phone
    
    
    4,185
    
    
    
    50
    
    
    
    4,135
    
    
    
    NMAdvertising
    
    
    14,156
    
    
    
    10,405
    
    
    
    3,751
    
    
    
    36.0
    %$
    393,449
    
    
    $
    362,810
    
    
    $
    30,639
    
    
    
    8.4
    %
 Nine Months EndedSeptember 30,
    
    
    Increase2006
    
    
    2005
    
    
    (Decrease)
    
    
    % ChangeBasic subscribers
    
    
    636,000
    
    
    
    655,000
    
    
    
    (19,000
    )
    
    
    (2.9
    %)Data customers
    
    
    243,000
    
    
    
    200,000
    
    
    
    43,000
    
    
    
    21.5
    %Phone customers
    
    
    23,000
    
    
    
    1,000
    
    
    
    22,000
    
    
    NMAverage monthly video revenue per basic subscriber (1)
    
    $
    51.21
    
    
    $
    47.95
    
    
    $
    3.26
    
    
    
    6.8
    %Average monthly data revenue per data customer(2)
    
    $
    37.85
    
    
    $
    38.22
    
    
    $
    (0.37
    )
    
    
    (1.0
    %)
 
 (1)
    
    Average monthly video revenue per basic subscriber is calculated based on
monthly video revenue divided by the average number of basic subscribers for the quarter.(2)
    
    Average monthly data revenue per data customer is calculated based on monthly data
revenue divided by the average number of data customers for the quarter.     21




---



##### Table of Contents



Costs and Expenses
      Adjusted OIBDA
  Operating Income
  Interest Expense, Net
  Gain on Derivatives, Net
   22




---



##### Table of Contents



Investment Income from Affiliate
  Loss on Early Extinguishment of Debt
  Net (Loss) Income
  Liquidity and Capital Resources
 Overview
     Operating Activities
    23




---



##### Table of Contents



Investing Activities
  Financing Activities
   
    
    On May 5, 2006, we refinanced a $543.1 million term loan with a new term loan in the
amount of $650.0 million. Borrowings under the new term loan bear interest at a rate that
is 0.5% less than the interest rate of the term loan that it replaced. The new term loan
matures in January 2015, whereas the term loan it replaced had a maturity of February 2013.
    
    On June 29, 2006, we used available cash to make an $8.0 million capital distribution to
MCC.
    
    On July 12, 2006, we borrowed $74.0 million (the Revolver Draw) under the revolving
credit portion of our subsidiary credit facility. On the same day, we used the proceeds of
the Revolver Draw and $26.0 million of available cash to make a $100.0 million capital
distribution to MCC.
 Other
   Contractual Obligations and Commercial Commitments
  Critical Accounting Policies
 Use of Estimates
    24




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##### Table of Contents



Share-based Compensation
   Inflation and Changing Prices
   25




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
 Mediacom LLC
   Mediacom Capital Corporation
    26




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##### Table of Contents



PART II
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
 10-K.
 
 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
  27




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##### Table of Contents



SIGNATURES
  MEDIACOM LLCNovember 9, 2006
    By:
    /s/ MARK E. STEPHANMark E. StephanExecutive Vice President and Chief Financial Officer  28




---



##### Table of Contents



SIGNATURES
  MEDIACOM CAPITAL CORPORATIONNovember 9, 2006
    By:
    /s/ MARK E. STEPHANMark E. StephanExecutive Vice President and Chief Financial Officer  29




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##### Table of Contents



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
  30