##### 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, 2011
 Commission File Numbers: 333-57285-01
 333-57285
 Mediacom LLC
Mediacom Capital Corporation*
  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 Yes þ No
  o Yes o No
  o Large accelerated filers
    
    o Accelerated filers
    
    þ Non-accelerated filers
    
    o Smaller reporting companies
 o Yes þ No
  *
    
    Mediacom Capital Corporation meets the conditions set forth in General Instruction H (1) (a)
and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format.




---



##### 



MEDIACOM LLC AND SUBSIDIARIES
 FORM 10-Q
FOR THE PERIOD ENDED MARCH 31, 2011
TABLE OF CONTENTS
 PagePART IItem 1. Financial Statements
    
    
    4Consolidated Balance Sheets (unaudited) March 31, 2011 and December 31, 2010
    
    
    4Consolidated Statements of Operations (unaudited) Three Months Ended March 31, 2011 and 2010
    
    
    5Consolidated Statements of Cash Flows (unaudited) Three Months Ended March 31, 2011 and 2010
    
    
    6Notes to Consolidated Financial Statements (unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    22Item 4. Controls and Procedures
    
    
    22PART IIItem 1. Legal Proceedings
    
    
    23Item 1A. Risk Factors
    
    
    23Item 6. Exhibits
    
    
    23Signatures
    
    
    24Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
     2




---



##### Table of Contents



Cautionary Statement Regarding Forward-Looking Statements
   
    
    increased levels of competition from existing and new competitors;
 
    
    lower demand for our video, high-speed data and phone services;
 
    
    our ability to successfully introduce new products and services to meet customer demands
and preferences;
 
    
    changes in laws, regulatory requirements or technology that may cause us to incur
additional costs and expenses;
 
    
    greater than anticipated increases in programming costs and delivery expenses related to
our products and services;
 
    
    changes in assumptions underlying our critical accounting policies;
 
    
    the ability to secure hardware, software and operational support for the delivery of
products and services to our customers;
 
    
    disruptions or failures of network and information systems upon which our business
relies;
 
    
    our reliance on certain intellectual property;
 
    
    our ability to generate sufficient cash flow to meet our debt service obligations;
 
    
    our ability to refinance future debt maturities or provide future funding for general
corporate purposes and potential strategic transactions, on similar terms as we currently
experience; and
 
    
    other risks and uncertainties discussed in this Quarterly Report, our Annual Report on
Form 10-K for the year ended December 31, 2010 and other reports or documents that we file
from time to time with the SEC.
   3




---



##### Table of Contents



PART I
 
 ITEM 1.
    
    FINANCIAL STATEMENTS
 MEDIACOM LLC AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
   March 31,
    
    
    December 31,2011
    
    
    2010ASSETSCURRENT ASSETSCash
    
    $
    8,621
    
    
    $
    22,014Restricted cash and cash equivalents
    
    
    
    
    
    
    8,853Accounts receivable, net of allowance for doubtful accounts of $823 and $1,228
    
    
    34,305
    
    
    
    35,318Prepaid expenses and other current assets
    
    
    11,706
    
    
    
    8,079Total current assets
    
    
    54,632
    
    
    
    74,264Preferred equity investment in affiliated company (Note 8)
    
    
    150,000
    
    
    
    150,000Property, plant and equipment, net of accumulated depreciation of $1,237,689 and $1,211,315
    
    
    679,620
    
    
    
    688,883Franchise rights
    
    
    616,807
    
    
    
    616,807Goodwill
    
    
    24,046
    
    
    
    24,046Subscriber lists, net of accumulated amortization of $117,891 and $117,781
    
    
    385
    
    
    
    495Other assets, net of accumulated amortization of $5,260 and $4,240
    
    
    29,772
    
    
    
    29,613Total assets
    
    $
    1,555,262
    
    
    $
    1,584,108LIABILITIES AND MEMBERS DEFICITCURRENT LIABILITIESAccounts payable, accrued expenses and other current liabilities
    
    $
    160,057
    
    
    $
    150,648Deferred revenue
    
    
    26,165
    
    
    
    25,674Current portion of long-term debt
    
    
    12,000
    
    
    
    12,000Total current liabilities
    
    
    198,222
    
    
    
    188,322Long-term debt, less current portion
    
    
    1,593,500
    
    
    
    1,507,000Other non-current liabilities
    
    
    18,343
    
    
    
    23,616Total liabilities
    
    
    1,810,065
    
    
    
    1,718,938Commitments and contingencies (Note 10)MEMBERS DEFICITCapital contributions
    
    
    342,473
    
    
    
    478,973Accumulated deficit
    
    
    (597,276
    )
    
    
    (613,803
    )Total members deficit
    
    $
    (254,803
    )
    
    $
    (134,830
    )Total liabilities and members deficit
    
    $
    1,555,262
    
    
    $
    1,584,108
   4




---



##### Table of Contents



MEDIACOM LLC AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
   Three Months EndedMarch 31,2011
    
    
    2010Revenues
    
    $
    166,306
    
    
    $
    159,900Costs and expenses:Service costs (exclusive of depreciation and
amortization)
    
    
    76,560
    
    
    
    71,260Selling, general and administrative expenses
    
    
    27,541
    
    
    
    26,414Management fee expense
    
    
    3,082
    
    
    
    2,968Depreciation and amortization
    
    
    29,231
    
    
    
    26,901Operating income
    
    
    29,892
    
    
    
    32,357Interest expense, net
    
    
    (25,011
    )
    
    
    (21,846
    )Gain (loss) on derivatives, net
    
    
    7,702
    
    
    
    (6,462
    )Investment income from affiliate
    
    
    4,500
    
    
    
    4,500Other expense, net
    
    
    (556
    )
    
    
    (751
    )Net income
    
    $
    16,527
    
    
    $
    7,798
   5




---



##### Table of Contents



MEDIACOM LLC AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
   Three Months EndedMarch 31,2011
    
    
    2010OPERATING ACTIVITIES:Net income
    
    $
    16,527
    
    
    $
    7,798Adjustments to reconcile net loss to net cash flows provided by operating activities:Depreciation and amortization
    
    
    29,231
    
    
    
    26,901(Gain) loss on derivatives, net
    
    
    (7,702
    )
    
    
    6,462Amortization of deferred financing costs
    
    
    1,020
    
    
    
    772Share-based compensation
    
    
    
    
    
    
    142Changes in assets and liabilities, net of effects from acquisitions:Accounts receivable, net
    
    
    1,013
    
    
    
    5,608Prepaid expenses and other assets
    
    
    (3,946
    )
    
    
    (1,803
    )Accounts payable, accrued expenses and other current liabilities
    
    
    11,111
    
    
    
    (29,528
    )Deferred revenue
    
    
    491
    
    
    
    274Other non-current liabilities
    
    
    (64
    )
    
    
    (63
    )Net cash flows provided by operating activities
    
    $
    47,681
    
    
    $
    16,563INVESTING ACTIVITIES:Capital expenditures
    
    
    (19,541
    )
    
    
    (24,777
    )Redemption of restricted cash and cash equivalents
    
    
    8,853
    
    
    
    Net cash flows used in investing activities
    
    $
    (10,688
    )
    
    $
    (24,777
    )FINANCING ACTIVITIES:New borrowings under the bank credit facility
    
    
    101,500
    
    
    
    62,875Repayment of borrowings under the bank credit facility
    
    
    (15,000
    )
    
    
    (57,875
    )Capital contributions from parent
    
    
    
    
    
    
    25,000Capital distributions to parent
    
    
    (136,500
    )
    
    
    (20,000
    )Other financing activities  book overdrafts
    
    
    (386
    )
    
    
    417Net cash flows (used in) provided by financing activities
    
    $
    (50,386
    )
    
    $
    10,417Net (decrease) increase in cash
    
    
    (13,393
    )
    
    
    2,203CASH, beginning of period
    
    
    22,014
    
    
    
    8,868CASH, end of period
    
    $
    8,621
    
    
    $
    11,071SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid during the period for interest, net of amounts capitalized
    
    $
    32,296
    
    
    $
    28,207
   6




---



##### Table of Contents



MEDIACOM LLC AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. ORGANIZATION
 Basis of Preparation of Unaudited Consolidated Financial Statements
     Restricted cash and cash equivalents
  Reclassifications
  2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 When to Perform
Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts
(a consensus of the FASB Emerging Issues Task Force). IntangiblesGoodwill and Other
  7




---



##### Table of Contents



Improving
Disclosures about Fair Value Measurements Fair Value Measurements and Disclosures
 3. FAIR VALUE
  
    
    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.
  Fair Value as of March 31, 2011(dollars in thousands)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalAssetsInterest rate exchange agreements
    
    $
    
    
    
    $
    3,357
    
    
    $
    
    
    
    $
    3,357LiabilitiesInterest rate exchange agreements
    
    $
    
    
    
    $
    33,574
    
    
    $
    
    
    
    $
    33,574Interest rate exchange agreements  liabilities, net
    
    $
    
    
    
    $
    30,217
    
    
    $
    
    
    
    $
    30,217
  Fair Value as of December 31, 2010(dollars in thousands)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalAssetsInterest rate exchange agreements
    
    $
    
    
    
    $
    2,180
    
    
    $
    
    
    
    $
    2,180LiabilitiesInterest rate exchange agreements
    
    $
    
    
    
    $
    40,099
    
    
    $
    
    
    
    $
    40,099Interest rate exchange agreements  liabilities, net
    
    $
    
    
    
    $
    37,919
    
    
    $
    
    
    
    $
    37,919
  8




---



##### Table of Contents



4. PROPERTY, PLANT AND EQUIPMENT
  March 31,
    
    
    December 31,2011
    
    
    2010Cable systems, equipment and subscriber devices
    
    $
    1,833,628
    
    
    $
    1,817,314Vehicles
    
    
    35,098
    
    
    
    35,098Furniture, fixtures and office equipment
    
    
    31,171
    
    
    
    30,374Buildings and leasehold improvements
    
    
    15,877
    
    
    
    15,877Land and land improvements
    
    
    1,535
    
    
    
    1,5351,917,309
    
    
    
    1,900,198Accumulated depreciation
    
    
    (1,237,689
    )
    
    
    (1,211,315
    )Property, plant and equipment, net
    
    $
    679,620
    
    
    $
    688,883
 5. ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
  March 31,
    
    
    December 31,2011
    
    
    2010Accounts payable  affiliates
    
    $
    46,793
    
    
    $
    35,154Liabilities under interest rate exchange agreements
    
    
    19,167
    
    
    
    20,481Accrued programming costs
    
    
    18,246
    
    
    
    17,699Accrued taxes and fees
    
    
    14,850
    
    
    
    15,329Accrued payroll and benefits
    
    
    12,407
    
    
    
    10,753Accounts payable
    
    
    9,506
    
    
    
    5,986Accrued service costs
    
    
    9,327
    
    
    
    8,232Subscriber advance payments
    
    
    6,729
    
    
    
    6,105Accrued interest
    
    
    5,922
    
    
    
    13,737Accrued property, plant and equipment
    
    
    5,918
    
    
    
    5,158Book overdrafts (1)
    
    
    2,499
    
    
    
    2,885Accrued telecommunications costs
    
    
    1,147
    
    
    
    1,486Other accrued expenses
    
    
    7,546
    
    
    
    7,643Accounts payable, accrued expenses and other current liabilities
    
    $
    160,057
    
    
    $
    150,648
 (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 net cash flows from financing activities in our Consolidated
Statements of Cash Flows.
  9




---



##### Table of Contents



6. DEBT
  March 31,
    
    
    December 31,2011
    
    
    2010Bank credit facility
    
    $
    1,255,500
    
    
    $
    1,169,0009 1/8% senior notes due 2019
    
    
    350,000
    
    
    
    350,000$
    1,605,500
    
    
    $
    1,519,000Less: current portion
    
    
    12,000
    
    
    
    12,000Total long-term debt
    
    $
    1,593,500
    
    
    $
    1,507,000
 Bank Credit Facility
  
    
    $304.2 million of revolving credit commitments, which expire in the amounts of $79.0
million and $225.2 million on September 30, 2011 and December 31, 2014, respectively;
 
    
    $622.4 million of outstanding Term Loan C borrowings, which mature on January 31, 2015;
 
    
    $295.5 million of outstanding Term Loan D borrowings, which mature on March 31, 2017; and
 
    
    $248.1 million of outstanding Term Loan E borrowings, which mature on October 23, 2017.
   Interest Rate Exchange Agreements
  
    
    We had current interest rate swaps which fix the variable portion of $900 million of
borrowings under the credit facility at a rate of 3.0%. Our current interest rate swaps are
scheduled to expire in the amounts of $300 million, $400 million and $200 million during the
years ending December 31, 2011, 2012 and 2014, respectively; and
 
    
    Forward-starting interest rate swaps which will fix the variable portion of $400 million of
borrowings under the credit facility at a rate of 3.1%. Our forward-starting interest rate
swaps are scheduled to commence in the amounts of $100 million and $300 million during the
years ending December 31, 2011 and 2012, respectively.
   10




---



##### Table of Contents



Senior Notes
  Debt Ratings
   Fair Value
  9 1/8% senior notes due 2019
    
    $
    372,750Bank credit facility
    
    $
    1,226,278
 7. MEMBERS DEFICIT
 Going Private Transaction
       11




---



##### Table of Contents



Three Months EndedMarch 31,2010Share-based compensation expense by type of award:Employee stock options
    
    $
    7Employee stock purchase plan
    
    
    17Restricted stock units
    
    
    118Total share-based compensation expense
    
    $
    142
 Employee Stock Purchase Plan
  8. INVESTMENT IN AFFILIATED COMPANY
  9. RELATED PARTY TRANSACTIONS
  10. COMMITMENTS AND CONTINGENCIES
 Legal Proceedings
 Gary Ogg and Janice Ogg v. Mediacom LLC
    Jim
Knight v. Mediacom Communications Corp.
 Colleen Witmer v. Mediacom Communications Corporation, et al., J.
Malcolm Gray v. Mediacom Communications Corporation, et al Haverhill Retirement System v. Mediacom Communications Corporation, et
al In Re Mediacom Communications Corporation Shareholders Litigation
 Wendy Kwait v. Mediacom Communications Corporation, et al
 Thomas Turberg v. Mediacom
Communications Corporation, et al
 Ella Mae Pease v. Rocco Commisso, et
al
     12




---



##### Table of Contents



11. GOODWILL AND OTHER INTANGIBLE ASSETS
 Intangibles  Goodwill and Other Goodwill and Other Intangible Assets),
      12. SUBSEQUENT EVENTS
  Legal Proceedings
 Gary Ogg and Janice Ogg v. Mediacom LLC
  13




---



##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
  Overview
     Recent Developments
 Going Private Transaction
     14




---



##### Table of Contents



Revenues, Costs and Expenses
        15




---



##### Table of Contents



Use of Non-GAAP Financial Measures
     Actual Results of Operations
 Three Months Ended March 31, 2011 compared to Three Months Ended March 31, 2010
  Three Months EndedMarch 31,2011
    
    
    2010
    
    
    $ Change
    
    
    % ChangeRevenues
    
    $
    166,306
    
    
    $
    159,900
    
    
    $
    6,406
    
    
    
    4.0
    %Costs and expenses:Service costs (exclusive of depreciation and amortization)
    
    
    76,560
    
    
    
    71,260
    
    
    
    5,300
    
    
    
    7.4
    %Selling, general and administrative expenses
    
    
    27,541
    
    
    
    26,414
    
    
    
    1,127
    
    
    
    4.3
    %Management fee expense
    
    
    3,082
    
    
    
    2,968
    
    
    
    114
    
    
    
    3.8
    %Depreciation and amortization
    
    
    29,231
    
    
    
    26,901
    
    
    
    2,330
    
    
    
    8.7
    %Operating income
    
    
    29,892
    
    
    
    32,357
    
    
    
    (2,465
    )
    
    
    (7.6
    %)Interest expense, net
    
    
    (25,011
    )
    
    
    (21,846
    )
    
    
    (3,165
    )
    
    
    14.5
    %Gain (loss) on derivatives, net
    
    
    7,702
    
    
    
    (6,462
    )
    
    
    14,164
    
    
    NMInvestment income from affiliate
    
    
    4,500
    
    
    
    4,500
    
    
    
    
    
    
    NMOther expense, net
    
    
    (556
    )
    
    
    (751
    )
    
    
    195
    
    
    
    (26.0
    %)Net income
    
    $
    16,527
    
    
    $
    7,798
    
    
    $
    8,729
    
    
    NMOIBDA
    
    $
    59,123
    
    
    $
    59,258
    
    
    $
    (135
    )
    
    
    (0.2
    %)
  16




---



##### Table of Contents



Three Months EndedMarch 31,2011
    
    
    2010
    
    
    $ Change
    
    
    % ChangeOIBDA
    
    $
    59,123
    
    
    $
    59,258
    
    
    $
    (135
    )
    
    
    (0.2
    %)Depreciation and amortization
    
    
    (29,231
    )
    
    
    (26,901
    )
    
    
    (2,330
    )
    
    
    8.7
    %Operating income
    
    $
    29,892
    
    
    $
    32,357
    
    
    $
    (2,465
    )
    
    
    (7.6
    %)
 Revenues
  Three Months EndedMarch 31,2011
    
    
    2010
    
    
    $ Change
    
    
    % ChangeVideo
    
    $
    101,345
    
    
    $
    98,912
    
    
    
    2,433
    
    
    
    2.5
    %HSD
    
    
    46,592
    
    
    
    42,882
    
    
    
    3,710
    
    
    
    8.7
    %Phone
    
    
    15,125
    
    
    
    14,303
    
    
    
    822
    
    
    
    5.7
    %Advertising
    
    
    3,244
    
    
    
    3,803
    
    
    
    (559
    )
    
    
    (14.7
    %)Total Revenues
    
    $
    166,306
    
    
    $
    159,900
    
    
    
    6,406
    
    
    
    4.0
    %
 March 31,
    
    
    Increase/2011
    
    
    2010
    
    
    (Decrease)
    
    
    % ChangeBasic subscribers
    
    
    521,000
    
    
    
    546,000
    
    
    
    (25,000
    )
    
    
    (4.6
    %)Digital customers
    
    
    319,000
    
    
    
    309,000
    
    
    
    10,000
    
    
    
    3.2
    %HSD customers
    
    
    386,000
    
    
    
    362,000
    
    
    
    24,000
    
    
    
    6.6
    %Phone customers
    
    
    158,000
    
    
    
    141,000
    
    
    
    17,000
    
    
    
    12.1
    %RGUs(1)
    
    
    1,384,000
    
    
    
    1,358,000
    
    
    
    26,000
    
    
    
    1.9
    %Average total monthly revenue per basic subscriber (2)
    
    $
    105.49
    
    
    $
    97.44
    
    
    $
    8.05
    
    
    
    8.3
    %
 (1)
    
    RGUs represent the total of basic subscribers and digital, HSD and phone customers.(2)
    
    Represents total average monthly revenues for the quarter divided by total average
basic subscribers for such period.
     17




---



##### Table of Contents



Costs and Expenses
     OIBDA
  Operating Income
  Interest Expense, Net
  Gain (Loss) on Derivatives, Net
   18




---



##### Table of Contents



Investment Income from Affiliate
  Other Expense, Net
  Net Income
  Liquidity and Capital Resources
 Overview
   Net Cash Flows Provided by Operating Activities
   Net Cash Flows Used in Investing Activities
   19




---



##### Table of Contents



Net Cash Flows (Used in) Provided By Financing Activities
  Recent
Developments  Going Private Transaction
  Capital Structure
  Bank Credit Facility
   Senior Notes
  Covenant Compliance and Debt Ratings
   Contractual Obligations and Commercial Commitments
  Critical Accounting Policies
   20




---



##### Table of Contents



Goodwill and Other Intangible Assets
 Intangibles  Goodwill and Other
   When to Perform Step 2 of the Goodwill Impairment Test for
Reporting Units with Zero or Negative Carrying Amounts (a consensus of the FASB Emerging Issues Task Force)
   21




---



##### Table of Contents



Inflation and Changing Prices
  
 ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4.
    
    CONTROLS AND PROCEDURES
 Mediacom LLC
  15d-15(f)
 Mediacom Capital Corporation
  15d-15(f)
  22




---



##### Table of Contents



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
 
  23




---



##### Table of Contents



SIGNATURES
  MEDIACOM LLCMay 12, 2011
    By:
    /s/ Mark E. StephanMark E. StephanExecutive Vice President and Chief Financial Officer  24




---



##### Table of Contents



SIGNATURES
  MEDIACOM CAPITAL CORPORATIONMay 12, 2011
    By:
    /s/ Mark E. StephanMark E. StephanExecutive Vice President and Chief Financial Officer  25




---



##### 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
  26