##### 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 March 31, 2007
 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)
  o Yes
    

þ No
   o Large accelerated filers
    

o Accelerated filers
    

þ Non-accelerated filers
  o Yes
    

þ No




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##### 



MEDIACOM LLC AND SUBSIDIARIES
 FORM 10-Q
FOR THE PERIOD ENDED MARCH 31, 2007
 TABLE OF CONTENTS
 PART I
    
    
    
    PageItem 1.
    
    Financial StatementsConsolidated Balance Sheets (unaudited) March 31,
2007 and December 31, 2006
    
    
    4Consolidated Statements of Operations (unaudited)
Three Months Ended March 31, 2007 and 2006
    
    
    5Consolidated Statements of Cash Flows
(unaudited) Three Months Ended March 31, 2007 and 2006
    
    
    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
    
    
    19Ehxibit 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 31,2007
    
    
    2006ASSETSCURRENT ASSETSCash
    
    $
    10,117
    
    
    $
    11,501Accounts receivable, net of allowance for doubtful accounts of $691 and $1,235
    
    
    29,730
    
    
    
    32,518Prepaid expenses and other current assets
    
    
    4,085
    
    
    
    1,523Total current assets
    
    
    43,932
    
    
    
    45,542Preferred equity investment in affiliated company
    
    
    150,000
    
    
    
    150,000Investment in cable television systems:Property, plant and equipment, net of accumulated depreciation of $926,633
and $909,104
    
    
    698,460
    
    
    
    707,047Franchise rights
    
    
    551,716
    
    
    
    552,513Goodwill
    
    
    16,650
    
    
    
    16,800Subscriber lists, net of accumulated amortization of $137,714 and $138,528
    
    
    1,176
    
    
    
    24Total investment in cable television systems
    
    
    1,268,002
    
    
    
    1,276,384Other assets, net of accumulated amortization of $13,448 and $12,933
    
    
    13,236
    
    
    
    14,457Total assets
    
    $
    1,475,170
    
    
    $
    1,486,383LIABILITIES AND MEMBERS DEFICITCURRENT LIABILITIESAccrued liabilities
    
    $
    143,004
    
    
    $
    156,699Deferred revenue
    
    
    21,391
    
    
    
    20,863Current portion of long-term debt
    
    
    11,625
    
    
    
    6,856Total current liabilities
    
    
    176,020
    
    
    
    184,418Long-term debt, less current portion
    
    
    1,532,875
    
    
    
    1,541,500Other non-current liabilities
    
    
    11,934
    
    
    
    11,485Total liabilities
    
    
    1,720,829
    
    
    
    1,737,403Commitments and contingencies (Note 9)MEMBERS DEFICITCapital contributions
    
    
    440,521
    
    
    
    440,521Accumulated deficit
    
    
    (686,180
    )
    
    
    (691,541
    )Total
members deficit
    
    
    (245,659
    )
    
    
    (251,020
    )Total
liabilities and members deficit
    
    $
    1,475,170
    
    
    $
    1,486,383
 
  4




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MEDIACOM LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months EndedMarch 31,2007
    
    
    2006Revenues
    
    $
    134,524
    
    
    $
    126,521Costs and expenses:Service costs (exclusive of depreciation
and amortization shown below)
    
    
    58,061
    
    
    
    53,419Selling, general and administrative expenses
    
    
    25,371
    
    
    
    23,224Management fee expense
    
    
    2,521
    
    
    
    2,297Depreciation and amortization
    
    
    25,930
    
    
    
    25,543Operating income
    
    
    22,641
    
    
    
    22,038Interest expense, net
    
    
    (29,475
    )
    
    
    (26,380
    )(Loss) gain on derivatives, net
    
    
    (2,077
    )
    
    
    573Gain on sale of cable systems
    
    
    10,781
    
    
    
    Investment income from affiliate
    
    
    4,500
    
    
    
    4,500Other expense, net
    
    
    (1,006
    )
    
    
    (1,024
    )Net income (loss)
    
    $
    5,364
    
    
    $
    (293
    )
 
  5




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MEDIACOM LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Three Months EndedMarch 31,2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
    
    $
    5,364
    
    
    $
    (293
    )Adjustments to reconcile net income (loss) to net cash provided by
operating activities:Depreciation and amortization
    
    
    25,930
    
    
    
    25,543Loss (gain) on derivatives, net
    
    
    2,077
    
    
    
    (573
    )Gain on sale of cable systems
    
    
    (10,781
    )
    
    
    Amortization of original issue discounts and deferred financing costs
    
    
    514
    
    
    
    695Share-based compensation
    
    
    111
    
    
    
    144Changes in assets and liabilities, net of effects from acquisitions:Accounts receivable, net
    
    
    2,915
    
    
    
    2,517Prepaid expenses and other assets
    
    
    (3,054
    )
    
    
    (392
    )Accrued liabilities
    
    
    (13,809
    )
    
    
    (6,796
    )Deferred revenue
    
    
    528
    
    
    
    1,147Other non-current liabilities
    
    
    (386
    )
    
    
    (521
    )Net cash flows provided by operating activities
    
    $
    9,409
    
    
    $
    21,471CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from sale of cable systems
    
    
    22,948
    
    
    
    Acquisition of cable system
    
    
    (7,274
    )
    
    
    Capital expenditures
    
    
    (22,611
    )
    
    
    (24,419
    )Net cash flows used in investing activities
    
    $
    (6,937
    )
    
    $
    (24,419
    )CASH FLOWS FROM FINANCING ACTIVITIES:New borrowings
    
    
    36,000
    
    
    
    32,000Repayment of debt
    
    
    (39,856
    )
    
    
    (28,600
    )Net cash flows (used in) provided by financing activities
    
    $
    (3,856
    )
    
    $
    3,400Net (decrease) increase in cash
    
    
    (1,384
    )
    
    
    452CASH, beginning of period
    
    
    11,501
    
    
    
    6,466CASH, end of period
    
    $
    10,117
    
    
    $
    6,918SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid during the period for interest, net of amounts capitalized
    
    $
    46,126
    
    
    $
    41,190
 
  6




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1. ORGANIZATION
     Reclassifications
  2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement No. 115
  7




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3. PROPERTY, PLANT AND EQUIPMENT
  March 31,
    
    
    December 31,2007
    
    
    2006Cable systems, equipment and subscriber devices
    
    $
    1,553,856
    
    
    $
    1,547,147Vehicles
    
    
    32,382
    
    
    
    30,492Furniture, fixtures and office equipment
    
    
    21,066
    
    
    
    20,632Buildings and leasehold improvements
    
    
    16,261
    
    
    
    16,177Land and land improvements
    
    
    1,528
    
    
    
    1,7031,625,093
    
    
    
    1,616,151Accumulated depreciation
    
    
    (926,633
    )
    
    
    (909,104
    )Property, plant and equipment, net
    
    $
    698,460
    
    
    $
    707,047
 4. ACCRUED LIABILITIES
  March 31,
    
    
    December 31,2007
    
    
    2006Accrued programming costs
    
    $
    19,971
    
    
    $
    20,463Accrued interest
    
    
    16,346
    
    
    
    33,273Accrued payroll and benefits
    
    
    10,898
    
    
    
    10,302Accrued taxes and fees
    
    
    10,778
    
    
    
    13,298Accrued service costs
    
    
    8,722
    
    
    
    8,978Accrued property, plant and equipment
    
    
    6,001
    
    
    
    8,764Subscriber advance payments
    
    
    6,001
    
    
    
    5,768Accrued telecommunications costs
    
    
    5,397
    
    
    
    7,148Intercompany
accounts payable and other accrued expenses
    
    
    58,890
    
    
    
    48,705$
    143,004
    
    
    $
    156,699
  8




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##### Table of Contents



5. DEBT
  March 31,
    
    
    December 31,2007
    
    
    2006Bank credit facilities
    
    $
    919,375
    
    
    $
    923,00077/8%
senior notes due 2011
    
    
    125,000
    
    
    
    125,00091/2%
senior notes due 2013
    
    
    500,000
    
    
    
    500,000Capital lease obligations
    
    
    125
    
    
    
    356$
    1,544,500
    
    
    $
    1,548,356Less: Current portion
    
    
    11,625
    
    
    
    6,856Total long-term debt
    
    $
    1,532,875
    
    
    $
    1,541,500
 Bank Credit Facilities
 ,
  Interest Rate Exchange Agreements
   9




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6. MEMBERS DEFICIT
 Share-based Compensation
 Share-Based Payment
 Three Months EndedMarch 31,2007
    
    
    2006Share-based compensation expense by type of award:Employee stock options
    
    $
    25
    
    
    $
    57Employee stock purchase plan
    
    
    13
    
    
    
    36Restricted stock units
    
    
    73
    
    
    
    51Total share-based compensation expense
    
    $
    111
    
    
    $
    144
  Employee Stock Purchase Plan
  7. INVESTMENT IN AFFILIATED COMPANY
   10




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8. COMMITMENTS AND CONTINGENCIES
 Legal Proceedings
 Gary Ogg and Janice
Ogg v. Mediacom, LLC
   11




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##### Table of Contents



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, 2007 compared to Three Months Ended March 31, 2006
  Three Months EndedMarch 31,2007
    
    
    2006
    
    
    $ Change
    
    
    % ChangeRevenues
    
    $
    134,524
    
    
    $
    126,521
    
    
    $
    8,003
    
    
    
    6.3
    %Costs and expenses:Service costs
    
    
    58,061
    
    
    
    53,419
    
    
    
    4,642
    
    
    
    8.7
    %Selling, general and administrative expenses
    
    
    25,371
    
    
    
    23,224
    
    
    
    2,147
    
    
    
    9.2
    %Management fee expense
    
    
    2,521
    
    
    
    2,297
    
    
    
    224
    
    
    
    9.8
    %Depreciation and amortization
    
    
    25,930
    
    
    
    25,543
    
    
    
    387
    
    
    
    1.5
    %Operating income
    
    
    22,641
    
    
    
    22,038
    
    
    
    603
    
    
    
    2.7
    %Interest expense, net
    
    
    (29,475
    )
    
    
    (26,380
    )
    
    
    (3,095
    )
    
    
    11.7
    %(Loss) gain on derivatives, net
    
    
    (2,077
    )
    
    
    573
    
    
    
    (2,650
    )
    
    NMGain on sale of cable systems
    
    
    10,781
    
    
    
    
    
    
    
    10,781
    
    
    NMInvestment income from affiliate
    
    
    4,500
    
    
    
    4,500
    
    
    
    
    
    
    
    Other expense, net
    
    
    (1,006
    )
    
    
    (1,024
    )
    
    
    18
    
    
    
    (1.8
    %)Net income (loss)
    
    $
    5,364
    
    
    $
    (293
    )
    
    $
    5,657
    
    
    NMAdjusted OIBDA
    
    
    53,182
    
    
    
    52,225
    
    
    
    957
    
    
    
    1.8
    %
  Three Months EndedMarch 31,2007
    
    
    2006
    
    
    $ Change
    
    
    % ChangeAdjusted OIBDA
    
    $
    53,182
    
    
    $
    52,225
    
    
    $
    957
    
    
    
    1.8
    %Non-cash, share-based compensation
    
    
    (111
    )
    
    
    (144
    )
    
    
    33
    
    
    NMInvestment income from affiliate
    
    
    (4,500
    )
    
    
    (4,500
    )
    
    
    
    
    
    NMDepreciation and amortization
    
    
    (25,930
    )
    
    
    (25,543
    )
    
    
    (387
    )
    
    
    1.5
    %Operating income
    
    $
    22,641
    
    
    $
    22,038
    
    
    $
    603
    
    
    
    2.7
    %
  13




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Revenues
  Three Months EndedMarch 31,2007
    
    
    2006
    
    
    $ Change
    
    
    % ChangeVideo
    
    $
    96,489
    
    
    $
    97,022
    
    
    $
    (533
    )
    
    
    (0.5
    %)Data
    
    
    29,467
    
    
    
    24,631
    
    
    
    4,836
    
    
    
    19.6
    %Phone
    
    
    3,936
    
    
    
    728
    
    
    
    3,208
    
    
    
    440.7
    %Advertising
    
    
    4,632
    
    
    
    4,140
    
    
    
    492
    
    
    
    11.9
    %$
    134,524
    
    
    $
    126,521
    
    
    $
    8,003
    
    
    
    6.3
    %
 Three Months EndedMarch 31,
    
    
    Increase2007
    
    
    2006
    
    
    (Decrease)
    
    
    % ChangeBasic subscribers
    
    
    622,000
    
    
    
    650,200
    
    
    
    (28,200
    )
    
    
    (4.3
    %)Digital customers
    
    
    225,000
    
    
    
    207,400
    
    
    
    17,600
    
    
    
    8.5
    %Data customers
    
    
    269,000
    
    
    
    224,000
    
    
    
    45,000
    
    
    
    20.1
    %Phone customers
    
    
    45,000
    
    
    
    10,000
    
    
    
    35,000
    
    
    
    350.0
    %RGUs (1)
    
    
    1,161,000
    
    
    
    1,091,600
    
    
    
    69,400
    
    
    
    6.4
    %Average total monthly per basic subscriber
(2)
    
    $
    71.69
    
    
    $
    64.87
    
    
    $
    6.82
    
    
    
    10.5
    %Average total monthly revenue per RGU (3)
    
    $
    38.89
    
    
    $
    38.99
    
    
    $
    (0.10
    )
    
    
    (0.3
    %)
 
 (1)
    
    Represents the total of basic subscribers, digital customers, data customers,
and phone customers at the end of each period.(2)
    
    Represents revenues for the quarter divided by the
average number of basic subscribers for such period.(3)
    
    Represents revenues for the quarter divided by the average number of RGUs for such
period.
      14




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Costs and Expenses
        Adjusted OIBDA
  Operating Income
  Interest Expense, Net
   15




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(Loss) Gain on Derivatives, Net
  Gain
on Sale of Cable Systems
  Investment Income from Affiliate
  Net Income (Loss)
  Liquidity and Capital Resources
 Overview
    Operating Activities
    16




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Investing Activities
  Financing Activities
  Other
   Contractual Obligations and Commercial Commitments
  Critical
Accounting Judgments and Estimates
 Use of Estimates
  Inflation and Changing Prices
   17




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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 LLCMay 15, 2007
    By:
    /s/ MARK E. STEPHANMark E. StephanExecutive Vice President andChief Financial Officer  20




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SIGNATURES
  MEDIACOM CAPITAL CORPORATIONMay 15, 2007
    By:
    /s/ MARK E. STEPHANMark E. StephanExecutive Vice President andChief 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